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Ordinance - 2008-O0058 - Relating To $22,615,000 Tax And Waterworks System Surplus Revenue - 06/12/2008
l 7 J I ~ I J l u B ] \ _J J l Ordinance Ho. 2008-00058 ORDINANCE relating to $22,615,000 CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A Adopted: June 12, 2008 1400565v.2 LUB200/71013 .l 7 I Ll ;] :J fJ I n I '-} J ··1 ·(J t ..J _J J J ] Section 1.1 Section 1.2 Section 1.3 Section 1.4 TABLE OF CONTENTS ARTICLE I DEFINITIONS AND OTifER PRELIMINARY MA TIERS Definitions ............................................................................................................... 1 Findings ................................................................................................................... 5 Table of Contents, Titles, and Headings ................................................................. 5 Interpretation ........................................................................................................... 5 ARTICLE II SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND; PRIOR LIEN, PREVIOUSLY ISSUED AND ADDITIONAL OBLIGATIONS Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5 Section 2.6 Section 2.7 Paynient of the Certificates ..................................................................................... 6 Interest and Sinking Fund ....................................................................................... 7 Deposits to Interest and Sinking Fund .................................................................... 8 Issuance of Prior Lien and Additional Obligations ................................................. 8 Certificates Subordinate to Prior Lien Obligations, Covenants and Agreements ... 8 Pledge of Revenues ................................................................................................. 9 S ysteII1 Fund ............................................................................................................ 9 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5 Section 3.6 Section 3.7 Section 3.8 Section3.9 Section 3.10 Section 3 .11 Section 3.12 Authorization ......................................................................................................... 10 Date, Denomination, Maturities, and Interest. ...................................................... 10 MediUJn, Method, and Place of Paynient. ............................................................. 11 Execution and Registration of Certificates ............................................................ 12 Ownership ............................................................................................................. 13 Registration, Transfer, and Exchange ................................................................... 13 Cancellation ........................................................................................................... 14 T eniporary Certificates.......................................................................................... 14 Replaceinent Certificates ....................................................................................... 14 Book-Entry-Only Systeni ...................................................................................... 15 Successor Securities Depository; Transfer Outside Book-Entry-Only System .... 16 Paynients to Cede & Co ........................................................................................ 17 ARTICLEN REDEMPTION OF CERTIFICATES BEFORE MATURITY 1400565v.2 LUB200nt0l3 l l 'J 1] 0 D I ~ I --1 .J J J I J ] ] J I Section 4.1 Section 4.2 Section4.3 Section4.4 Section 4.5 Section4.6 Section4.7 Section4.8 Section 5.1 Section 5.2 Section 5.3 Section 5.4 Section 5.5 Section 5.6 Section 5.7 Section 6.1 Section 6.2 Section 6.3 Section 6.4 Section 6.5 Redentption ........................................................................................................... 17 Optional Redemption ............................................................................................ 17 No Mandatory Sinking Fund Redemption ............................................................ 17 Partial Redemption ................................................................................................ 17 Notice of Redemption to Owners .......................................................................... 18 Paynient Upon Redemption .................................................................................. 18 Effect of Redemption ............................................................................................ 18 I.apse of Paytnent. ................................................................................................. 19 ARTICLEV PAYING AGENT/REGISTRAR Appointment of Initial Paying Agent/Registrar .................................................... 19 Qualifications ........................................................................................................ 19 Maintaining Paying Agent/Registrar ..................................................................... 19 Tennination ........................................................................................................... 19 Notice of Change to Owners ................................................................................. 19 Agreement to Perfonn Duties and Functions ......................... , .............................. 20 Delivery of Records to Successor ......................................................................... 20 ARTICLE VI FORM OF THE CERTIFICATES Form Generally ..................................................................................................... 20 Form of the Certificates ......................................................................................... 20 CUSIP Registration ............................................................................................... 26 Legal Opinion ........................................................................................................ 26 Bond Insurance ...................................................................................................... 26 ARTICLE VII SALE AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS Section 7.1 Section 7.2 Section 7.3 Section 7.4 Section 7.5 Sale of Certificates; Application ........................................................................... 26 Control and Delivery of Certificates ..................................................................... 26 Project Fund .......................................................................................................... 27 Deposit of Proceeds ............................................................................................... 2 7 Approval of Escrow Agreement. ........................................................................... 27 ARTICLE VIII INVESTMENTS Section 8.1 Investments ............................................................................................................ 27 Section 8.2 Investment Income ................................................................................................ 28 1400S65v.2 LUB200/71013 ' ) 7 '] :l D 0 I ~ I -1 _J J ~ n J J ] } l Section 9.1 Section 9.2 Section 9.3 Section 9.4 Section 9.5 Section 9.6 Section 9.7 Section 9.8 Section 9.9 Section 9.10 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Payinent of the Certificates ................................................................................... 28 Other Representations and Covenants ................................................................... 28 Provisions Concerning Federal Income Tax Exclusion ........................................ 28 No Private Use or Payinent and No Private Loan Financing ................................ 29 No Federal Guaranty ......................................................................................... , ... 29 . Certificates Are Not Hedge Bonds ........................................................................ 29 No• Arbitrage Covenant. ........................................................................................ 29 Arbitrage Rebate ................................................................................................... 30 Infonnation Reporting ........................................................................................... 30 Continuing Obligation ........................................................................................... 30 ARTICLEX DEFAULT AND REMEDIES Section 10.1 Events of Default. .................................................................................................. 3 0 Section I 0.2 Reinedies for Default. ........................................................................................... 31 Section 10.3 ReJ11edies Not Exclusive ....................................................................................... 31 ARTICLE XI DISCHARGE Section 11.1 Discharge ............................................................................................................... 31 ARTICLE XII CONTINUING DISCLOSURE UNDERTAKING Section 12.1 Annual Reports ...................................................................................................... 32 Section 12.2 Material Event Notices .......................................................................................... 32 Section 12.3 Limitations, Disclaimers and Amendments .......................................................... 33 ARTICLE XIII AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 13 .1 Amendments .......................................................................................................... 34 Section 13.2 Attorney General Modification ............................................................................. 35 ARTICLE XIV SPECIAL PROVISIONS RELATING TO THE TEXAS WATER DEVELOPMENT BOARD 1400565v.2 LUB2oontol3 n 0 I J I ] J ID I j J J J ] j Section 14.1 Application of Article XIV ................................................................................... 35 Section 14.2 Covenant to Abide with Rules .............................................................................. 35 Section 14.3 Tax Covenant. ....................................................................................................... 35 Section 14.4 Final Accounting ................................................................................................... 35 Section 14.S Annual Audit Reports ............................................................................................ 36 Section 14.6 Maintenance and Operation -Insurance ............................................................... 36 ARTICLE XV EFFECTIVE IMMEDIATELY Section 15.1 Effective Immediately ........................................................................................... 36 Exhibit A -Description of Annual Disclosure of Financial Information .................................... A-1 1400565v.2 LUB200/71013 1 7 0 0 ;] J ~ l I ] j u ~ J J ] J r ..I ) AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008A; APPROVING A PA YING AGENT/REGISTRAR AGREEMENT; PRESCRIBING THE FORM OF SAID CERTIFICATES; LEVYING A TAX AND PLEDGING SURPLUS WATERWORKS SYSTEM REVENUES lN PAYMENT THEREOF AND ENACTING OTHER PROVISIONS RELATING THERETO WHEREAS, wider the provisions of Subchapter C, Chapter 271, Texas Local Government Code, as amended, the City of Lubbock, Texas (the ~'City"), after giving proper notice, is authorized to issue and sell for cash its certificates of obligation (herein defined as the "Certificates'') that are secured by and payable from the ad valorem taxes and other revenues specified in Article II of this Ordinance, and that are issued in the amowit, for the pwposes, and with the provisions set forth in Section 3.1 of this Ordinance; WHEREAS, pursuant to a resolution heretofore passed by the City Council, notice of intention to issue the Certificates was published in a newspaper of general circulation in the City in accordance with applicable Jaw; WHEREAS, no petition has been filed with the City Secretary, any member of the City Council or any other official of the City, protesting the issuance of the Certificates; WHEREAS, the City Cowicil is now authorized and empowered to proceed with the issuance and sale of the Certificates, and has found and detennined that it is necessary and in the best interests of the City and its citizens that it issue the Certificates in accordance with the terms and provisions of this Ordinance; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place, and pwpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: ARTICLE I DEFINmONS AND OTHER PRELIMINARY MA TIERS Section 1.1 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: "Additional Obligations" means tax and revenue obligations hereafter issued which by their terms are payable from ad valorem taxes and additionally payable from and secured by a parity lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien and pledge securing the payment of the Previously Issued Obligations and the Certificates. l400565v.2 LUB200nt013 Cl I] CI l] ~ ~ I J J j J J J J J I "Application" means the Application filed with the Texas Water Development Board requesting financial assistance for the purposes set forth therein. "Certificate" means any of the Certificates. "Certificate Date" means the date designated as the initial date of the Certificates by Section 3.2(a) ofth.is Ordinance. "Certificates" means the certificates of obligation authorized to be issued by Section 3.1 of this Ordinance and designated as "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A." "City" means the City of Lubbock, Texas. "Closing Date" means the date of the initial delivery of and payment for the Certificates. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings, and court decisions. "Collection Date" means, when reference is being made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes assessed each year by the City become delinquent wider applicable law. "Designated Payment/Tnmsfer Office" means (i) with respect to the initial Paying Agent/Registrar named in this Ordinance, the Designated Payment/Transfer Office as designated in the Paying Agent/Registrar Agreement, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Escrow Agent" means Texas Treasury Safekeeping Trust Co., its successors and assigns. "Escrow Agreement" means that certain Escrow Agreement, between the City and the Escrow Agent, dated as of June 15, 2008, pertaining to the deposit of the proceeds of the Certificates. "Event of Default" means any event of default as defined in Section 10.1 of this Ordinance. "Fiscal Year" means such fiscal year as shall from time to time be set by the City Council. -2- l400565v.2 LUB200n!0l3 \ ,7 rl ~ 0 ~ ~ I J J D M J J I "Gross Revenues" means, with respect to any period, all income, revenues and receipts received from the operation and ownership of the System. "Initial Certificate" means the initial certificate authorized by Section 3.4 of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 2.2 of this Ordinance. "Interest Payment Date,, means the date or dates on which interest on the Certificates is scheduled to be paid witil their respective dates of maturity or prior redemption, such dates being February 15 and August 15 of each year, commencing August 15, 2008. "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. "Net Revenues" means the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. "Operating and Maintenance Expenses" means all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, including, but not limited to, the costs of insurance, the purchase and carrying of stores, materials, and supplies, the payment of salaries and labor, and other expends reasonably and properly charged, under generally accepted accounting principles, to the operation and maintenance of the System or by statute deemed to be a first lien against the Gross Revenues. Depreciation charges on equipment, machinery, plants and other facilities comprising the System and expenditures classed under generally accepted accounting principles as capital expenditures shall not be considered as "Operating and Maintenance Expenses" for purposes of determining ''Net Revenues." ''Owner" means the person who is the registered owner of a Certificate or Certificates, as shown in the Register. "Outstanding" means when used in this Ordinance with respect to Certificates, Previously Issued Obligations or any Additional Obligations, as the case may be, as of the date of detennination, all Obligations and any Additional Obligations theretofore sold, issued and delivered by the City, except: (1) Certificates, Previously Issued Obligations or any Additional Obligations cancelled or delivered to the Paying Agent/Registrar for cancellation in connection with the exchange or transfer of such obligations; (2) 1400565v.2 LUB200/710l3 Certificates, Previously Issued Obligations or any Additional Obligations paid or deemed to be paid in accordance with the provisions of Article XI hereof; and -3- I j 7 :-1 0 0 0 ~ ~ I -J J ~ m J ] .J ] J J (3) Certificates, Previously Issued Obligations or any Additional Obligations that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Paying Agent/Registrar" means initially The Bank of New York Trust Company, National Association, or any successor thereto as provided in this Ordinance. "Previously Issued Obligations" means the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 2005, dated July 1, 2005, issued in the aggregate principal amount of $43,080,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2004, dated September 15, 2004, issued in the original principal amount of $3,100,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2003, dated July 15, 2003, issued in the original principal amount of $9,765,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2002, dated February 15, 2002, issued in the original principal amount of $6,450,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 1999, dated September 15, 1999, issued in the original principal amount of $24,800,000; and the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 1999, dated April 1, 1999, issued in the original principal amount of $12,300,000. "Prior Lien Obligations" means all bonds or other similar obligations of the City presently outstanding or that may be hereafter issued, payable in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such lien and pledge securing the payment thereof is prior and superior in claim, rank and dignity to the lien on and pledge of the Net Revenues securing the payment of the Previously Issued Obligations and the Certificates. "Project" means the purposes for which the Certificates are issued as set forth in Section 3.1. "Project Fund" means the fund created pursuant to Section 7.3. "Pmchaser" means the Texas Water Development Board. "Record Date" means the last business day of the month next preceding an Interest Payment Date. "Register'' means the Register specified in Section 3.6(a) of this Ordinance . "Representations Letter" means the Blanket Letter of Representations between the City andDTC. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. l400565v.2 LUB20Dnl013 l ·1 J J 0 ~ n I J J ~ ~ J J J J ] ] "SID" means any person designated by the State of Texas or an authorized department, office 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. "Similarly Secured Obligations" means collectiveJy the Certificates, the Previously Issued Obligations, and any Additional Obligations. "System" means the City's Waterworks System being all properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment, transmission and distribution of treated, potable water, together with all future extensions, improvements, replacements and additions thereto. "TWDB" means the Texas Water Development Board. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for th~ payment of principal of or interest on the Certificates as the same come due and payable and remaining unclaimed by the Owners of such Certificates after the applicable payment or redemption date. Section 1.2 Findings. The declarations, determinations, and findings declared, made, and found in the preamble to this Ordinance are hereby adopted, restate, and made a part of the operative provisions hereof. Section 1.3 Table of Contents, Titles, and Headings.·· The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.4 Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. -5- 1400565v.2 LUB200/710B D 7 0 0 0 0 ] J J J J ARTICLE II SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND; PRIOR LIEN, PREVIOUSLY ISSUED AND ADDITIONAL OBLIGATIONS Section 2 .1 Payment of the Certificates. (a) Pursuant to the authority granted by the Texas Constitution and laws of the State of Texas, there shall be levied and there is hereby levied for the current year and for each succeeding year thereafter while any of the Certificates or any interest thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Certificates, being (i) the interest on the Certificates, and (ii) a sinking fund for their redemption at maturity or a sinking fund of two percent per annum (whichever amount is the greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law, and the money thus collected shall be deposited as collected to the Interest and Sinking Fund. (c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Certificates wheQ.. and as due and payable in accordance with their tenns and this Ordinance. ( d) The amount of taxes to be assessed and provided annually for the payment of principal of and interest on the Certificates shall be determined and accomplished in the following manner. Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying and assessing ad valorem taxes each year, the City Council shall detennine: (i) The amount on deposit in the Interest and Sinking Fund after (x) deducting therefrom the total amount of debt service requirements to become due on Certificates prior to the next Collection Date for the ad valorem taxes to be assessed, and (y) adding thereto the amount of Net Revenues of the System appropriated and allocated thereto to pay such debt service requirements prior to the next Collection Date; (ii) The amount of Net Revenues, if any, appropriated and to be set aside for the payment of the debt service requirements on the Certificates between the Collection Date for the taxes then to be assessed and the Collection Date for the taxes to be assessed during the next succeeding calendar year; and (iii) The amount of debt service requirements to become due and payable on the Certificates between the Collection Date for the taxes then to be assessed and the Collection Date for the taxes to be assessed during the next succeeding calendar year. -6- 1400S65v.2 LUB200/71013 0 LJ J J ~ j I J J I m ] J ] J ] ] The amount of taxes to be assessed and collected annually each year to pay the debt service requirements on the Certificates shall be the amount established in paragraph (iii) above less the swn total of the amounts established in paragraphs (i) and (ii), after taking into consideration delinquencies and costs of collecting such annual taxes. (e) The City hereby covenants and agrees that it will at all times maintain rates and charges for the services of the System sufficient to provide for the payment of all costs of operation and maintenance of the System plus an amount equal to the annual debt service requirements of all obligations payable from the revenues of the System for which the City is budgeting repayment of such obligations; provided, however, if the City elects to detennine the tax rate to be assessed for each Fiscal Year based on the amount of Net Revenues budgeted, appropriated and allocated to be available pursuant to subparagraph ( d) of this Section, the City shall maintain rates and charges for the services of the System sufficient in conjunction with other legally available funds to provide for payment of all costs of operation and maintenance of the System plus an amount equal to 1.10 times the annual debt service requirements of all obligations payable from the revenues of the System for which the City is budgeting the repayment of such obligations, or the City shall provide documentation which evidences the levy and collection of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds except water system rates and charges, sufficient for the repayment of water system debt service requirements. (f) The City hereby covenants and agrees that, during such time as the Certificates are outstanding and prior to the time taxes are levied each year, it will establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient Net Revenues or the proceeds of ad valorem taxes or any other legally available funds on hand at the time of adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund. (g) If the liens and provisions of this Ordinance shall be released in a manner permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Certificates, there shall be subtracted the amount of any Certificates that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. Section 2.2 Interest and Sinking Fund. (a) The City hereby establishes a special fund or account to be designated the .. City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, Interest and Sinking Fund" (the "Interest and Sinking Fund''), said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Certificates when and as due and payable in accordance with their terms and this Ordinance. -7- 1400565v.2 LUB200nt013 --, ! : j C! ] 0 0 ~ I ] J g ~ ~ J J fil J J Section 2.3 Deposits to Interest and Sinking Fund. The City hereby covenants and agrees to cause to be deposited in the Interest and Sinking Fund prior to each interest and principal payment date from the Net Revenues of the System, after deduction of all payments required to be made to special funds or accounts created for the payment and security of the Prior Lien Obligations, an amount equal to one hundred percent (100%) of the amount required to fully pay the accrued interest and principal of the Certificates then due and payable by reason of maturity or redemption prior to maturity, such deposits to pay accrued interest and principal on the Certificates to be made in substantially equal monthly installments. The monthly deposits to the Interest and Sinking Fund, as hereinabove provided, shall be made until such time as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorem taxes levied, collected and deposited in the Interest and Sinking Fund for and on behalf of the Certificates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Interest and Sinking Fund from the Net Revenues of the System. Section 2.4 Issuance of Prior Lien and Additional Obligations. (a) The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount or subject to any terms, conditions, or restrictions other than as may be required by law or otherwise. (b) The City hereby expressly reserves the right to issue Additional Obligations, without limitation or any restriction or condition being applicable to their issuance under the terms of this Ordinance, payable from and, together with the other Similarly Secured Obligations, equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System. Section 2.5 Certificates Subordinate to Prior Lien Obligations, Covenants and Agreements. It is the intention of the City Council and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in ordinances authorizing the issuance of Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders or owners of the Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract with respect to the pledge of revenues herein made for the payment and security of the Certificates. -8- l400565v.2 LUB200nI0l3 .J :7 0 u 0 D I ~ I ] J J ~ J ] l J ] ] } Section 2.6 Pledge of Revenues. The City hereby covenants and agrees that, subject only to a prior lien on and pledge of the Net Revenues of the System for the payment and security of Prior Lien Obligations, the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Interest and Sinking Fund as hereafter provided, are hereby pledged, equally and ratably, to the payment of the principal of, redemption premium, if any, and interest on the Certificates and the other Similarly Secured Obligations as herein provided, and the pledge of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be valid and binding in accordance with the terms hereof without any filing or recording thereof (except in the official records of the City), physical delivery of such Net Revenues or further act by the City. Section 2. 7 System Fund. The City hereby reaffirms its covenant and agreement made in connection with the issuance of the Previously Issued Obligations that all Gross Revenues ( excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited from day to day as collected into an "City of Lubbock, Texas, Waterworks System Operating Fund" (the "System Fund") which Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited into the System Fund shall be pledged and appropriated to the ex:tent required for the following purposes and in the order of priority shown, to wit: First: To the payment of all necessary and reasonable Operation and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues; Second: To the payment of the amounts required to be deposited in the special funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations; and Third: Equally and ratably to the payment of the amounts required to be deposited in the special funds and accounts created and established for the payment of Similarly Secured Obligations. Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law, provided that, as required by the TWDB, if annual debt service on the Certificates in a particular Fiscal Year will not be paid from funds on deposit in the Interest and Sinking Fund plus ad valorem taxes (as pennitted by Section 2.1 hereof), but instead will be paid in whole or in part from appropriated Net Revenues (as permitted by Section 2.1 hereof), the City shall not transfer Net -9- 1400565v.2 LUB200/71013 l Revenues except as provided above in this Section 2.7 until an amount equa1 to the annual debt service requirements on the Certificates for the then-current Fiscal Year have been deposited to ~j the Interest and Sinking Fund. 0 l] 0 ~ i I [J J ~ I J J J J ] } ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3.1 Authorization. The City's certificates of obligation to be designated "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A" (the "Certificates''), are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, specifically Subchapter C, Chapter 271, Texas Local Government Code, as amended, and Article VIII of the City's Home-Rule Charter. The Certificates shall be issued in the aggregate principal amount of $22,615,000 for the purpose of paying contractual obligations to be incurred for the following purposes, to wit: (i) acquisition of land, easements and rights-of way, and planning, design and engineering seivices, as well as special engineering services that include supporting environmental investigations, surveying and geotechnical studies, all in connection with the planning, design and construction of a raw water transmission line, pump station and water. treatment plant improvements to enable Lake Alan Henry to serve as a water supply for the City (the "Project") and (ii) payment of professional services of attorneys, financial advisors and other professionals in connection with the Project and the issuance of the Certificates. Section 3.2 Date, Denomination, Maturities, and Interest. (a) The Certificates shall be dated June 15, 2008. The Certificates shall be in fully registered fonn, without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Certificate, which shall be nwnbered T-1. (b) The Certificates shall mature on February 15 in the years and in the principal amounts set forth in the following schedule: Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2009 $ 975,000 0.423% 2019 $1,110,000 2.133% 2010 980,000 0.623% 2020 1,135,000 2.367% 2011 985,000 0.933% 2021 1,160,000 2.489% 2012 995,000 1.153% 2022 1,190,000 2.573% 2013 1,005,000 1.303% 2023 1~20,000 2.649% 2014 1,020,000 1.433% 2024 1,250,000 2.710% 2015 1,035,000 1.583% 2025 1,285,000 2.759% 2016 1,050,000 1.733% 2026 1,320,000 2.797% -10- 1400565v.2 Lue2oomon .] .7 J D Q B I ~ I J J ~ 0 J ] J ] ] } 2017 2018 1,065,000 1,090,000 1.883% 2.013% 2027 2028 1,360,000 1,385,000 2.832% 2.877% (c) Interest shall accrue and be paid on each Certificate respectively until its maturity or prior redemption, from the later of the Closing Date or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the schedule contained in subsection (b) above. Such interest shall be payable on each Interest Payment Date until maturity or prior redemption. Interest on the Certificates shall be calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each. Section 3.3 Medium, Method, and Place of Payment. (a) The principal of and interest on the Certificates shall be paid in lawful money of the United States of America. (b) Interest on the Certificates shall be payable to the Owners as shown in the Register at the close ofbusiness on the Record Date. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent United States mail, first class postage prepaid, by the Paying Agent/Registrar to each Owner, at the address thereof as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, that the Owner shall bear all risk and expense of such alternative banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. ( d) The principal of each Certificate shall be paid to the Owner thereof on the due date, whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Certificate at the Designated Payment/Transfer Office of the Paying Agent/Registrar. (e) Notwithstanding the preceding Subsections (c) and (d), so long as TWDB is the owner of the Certificates, payments of interest on and principal of the Certificates shall be made by wire transfer at no cost to TWDB. (f) If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Paymentrrransfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in Section 3.2 of this Ordinance. (g) Unclaimed Payments shall be segregated in a special escrow account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of the Certificates -ll- t400565v.2 LUB200/71013 !] 0 D 0 I ~ I J J Q I J J ] J ] J to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment on the Certificates thereafter coming due; to the extent any such moneys remain three years after the retirement of all outstanding Certificates, such moneys shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other person shall be liable or responsible to any Owners of such Certificates for any further payment of such unclaimed moneys or on account of any such Certificates, subject to Title 6 of the Texas Property Code. Section 3.4 Execution and Registration of Certificates. (a) The Certificates shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Certificates ceases to be such officer before the authentication of such Certificates or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Certificates: In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Certificate delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the fonn provided herein, manually executed by the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Certificate has been duly approved by the Attorney General of the State of Texas, that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State of Texas. ( d) On the Closing Date, one Initial Certificate representing the entire principal amount of all Certificates, payable in stated installments to the initial purchaser, or its designee, executed by the Mayor and City Secretary of the City by their manual or facsimile signatures, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the initial purchaser or its designee. Upon payment for the Initial Certificate, the Paying Agent/Registrar shall cancel the Initial Certificate and deliver a single registered, definitive Certificate for each maturity, in the aggregate principal amount thereof, to DTC on behalf of the purchaser. -12- 1400565v.2 LUB20on1013 ij 1 [] D 0 0 I ~ i J J ~ m J J J ] ] ] Section 3.5 Ownership. (a) The City, the Paying Agent/Registrar, and any other person may treat the person in whose name any Certificate is registered as the absolute owner of such Certificate for the purpose of making and receiving payment as herein provided ( except interest shall be paid to the person in whose name such Certificate is registered on the Record Date), and for all other purposes, whether or not such Certificate is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Certificate shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to the extent of the swns paid. Section 3.6 Registration, Transfer, and Exchange. (a) So long as any Certificates remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Certificates in accordance with this Ordinance. (b) The ownership of a Certificate may be transferred only upon the presentation and surrender of the Certificate at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Certificate shall be effective until entered in the Register. (c) The Certificates shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/I'ransfer Office of the Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and in a denomination or denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to the unpaid principal amount of the Certificates presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Certificates exchanged for other Certificates in accordance with this Section. (d) Each exchange Certificate delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such exchange Certificate is delivered. ( e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Certificates. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, or exchange of a Certificate. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Certificate called for redemption, in whole or in part, where such redemption is scheduled to occur within forty-five (45) calendar days after the transfer or -13- 1400565v.2 LUB200/71013 il Cl 0 0 I ~ I [j J 8 ~ J J J J ] J exchange date; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Certificate. Section 3. 7 Cancellation. All Certificates paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records made regarding such payment, redemption, exchange, or replacement. The Paying Agent/Registrar shall then return such cancelled Certificates to the City or may in accordance with law destroy such cancelled Certificates and periodically furnish the City with certificates of destruction of such Certificates. Section 3.8 Temporary Certificates. (a) Following the delivery and registration of the Initial Certificate and pending the preparation of definitive Certificates, the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Certificates that are printed, lithographed, typewritten, mimeographed, or otherwise produced, in any denomination, substantially of the tenor of the definitive Certificates in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions, and other variations as the officers of the City executing such temporary Certificates may determine, as evidenced by their signing of such temporary Certificates. (b) Until exchanged for Certificates in definitive form, such Certificates in temporary form shall be entitle.d to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Certificates in definitive form; thereupon, upon the presentation and surrender of the Certificate or Certificates in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a Certificate or Certificates of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Certificate or Certificates in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.9 Replacement Certificates. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Certificate to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection there,with and any other expenses coMected therewith. (b) In the event that any Certificate is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser~ -14- l400565v.2 LUB2oonJOl3 0 [] 0 0 ~ ~ I J J ~ ~ J ] ] ] ] ] shall authenticate and deliver a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction, or theft of such Certificate; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City hannless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. ( c) If, after the delivery of such replacement Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the City or the Paying Agent/Registrar in coru,ection therewith. (d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Certificate has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Certificate, may pay such Certificate when it becomes due and payable. (e) Each replacement Certificate delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in Ii~ of which such replacement Certificate is delivered. Section 3.10 Book-Entry-Only System. (a) Notwithstanding any other provision hereof, upon initial issuance of the Certificates, the Certificates shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Certificates shall be initially issued in the form of a single separate certificate for each of the maturities thereof. (b) With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Certificates. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the -15- 1400565v.2 LUB200/71013 17 ~] 0 0 D D ; ~ I lJ J ~ ~ J J J J J J records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC Participant or any other person, other than ari Owner, as shown on the Register, of any notice with respect to the Certificates, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner, as shown in the Register of any amoWlt with respect to principal of or interest on the Certificates. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate is registered in the Register as the absolute owner of such Certificate for the purpose of payment of principal of and interest on Certificates, for the purpose of giving notices of redemption and other matters with respect to such Certificate, for the purpose of registering transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Certificates only to or upon the order of the respective Owners as shown in the Register, as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of interest on the Certificates to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that OTC has determined to substitute a new nominee in place of Cede & Co., the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (c) The Representations Letter previously executed and delivered by the City, and applicable to the City's obligations delivered in book-entry-only fonn to DTC as securities depository, is hereby ratified and approved for the Certificates. Section 3.11 Successor Securities Oe.pository; Transfer Outside Book-Entry-Only System. In the event that the City determines that it is in the best interest of the City and the beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the event DTC discontinues the services described herein, the City shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Certificates to such successor securities depository; or (ii) notify DTC and DTC Participants of the availability through OTC of certificated Certificates and cause the Paying Agent/Registrar to transfer one or more separate registered Certificates to DTC Participants having Certificates credited to their DTC accounts; provided, however, that neither the City nor the Paying Agent/Registrar shall discharge DTC without the prior written consent of TWDB. In such event, the Certificates shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. l400565v.2 LUB200/71013 7 :7 10 L D !] D ~ i I J J ~ i J ] J ] ] ] Section 3.12 Payments to Cede & Co. Notwithst.anding any other provision of this Ordinance to the contrary, so long as the Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Certificates, and all notices with respect to such Certificates shall be made and given, respectively, in the manner provided in the Representations Letter of the City to DTC. ARTICLE IV REDEMPTION OF CERTIFICATES BEFORE MATURITY Section 4.1 Redemption. The Certificates are subject to redemption before their scheduled maturity only as provided in this Article IV. Section 4.2 Optional Redemption. (a) The City reserves the option to redeem Certificates maturing on and after February 15, 2019 in whole or any part, before their respective scheduled maturity dates, on August 15, 2018 or on any date thereafter, such redemption date or dates to be fixed by the City, at a price equal to the principal amount of the Certificates called for redemption plus accrued interest to the date fixed for redemption. (b) If less than all of the Certificates are to be redeemed pursuant to an optional redemption, the Certificates shall be redeemed in inverse order of maturity. If less than all of the Certificates within a maturity are to be redeemed, Certificates within such maturity shall be called by lot or other customary method that results in a random selection of the Certificates. (c) The City, at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Certificates to be redeemed. Section 4.3 No Mandatory Sinking Fund Redemption. The Certificates are not subject to scheduled mandatory redemption. Section 4.4 Partial Redemption. (a) A portion of a single Certificate of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Certificate as though it were a single Certificate for purposes of selection for redemption. (b) Upon surrender of any Certificate for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.6 of this Ordinance, shall authenticate and deliver -17- 1400565v.2 LUB200nI013 ! I n 0 0 D 0 i i I J J u fil J J J J ] ] an exchange Certificate or Certificates in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered, such exchange being without charge. (c) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Certificate as to which only a portion thereof is to be redeemed. Section 4.5 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Certificates by sending notice by United States mail, first class postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Certificate ( or part thereof) to be redeemed, at the address shown on the Register at the close of business on the business day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Certificates are to be surrendered for payment, and, if less than all the Certificates outstanding are to be redeemed, an identification of the Certificates or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively preswned to have been duly given, whether or not the Owner receives such notice. Section 4.6 Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Certificates to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of and accrued interest on the Certificates being redeemed. (b) Upon presentation and surrender of any Certificate called for redemption at the Designated PaymentJTransfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of and accrued interest on such Certificate to the date of redemption from the money set aside for such purpose. Section 4.7 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.5 of this Ordinance, the Certificates or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof or accrued interest thereon, such Certificates or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Certificates are presented and sUJTendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Certificate or portion thereof called for redemption shall continue to -18- I 400565v.2 LUB200/71013 7 I !] 0 D 0 I B I ] J E ~ ] ] ] ] ] ] bear interest at the rate stated on the Certificate until due provision is ma.de for the payment of same by the City. Section 4.8 Lapse of Payment. Money set aside for the redemption of Certificates and remaining unclaimed by the Owners of such Certificates shall be subject to the provisions of Section 3.3(f) hereof. ARTICLEV PA YING AGENT/REGISTRAR Section S .1 Appointment of Initial Paying Agent/Registrar. The Bank of New York Trust Company, National Association, is hereby appointed as the initial Paying Agent/Registrar for the Certificates. Section 5.2 Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Certificates. Section 5.3 Maintaining Paying Agent/Registrar. (a) At all times while any of the Certificates are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.2 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented at this meeting, such form of agreement being hereby approved. The signature of the Mayor shall be attested by the City Secretary of the City. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.4 Termination. The City, upon not less than sixty (60) clays notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.5 Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class postage prepaid, at the address thereof in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. -19- 1400565v.2 LUB200n1013 7 n 0 0 D I u I 0 • D D J J J J Section 5.6 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.7 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Certificates to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE CERTIFICATES Section 6.1 Fonn Generally. (a) The Certificates, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Certificates, (i) shall be substantially in the form set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Certificates, as evidenced by their execution thereof. (b) Any portion of the text of any Certificates may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Certificates. (c) The definitive Certificates, if any, shall be typewritten, photocopied, print~ lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as detennined by the officers executing such Certificates, as evidenced by their execution thereof. (d) The Initial Certificate submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.2 Form of the Certificates. The fonn of the Certificates, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially as follows: -20- 1400565v.2 LUB200nJ0I3 -. \ : ) r7 I J LJ 0 0 m ~ I 0 0 @ ~ 0 D J ~ ] D (a) Form of Certificate. REGISTERED No. __ United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A INTEREST RATE: MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: __ % June 15, 2008 REGISTERED $.....,_ __ _ CUSIP NUMBER: The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value received, hereby promises to pay to or registered assigns, on the Maturity Date specified above, the sum of _________ DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annwn rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank ofNew York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Paymentffransfer Office of such successor .. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the -21- 1400565v.2 LUB200nI013 l 0 0 i ~ I J J J ~ J ] ] ] ·1 J ] registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. If the date for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, legal holiday, or day on which hanking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Satmday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and pa:yment on such date shall have the same force and effect as if made on the original date payment was due. This Certificate is one of a series of fully registered certificates specified in the title hereof issued in the aggregate principal amount of $22,615,000 (herein referred to as the "Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the purpose of paying contractual obligations to be incurred for authorized public improvements (collectively, the "Project"), as described in the Ordinance, and to pay the contractual obligations for professional services of attorneys, financial advisors and other professionals in connection with the Project and the issuance of the Certificates. The City has reserved the option to redeem the Certificates maturing on or after February 15, 2019, in whole or in part, before their respective scheduled maturity dates, on August 15, 2018, or on any date thereafter, at a price equal to the principal amount of the Certificates so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Certificates are to be redeemed pursuant to an optional redemption, the Certificates shall be redeemed in inverse order of maturity. If less than all of the Certificates within a maturity are to be redeemed, Certificates within such maturity shall be called by lot or other customary method that results in a random selection of the Certificates. Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Certificates to be redeemed in whole or in part. Notice having been so given, the Certificates or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Certificates or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Certificates or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Certificate is transferable upon surrender of this Certificate for transfer at the designated office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Certificates of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided ( except interest shall be paid to the person in whose name this Certificate is -22- 1400565v.2 LUB200/71013 ~1 '7 i J 1] Q 0 0 I D I ] J u B J ] j ] J ] registered on the Record Date) and for all other purposes, whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the series of which it is a part is duly authorized by law; that all acts, conditions, and things to be done precedent to and in the issuance of the Certificates have been properly done and performed and have happened in regular and due time, form, and manner as required by law; that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Certificates within the limit prescribed by law; that, in addition to said taxes, further provisions have been made for the payment of the debt service requirements of the Certificates to be additionally payable from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's Waterworks System (the "System"), such lien and pledge, however, being (i) junior and subordinate to the lien on and pledge of the Net Revenues of the System securing the payment of Prior Lien Obligations (as defined in the Ordinance) currently outstanding and hereafter issued by the City and (ii) on parity with the lien on and pledge of the Net Revenues of the System securing the payment of the Previously Issued Obligations (as defined in the Ordinance) and any Additional Obligations (as defined in the Ordinance) hereafter issued; that in the Ordinance, the City reserves and retains the right to issue Prior Lien Obligations while the Certificates are outstanding without limitation as to principal amount or subject to any terms, conditions or restrictions other than as may be required by law or otherwise, as well as the right to issue Additional Obligations payable from and, together with the Certificates and the Previously Issued Obligations, equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System; and that the total indebtedness of the City, including the Certificates, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Certificate. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] -23- 1400565v.2 LUB200nl013 ; __ \ ·1 . I :] J f] L, D ~ B I ] J ~ m j ] j ] ] (b) Fonn of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Certificates if such certificate on the Initial Certificate is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS § § § REGISTER NO. __ _ I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Certificate has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Lubbock, Texas; and that this Certificate has this day been registered by me. Witness my hand and seal of office at Austin, Texas, _______ . [SEAL] Comptroller of Public Accounts of the State of Texas (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Certificate if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PA YING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Certificate of this series of Certificates was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates referred to in the within-mentioned Ordinance. Dated: 1400565v.2 LUB200/71013 The Bank of New York Trust Company, National Association as Paying Agent/Registrar By: Authorized Signatory -24- n ; ) 0 0 0 0 m B 1· J J i i ] ] ] ] ] ] (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): _____________ _ (Social Security or other identifying number: ________ the within Certificate and all rights hereunder and hereby irrevocably constitutes and appoints ________ attorney to transfer the within Certificate on the books kept for registration hereof, with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Signature Guaranteed By: Authorized Signatory (e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations: (i) immediately under the name of the Certificate the headings "INTEREST RA TE" and "MA TIJRITY DATE" shall both be completed with the expression "As shown below" and, the heading "CLOSING DATE" shall be completed with the date of delivery of the Certificates; and (ii) in the first paragraph of the Certificate, the words "on the maturity date specified above" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annmn rates set forth in the following schedule: Principal Installments Interest Rate (Information to be inserted from schedule in Section 3.2 of the Ordinance) -25- 1400565v.2 LUB200n!Ol3 0 n L. 0 i] I ] J J i J J ] ] 1 Section 6.3 CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's, A Division of the McGraw-Hill Companies, New York, New York, and may authorize the printing of such nwnbers on the face of the Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Certificates shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Certificates. Section 6.4 Legal Opinion. The approving legal opinion of Vinson & Elkins L.L.P ., Bond Counsel, may be attached to or printed on the reverse side of each Certificate over the certification of the City Secretary of the City, which may be executed in facsimile. Section 6.5 Bond Insurance. Information pertaining to bond insurance, if any, may be printed on each Certificate. ARTICLE VII SALE AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS Section 7.1 Sale of Certificates: Ap,plication. (a) The Certificates are hereby officially sold to the Purchaser for a purchase price equal to the principal amount thereof pursuant to the terms of the commitment issued by the Purchaser in connection with the sale of the Certificates. It is hereby officially found, determined and declared that the terms of this sale are the most advantageous reasonably obtainable. The Initial Certificate shall be registered in the name of the Purchaser or its designee. (b) All officers of the City are authorized to execute such documents, certificates and receipts as they may deem appropriate in order to consummate the delivery of the Certificates in accordance with the terms of sale therefor. (c) The obligation of the Purchaser identified in subsection (a) of this Section to accept delivery of the Certificates is subject to such purchaser being furnished with the final~ approving opinion of Vinson & Elkins L.L.P., bond counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 7.2 Control and Delivery of Certificates. (a) The Mayor of the City is hereby authorized to have control of the Initial Certificate and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the -26- 1400565v.2 LUB200/71013 ~ ) ~, n l] [] 0 I B I J J J ~ J J ] ] ] ] Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Certificates shall be made to the initial purchasers thereof under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. Section 7.3 Project Fund. (a) There is hereby established and created the ''City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A Project Fund" (the "Project Fund"), which shall be kept segregated and apart from other funds and accounts of the City. (b) Moneys remaining in the Project Fund upon completion of the Project shall be applied as provided in Section 14.4. Moneys on deposit in the Project Fund shall be applied solely to the payment of the costs related to the issuance of the Certificates and the costs of the Project in accordance with the applicable requirements of the Texas Water Code and the rules and regulations of the TWDB. Section 7.4 De.posit of Proceeds. Proceeds from the sale of the Certificates shall be applied to the payment of the costs of issuing the Certificates with the remainder deposited to the Escrow Fund (as defined in the Escrow Agreement) and, to the extent directed in writing by TWDB, to the Project Fund. Monies deposited to the Escrow Fund shall be applied as provided in the Escrow Agreement. Section 7 .S Approval of Escrow Agreement. The Escrow Agreement, in substantially the fonn presented at this meeting, and the terms and provisions thereof, are hereby approved, and its execution and delivery by the Mayor, are hereby authorized and approved. Section 8.1 Investments. ARTICLE VIII INVESTMENTS (a) Money in the Interest and Sinking, Escrow and Project Funds created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law, including specifically the Public Funds Investment Act, Chapter 2256, Texas Government Code. (b) Any securities or obligations in which such money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be -27- 1400565v.2 LUB200/71013 : · J :I r l timely applied to the making of all payments required to be made from the fund from which the 0 0 D I ~ I J j ~ B J J J ] j ] investment was made. Section 8.2 Investment Income. Interest and income derived from investment of the Interest and Sinking Fund and the Project Fund shall be credited to such fund. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.1 Payment of the Certificates. On or before each Interest Payment Date while any of the Certificates are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of and interest on the Certificates as will accrue or mature on the applicable Interest Payment Date or date of prior redemption. Section 9.2 Other Rq,resentations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance; the City will promptly pay or cause to be paid the principal of and interest on each Certificate on the dates and at the places and manner prescribed in such Certificate; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Certificates; all action on its part for the creation and issuance of the Certificates has been duly and effectively taken; and the Certificates in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 9.3 Provisions Concerning Federal Income Tax Exclusion. The City intends that the interest on the Certificates shall be excludable from gross income for pwposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code''), and the applicable regulations promulgated thereunder (the «Regulations"). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Certificates to be includable in the gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of Sections 9.3 through 9.9 of this Article IX; provided, however, that the City shall not be required to comply with any particular requirement of Sections 9.3 through 9.9 of this Article IX if the City has received an opinion of nationally recognized bond counsel (''Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax · purposes of interest on the Certificates or if the City has received a Counsel's Opinion to the -28- l400565v.2 LUB200/71013 !j ;7 J D [J 0 I ~ I J J ] ~ J ] ] ] j effect that compliance with some other requirement set forth in Sections 9.3 through 9.9 of this Article IX will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in Sections 9.3 through 9.9 of this Article IX. Section 9.4 No Private Use or Payment and No Private Loan Financing. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be ''private activity bonds" within the meaning of section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use of the proceeds of the Certificates, including interest or other investment income derived from Certificate proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Certificates will not be "private activity bonds" within the meaning of section 141 of the Code and the Regulations. Section 9.5 No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Certificates to be "federally guaranteed" within the meaning of section l 49(b) of the Code and the Regulations, except as pennitted by section 149(b)(3) of the Code and the Regulations. Section 9.6 Certificates Are Not Hedge Bonds. The City covenants and agrees not to take any action, or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would cause the Certificates to be ''hedge bonds" within the meaning of section 149(g) of the Code and the Regulations. Section 9.7 No-Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, the City will reasonably expect that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Certificates including interest or other investment income derived from Certificate proceeds, regulate investments of proceeds of the Certificates, and take such other and further action as may be required so that the Certificates will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations. -29- 1400565v.2 LUB200n1013 0 0 B ~ I ] J J ~ ] J Section 9.8 Arbitrage Rebate. If the City does not qualify for an exception to the requirements of Section 148( f) of the Code, the City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Certificates (within the meaning of section 148(t)(6)(B) of the Code), be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate the amount earned on the investment of the gross proceeds of the Certificates separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any Certificates of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Certificates which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Certificates or on such other dates as may be pennitted under the Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Certificates that might result in a reduction in the amowit required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. Section 9.9 Information Rg,orting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Certificates are issued, an information statement concerning the Certificates, all under and in accordance with section 149(e) of the Code and the Regulations. Section 9.10 Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of Sections 9.3 through 9.9 of this Article IX shall survive the defeasance and discharge of the Certificates. ARTICLEX DEFAULT AND REMEDIES Section 10.1 Events of Default. ] Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: ] (i) the failure to make payment of the principal of or interest on any of ] 1 the Certificates when the same becomes due and payable; or -30- 1400565v.2 LUB20M1013 ! J ~1 0 0 !] 0 I 0 I J J J Li J ~ ] ] l (ii) default in the performance or observance of any other covenant, agreement, or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of sixty (60) days after notice of such default is given by any Owner to the City. Section 10.2 Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to a trustee or trustees therefor, may proceed against the City for the pUipose of protecting and enforcing the rights of the Owners under this Ordinance by mandamus or other suit, action or special proceeding in equity or at law in any court of competent jurisdiction for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Certificates then outstanding. Section 10.3 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE XI DISCHARGE Section 11.1 Discharge. The Certificates may be defeased, discharged or refunded in any manner pennitted by applicable law. -31- 1400565v.2 LUB200/7l013 0 0 0 0 ' ~ I 0 J ~ ; J J ] ] ] J ARTICLE XII CONTINUING DISCWSURE UNDERTAKING Section 12.1 Annual Reports. (a) The City shall provide annually to each NRMSIR and to any SID, within six (6) months after the end of each fiscal year, financial information and operating data with respect to the City of the general type included in the Application, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID. The City shall provide audited financial statements for the applicable fiscal year to each NRMSIR and to any SID when and if audited financial statements become available. (b) 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 infonnation and operating data pursuant to this Section. ( c) The financial infonnation and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific referenced to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. Section 12.2 Material Event Notices. (a) 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 Certificates, if such event is material within the meaning of the federal securities laws: (i) principal and interest payment delinquencies; (ii) nonpayment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; -32- 1400S65v.2 LUB200/71013 . j ,7 0 0 0 0 0 D I 0 J ~ m J ~ ] J ] J (vi) adverse tax opinions or events affecting the tax-exempt status of the Certificates; (vii) modifications to rights of Owners; (viii) redemption calls; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Certificates; and (xi) rating changes. (b) 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 Section 12.1 of this Ordinance by the time required by such Section. Section 12.3 Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person° with respect to the Certificates within the meaning of the Rule, except that the City in any event will give notice of any redemption calls and any defeasances that cause the City to be no longer an "obligated person." (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Certificates, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE 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 ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. -33- 1400565v.2 LUB20Gnl013 7 !l 0 D D 0 I I I J J Q ~ J ] ] ] ] ] (c) No default by the City in observing or perfonning its obligations under this Article shall constitute a breach of or default under the Ordinance for pwposes of any other provisions of this Ordinance. (d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. ( e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount ( or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the outstanding Certificates consent to such amendment or (B) an entity or individual person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of th~. Owners and beneficial owners of the Certificates. If the City so amends the provisions of this Article, it shall include with any amended financial infonnation or operating data next provided in accordance with Section 12.1 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in type of financial information or operating data so provided. (f) Any filing required to be made pursuant to this Article XII may be made through the facilities of DisclosureUSA or such other central post office as may be approved in writing by the SEC for such purpose. Any such filing made through such central post office will be deemed to have been filed with each NRMSIR and SID or MSRB as if such filing had been made directly to such entity. ARTICLE XIII AMENDMENTS; A ITORNEY GENERAL MODIFICATION Section 13 .1 Amendments. This Ordinance shall constitute a contract with the Owners, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains outstanding except as permitted in this Section. The City may, without consent of or notice to any Owners~ from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or fonnal defect or omission herein. In addition, the City may, with the written consent of the Owners of the Certificates holding a majority in aggregate principal amount of the Certificates then outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Certificates, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest -34- l400565v.2 LUB20onlOl3 ,7 J 0 0 0 0 ; 0 I J J ~ I J ] ] ] ] ) thereon, or in any other way modify the tenns of payment of the principal of or interest on the Certificates, (ii) give any preference to any Certificate over any other Certificate, or (iii) reduce the aggregate principal amount of Certificates required to be held by Owners for consent to any such amendment, addition, or rescission. Section 13.2 Attorney General Modification. In order to obtain the approval of the Certificates by the Attorney General of the State of Texas, any provision of this Ordinance may be modified, altered or amended after the date of its adoption if required by the Attorney General in connection with the Attorney General's examination as to the legality of the Certificates and approval thereof in accordance with the applicable law. Such changes, if any, shall be provided to the City Secretary and the City Secretary shall insert such changes into this Ordinance as if approved on the date hereof. ARTICLEXN SPECIAL PROVISIONS RELATING TO THE TEXAS WATER DEVELOPMENT BOARD Section 14.1 Application of Article XIV. The provisions of this Article shall apply so long as the Certificates, or any of them, are owned by the TWDB. Section 14.2 Covenant to Abide with Rules. The City will abide with all applicable laws of the State of Texas and Rules of the TWDB relating to the loan of funds evidenced by the Certificates and the Project. Section 14.3 Tax Covenant. The City will not take, or omit to talce, any action which action or omission would adversely affect the excludability for federal income tax purposes of interest payable on the Certificates or on any series of bonds issued by the TWDB. Section 14.4 Final Accounting. Upon completion of the Project, the City shall render a final accounting of the cost of the Project; and, if the total cost of the Project, as finally completed, is less than originally estimated, so that the proper share of the participation of the TWDB in the Project is redu~ the City shall return to the TWDB the amount of such excess to the nearest multiple of the denomination of the Certificates, whereupon the TWDB shall cancel and return to the City a like amount of said Certificates held by the TWDB. The Certificates to be canceled and returned shall be chosen in inverse order of maturity. The remainder of such excess (an amount less than $5,000) shall be deposited into the Interest and Sinking Fund. -35- l400565v.2 LUB200/7l013 ... 1 7 n D 0 0 I ~ I J J J J ] ] ] Section 14.5 AnnuaJ Audit Re.ports. The City shall provide to the Executive Administrator of TWDB, without necessity of a written request therefor, a copy of the City's annual audit report within 180 days after the end of the City's fiscal year. Section 14.6 Maintenance and Operation-Insurance. The City hereby covenants and agrees that the System shall be maintained in good condition and operated in an efficient manner and at reasonable cost. So long as any of the Certificates are outstanding, the City agrees to maintain casualty and other insurance on the System of a kind and in an amount customarily canied by municipal corporations owning and operating similar properties. Nothing in this ordinance shall be construed as requiring the City to expend any funds which are derived from sources other than the operation of the System but nothing herein shall be construed as preventing the City from doing so. · ARTICLE XV EFFECTIVE IMMEDIATELY Section 15.1 Effective Immediately. Notwithstanding the provisions of the City Charter, this Ordinance shall become effective immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government Code. -36- l400565v.2 LUB200/71013 ri . -! PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 12th D 0 D m 0 I J J w ~ J j J ] J J day of June, 2008, at a special meeting of the City Council of the City of Lubbock, Texas. ATTEST: TOM MARTIN, Mayor REBECA GARZA, City secre ~J2 0 Q<:-c-9~ [SEAL] APPROVED AS TO CONTENT: By: '7~,q~Offi= APPROVED AS TO FORM: By: Signature Page for Order for Issuance 1400565v.2 LUB200/71013 ·1 u Q 0 0 I 0 I ] ] ~ ~ ] EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION The following infonnation is referred to in Article XII of this Ordinance. Annual Financial Statements and Operating Data The financial infonnation and operating data with respect to the City to be provided annually in accordance with such Article are as specified below: · l. The audited financial statements of the City for the most recently concluded fiscal year. 2. Statistical and financial data with respect to the City of the general type included in the main text of the Application. Accounting Principles The accounting principles referred to in such Article are the accounting principles described in the notes to the financial statements referred to in Paragraph 1 above. A-1 140056Sv.2 LUB20Ml013 0 0 0 D D ..... J ] J .., Dallas 1406744v.l TRANSCRIPT OF PROCEEDINGS pertaining to CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A Dated: June 1, 2008 Delivered: June 26, 2008 Vinson &-Elkins ATTORNEYS AT LAW VINSON & ELKIN$ LL.P, 3700 TRAMMELL CROW CEftl'EII 2001 ROSS AVENUE DALLAS, TEXAS 75201-2975 TELEPHONE (214) 220-7700 VOICE MAil (214) 22~7999 FAX (214) 220-n16 0 0 0 l""'I ' ;....I 0 0 0 0 r l-.1 LI J • J ] J ] TABLE OF CONTENTS CITY OF LUBBOC~ TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A Document Certified Resolution Authorizing Publication of Notice of Intention to Issue Certificates Affidavits of Publication oflntent Notice and Newspaper Certification Certified Ordinance Providing for the Issuance of Certificates Paying Agent/Registrar Agreement Application to Texas Water Development Board Resolution of Texas Water Development Board General Certificate Instruction Letter to Attorney General and Comptroller Escrow Agreement Specimen Certificate Opinion of Bond Counsel Attorney General Opinion and Comptroller Registration Certificate Tax Certificate 8038-G and Evidence of Transmittal Dallas 1406700v. l Tab I 2 3 4 5 6 7 8 9 10 11 12 13 14 0 0 u .,.., l 0 0 0 D 0 0 r LJ n 0 0 j""I 0 D 0 MINUTES AND CERTIFICATION PERTAINING TO PASSAGE OF A RESOLUTION STATE OF TEXAS § COUNTY OF LUBBOCK § CITY OF LUBBOCK § On the 24th day of April, 2008, the City Council of the City of Lubbock, Texas, convened in a regular meeting at the regular meeting place thereof, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the duly constituted officers and members of the City Council, which officers and members are as follows: David A. Miller, Mayor Linda Deleon Floyd Price Todd R. Klein Phyllis S. Jones John Leonard ) ) ) ) ) Jim Gilbreath, Mayor Pro Tern Members of the Council and all of said persons were present except John Leonard thus constituting a quorum. Whereupon, among other business, a written Resolution bearing the following caption was introduced: A RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION The Resolution, a full, true and correct copy of which is attached hereto, was read and reviewed by the City Council. Thereupon, it was duly moved and seconded that the Resolution be passed and adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Resolution was passed and adopted by the following vote: AYES: NOES: ABSTENTIONS: 1411571 6 0 0 0 0 D ,., L! D 0 0 0 D n ....... r u 0 r LJ r w 0 D D n t MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the attached and following copy of said Resolution is hereby certified to be a true and correct copy of an official copy thereof on file among the official records of the City, all on this the IM- day of June, 2008. City Se etary City of Lubbock, Texas [SEAL] 1411571 -2- 0 0 D [ 0 D r L 0 0 0 0 r tJ n 0 Resol"tion No. 2008-R0139 A RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION WHEREAS, the City of Lubbock, Texas (the '"City"), pursuant to Subchapter C, Chapter 271, Texas Local Government Code, as amended, is authorized to issue its certificates of obligation (the "Certificates") for the purpose of paying contractual obligations to be incurred for the purposes set forth in Exhibit A hereto; and WHEREAS, the City Council of the City has found and detennined that a notice of intention to issue certificates of obligation should be published in accordance with the requirements of applicable law; NOW, TIIEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF lHE CITY OF LUBBOCK, TEXAS, THAT: Section 1. The findings and determinations set forth in the preambles hereto are hereby incorporated by reference for all purposes. Section 2. The City Secretary of the City is hereby authorized and directed to issue a notice of intention to issue the Certificates in substantially the fonn set forth in Exhibit A hereto incorporated herein by reference for all purposes. The notice as set forth in Exhibit A shall be published once a week for two consecutive weeks, the date of the first publication being not less than the day before the (30th) day prior to the date set forth in the notice for passage of the ordinance authorizing the Certificates. Such notice shall be published in a newspaper of general circulation in the area of the City of Lubbock, Texas. Section 3. This resolution shall take effect from and after the date of its passage. 1388513v.1 LUB200/l C 0 D D 0 r LJ r, LI r, w 0 0 r- LJ D 0 0 D r u 0 ADOPTED THIS 24th day of April, 2008, by the City Council of the City of Lubbock, Texas. CITY OF LUBBOCK., 1EXAS L ATTEST: -2• 13885l3v. l Ll/B200/l 0 D r L 0 D D 0 D D 0 w C Q 0 n Resolution No. 2008-R0139 Exhibit A NOTICE OF INTENTION TO ISSUE CITY OF LUBBOCK, TEXAS COMBINATION TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that on June 12, 2008, the City Council of the City of Lubbock, Texas, at 7:30 a.m. at a regular meeting of the City Council to be held in the City Council Chambers at the Municipal Complex, 1625 13th Street, Lubbock, Texas, the regular meeting place of the City Council, intends to pass an ordinance authorizing the issuance of not to exceed $22,615,000 principal amount of certificates of obligation for the purpose of paying contractual obligations to be incurred for the following pwposes, to wit: (i) acquisition of land, easements and rights-of way, and planning, design and engineering services, as well as special engineering services that include supporting environmental investigations, surveying and geotechnical studies, all in connection with the planning, design and construction of a raw water transmission line, pump station and water treatment plant improvements to enable Lake Alan Henry to serve as a water supply for the City (the "Project") and (ii) payment of professional services of attorneys, financial advisors and other professionals in connection with the Project and the issuance of the Certificates. The Certificates shall bear interest at a rate not to exceed fifteen percent (15%) per annum and shall have a maximum maturity date of not later than forty ( 40) years after their date. Said Certificates shall be payable from the levy of a direct and continuing ad valorem tax, levied within the limits prescribed by law, against all taxable property within the City sufficient to pay the interest on this series of Certificates as due and to provide for the payment of the principal thereof as the same matures, as authorized by Subchapter C, Chapter 271, Texas Local Government Code, as amended, and from the surplus net revenues of the City's Waterworks System. THIS NOTICE is given in accordance with law and as directed by the City Council of the City of Lubbock, Texas on April 24, 2008. A-1 1388513v.l LUB200/l D D D D O· 0 D D 0 r u 0 D 0 AFFIDAVIT OF NEWSPAPER THE STATE OF TEXAS § § COUNTY OF LUBBOCK § BEFORE ME, the undersigned authority, on this day personally appeared the person whose name is subscribed below, who, being by me first duly sworn, upon oath deposed and said: 1. That this affiant is a duly authorized officer or employee of Lubbock Avalanche Journal, which is a newspaper of general circulation in the City of Lubbock, Lubbock County, Texas. 2. That said newspaper is a "newspaper" as defined by Section 2051.044, Texas Government Code, and as such: (1) (2) (3) (4) devotes not less than 25 percent of its total column lineage to general interest items; is published at least once each week; is entered as second-class postal matter in the county where published; and has been published regularly and continuously for at least 12 months prior to publishing the notice referenced below. Authorized Officer or Employee SWORN TO AND SUBSCRJBED BEFORE ME, this the ~o:)!=-n_ci---=~~~~ ~ e LYNDA WEEMS Notary Public, State of Texas My Commission Expires 02-20-2008 llm:DD1n:m= . .-.: ... c,,r_:---;,,n·o;.-,~-:v.~ xm::rrdl [NOTARY SEAL] Dallas 1306399v .I ~'.$TATE OF TEXAS J©UNTY OF LUBBOCK ::-.>. .t: ~forti me Alan C. Weems ....., ...... ... d~y personally appeared Inez Lo ez ----------------i! ~rpor.ation, publishers of the Lubbock Avalanche•Journal -Morning, r did''diSpose and say that said newspaper has run continuously form infi8ftk>n of this L al Notice ,::;.·... ..;;;.;;;.&.;;.;.;...;;~.;;.;.;;...;:;_ ___________ -Ii: ,.... ______ No. printed copy of the ..... ' McK AVALANCHE-JOURNAL rii~#communication Corporation .. ,.~ .... •·. r Cbfpt;j; . ... ... .. · Siib~fibed and sworn to before me this ,-, -~"\ .. EdAMsa-10 D ..... l r Lubbock County, Texas on this e Southwestern Newspaper g by me duly sworn s prior to the first ' unty, Texas and the attached and was printed in the Lub ock .07 IC in and for the State of Texas sn12011 ALAN C WEEMS Nntary Public, State of Texas My Commission Expires Moy 07, 2011 .Z..)_etTATE OF TEXAS L ~TY OF LUBBOCK I Jh t-~~ me Alan C. Weems If personally appeared Inez Lo ez --'--'..;...;;;.-;..L-.;...... ________ ~t.c. ~poration, publishers of the Lubbock Avalanche-Journal -Morni ' r j .· dispose and say that said newspaper has run continuously f o ~ 11 ,sertron of this Le al Notice ;t, ., ';~'tr· .. ('""'\-----No. _ inted copy of the Le al Notice ~1<ti J·~,, ,,_..,. 'BtJe Sales Manager -CK AVALANCHE-JOURNAL f''• .--l )~ m~communication Corporation ~rp6~ .. , .... :·· -Jbsbfibed and sworn to before me this ~; rt', ... 0 D [ lRM 58-10 ,:,..,.. for Lubbock County, Texas on this , : · ' f the Southwestern Newspaper .- being by me duly sworn County, Texas and the attached ~·inat and was printed in the Lubbock .o UBLIC in and tor the State of Texas sn12011 ALAN C WEEMS otary Public, State of Texas My Commission Expires May 07, 201 J 0 0 D D LI • D LI w r L u MINUTES AND CERTIFICATION PERTAINING TO PAS SAGE OF AN ORDINANCE STATE OF TEXAS § COUNTY OF LUBBOCK § CITY OF LUBBOCK § On the 12th day of June, 2008, the City Council of the City of Lubbock, Texas, convened in a regular meeting at the regular meeting place thereof, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the duly constituted officers and members of the City Council, which officers and members are as follows: Tom Martin, Mayor Jim Gilbreath, Mayor Pro Tern Linda DeLeon Floyd Price Todd R. Klein Phyllis S. Jones John W. Leonard, III ) ) ) ) ) Members of the Council and all of said persons were present except H.A. thus constituting a quorum. Whereupon, among other business, a written Ordinance bearing the following caption was introduced: AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008A; APPROVING A PA YING AGENT/REGISTRAR AGREEMENT; PRESCRIBING THE FORM OF SAID CERTIFICATES LEVYING A TAX AND PLEDGING SURPLUS WATERWORKS SYSTEM REVENUES IN PAYMENT THEREOF AND ENACTING OTHER PROVISIONS RELATING THERETO The Ordinance, a full, true and correct copy of which is attached hereto, was read and reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be passed and adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Ordinance was passed and adopted by the following vote: AYES: NOES: ABSTENTIONS: Dallas 1406322v. l 7 0 0 0 D C D r L r LJ D D rr I LJ 0 D 0 D Li D n D MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the attached and following copy of said Ordinance is hereby certified to be a true and correct copy of an official copy thereof on file among the official records of the City, all on this the 12th day of June, 2008. City ecretary City of Lubbock, Texas [SEAL] Minutes and Certification of Order Authorizing Issuance D r w 0 0 L, r LJ r, D r- IJ 0 0 0 r lJ l.J LJ D Ordinance No. 2008--00058 ORDINANCE relating to $22,615,000 CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A Adopted: June 12, 2008 1400565v.2 LUB200/71013 [1 "--1 0 0 .1 r-i l.J 0 n l r-1 ;J - ..., ] ] ] J TABLE OF CONTENTS ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MA TIERS Section 1.1 Definitions ............................................................................................................... 1 Section 1.2 Findings ................................................................................................................... 5 Section 1.3 Table of Contents, Titles, and Headings ................................................................. 5 Section 1.4 lnterpretati on. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . . . . . . . .. . . . . . .. . .. . . . . . . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE II SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND; PRIOR LIEN, PREVIOUSLY ISSUED AND ADDITIONAL OBLIGATIONS Section 2.1 Payment of the Certificates ..................................................................................... 6 Section 2.2 Interest and Sinking Fund. . ..................................................................................... 7 Section 2.3 Deposits to Interest and Sinking Fund .................................................................... 8 Section 2.4 Issuance of Prior Lien and Additional Obligations ................................................. 8 Section 2.5 Certificates Subordinate to Prior Lien Obligations, Covenants and Agreements ... 8 Section 2.6 Pledge of Revenues ................................................................................................. 9 Section 2.7 S ystern Fund ............................................................................................................ 9 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5 Section 3.6 Section 3.7 Section 3.8 Section 3.9 Section 3 .10 Section 3 .11 Section 3 .12 Authorization ......................................................................................................... 10 Date, Denomination, Maturities, and Interest. ...................................................... 10 Medium, Method, and Place of Payment. ............................................................. 11 Execution and Registration of Certificates ............................................................ 12 Ownership ............................................................................................................. 13 Registration, Transfer, and Exchange ................................................................... 13 Cancellation ........................................................................................................... 14 Temporary Certificates .......................................................................................... 14 Replacerrient Certificates ....................................................................................... 14 Book-Entry-Only System ...................................................................................... 15 Successor Securities Depository; Transfer Outside Book-Entry-Only System .... 16 Payinents to Cede & Co ........................................................................................ 17 ARTICLE IV REDEMPTION OF CERTIFICATES BEFORE MATURITY 1400565v.2 LUB200nI013 0 D 0 u 0 r l.J 0 0 0 0 ,,, .J l 1 Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6 Section 4.7 Section 4.8 Section 5.1 Section 5.2 Section 5.3 Section 5.4 Section 5.5 Section 5.6 Section 5.7 Section 6.1 Section 6.2 Section 6.3 Section 6.4 Section 6.5 Redemption ........................................................................................................... 1 7 Optional Redemption ............................................................................................ 1 7 No Mandatory Sinking Fund Redemption ............................................................ 17 Partial Redemption ................................................................................................ 17 Notice of Redemption to Owners .......................................................................... 18 Payment Upon Redemption .................................................................................. 18 Effect of Redemption ............................................................................................ 18 Lapse of Payment. ................................................................................................. 19 ARTlCLEV PA YlNG AGENT/REGlSTRAR Appointment of lnitial Paying Agent/Registrar .................................................... 19 Qualifications ........................................................................................................ 19 Maintaining Paying Agent/Registrar ..................................................................... 19 Termination. . .. .. . . .. . . .. . . .. . . .. . . .... ... . . .. . . .. . . ... . ... . . .. . . .. . . .. . . .. . . .. . . .. . . .. . .. . . . . . .. . .. . . .. .... .. . .. . .. . . 19 Notice of Change to Owners ................................................................................. 19 Agreement to Perform Duties and Functions ........................................................ 20 Delivery of Records to Successor ......................................................................... 20 ARTICLE VI FORM OF THE CERTIFICATES Form Generally ..................................................................................................... 20 Form of the Certificates ......................................................................................... 20 CUSIP Registration ............................................................................................... 26 Legal Opinion ........................................................................................................ 26 Bond Insurance ...................................................................................................... 26 ARTICLE VII SALE AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS Section 7.1 Section 7.2 Section 7.3 Section 7.4 Section 7.5 Section 8.1 Section 8.2 Sale of Certificates; Application ........................................................................... 26 Control and Delivery of Certificates ..................................................................... 26 Project Fund .......................................................................................................... 27 Deposit of Proceeds ............................................................................................... 27 Approval of Escrow Agreetnent ............................................................................ 27 ARTICLE VIII lNVESTMENTS Investinents ............................................................................................................ 27 Investinent Income ................................................................................................ 28 !400565v.2 LUB200nIOB Q D 0 r , u 0 0 0 0 r LI 0 LJ D :...:, ] ] Section 9.1 Section 9.2 Section 9.3 Section 9.4 Section 9.5 Section 9.6 Section 9.7 Section 9.8 Section 9.9 Section 9.10 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Payinent of the Certificates ................................................................................... 28 Other Representations and Covenants ................................................................... 28 Provisions Concerning Federal Income Tax Exclusion ........................................ 28 No Private Use or Payinent and No Private Loan Financing ................................ 29 No Federal Guaranty ............................................................................................. 29 Certificates Are Not Hedge Bonds ........................................................................ 29 No-Arbitrage Covenant. ........................................................................................ 29 Arbitrage Rebate ................................................................................................... 3 0 Information Reporting ........................................................................................... 3 0 Continuing Obligation ........................................................................................... 30 ARTICLEX DEFAULT AND REMEDIES Section 10.1 Events of Default. .................................................................................................. 30 Section 10.2 Remedies for Default. ........................................................................................... 31 Section 10. 3 Remedies Not Exclusive ....................................................................................... 31 ARTICLE XI DISCHARGE Section 11.1 Discharge ............................................................................................................... 31 ARTICLE XII CONTINUING DISCLOSURE UNDERTAKING Section 12 .1 Annual Reports ...................................................................................................... 3 2 Section 12.2 Material Event Notices .......................................................................................... 3 2 Section 12.3 Limitations, Disclaimers and Amendments .......................................................... 33 ARTICLE XIII AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 13 .1 Amendments .......................................................................................................... 34 Section 13.2 Attorney General Modification ............................................................................. 35 ARTICLE XIV SPECIAL PROVISIONS RELATING TO THE TEXAS WATER DEVELOPMENT BOARD 1400565v.2 LUB200nt0l3 r lJ r w ,..., w 0 0 0 0 rJ LI 0 n 0 r w r .!.J D 0 0 0 ,..... LJ Section 14.1 Application of Article XIV ................................................................................... 35 Section 14.2 Covenant to Abide with Rules .............................................................................. 35 Section 14.3 Tax Covenant. ....................................................................................................... 35 Section 14.4 Final AccoW1ting ................................................................................................... 35 Section 14.5 Annual Audit Reports ............................................................................................ 36 Section 14.6 Maintenance and Operation -Insurance ............................................................... 36 ARTICLE XV EFFECTIVE IMMEDIATELY Section 15.1 Effective Immediately ........................................................................................... 36 Exhibit A -Description of Annual Disclosure of Financial Infonnation .................................... A-1 1400565v.2 LUB2O0ntO13 J r LJ r L 0 r LI 0 r w r Lr a 0 D (1 L, 0 D 0 w n [ AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOC~ TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008A; APPROVING A PA YING AGENT/REGISTRAR AGREEMENT; PRESCRIBING THE FORM OF SAID CERTIFICATES; LEVYING A TAX AND PLEDGING SURPLUS WATERWORKS SYSTEM REVENUES IN PAYMENT THEREOF AND ENACTING OTHER PROVISIONS RELATING THERETO WHEREAS, under the provisions of Subchapter C, Chapter 271, Texas Local Government Code, as amended, the City of Lubbock, Texas (the "City"), after giving proper notice, is authorized to issue and sell for cash its certificates of obligation (herein defined as the "Certificates") that are secured by and payable from the ad valorem taxes and other revenues specified in Article II of this Ordinance, and that are issued in the amount, for the purposes, and with the provisions set forth in Section 3 .1 of this Ordinance; WHEREAS, pursuant to a resolution heretofore passed by the City Council, notice of intention to issue the Certificates was published in a newspaper of general circulation in the City in accordance with applicable law; WHEREAS, no petition has been filed with the City Secretary, any member of the City Council or any other official of the City, protesting the issuance of the Certificates; WHEREAS, the City Council is now authorized and empowered to proceed with the issuance and sale of the Certificates, and has found and determined that it is necessary and in the best interests of the City and its citizens that it issue the Certificates in accordance with the terms and provisions of this Ordinance; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place, and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MA TIERS Section 1.1 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: "Additional Obligations" means tax and revenue obligations hereafter issued which by their terms are payable from ad valorem taxes and additionally payable from and secured by a parity lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien and pledge securing the payment of the Previously Issued Obligations and the Certificates. 1400565v.2 LUB200/71013 0 0 0 0 0 0 • 0 0 0 0 0 ,., ] J - ..JJ ] ] "Application" means the Application filed with the Texas Water Development Board requesting financial assistance for the purposes set forth therein. "Certificate" means any of the Certificates. "Certificate Date" means the date designated as the initial date of the Certificates by Section 3.2(a) of this Ordinance. "Certificates" means the certificates of obligation authorized to be issued by Section 3 .1 of this Ordinance and designated as "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A." "City" means the City of Lubbock, Texas. "Closing Date" means the date of the initial delivery of and payment for the Certificates. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings, and court decisions. "Collection Date" means, when reference is being made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes assessed each year by the City become delinquent under applicable law. "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named in this Ordinance, the Designated Payment/Transfer Office as designated in the Paying Agent/Registrar Agreement, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "OTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Escrow Agent" means Texas Treasury Safekeeping Trust Co., its successors and assigns. "Escrow Agreement" means that certain Escrow Agreement, between the City and the Escrow Agent, dated as of June 15, 2008, pertaining to the deposit of the proceeds of the Certificates. "Event of Default" means any event of default as defined in Section 10.1 of this Ordinance. "Fiscal Year" means such fiscal year as shall from time to time be set by the City Council. -2- 1400565v.2 LUB200nI013 r; I u ,- L r u 0 n • ...... ..J .., . ..,. J ] ..., I "Gross Revenues" means, with respect to any period, all income, revenues and receipts received from the operation and ownership of the System. "Initial Certificate" means the initial certificate authorized by Section 3.4 of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 2.2 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Certificates is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being February 15 and August 15 of each year, commencing August 15, 2008. "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. ''Net Revenues" means the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. "Operating and Maintenance Expenses" means all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, including, but not limited to, the costs of insurance, the purchase and carrying of stores, materials, and supplies, the payment of salaries and labor, and other expends reasonably and properly charged, under generally accepted accounting principles, to the operation and maintenance of the System or by statute deemed to be a first lien against the Gross Revenues. Depreciation charges on equipment, machinery, plants and other facilities comprising the System and expenditures classed under generally accepted accounting principles as capital expenditures shall not be considered as "Operating and Maintenance Expenses" for purposes of detennining ''Net Revenues." "Owner" means the person who is the registered owner of a Certificate or Certificates, as shown in the Register. "Outstanding" means when used in this Ordinance with respect to Certificates, Previously Issued Obligations or any Additional Obligations, as the case may be, as of the date of determination, all Obligations and any Additional Obligations theretofore sold, issued and delivered by the City, except: (1) Certificates, Previously Issued Obligations or any Additional Obligations· cancelled or delivered to the Paying Agent/Registrar for cancellation in connection with the exchange or transfer of such obligations; (2) 1400565v.2 LUB200/71013 Certificates, Previously Issued Obligations or any Additional Obligations paid or deemed to be paid in accordance with the provisions of Article XI hereof; and -3- r. G 0 r LJ ,-, L 0 0 n LI 0 J J (3) Certificates, Previously Issued Obligations or any Additional Obligations that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Paying Agent/Registrar" means initially The Bank of New York Trust Company, National Association, or any successor thereto as provided in this Ordinance. "Previously Issued Obligations" means the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 2005, dated July 1, 2005, issued in the aggregate principal amount of $43,080,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2004, dated September 15, 2004, issued in the original principal amount of $3,100,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2003, dated July 15, 2003, issued in the original principal amount of $9,765,000; the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2002, dated February 15, 2002, issued in the original principal amount of $6,450,000; the outstanding City of Lubboc~ Texas, Tax and Watezworks System Surplus Revenue Certificates of Obligation, Series 1999, dated September 15, 1999, issued in the original principal amount of $24,800,000; and the outstanding City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 1999, dated April 1, 1999, issued in the original principal amount of $12,300,000. "Prior Lien Obligations" means all bonds or other similar obligations of the City presently outstanding or that may be hereafter issued, payable in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such lien and pledge securing the payment thereof is prior and superior in claim, rank and dignity to the lien on and pledge of the Net Revenues securing the payment of the Previously Issued Obligations and the Certificates. "Project" means the purposes for which the Certificates are issued as set forth in Section 3.1. "Project Fund" means the fund created pursuant to Section 7.3. "Purchaser" means the Texas Water Development Board. ] "Record Date" means the last business day of the month next preceding an Interest ] ] ] J Payment Date. "Register" means the Register specified in Section 3.6(a) of this Ordinance. "Representations Letter'' means the Blanket Letter of Representations between the City andDTC. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. -4- 1400565v .2 LUB200/71 013 D 0 u 0 0 LI 0 0 0 0 .J 7 J l J "SID" means any person designated by the State of Texas or an authorized department, office or agency thereof, as and detennined by the SEC or its staff to be a state information depository within the meaning of the Rule from time to time. "Similarly Secured Obligations" means collectively the Certificates, the Previously Issued Obligations, and any Additional Obligations. "System" means the City's Waterworks System being all properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment, transmission and distribution of treated, potable water, together with all future extensions, improvements, replacements and additions thereto. "TWDB" means the Texas Water Development Board. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of or interest on the Certificates as the same come due and payable and remaining unclaimed by the Owners of such Certificates after the applicable payment or redemption date. Section 1.2 Findings. The declarations, determinations, and findings declared, made, and found in the preamble to this Ordinance are hereby adopted, restate, and made a part of the operative provisions hereof. Section 1.3 Table of Contents, Titles, and Headings. The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.4 Intemretation . (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordinance and all the tenns and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. -5- 1400565v.2 LUB200/71013 D 0 0 0 0 ,.., L.J 0 0 n LJ 0 L J ...l l ARTICLE II SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND; PRIOR LIEN, PREVIOUSLY ISSUED AND ADDITIONAL OBLIGATIONS Section 2.1 Payment of the Certificates. (a) Pursuant to the authority granted by the Texas Constitution and laws of the State of Texas, there shall be levied and there is hereby levied for the current year and for each succeeding year thereafter while any of the Certificates or any interest thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Certificates, being (i) the interest on the Certificates, and (ii) a sinking fund for their redemption at maturity or a sinking fund of two percent per annum (whichever amount is the greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law, and the money thus collected shall be deposited as collected to the Interest and Sinking Fund. ( c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Certificates whe11, and as due and payable in accordance with their tenns and this Ordinance. (d) The amount of taxes to be assessed and provided annually for the payment of principal of and interest on the Certificates shall be detennined and accomplished in the following manner. Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying and assessing ad valorem taxes each year, the City Council shall determine: (i) The amount on deposit in the Interest and Sinking Fund after (x) deducting therefrom the total amount of debt service requirements to become due on Certificates prior to the next Collection Date for the ad valorem taxes to be assessed, and (y) adding thereto the amount of Net Revenues of the System appropriated and allocated thereto to pay such debt service requirements prior to the next Collection Date; (ii) The amount of Net Revenues, if any, appropriated and to be set aside for the payment of the debt service requirements on the Certificates between the Collection Date for the taxes then to be assessed and the Collection Date for the taxes to be assessed during the next succeeding calendar year; and (iii) The amount of debt service requirements to become due and payable on the Certificates between the Collection Date for the taxes then to be assessed and the Collection Date for the taxes to be assessed during the next succeeding calendar year. -6- 1400565v.2 LUB200nl013 r LI u 0 0 0 r LJ 0 ,-, L r l. J D w r L D 0 0 0 0 The amount of taxes to be assessed and collected annually each year to pay the debt service requirements on the Certificates shall be the amount established in paragraph (iii) above less the sum total of the amounts established in paragraphs (i) and (ii), after talcing into consideration delinquencies and costs of collecting such annual taxes. ( e) The City hereby covenants and agrees that it will at all times maintain rates and charges for the services of the System sufficient to provide for the payment of all costs of operation and maintenance of the System plus an amount equal to the annual debt service requirements of all obligations payable from the revenues of the System for which the City is budgeting repayment of such obligations; provided, however, if the City elects to determine the tax rate to be assessed for each Fiscal Year based on the amount of Net Revenues budgeted, appropriated and allocated to be available pursuant to subparagraph (d) of this Section, the City shall maintain rates and charges for the services of the System sufficient in conjunction with other legally available funds to provide for payment of all costs of operation and maintenance of the System plus an amount equal to 1.10 times the annual debt service requirements of all obligations payable from the revenues of the System for which the City is budgeting the repayment of such obligations, or the City shall provide documentation which evidences the levy and collection of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds except water system rates and charges, sufficient for the repayment of water system debt service requirements. (f) The City hereby covenants and agrees that, during such time as the Certificates are outstanding and prior to the time taxes are levied each year, it will establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient Net Revenues or the proceeds of ad valorem taxes or any other legally available funds on hand at the time of adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund. (g) If the liens and provisions of this Ordinance shall be released in a manner permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the- aggregate principal amount of outstanding Certificates, there shall be subtracted the amount of any Certificates that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. Section 2.2 Interest and Sinking Fund. ( a) The City hereby establishes a special fund or account to be designated the "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, Interest and Sinking Fund" (the "Interest and Sinking Fund"), said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Certificates when and as due and payable in accordance with their terms and this Ordinance. -7- 1400565v.2 LUB200/710!3 C C r L, D 0 0 0 0 n LI 0 0 '7 u J --, Section 2.3 Deposits to Interest and Sinking Fund. The City hereby covenants and agrees to cause to be deposited in the Interest and Sinking Fund prior to each interest and principal payment date from the Net Revenues of the System, after deduction of all payments required to be made to special funds or accounts created for the payment and security of the Prior Lien Obligations, an amount equal to one hundred percent (100%) of the amount required to fully pay the accrued interest and principal of the Certificates then due and payable by reason of maturity or redemption prior to maturity, such deposits to pay accrued interest and principal on the Certificates to be made in substantially equal monthly installments. The monthly deposits to the Interest and Sinking Fund, as hereinabove provided, shall be made until such time as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorem taxes levied, collected and deposited in the Interest and Sinking Fund for and on behalf of the Certificates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Interest and Sinking Fund from the Net Revenues of the System. Section 2.4 Issuance of Prior Lien and Additional Obligations. (a) The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount or subject to any tenns, conditions, or restrictions other than as may be required by law or otherwise. (b) The City hereby expressly reserves the right to issue Additional Obligations, without limitation or any restriction or condition being applicable to their issuance under the tenns of this Ordinance, payable from and, together with the other Similarly Secured Obligations, equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System. Section 2.5 Certificates Subordinate to Prior Lien Obligations. Covenants and Agreements. It is the intention of the City Council and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in ordinances authorizing the issuance of Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders or owners of the Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract with respect to the pledge of revenues herein made for the payment and security of the Certificates. -8- 1400565v.2 LUB200171013 0 D u n LJ 0 0 0 0 ,.., - ,..., .. ] ] J Section 2.6 Pledge of Revenues. The City hereby covenants and agrees that, subject only to a prior lien on and pledge of the Net Revenues of the System for the payment and security of Prior Lien Obligations, the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Interest and Sinking Fund as hereafter provided, are hereby pledged, equally and. ratably, to the payment of the principal of, redemption premium, if any, and interest on the Certificates and the other Similarly Secured Obligations as herein provided, and the pledge of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the tenns and provisions hereof and be valid and binding in accordance with the terms hereof without any filing or recording thereof ( except in the official records of the City), physical delivery of such Net Revenues or further act by the City. Section 2.7 System Fund. The City hereby reaffirms its covenant and agreement made in connection with the issuance of the Previously Issued Obligations that all Gross Revenues ( excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited from day to day as collected into an "City of Lubbock, Texas, Waterworks System Operating Fund" (the "System Fund") which Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited into the System Fund shall be pledged and appropriated to the extent required for the following purposes and in the order of priority shown, to wit: First: To the payment of all necessary and reasonable Operation and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues; Second: To the payment of the amounts required to be deposited in the special funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the tenns and provisions of the ordinances authorizing the issuance of Prior Lien Obligations; and Third: Equally and ratably to the payment of the amounts required to be deposited in the special funds and accounts created and established for the payment of Similarly Secured Obligations. Any Net Revenues remammg in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law, provided that, as required by the TWDB, if annual debt service on the Certificates in a particular Fiscal Year will not be paid from funds on deposit in the Interest and Sinking Fund plus ad valorem taxes (as permitted by Section 2.1 hereof), but instead will be paid in whole or in part from appropriated Net Revenues (as pennitted by Section 2.1 hereof), the City shall not transfer Net -9- 1400565v.2 LUB200/71013 0 0 0 0 0 0 C n LJ • 0 0 ,.., Revenues except as provided above in this Section 2.7 until an amount equal to the annual debt service requirements on the Certificates for the then-current Fiscal Year have been deposited to the Interest and Sinking Fund. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3.1 Authorization. The City's certificates of obligation to be designated "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A" (the "Certificates"), are hereby authorized to be issued and delivered in accordance with the· Constitution and laws of the State of Texas, specifically Subchapter C, Chapter 271, Texas Local Government Code, as amended, and Article VIII of the City's Home-Rule Charter. The Certificates shall be issued in the aggregate principal amount of $22,615,000 for the purpose of paying contractual obligations to be incurred for the following pwposes, to wit: (i) acquisition of land, easements and rights-of way, and planning, design and engineering services, as well as special engineering services that include supporting environmental investigations, surveying and geotechnical studies, all in connection with the planning, design and construction of a raw water transmission line, pump station and water treatment plant improvements to enable Lake Alan Henry to serve as a water supply for the City (the "Project") and (ii) payment of professional services of attorneys, financial advisors and other professionals in connection with the Project and the issuance of the Certificates. Section 3 .2 Date. Denomination, Maturities, and Interest. (a) The Certificates shall be dated June 15, 2008. The Certificates shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Certificate, which shall be numbered T-1. u (b) The Certificates shall mature on February 15 in the years and in the principal ....., L.J J ] J ] amounts set forth in the following schedule: Principal Interest Year Amount Rate 2009 $ 975,000 0.423% 2010 980,000 0.623% 2011 985,000 0.933% 2012 995,000 1.153% 2013 1,005,000 1.303% 2014 1,020,000 1.433% 2015 1,035,000 1.583% 2016 1,050,000 1.733% 1400565v.2 LUB200/71013 Principal Interest Year Amount Rate 2019 $1,110,000 2.133% 2020 1,135,000 2.367% 2021 1,160,000 2.489% 2022 1,190,000 2.573% 2023 1,220,000 2.649% 2024 1,250,000 2.710% 2025 1,285,000 2.759% 2026 1,320,000 2.797% -10- r LJ D 0 0 0 0 0 0 r u r LI lJ n w 0 J 2017 2018 1,065,000 1,090,000 1.883% 2.013% 2027 2028 1,360,000 1,385,000 2.832% 2.877% (c) Interest shall accrue and be paid on each Certificate respectively until its maturity or prior redemption, from the later of the Closing Date or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the schedule contained in subsection (b) above. Such interest shall be payable on each Interest Payment Date until maturity or prior redemption. Interest on the Certificates shall be calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each. Section 3.3 Medium, Method, and Place of Payment. (a) The principal of and interest on the Certificates shall be paid in lawful money of the United States of America. (b) Interest on the Certificates shall be payable to the Owners as shown in the Register at the close of business on the Record Date. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent United States mail, first class postage prepaid, by the Paying Agent/Registrar to each Owner, at the address thereof as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, that the Owner shall bear all risk and expense of such alternative banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. ( d) The principal of each Certificate shall be paid to the Owner thereof on the due date, whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Certificate at the Designated Payment/fransfer Office of the Paying Agent/Registrar. (e) Notwithstanding the preceding Subsections (c) and (d), so long as TWDB is the owner of the Certificates, payments of interest on and principal of the Certificates shall be made by wire transfer at no cost to TWDB. (f) If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all pwposes. be deemed to have been made on the due date thereof as specified in Section 3.2 of this Ordinance. (g) Unclaimed Payments shall be segregated in a special escrow account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of the Certificates -11- 140056Sv.2 LUB200nl013 D 0 r u r w 0 D 0 r u 0 D u n J J J to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code, Unclaimed Payments remaining wiclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment on the Certificates thereafter coming due; to the extent any such moneys remain three years after the retirement of all outstanding Certificates, such moneys shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other person shall be liable or responsible to any Owners of such Certificates for any further payment of such wiclaimed moneys or on account of any such Certificates, subject to Title 6 of the Texas Property Code. Section 3.4 Execution and Registration of Certificates. (a) The Certificates shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Certificates ceases to be such officer before the authentication of such Certificates or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance W1less and W1til there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Certificates: In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Certificate delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Certificate has been duly approved by the Attorney General of the State of Texas, that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State of Texas. ( d) On the Closing Date, one Initial Certificate representing the entire principal amoW1t of all Certificates, payable in stated installments to the initial purchaser, or its designee, executed by the Mayor and City Secretary of the City by their manual or facsimile signatures, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the initial purchaser or its designee. Upon payment for the Initial Certificate, the Paying Agent/Registrar shall cancel the Initial Certificate and deliver a single registered, definitive Certificate for each maturity, in the aggregate principal amoW1t thereof, to OTC on behalf of the purchaser. -12- 1400565v.2 LUB200nI013 C 0 D 0 D 0 w 0 u u ,.., tJ -, ,J J J Section 3 .5 Ownership. (a) The City, the Paying Agent/Registrar, and any other person may treat the person in whose name any Certificate is registered as the absolute owner of such Certificate for the purpose of making and receiving payment as herein provided ( except interest shall be paid to the person in whose name such Certificate is registered on the Record Date), and for all other pmposes, whether or not such Certificate is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Certificate shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to the extent of the sums paid. Section 3.6 Registration, Transfer. and Exchange. (a) So long as any Certificates remain outstanding. the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register'') in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Certificates in accordance with this Ordinance. (b) The ownership of a Certificate may be transferred only upon the presentation and surrender of the Certificate at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Certificate shall be effective until entered in the Register. (c) The Certificates shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/fransfer Office of the Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and in a denomination or denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to the unpaid principal amount of the Certificates presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Certificates exchanged for other Certificates in accordance with this Section. ( d) Each exchange Certificate delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such exchange Certificate is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Certificates. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, or exchange of a Certificate. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Certificate called for redemption, in whole or in part, where such redemption is scheduled to occur within forty-five (45) calendar days after the transfer or -13- 1400565v.2 LUB200/71013 0 D C r LJ D 0 D 0 r u r LJ J J J exchange date; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Certificate. Section 3.7 Cancellation. All Certificates paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records made regarding such payment, redemption, exchange, or replacement. The Paying Agent/Registrar shall then return such cancelled Certificates to the City or may in accordance with law destroy such cancelled Certificates and periodically furnish the City with certificates of destruction of such Certificates. Section 3.8 Temporary Certificates. (a) Following the delivery and registration of the Initial Certificate and pending the preparation of definitive Certificates, the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Certificates that are printed, lithographed, typewritten, mimeographed, or otherwise produced, in any denomination, substantially of the tenor of the definitive Certificates in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions, and other variations as the officers of the City executing such temporary Certificates may determine, as evidenced by their signing of such temporary Certificates. (b) Until exchanged for Certificates in definitive form, such Certificates in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Certificates in definitive form; thereupon, upon the presentation and surrender of the Certificate or Certificates in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a Certificate or Certificates of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Certificate or Certificates in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.9 Replacement Certificates. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Certificate to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Certificate is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser~ -14- 1400565v.2 LUB200nl013 u 0 C D 0 n LI 0 0 0 0 r u '7 u r J l J shall authenticate and deliver a replacement Certificate of like tenor and principal amount, lbearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circwnstances of the loss, destruction, or theft of such Certificate; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City hannless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. ( c) If, after the delivery of such replacement Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the City or the Paying Agent/Registrar in connection therewith. ( d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Certificate has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Certificate, may pay such Certificate when it becomes due and payable. (e) Each replacement Certificate delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieq of which such replacement Certificate is delivered. Section 3.10 Book-Entry-Only System. (a) Notwithstanding any other provision hereof, upon initial issuance of the Certificates, the Certificates shall be registered in the name of Cede & Co., as nominee of OTC. The definitive Certificates shall be initially issued in the form of a single separate certificate for each of the maturities thereof. (b) With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Certificates. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the -15- 1400565v.2 LUB200/71013 0 D 0 D D C ,.., L u J 7 J records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC Participant or any other person, other than ari Owner, as shown on the Register, of any notice with respect to the Certificates, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner, as shown in the Register of any amount with respect to principal of or interest on the Certificates. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate is registered in the Register as the absolute owner of such Certificate for the purpose of payment of principal of and interest on Certificates, for the purpose of giving notices of redemption and other matters with respect to such Certificate, for the purpose of registering transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Certificates only to or upon the order of the respective Owners as shown in the Register, as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of interest on the Certificates to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that OTC bas determined to substitute a new nominee in place of Cede & Co., the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (c) The Representations Letter previously executed and delivered by the City, and applicable to the City's obligations delivered in book-entry-only form to OTC as securities depository, is hereby ratified and approved for the Certificates. Section 3.11 Successor Securities Depository: Transfer Outside Book-Entry-Only System. In the event that the City determines that it is in the best interest of the City and the beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the event DTC discontinues the services described herein, the City shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Certificates to such successor securities depository; or (ii) notify OTC and OTC Participants of the availability through DTC of certificated Certificates and cause the Paying Agent/Registrar to transfer one or more separate registered Certificates to OTC Participants having Certificates credited to their DTC accounts; provided, however, that neither the City nor the Paying Agent/Registrar shall discharge DTC without the prior written consent of TWDB. In such event, the Certificates shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. -16- 1400565v.2 LUB200nI013 n u 0 0 0 0 D D D r 0 r ,..... 0 Section 3.12 Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as the Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Certificates, and all notices with respect to such Certificates shall be made and given, respectively, in the manner provided in the Representations Letter of the City to DTC. ARTICLE IV REDEMPTION OF CERTIFICATES BEFORE MATURITY Section 4.1 Redemption. The Certificates are subject to redemption before their scheduled maturity only as provided in this Article IV. Section 4.2 Optional Redemption. ( a) The City reserves the option to redeem Certificates maturing on and after February 15, 2019 in whole or any part, before their respective scheduled maturity dates, on August 15, 2018 or on any date thereafter, such redemption date or dates to be fixed by the City, at a price equal to the principal amount of the Certificates called for redemption plus accrued interest to the date fixed for redemption. (b) If less than all of the Certificates are to be redeemed pursuant to an optional redemption, the Certificates shall be redeemed in inverse order of maturity. If less than all of the Certificates within a maturity are to be redeemed, Certificates within such maturity shall be called by lot or other customary method that results in a random selection of the Certificates. (c) The City, at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Certificates to be redeemed. Section 4.3 No Mandatory Sinking Fund Redemption. The Certificates are not subject to scheduled mandatory redemption. Section 4.4 Partial Redemption. (a) A portion of a single Certificate of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof If such a Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Certificate as though it were a single Certificate for purposes of selection for redemption. (b) Upon surrender of any Certificate for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.6 of this Ordinance, shall authenticate and deliver -17- 1400565v.2 LUB200/71013 D 0 0 0 ,...., 7 J l an exchange Certificate or Certificates in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered, such exchange being without charge. (c) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Certificate as to which only a portion thereof is to be redeemed. Section 4.5 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Certificates by sending notice by United States mail, first class postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Certificate ( or part thereof) to be redeemed, at the address shown on the Register at the close of business on the business day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Certificates are to be surrendered for payment, and, if less than all the Certificates outstanding are to be redeemed, an identification of the Certificates or portions thereof to be redeemed. ( c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. Section 4.6 Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Certificates to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of and accrued interest on the Certificates being redeemed. (b) Upon presentation and surrender of any Certificate called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of and accrued interest on such Certificate to the date of redemption from the money set aside for such purpose. Section 4.7 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.5 of this Ordinance, the Certificates or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof or accrued interest thereon, such Certificates or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Certificates are presented and surrendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Certificate or portion thereof called for redemption shall continue to -18- 140056Sv.2 LUB200nt013 D w bear interest at the rate stated on the Certificate until due provision is made for the payment of same by the City. 0 D r L D u 0 -LI D -Li ,... J Section 4.8 Lapse of Payment. Money set aside for the redemption of Certificates and remaining unclaimed by the Owners of such Certificates shall be subject to the provisions of Section 3.3(t) hereof. ARTICLEV PA YING AGENT/REGISTRAR Section 5 .1 Appointment of Initial Paying Agent/Registrar. The Bank of New York Trust Company, National Association, is hereby appointed as the initial Paying Agent/Registrar for the Certificates. Section 5.2 Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Certificates. Section 5.3 Maintaining Paying Agent/Registrar. (a) At all times while any of the Certificates are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.2 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented at this meeting, such form of agreement being hereby approved. The signature of the Mayor shall be attested by the City Secretary of the City. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.4 Termination. The City, upon not less than sixty ( 60) days notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be tenninated written notice of such termination. Section 5.5 Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class postage prepaid, at the address thereof in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. -19- 1400565v.2 LUB200nt013 D - D D w 0 r L D r LI 0 r L D tJ D Section 5.6 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5. 7 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of the successor, will deliver the Register ( or a copy thereof) and all other pertinent books and records relating to the Certificates to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE CERTIFICATES Section 6.1 Form Generally. (a) The Certificates, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Certificates, (i) shall be substantially in the form set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance, and (ii) may have such letters, nmnbers, 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 any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Certificates, as evidenced by their execution thereof. (b) Any portion of the text of any Certificates may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Certificates. (c) The definitive Certificates, if any, shall be typewritten, photocopied, printed~ lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Certificates, as evidenced by their execution thereof. (d) The Initial Certificate submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.2 Form of the Certificates. The form of the Certificates, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially as follows: -20- 140056Sv.2 LUB200/71013 0 D D 0 0 0 D 0 r u r 0 0 D J J J ( a) F onn of Certificate. REGISTERED No. __ United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A INTEREST RA TE: MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: __ % June 15, 2008 REGISTERED $ ___ _ CUSIP NUMBER: The City of Lubbock (the "City"), in the County of Lubboc~ State of Texas, for value received, hereby promises to pay to or registered assigns, on the Maturity Date specified above, the sum of ________ DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the -21- l400565v .2 LUB20on I O 13 D r w registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding r-, such interest payment date. LI 0 0 0 0 0 0 0 0 ,-, ' L [ -, ...... J If the date for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next· succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Certificate is one of a series of fully registered certificates specified in the title hereof issued in the aggregate principal amount of $22,615,000 (herein referred to as the "Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the purpose of paying contractual obligations to be incUITed for authorized public improvements (collectively, the "Project"), as described in the Ordinance, and to pay the contractual obligations for professional services of attorneys, financial advisors and other professionals in coIU1ection with the Project and the issuance of the Certificates. The City has reserved the option to redeem the Certificates maturing on or after February 15, 2019, in whole or in part, before their respective scheduled maturity dates, on August 15, 2018, or on any date thereafter, at a price equal to the principal amount of the Certificates so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Certificates are to be redeemed pursuant to an optional redemption, the Certificates shall be redeemed in inverse order of maturity. If less than all of the Certificates within a maturity are to be redeemed, Certificates within such maturity shall be called by lot or other customary method that results in a random selection of the Certificates. Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Certificates to be redeemed in whole or in part. Notice having been so given, the Certificates or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Certificates or portions thereof so called for redemption shall not have been sUITendered for payment, interest on such Certificates or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Certificate is transferable upon sUITender of this Certificate for transfer at the designated office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Certificates of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided ( except interest shall be paid to the person in whose name this Certificate is -22- 1400565v.2 LUB200/71013 w 0 ['1 u 0 n u l.J 0 0 0 • • ...., ...J l J registered on the Record Date) and for all other purposes, whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the series of which it is a part is duly authorized by law; that all acts, conditions, and things to be done precedent to and in the issuance of the Certificates have been properly done and performed and have happened in regular and due time, fonn, and manner as required by law; that ad valorern. taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Certificates within the limit prescribed by law; that, in addition to said taxes, further provisions have been made for the payment of the debt service requirements of the Certificates to be additionally payable from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's Waterworks System (the "System"), such lien and pledge, however, being (i) junior and subordinate to the lien on and pledge of the Net Revenues of the System securing the payment of Prior Lien Obligations ( as defined in the Ordinance) currently outstanding and hereafter issued by the City and (ii) on parity· with the lien on and pledge of the Net Revenues of the System securing the payment of the Previously Issued Obligations (as defined in the Ordinance) and any Additional Obligations (as defined in the Ordinance) hereafter issued; that in the Ordinance, the City reserves and retains the right to issue Prior Lien Obligations while the Certificates are outstanding without limitation as to principal amount or subject to any tenns, conditions or restrictions other than as may be required by law or otherwise, as well as the right to issue Additional Obligations payable from and, together with the Certificates and the Previously Issued Obligations, equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System; and that the total indebtedness of the City, including the Certificates, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Certificate. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] -23- 1400565v.2 LUB200/71013 ,......., tJ 0 0 0 0 (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Certificates if such certificate on the Initial Certificate is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS OF THE ST ATE OF TEXAS § § § REGISTER NO. __ _ I hereby certify that there is on file and of record in my office a certificate of the Attorney ,-, General of the State of Texas to the effect that this Certificate has been examined by him as Li required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Lubbock, Texas; f and that this Certificate has this day been registered by me. G 0 l"7 LI 0 0 0 C 0 J Witness my hand and seal of office at Austin, Texas,---------' [SEAL] Comptroller of Public Accounts of the State of Texas (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Certificate if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PA YING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Certificate of this series of Certificates was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates referred to in the within-mentioned Ordinance. Dated: 1400565v.2 LUB200/71013 The Bank of New York Trust Company, National Association as Paying Agent/Registrar By: Authorized Signatory -24- 0 C r u 0 r u r 0 0 0 w L.J • 0 -, J --, (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): ______________ _ (Social Security or other identifying number: ________ ....., the within Certificate and all rights hereunder and hereby irrevocably constitutes and appoints _________ attorney to transfer the within Certificate on the books kept for registration hereof, with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Signature Guaranteed By: Authorized Signatory (e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations: (i) immediately under the name of the Certificate the headings .. INTEREST RATE" and "MATIJRITY DATE" shall both be completed with the expression "As shown below" and, the heading "CLOSING DATE" shall be completed with the date of delivery of the Certificates; and (ii) in the first paragraph of the Certificate, the words "on the maturity date specified above" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Principal Installments Interest Rate (Information to be inserted from schedule in Section 3.2 of the Ordinance) -25- 1400565v.2 LUB200nt013 0 r w 0 r-, ' L.l 0 0 r L, r u w 0 r u D • w • J Section 6.3 CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's, A Division of the McGraw-Hill Companies, New York, New York, and may authorize the printing of such numbers on the face of the Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Certificates shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Certificates. Section 6.4 Legal Opinion. The approving legal opinion of Vinson & Elkins L.L.P., Bond Counsel, may be attached to or printed on the reverse side of each Certificate over the certification of the City Secretary of the City, which may be executed in facsimile. Section 6.5 Bond Insurance. Infonnation pertaining to bond insurance, if any, may be printed on each Certificate. ARTICLE VII SALE AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS Section 7.1 Sale of Certificates; Application. (a) The Certificates are hereby officially sold to the Purchaser for a purchase price equal to the principal amount thereof pursuant to the terms of the commitment issued by the Purchaser in connection with the sale of the Certificates. It is hereby officially found, determined and declared that the terms of this sale are the most advantageous reasonably obtainable. The Initial Certificate shall be registered in the name of the Purchaser or its designee. (b) All officers of the City are authorized to execute such documents, certificates and receipts as they may deem appropriate in order to consummate the delivery of the Certificates in accordance with the terms of sale therefor. (c) The obligation of the Purchaser identified in subsection (a) of this Section to accept delivery of the Certificates is subject to such purchaser being furnished with the final; approving opinion of Vinson & Elkins L.L.P., bond counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 7 .2 Control and Delivery of Certificates. (a) The Mayor of the City is hereby authorized to have control of the Initial Certificate and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the -26- 1400565v.2 LUB200nI0B 0 Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. 0 (b) After registration by the Comptroller of Public Accounts, delivery of the Certificates shall be made to the initial purchasers thereof under and subject to the general r supervision and direction of the Mayor, against receipt by the City of all amounts due to the City LJ under the terms of sale. 0 0 D 0 0 0 t.J 0 r r w 0 Section 7.3 Project Fund. (a) There is hereby established and created the "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A Project Fund" (the "Project Fund"), which shall be kept segregated and apart from other funds and accounts of the City. (b) Moneys remaining in the Project Fund upon completion of the Project shall be applied as provided in Section 14.4. Moneys on deposit in the Project Fund shall be applied solely to the payment of the costs related to the issuance of the Certificates and the costs of the Project in accordance with the applicable requirements of the Texas Water Code and the rules and regulations of the TWDB. Section 7.4 Deposit of Proceeds. Proceeds from the sale of the Certificates shall be applied to the payment of the costs of issuing the Certificates with the remainder deposited to the Escrow Fund (as defined in the Escrow Agreement) and, to the extent directed in writing by TWDB, to the Project Fund. Monies deposited to the Escrow Fund shall be applied as provided in the Escrow Agreement. Section 7 .5 Approval of Escrow Agreement. The Escrow Agreement, in substantially the form presented at this meeting, and the tenns and provisions thereof, are hereby approved, and its execution and delivery by the Mayor, are hereby authorized and approved. ARTICLE VII] INVESTMENTS Section 8.1 Investments. (a) Money in the Interest and Sinking, Escrow and Project Funds created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law, including specifically the Public Funds Investment Act, Chapter 2256, Texas Government Code. (b) Any securities or obligations in which such money is so invested shall be kept and. held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be -27- 1400565v.2 LUB200nt0B 0 LJ timely applied to the making of all payments required to be made from the fund from which the investment was made. r u t..J 0 0 0 r u 0 0 ,...., LI J J 7 J Section 8.2 Investment Income. Interest and income derived from investment of the Interest and Sinking Fund and the Project Fund shall be credited to such fund. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.1 Payment of the Certificates. On or before each Interest Payment Date while any of the Certificates are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of and interest on the Certificates as will accrue or mature on the applicable Interest Payment Date or date of prior redemption. Section 9.2 Other Representations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance; the City will promptly pay or cause to be paid the principal of and interest on each Certificate on the dates and at the places and manner prescribed in such Certificate; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Certificates; all action on its part for the creation and issuance of the Certificates has been duly and effectively taken; and the Certificates in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 9.3 Provisions Concerning Federal Income Tax Exclusion. The City intends that the interest on the Certificates shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable regulations promulgated thereunder (the "Regulations"). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Certificates to be includable in the gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of Sections 9 .3 through 9.9 of this Article IX; provided, however, that the City shall not be required to comply with any particular requirement of Sections 9.3 through 9.9 of this Article IX if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion'') that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Certificates or if the City has received a Counsel's Opinion to the -28- 1400565v.2 LUB200/71013 r u effect that compliance with some other requirement set forth in Sections 9.3 through 9.9 of this Article IX will satisfy the applicable requirements of the Code, in which case compliance with r such other requirement specified in such Counsel's Opinion shall constitute compliance with the u corresponding requirement specified in Sections 9.3 through 9.9 of this Article IX. r Ls 0 0 ,.... w D r LI • ,.... ..J J ...., ..J J l Section 9.4 No Private Use or Payment and No Private Loan Financing. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be .. private activity bonds" within the meaning of section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use of the proceeds of the Certificates, including interest or other investment income derived from Certificate proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Certificates will not be ''private activity bonds" within the meaning of section 141 of the Code and the Regulations. Section 9.5 No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take . any action within its control, that, if taken or omitted, respectively, would cause the Certificates to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations. Section 9.6 Certificates Are Not Hedge Bonds. The City covenants and agrees not to take any action, or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would cause the Certificates to be "hedge bonds" within the meaning of section l 49(g) of the Code and the Regulations. Section 9.7 No-Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, the City will reasonably expect that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of section 148( a) of the Code and the Regulations. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Certificates including interest or other investment income derived from Certificate proceeds, regulate investments of proceeds of the Certificates, and take such other and further action as may be required so that the Certificates will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations . -29- l400565v.2 LUB200/71013 0 r u 0 D 0 r LI j 0 J J .J J -; J Section 9.8 Arbitrage Rebate. If the City does not qualify for an exception to the requirements of Section 148( t) of the Code, the City will take all necessary steps to comply with the requirement that certain amowits earned by the City on the investment of the "gross proceeds" of the Certificates (within the meaning of section 148(t)(6)(B) of the Code), be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate the amount earned on the investment of the gross proceeds of the Certificates separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any Certificates of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Certificates which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Certificates or on such other dates as may be permitted under the Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Certificates that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. Section 9.9 Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Certificates are issued, an information statement concerning the Certificates, all under and in accordance with section 149(e) of the Code and the Regulations. Section 9.10 Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of Sections 9.3 through 9.9 of this Article IX shall survive the defeasance and discharge of the Certificates. ARTICLEX DEF AULT AND REMEDIES Section 10.1 Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Certificates when the same becomes due and payable; or -30- l400565v.2 LUB200/71013 0 D r u r L.I 0 0 r w 0 [ C r w n l..1 J J -, (ii) default in the performance or observance of any other covenant, agreement, or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of sixty ( 60) days after notice of such default is given by any Owner to the City. Section 10.2 Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance by mandamus or other suit, action or special proceeding in equity or at law in any court of competent jurisdiction for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Certificates then outstanding. Section 10.3 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. Section 11.1 Discharge. ARTICLE XI DISCHARGE The Certificates may be defeased, discharged or refunded in any manner permitted by applicable law. -31- 1400565v.2 LUB200/71013 0 D 0 0 D D 0 D 0 D • ..., J ARTICLE XII CONTINUING DISCLOSURE UNDERTAKING Section 12.1 Annual Reports. (a) The City shall provide annually to each NRMSIR and to any SID, within six (6) months after the end of each fiscal year, financial infonnation and operating data with respect to the City of the general type included in the Application, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID. The City shall provide audited financial statements for the applicable fiscal year to each NRMSIR and to any SID when and if audited financial statements become available. (b) 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. ( c) The financial infonnation and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific referenced to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. Section 12.2 Material Event Notices. (a) 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 Certificates, if such event is material within the meaning of the federal securities laws: (i) principal and interest payment delinquencies; (ii) nonpayment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) perfonn; l400565v.2 LUB200nJ0I 3 substitution of credit or liquidity providers, or their failure to -32- D D r u LJ 0 0 n r tJ r L, 0 r w C w J (vi) adverse tax opinions or events affecting the tax-exempt status of the Certificates; (vii) modifications to rights of Owners; (viii) redemption calls; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Certificates; and (xi) rating changes. (b) 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 Section 12.1 of this Ordinance by the time required by such Section. Section 12.3 Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give notice of any redemption calls and any defeasances that cause the City to be no longer an "obligated person." (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Certificates, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any infonnation provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE 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 ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. -33- 1400565v.2 LUB200/710B D LJ D r LJ 0 r L.J r LI D J w D ,..... u ( c) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. ( e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount ( or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the outstanding Certificates consent to such amendment or (B) an entity or individual person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the. Owners and beneficial owners of the Certificates. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 12.1 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in type of financial information or operating data so provided. (f) Any filing required to be made pursuant to this Article XII may be made through the facilities of DisclosureUSA or such other central post office as may be approved in writing by the SEC for such purpose. Any such filing made through such central post office will be deemed to have been filed with each NRMSIR and SID or MSRB as if such filing had been made directly to such entity. ARTICLE XIII AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 13.1 Amendments. This Ordinance shall constitute a contract with the Owners, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains outstanding except as permitted in this Section. The City may, without consent of or notice to any Owners; from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of the Owners of the Certificates holding a majority in aggregate principal amount of the Certificates then outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Certificates, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest -34- 1400565v.2 LUB200/71013 LJ 0 0 r 0 w 0 w r L, 0 ..... thereon, or in any other way modify the tenns of payment of the principal of or interest on the Certificates, (ii) give any preference to any Certificate over any other Certificate, or (iii) reduce the aggregate principal amount of Certificates required to be held by Owners for consent to any such amendment, addition, or rescission. Section 13.2 Attorney General Modification. In order to obtain the approval of the Certificates by the Attorney General of the State of Texas, any provision of this Ordinance may be modified, altered or amended after the date of its adoption if required by the Attorney General in connection with the Attorney General's examination as to the legality of the Certificates and approval thereof in accordance with the applicable law. Such changes, if any, shall be provided to the City Secretary and the City Secretary shall insert such changes into this Ordinance as if approved on the date hereof. ARTICLE XIV SPECIAL PROVISIONS RELATING TO THE TEXAS WATER DEVELOPMENT BOARD Section 14.1 Application of Article XIV. The provisions of this Article shall apply so long as the Certificates, or any of them, are owned by the TWDB. Section 14.2 Covenant to Abide with Rules. The City will abide with all applicable laws of the State of Texas and Rules of the TWDB relating to the loan of funds evidenced by the Certificates and the Project. Section 14.3 Tax Covenant. The City will not take, or omit to take, any action which action or omission would adversely affect the excludability for federal income tax purposes of interest payable on the Certificates or on any series of bonds issued by the TWDB. Section 14.4 Final Accounting. Upon completion of the Project, the City shall render a final accounting of the cost of the Project; and, if the total cost of the Project, as finally completed, is less than originally estimated, so that the proper share of the participation of the TWDB in the Project is reduced, the City shall return to the TWDB the amount of such excess to the nearest multiple of the denomination of the Certificates, whereupon the TWDB shall cancel and return to the City a like amount of said Certificates held by the TWDB. The Certificates to be canceled and returned shall be chosen in inverse order of maturity. The remainder of such excess (an amount less than $5,000) shall be deposited into the Interest and Sinking Fund. -35- 1400565v.2 LUB200mOJ3 D r w C r LI 0 r Li 0 D u D u D 0 D LJ 0 Section 14.5 Annual Audit Reports. The City shall provide to the Executive Administrator of TWDB, without necessity of a written request therefor, a copy of the City's annual audit report within 180 days after the end of the City's fiscal year. Section 14.6 Maintenance and Operation -Insurance. The City hereby covenants and agrees that the System shall be maintained in good condition and operated in an efficient manner and at reasonable cost. So long as any of the Certificates are outstanding, the City agrees to maintain casualty and other insurance on the System of a kind and in an amount customarily carried by municipal corporations owning and operating similar properties. Nothing in this ordinance shall be construed as requiring the City to expend any funds which are derived from sources other than the operation of the System but nothing herein shall be construed as preventing the City from doing so. · ARTICLE XV EFFECTIVE IMMEDIATELY Section 15.1 Effective Immediately. Notwithstanding the provisions of the City Charter, this Ordinance shall become effective immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government Code. -36- 1400565v.2 LUB200/71013 D r u D L C ,..., u • D • 0 PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 12th day of June, 2008, at a special meeting of the City Council of the City of Lubbock, Texas. TOM MARTIN, Mayor ATTEST: REBECA GARZA, City Secre ~Oo~ <)~ [SEAL) APPROVED AS TO CONTENT: By: APPROVED AS TO FORM: By: Signature Page for Order for Issuance I400565v.2 LUB20017 IO 13 D D LI D 0 0 D C 0 0 I u D ..... j ,.... ) 7 EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION The following infonnation is referred to in Article XII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Article are as specified below: · 1. The audited financial statements of the City for the most recently concluded fiscal year. 2. Statistical and financial data with respect to the City of the general type included in the main text of the Application. Accounting Principles The accounting principles referred to in such Article are the accounting principles described in the notes to the financial statements referred to in Paragraph I above. A-1 140056Sv.2 LUB200nI013 C ,.... l.J ,....., u 0 0 0 0 r L 0 D [ 0 0 0 n LJ 0 PA YING AGENT/REGISTRAR AGREEMENT between CITY OF LUBBOCK, TEXAS and THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION Pertaining to City of Lubbock, Texas Tax and Waterworks System Surplus Revenue Certificates of Obligation Series 2008A Dated as of June 15, 2008 1406253v.l LUB200/7I014 [j 0 l -Li 0 0 D 0 0 0 0 0 0 0 D r TABLE OF CONTENTS Page ARTICLE I APPOINTMENT OF BANK AS PA YING AGENT AND REGISTRAR Section 1.01. Appointtn ent. . . . . . . . . . . . .. . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 1.02. Compensation .......................................................................................................... 1 ARTICLE II DEFINITIONS Section 2.01. Definitions ............................................................................................................... 2 Section 2.02. Other Definitions ..................................................................................................... 3 ARTICLE III PAYING AGENT Section 3.01. Duties of Paying Agent ........................................................................................... 3 Section 3.02. Payment Dates ......................................................................................................... 3 ARTICLE IV REGISTRAR Section 4.01. Transfer and Exchange ............................................................................................ 4 Section 4.02. The Certificates ....................................................................................................... 4 Section 4.03. Fonn of Register ...................................................................................................... 4 Section 4.04. List of Owners ......................................................................................................... 4 Section 4.05. Cancellation of Certificates ..................................................................................... 5 Section 4.06. Mutilated, Destroyed, Lost, or Stolen Certificates .................................................. 5 Section 4.07. Transaction Information to Issuer ........................................................................... 6 Section 5.01. Section 5.02. Section 5.03. Section 5.04. Section 5.05. Section 5.06. Section 5.07. ARTICLEV THE BANK Duties of Bank ......................................................................................................... 6 Reliance on Documents, Etc ................................................................................... 6 Recitals of Issuer ..................................................................................................... 7 May Hold Certificates ............................................................................................. 7 Money Held by Bank .............................................................................................. 7 lndeII1J1ification ....................................................................................................... 8 Interpleader .............................................................................................................. 8 (i) 1406253v.1 LUB200nt014 D c:- L D J] 0 0 0 (, ~ ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Amendment ............................................................................................................. 8 Section 6.02. Assigrunent .............................................................................................................. 8 Section 6.03. Notices ..................................................................................................................... 8 Section 6.04. Designated Payment/Transfer Office ...................................................................... 9 Section 6.05. Effect of Headings ................................................................................................... 9 Section 6.06. Successors and Assigns ........................................................................................... 9 Section 6.07. Separability .............................................................................................................. 9 Section 6.08. Benefits of Agreerrient ............................................................................................ 9 Section 6.09. Entire Agreement .................................................................................................... 9 Section 6.10. Counterparts ............................................................................................................ 9 Section 6.11. Tennination ............................................................................................................. 9 Section 6.12. Governing Law ...................................................................................................... 10 u Annex A -Schedule of Fees for Service as Paying Agent/Registrar 0 C 0 0 D 0 0 '7 w ...., (ii) \ 406253v. l LUB200/71014 r, LI r LI 0 r. 0 0 0 0 D D 0 w r L w D 0 D PA YING AGENT/REGISTRAR AGREEMENT TIIIS PAYING AGENT/REGISTRAR AGREEMENT (the or this "Agreement"), dated as of June 15, 2008, is by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION (the "Bank"), a national banking association duly organized and existing under the laws of the United States of America. WHEREAS, the Issuer has duly authorized and provided for the issuance of its Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A (the "Certificates"), dated June 15, 2008, to be issued as registered securities without coupons; WHEREAS, all things necessary to make the Certificates the valid obligations of the Issuer, in accordance with their terms, will be taken upon the issuance and delivery thereof; WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in paying the principal, redemption premium, if any, and interest on the Certificates, in accordance with the terms thereof, and that the Bank act as Registrar for the Certificates; and WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance with its terms, have been done; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE I APPOINTMENT OF BANK AS PA YING AGENT AND REGISTRAR Section 1.01. Appointment. (a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Certificates in paying to the Owners of the Certificates the principal, redemption premium, if any, and interest on all or any of the Certificates. (b) The Issuer hereby appoints the Bank as Registrar with respect to the Certificates. { c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent and Registrar. Section 1.02. Compensation. (a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A hereto for the first year of this Agreement, or such part thereof as this Agreement shall be in effect, and thereafter while this Agreement is in effect, the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. 1406253v.l LUB200n!0l4 D r, r l..J 0 0 0 0 0 r LJ 0 r w 0 D n (b) In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof, including the reasonable compensation and the expenses and disbursements of its agents and counsel. ARTICLE II DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms have the following meanings when used in this Agreement: "Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Certificate" or "Certificates" means any or all of the Issuer's Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, dated June 15, 2008. "Certificate Ordinance'' means the ordinance of the City Council of the Issuer authorizing the issuance and delivery of the Certificates. "Designated Payment/Transfer Office" means the principal corporate trust office of the Bank located in Dallas, Texas, or in such other location as designated by the Paying Agent/Registrar. The Bank will notify the Issuer in writing of any change in location of the Designated Payment/Transfer Office. "Fiscal Year" means the 12-month period ending September 30th of each year. "Issuer Request" and "Issuer Order'' means a written request or order signed in the name of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized by applicable law to be closed. "Owner" means the Person in whose name a Certificate is registered in the Register. "Paying Agent" means the Bank when it is performing the functions associated with the terms in this Agreement. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision of a government. "Predecessor Certificates" of any particular Certificate means every previous Certificate evidencing all or a portion of the same obligation as that evidenced by such particular Certificate (and, for the purposes of this definition, any Certificate registered and delivered under - 2 - 14062S3v.l LUB200/7\014 D D u r-, I w 0 D 0 0 0 0 0 D 0 0 D r w D L Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Certificate). "Record Date" means the last Business Day of the month next preceding an interest payment date established by the Certificate Ordinance. "Register" means a register in which the Issuer shall provide for the registration and transfer of Certificates. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Stated Maturity" means the date or dates specified in the Certificate Ordinance as the fixed date on which the principal of the Certificates is due and payable or the date fixed in accordance with the terms of the Certificate Ordinance for redemption of the Certificates, or any portion thereof, prior to the fixed maturity date. Section 2.02. Other Definitions. The terms "Bank" and "Issuer" have the meanings assigned to them in the opening paragraph of this Agreement. ARTICLE III PAYING AGENT Section 3.01. Duties of Paying Agent. (a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at the Stated Maturity and upon the surrender of the Certificate or Certificates so maturing at the Bank Office, the principal amount of the Certificate or Certificates then maturing, and redemption premium, if any, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payment. (b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when due on the Certificates to each Owner of the Certificates (or their Predecessor Certificates) as shown in the Register at the close of business on the Record Date, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payments; such payments shall be made by computing the amount of interest to be paid each Owner, preparing the checks, and mailing the checks on each interest payment date addressed to each Owner's address as it appears in the Register on the Record Date. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of, redemption premium, if any, and interest on the Certificates at the dates specified in the Certificate Ordinance. -3 - 1406253v.1 LUB200/71014 D 0 LJ D 0 D 0 r L ,-, w 0 r ARTICLE IV REGISTRAR Section 4.01. Transfer and Exchange. (a) The Issuer shall keep the Register at the Bank Office, and subject to such reasonable written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the registration and transfer of the Certificates. The Bank is hereby appointed "Registrar" for the purpose of registering and transferring the Certificates as herein provided. The Bank agrees to maintain the Register while it is Registrar. The Bank agrees to at all times maintain a copy of the Register at its office located in the State of Texas. (b) The Bank as Registrar hereby agrees that at any time while any Certificate is outstanding, the Owner may deliver such Certificate to the Registrar for transfer or exchange, accompanied by instructions from the Owner, or the duly authorized designee of the Owner, designating the persons, the maturities, and the principal amounts to and in which such Certificate is to be transferred and the addresses of such persons; the Registrar shall thereupon, within not more than three (3) business days, register and deliver such Certificate or Certificates as provided in such instructions. The provisions of the Certificate Ordinance shall control the procedures for transfer or exchange set forth herein to the extent such procedures are in conflict with the provisions of the Certificate Ordinance. (c) Every Certificate surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed in a manner satisfactory to the Bank, duly executed by the Owner thereof or his attorney duly authorized in writing. u ( d) The Bank may request any supporting documentation it feels necessary to effect a f7 lJ 0 • D 0 0 0 re-registration. Section 4.02. The Certificates. The Issuer shall provide an adequate inventory of unregistered Certificates to facilitate transfers. The Bank covenants that it will maintain the unregistered Certificates in safekeeping and will use reasonable care in maintaining such unregistered Certificates in safekeeping, which shall be not less than the care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. Section 4.03. Form of Register. (a) The Bank as Registrar will maintain the records of the Register in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Register in any form other than a form which the Bank has currently available and currently utilizes at the time. (b) The Register may be maintained in written fonn or in any other fonn capable of being converted into written fonn within a reasonable time. Section 4.04. List of Owners. (a) The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the cost, if any, of reproduction, a copy of the information contained in the Register. The Issuer may also inspect the information in the -4- 1406253v.l LUB200n1014 D D 0 f7 L 0 r LJ Ir I u r LJ LI 0 ,..., L, D D D 0 LJ n 0 Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Banlc to provide an up-to-date listing or to convert the information into written form. (b) The Bank will not release or disclose the content of the Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena or court order or as otherwise required by law. Upon receipt of a subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05. Cancellation of Certificates. All Certificates surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Certificates previously certified or registered and delivered which the Issuer may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly cancelled by the Bank. All cancelled Certificates held by the Banlc shall be disposed of pursuant to the Securities Exchange Act of 1934. Section 4.06. Mutilated, Destroyed, Lost, or Stolen Certificates. (a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank to deliver fully registered Certificates in exchange for or in lieu of mutilated, destroyed, lost, or stolen Certificates as long as the same does not result in an overissuance. (b) If (i) any mutilated Certificate is surrendered to the Bank, or the Issuer and the Bank receives evidence to their satisfaction of the destruction, loss, or theft of any Certificate, and (ii) there is delivered to the Issuer and the Bank such security or indemnity as may be required by the Bank to save and hold each of them hannless, then in the absence of notice to the Issuer or the Bank that such Certificate has been acquired by a bona fide purchaser, the Issuer shall execute, and upon its request the Bank shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate of the same stated maturity and of like tenor and principal amount bearing a number not contemporaneously outstanding. (c) Every new Certificate issued pursuant to this Section in lieu of any mutilated; destroyed, lost, or stolen Certificate shall constitute a replacement of the prior obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Certificate Ordinance equally and ratably with all other outstanding Certificates. (d) Upon the satisfaction of the Bank and the Issuer that a Certificate has been mutilated, destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or security as they may require, the Bank shall cancel the Certificate number on the Certificate registered with a notation in the Register that said Certificate has been mutilated, destroyed, lost, or stolen; and a new Certificate shall be issued of the same series and of like tenor and principal amount bearing a number, according to the Register, not contemporaneously outstanding. -5- !406253v.l LUB200nt014 r w D 0 D 0 r LJ 0 D LJ D 0 0 D '7 L D 0 • 0 0 (e) The Bank may charge the Owner the Bank's fees and expenses in connection with issuing a new Certificate in lieu of or exchange for a mutilated, destroyed, lost, or stolen Certificate. (f) The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or destroyed Certificates and any future substitute blanket bond for lost, stolen, or destroyed Certificates that the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the Issuer of any changes in the security or other company giving such bond or the tenns of any such bond, provided that the amount of such bond is not reduced below the amount of the bond on the date of execution of this Agreement. The blanket bond then utilized by the Bank for lost, stolen, or destroyed Certificates by the Bank is available for inspection by the Issuer on request. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Certificates it has paid pursuant to Section 3.01; Certificates it has delivered upon the transfer or exchange of any Certificates pursuant to Section 4.01; and Certificates it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Certificates pursuant to Section 4.06 of this Agreement. ARTICLEV THEBANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and in accordance with the Certificate Ordinance and agrees to use reasonable care in the performance thereof. The Bank hereby agrees to use the funds deposited with it for payment of the principal of, redemption premium, if any, and interest on the Certificates to pay the Certificates as the same shall become due and further agrees to establish and maintain all accounts and funds as may be required for the Bank to function as Paying Agent. Section 5.02. Reliance on Documents. Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, -6- 1406253v.l LUB200/71014 D r w [] r L.J 0 n tJ r LJ r L:i D D D r Li 0 r lJ D D direction, consent, order, certificate, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Certificates, but is protected in acting upon receipt of Certificates containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Owner or an attorney-in-fact of the Owner. The Bank shall not be bound to make any investigation into the facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document supplied by Issuer. ( e) The Bank 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 perfonn any duties hereunder either directly or by or through agents or attorneys of the Banlc. Section 5.03. Recitals oflssuer. (a) The recitals contained herein and in the Certificates shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. (b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any other Person for any amount due on any Certificate except as otherwise expressly provided herein with respect to the liability of the Bank for its duties under this Agreement. Section 5.04. May Hold Certificates. The Banlc, in its individual or any other capacity, may become the Owner or pledgee of Certificates and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Money Held by Bank. (a) Money held by the Bank hereunder need not be segregated from any other funds provided appropriate accounts are maintained. (b) The Bank shall be under no liability for interest on any money received by it hereunder. (c) Subject to the provisions of Title 6, Texas Property Code, any money deposited with the Bank for the payment of the principal, redemption premium, if any, or interest on any Certificate and remaining unclaimed for three years after final maturity of the Certificate has become due and payable will be paid by the Bank to the Issuer, and the Owner of such Certificate shall thereafter look only to the Issuer for payment thereof, and all liability of the Banlc with respect to such monies shall thereupon cease. (d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas Property Code. ( e) The Bank shall deposit any moneys received from the Issuer into a trust account to be held in a paying agent capacity for the payment of the Certificates, with such moneys in the account that exceed the deposit insurance, available to the Issuer, provided by the Federal -7- 1406253v.l LUB200/71014 D 0 0 0 • 0 D D D 0 • r u r l.J • 0 0 Deposit Insurance Corporation to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas and to the extent practicable under the laws of the United States of America to secure and be pledged as collateral for trust accounts until the principal and interest on the Certificates have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Certificates shall, at its own expense and risk, request such other medium of payment. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank, its officers, directors, employees, and agents for, and hold them harmless against, any loss, liability, or expense incurred without negligence or bad faith on their part arising out of or in connection with its acceptance or administration of the Bank's duties hereunder, and under Article V of the Certificate Ordinance, including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may·seek adjudication of any adverse claim, demands or controversy over its persons as well as funds on deposit in a court of competent jurisdiction within the State of Texas; waive personal service of any process; and agree that service of process by certified or registered mail, return receipt requested, to the address set forth in this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction within the State of Texas to determine the rights of any person claiming any interest herein. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 6.02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown below: (a) if to the Issuer: (b) if to the Bank: 1406253v.l LUB200/71014 City of Lubbock, Texas 1625 13th Street Lubbock, Texas 79457 Attention: Director of Fiscal Policy and Strategic Planning The Bank of New York Trust Company, National Association -8 - D u 0 D 0 D r LJ r L C 0 0 0 D D D 0 0 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Attention: Issuer Administrative Services Section 6.04. Designated Payment/Transfer Office. The Designated Payment/Transfer Office shall be the office of the Bank as set forth below: The Bank of New York Trust Company, National Association 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Attention: Securities Delivery Section 6.05. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof Section 6.06. Successors and Assigns. All covenants and agreements herein by the Issuer shall hind its successors and assigns, whether so expressed or not. Section 6.07. Separability. If any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.08. 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 6.09. Entire Agreement. This Agreement and the Certificate Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar, and if any conflict exists between this Agreement and the Certificate Ordinance, the Certificate Ordinance shall govern. Section 6.10. 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 6.11. Termination. (a) This Agreement will terminate on the date of final payment by the Bank issuing its checks for the final payment of principal, redemption premium, if any, and interest of the Certificates. (b) This Agreement may be earlier terminated upon sixty (60) days written notice by either party; provided, that, no tennination shall be effective until a successor has been appointed by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty ( 60) days after the giving of notice of resignation. -9- 1406253v.1 LUB200/71014 0 LJ (c) The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. ,.., u Section 6.12. Governing Law. This Agreement shall be construed in accordance with r LJ 0 D r L u 0 r w n L r u D D 0 0 and governed by the laws of the State of Texas. -10- 1406253v.1 LUB200/71014 0 u • D IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY OF LUBBOCK, TEXAS By: Tom Martin, Mayor D ATTEST: r LJ D LI r- L 0 0 0 l 0 Signature Page for Paying Agent/Registrar Agreement D • • •. D D 0 Li 0 D D D D 0 D COMPANY, THE BANK OF NEW YORK TRUST NATIONAL ASSOCIATION By: __ A~u ______;;._~;_____- Title: _Ass __ ist_an--'t-'-Vi=1ce=--:..:Pres=id...,.ent="------ Signature Page for Paying Agent/Registrar Agreement D r u D n w 0 0 0 D ,-. L, D D r lJ ANNEX "A" SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT/REGISTRAR Annex.A D 0 ~· THE BANK OF NEW YORK MELLON City of Lubbock. Texalii Tax and Waterworks System Surplus Rnenue Certificates of Obligation, Series 2008 Acceptance Fee: Waived A one-time charge covering the Bank Officer's review of governing documents, communication with members of the closing party, including representatives of the issuer, investment banker(s) and attomey(s), establishment of procedures and controls, set-up of trust accounts and tickler suspense items and the receipt and disbursement/investment of bond proceeds. This fee is payable on the closing date. Annual Paying Agent Administration Fee: $500 An annual charge covering the normal paying agent duties related to account administration and bondholder services. This fee is payable annually, in advance, on the closing date and each anniversary thereafter. Extraordinary Services / Miscellaneous Fees: By Appraisal The charges for performing extraordinary or other services not contemplated at the time of the execution of the transaction or not specifically covered elsewhere in this schedule will be determined by appraisal in amounts commensurate with the service to be provided. If it is contemplated that the Trustee hold and/or value collateral or enter into any investment contract, forward purchase or similar or other agreement, additional acceptance, administration and counsel review fees will be applicable to the agreement governing such services. If the bonds are converted to certificated form, additional annual fees will be charged for any applicable tender agent and/or registrar/paying agent services. Additional information will be provided at such time. Should this transaction terminate prior to closing, all out-of-pocket expenses incurred, including legal fees, will be billed at cost. If all outstanding bonds of a series are defeased or called in full prior to their maturity, a termination fee may be assessed at that time. Miscellaneous fees may include, but are not necessarily limited to the following, if applicable: UCC filing fees, money market sweep fees, auditor confirmation fees, wire transfer fees, transaction fees to settle third-party trades and reconcilement fees to balance trust account balances to third-party investment provider statements. Annual fees include one standard audit confirmation per year without charge. Standard audit confirmations include the final maturity date, principal paid, principal outstanding, interest cycle, interest paid, cash and asset information, interest rate, and asset statement information. Non-standard audit confirmation requests may be assessed an additional fee. Periodic tenders, sinking fund, optional or extraordinary call redemptions will be assessed an additional charge of $300 per event. Terms and Disclosures Terms of Proposal Final acceptance of the appointment under the Indenture is subject to approval of authorized officers of BNY and full review and execution of all documentation related hereto. Please note that if this transaction does not close, you will be responsible for paying any expenses incurred, including counsel fees. We reserve the right to terminate this offer if we do not enter into final written documents within three months from the date this docwnent is first transmitted to you. Fees may be subject to adjustment during the life of the engagement. Customer Notice Required by the USA Patriot Act To help the US government fight the funding of terrorism and money laundering activities, US Federal law requires all financial institutions to obtain, verify, and record information that identifies each person (whether an individual or organization) for which a relationship is established. What this means to you: When you establish a relationship with BNY, we will ask you to provide certain infonnation (and documents) that will help us to identify you. We will ask for your organization's name, physical address, tax identification or other government registration number and other information that will help us to identify you. We may also ask for a Certificate of Incorporation or similar document or other pertinent identifying documentation for your type of organization. 0 0 r-1 L.J r L 0 0 0 D r ~ J 0 0 r, L 0 0 ,...., J J December 26, 2007 JeffWalker Team Lead/Financial Applications Texas Water Development Board 1700 North Congress P.O. Box 13231 Austin, Texas 78711-3231 Dear Mr. Walker: With this cover letter I am submitting an application for financial assistance for water supply infrastructure as we discussed in our pre--application meeting on December 7, 2007. We appreciate the opportunity to meet with you and to discuss the alternative ways the Texas Water Development Board can assist with water infrastructure needs. We believe we have included all of the items required in the application booklet. If we have missed something, please let us know and we will respond promptly and provide the information or documentation that is necessary to complete the application. The City of Lubbock has an urgent need for additional water supplies at this time. The Llano Estacado Regional Plan (Region 0) does not project a water supply need until about 2020, but recent conditions have accelerated the need for additional water supply. With Lake Meredith setting new records for low levels, the Canadian River Municipal Water Authority (CRMWA) has lowered the allocation used in the Regional Plan. The Plan shows 29,000 to 30,000 acre-feet of water being available from Lake Meredith for CRMW A member cities in the Lubbock County area (City of Lubbock is the primary recipient, but the City of Slaton also receives some of this allocation). For the City of Lubbock alone, the 2008 allocation from Lake Meredith will be 11,117 acre feet. CRMW A's increased usage of groundwater from Roberts County will help make up for r Ll 0 LJ t7 r w 0 ......, l.1 0 0 0 0 0 0 0 C LJ some of the reduction in supply from Lake Meredith, but it will still leave the City with a drop in total CRMWA supplyoflO,000to 14,000 acre-feet of the planned supply. This drop in allocation represents 25% to 33% of the City's total water supply needs. The City's only other water supply, the groundwater from the Bailey County well field, must be conserved in order to prolong the useful life of the well field. Even the state is encouraging the groundwater conservation districts to adopt conservation standards. If the City targets a conservation usage rate of 8,000 to 10,000 acre feet annually from its 80,000+ acres of groundwater rights, then the well field may last 30 to 50 years. If the City does not conserve this water supply, modeling for the Ogallala Aquifer in Baily County indicates that sustainable production of groundwater could begin to drop within a five year period. The City must do its part to conserve this precious water source. With these two factors in mind, the City of Lubbock cannot wait until 2020 to begin using Lake Alan Henry as a water supply. The City is at capacity now. Our City Council has asked the Water Utility to move forward expeditiously and complete engineering design in 2008 so that construction can begin in 2009. With this aggressive schedule, the Lake Alan Henry infrastructure should be complete by 2012. The infrastructure necessary to begin using the Lake Alan Henry water includes water transmission pipelines, pump stations, water treatment facility, and related improvements. Conservation efforts on the part of the City and its citizens has helped, but our use is at capaci_ty . The City recognizes that this is an expensive project, and that there is not enough state funding to completely assist Lubbock in one round. We would appreciate consideration of immediate assistance with the engineering design phase of the project which needs to move forward at this time. The City will plan on requesting consideration for assistance with project construction funding in subsequent funding cycles. The basic and special engineering services for this $243,472,000 construction project are estimated to be $27,226,000. The City of Lubbock also assists a number of rural communities and school districts with water supplies. These include Buffalo Springs, Ransom Canyon, Shallowater, and Lubbock Cooper Independent School District. In addition, negotiations are underway to help Roosevelt Independent School District, Wolfforth, Wilson, and the White River Municipal Water District (The White River Municipal Water District includes the cities of Crosbyton, Post, Ralls, and Spur). The City of Lubbock also treats water for the CRMWA member cities of Brownfield, Lamesa, Levelland, O'Donnell, Slaton, and Tahoka. While the City of Lubbock alone will back the repayment of the project financing, the City is active in helping with the water supply needs of other area communities. We again appreciate your assistance and consideration of this important project for the South Plains region. It is both a vital and an urgent need for the City of Lubbock now and in the future. If you have any questions, please call me at 806-775-2015, or call Aubrey Spear at 806-775-2585. n I..J LI 0 r-, LJ 0 lJ -, I L> 0 0 0 0 0 0 0 n 0 Sincerely, Thomas L. Adams Deputy City Manager/Water Utility Director D 0 n 0 0 0 0 n L 0 0 D 0 0 0 0 D n r I LJ City of Lubboc~ Texas Water Utility Department Texas Water Development Board Financial Assistance Application for Water Supply December 26, 2007 Table of Content Section Detail A. WRD...006 -General Information 1. Legal Name and Authority 2. Official Representative 3. Principal Officers 4. Project Engineer, Bond Council, Legal Counsel, and Financial Advisor 5. Comprehensive Project Description 6. Participating Political Subdivisions (not applicable) 7. Itemized Project Cost Estimate B. WRD-006 -Fiscal Information 1. Legal Name and Description of the Security 2. Depository Trust Company Language Acknowledgement 3. Issues Impacting Project or Debt Repayment 4. Prior Default on Debt (not applicable) 5. Outstanding Debt 6. G.O. and Revenue Debt per capita 7. Direct and Overlapping tax rate 8. Assessed Valuation Per Capita 9. Five Year Sales Tax Collection History 10. Pro Forma for Water System Revenues 11. Top ten (10) customers 12. Fiv~ Year System Operating Statements 13. Schedule of Current and Proposed Rates 14. Preceding Five Year Historical Data 15. Current Top Ten Taxpayers 16. Maximum Tax Permitted by Law ) 17. Annual Audit (Separate Document) (oos\-o--tf-o....J.-. .. .R. 18. Bond Insurance 19. Pr~Design Funding Option 20. Other Credit Enhancement 21. Current Outstanding Bond Ratings 0 C 0 0 0 0 ,- L r lJ 0 0 0 - ] l l C. D. E. F. G. WRD-006 -Community Information I. Median Household income (MHI) 2. Unemployment rate 3. Percentage of Area Below Poverty Level 4. Median Age 5. Largest Employers WRD-006 -Legal Information 1. Resolution Requesting Financial Assistance 2. Official Representative Affidavit (~l,)0...:lto,,\t.- 3. Water Supply Agreements (not applicable) 4. Consultant Services Contracts c..~O.:.l.J.,\..lil-' Ufln 5. Subordinate Lien (not applicable) 6. Certificate of Convenience and Necessity 7. Specific Legal Authority Engineering Information LO,.JJ (U \ a.<..:.lo-vE>..--~...-..r+-) 1. Cover Letter 2. WRD-253d -Water Project Data 3. Preliminary Engineering Executive Summary 4. Preliminary Engineering Report: Lake Alan Henry Water Transmission Line, Pump Stations, Water Treatment Facility and Related Projects (separate document, one copy) Environmental Information (..o.,.,~\.~ v.fl:Y'-~~-#-) 1. Environmental Infonnation -Preliminary Engineering Report 2. Agency Letters Water Conservation Plan C ~ \.oYL of"' "'b~) 1. Letter from the Texas Commission on Environmental Quality. 2. Water Conservation Plan 0 0 r t_; D 0 0 0 0 0 D .. ,..., J J J 7 ) J City of Lubboc~ Texas Water Utility Department TWDB Financial Assistance Application General Information (WRD-006) December 17, 2007 A. General Information 1. City Name and Authority a. Corporate Name: City of Lubbock b. The City of Lubbock was first incorporated as a municipality on March 16, 1909. The City is a home rule municipal coipOration as provided under authority of Article XI, Section 5 ( commonly called the home rule amendment) and by home rule charter adopted by election of December 27, 191 7. Article II, Section 10 of the City Charter provides that the City has the power to, among other tirings, own or construct, within or without the city limits, water systems. Additionally, Section 402.017 of the Local Government Code provides similar authority. Please note that Section 402.017 will be renumbered to Section 552.017 of the Local Government Code, effective April 1, 2009. 2. Official Representative Thomas L. Adams Deputy City Manager and Water Utility Director P .0. Box 2000 Lubbock, TX 79457 Phone-806-775-2015 Fax-806-775-2051 Cell Phone -806-577-3498 Email Address -tadams@mylubbock.us 3. Names and Titles of Principal Officers a Mayor -David A. Miller b. Council Members (1) Linda DeLeon (2) Floyd Price (3) Todd Klein (4) Phyllis Jones (5) John W. Leonard III 1 C w LJ - 0 0 0 D r L 0 w 0 r w r u r £.J r L 0 n 0 ( 6) Jim Gilbreath c. City Manager -Lee Ann Dumbauld d. City Attorney -Anita Burgess e. City Secretary -Becky Garza f. Assistant Water Utility Director -Aubrey Spear (806-775-2585) 4. Contact Information a. Financial Advisor: Matthew Boles Managing Director RBC Dain Rauscher Inc. Cityplace, Suite 2500 2711 N. Haskell Avenue Dallas, Texas 75204 Phone: 214-989-1672 Email: Matt.Boles@rbccm.com b. Project Engineer: John Kelley, P.E. Vice President Parkhill, Smith and Cooper 4222 85th Street Lubbock, Texas 79423 Phone:806-473-2200 Email: ikelley@TEAM-PSC.com c. Legal Counsel: Anita Burgess City Attorney P.O. Box 2000 Lubbock, TX 79457 (806) 775-2222 Email: ABurgess@mail.ci.lubbock.tx.us d. Bond Counsel: Jennifer Webster Taffe Attorney 2 ri LJ [] 0 n LJ 0 0 0 r J 0 ,.., .J ) ..... J l j Vinson & Elkins, L.L.P 3 700 Trammell Crow Center 2001 Ross A venue Dallas, Texas 75201 214-220-7941 Email: jtaffe@velaw.com 5. Comprehensive Description of the Project: Lake Alan Henry Water Transmission Line, Pump Stations, Water Treatment Facility and Related Improvements Project The Montford Dam was completed in October of 1993 and Lake Alan Henry began to fill with water. The project site is located approximately 60 miles southeast of the City of Lubbock and is located primarily in Garza County, Texas. The City of Lubbock is the owner of Permit No. 4146A (Application No. 4155A) for the imponndment of 115,937 feet of water in Lake Alan Henry on the South Fork of the Double Mountain Fork of the Brazos River. The permit authorizes up to 35,000 acre-feet of water diversion from Lake Alan Herny per annum with a 2007 estimated firm yield of 19,500 acre-feet. The next step in the project is to develop the water transmission lines, pump stations, water treatment plant, and related improvements to bring the water supply from Lake Alan Henry to the City of Lubbock for treatment, distribution, and use as part of the City's water supply system. The project proposes to construct a pipeline that can deliver up to 36 MGD from Lake Alan Henry to the City of Lubbock. Initial pump station and water treatment capacity is planned at 10 MGD with plan and design capacity to increase up to 36 MGD. The project system also anticipates the development of the Post Reservoir for future water supplies in about 25 to 30 years. Permit negotiations, applications and amendments are planned or pending related to this project. The pipeline and pump station system is planned to deliver an additional 11 MGD from Post to Lubbock. The City of Lubbock currently uses about 35,000 to 44,000 acre feet of water annually. The City participates with the Canadian River Municipal Water Authority for about 75% of its water supply, and the Authority has been decreasing water allocations due to low water levels in Lake Meredith. The City's only other water supply is the Ogallala Aquifer with a well field in Bailey County. This well field continues to decline, and even with significant conservation, it may only last 30 to 40 years. Without conservation, actual water production from the well field would begin to decrease with.in 5 years. 3 D 0 0 D 0 0 0 r ._J 'j J 7 J -, I J With existing supplies being limited, the City is at capacity. With that in mind, the City plans call for the completion of the project by 2012. Engineering services would be performed in 2008 and 2009, with construction taking place in 2009 through 2011 in order to accomplish this goal. 6. Participating Political Subdivisions: The City of Lubbock is will have responsibility for ownership and financial obligations. No federal or state agencies are involved. The City does provide water to a number of political subdivisions as customers of the City of Lubbock, and as such, the City sells small quantities of water to these entities, but they will not have an ownership interest in or a financial obligation for the project. They will only assist by making payments for water used like other customers. The political subdivisions who are water customers include: the City of Ransom Canyon, the City of Shallowater, the City of Littlefield ( emergency basis only), the City of New Deal (water delivery only since the supply originates from the City of Slaton), Lubbock Cooper Independent School District, and Lubbock County Water Control & Improvement District I (Buffalo Springs). The City of Lubbock has pending negotiations with the City of Wilson, The City of Wolfforth, White River Municipal Water District (the cities of Post, Spur, Crosbyton and Dickens), and Roosevelt Independent School District. The City of Lubbock is working with these entities on various water delivery projects that are not part of this project or assistance application. 7. Itemized Project Cost Estimate The itemized project cost estimate has been printed separately from this portion of the application materials. 4 :-:-J i._l :: "1 C I C"7 c:J r ) C -J c:::> C-J CJ :::..J CJ C 1 CJ City of Lubbock CJ Cl C-_] Project Item Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (Describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Engineering Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&M Manual Corrosion Control Subtotal Special Fees Land, Easements, ROW Contingency TOTAL PROJECT COSTS Project Total Costs Request Total $0 $0 $0 $0 $108,357,000 $23,725,000 $0 $19,049,000 $15,628,000 $4,572,000 $171,331,000 $2,241,000 $2,241,000 $13,309,000 $13,309,000 $5,642,000 $21,192,000 $0 $500,000 $500,000 $0 $3,966,000 $500,000 $500,000 $346,000 $204,000 $204,000 $293,000 $225,000 $6,034,000 $3,750,000 $3,750,000 $0 $39,415,000 $2,000,000 $241,722,000 $22,504,000 Lake Alan Henry Infrastructure Project January 29, 2008 Funds Needed -Milestone Dates Design, Pl@oloq Phase Mar1,2008 Jun 1, 2008 Oct 1, 2008 $0 $0 $0 $641,000 $250,000 $1,350,000 $3,264,000 $1,677,000 $8,368,000 $3,905,000 $1,927,000 $9,718,000 $500,000 $500,000 $204,000 $1,204,000 $0 $0 $3,750,000 $1,000,000 $1,000,000 $9 859.000 $2.927.000 $9,718,000 Construction Phase Feb 1, 2009 Jan 1, 2010 Apr 1, 2010 $83,717,000 $24,640,000 $23,725,000 $19,049,000 $15,628,000 $4,572,000 $34,677,000 $112,014,000 $24,640,000 1351000 $3,578,000 $713,000 $1,351,000 $3,578,000 $713,000 $1,326,000 $2,340,000 $300,000 $146,000 $166,000 $34,000 $238,000 $50,000 $5,000 $25,000 $166,000 $34,000 $1,735,000 $2,722,000 $373,000 $8,669,000 $23,818,000 $4,928,000 $46.432 000 $142,132,000 $30,654,000 L-.JI-JI-Jt-Jl-...jL.-JL-.:JL-1 L-J C,.J CJ CJ Construction Schedule Survey/Permits/Land Acquisition Water Treatment Plant Design Treated Water Pipeline Design Raw Water Pipeline Design Water Treatment Plant Construction Raw Water Pipeline Construction Treated Water Pipeline Construction Start Dates March 1, 2008 March 1, 2008 June 1, 2008 October 1, 2008 February 1, 2009 January 1, 2010 April 1, 2010 J l =._.1 1 I CJ C--:J 0 0 0 0 0 0 0 n C 0 0 0 r w 0 0 [ ,.... City of Lubbock Lake Alan Henry Water Supply Project City of Lubbock, Texas Water Utility Department LAKE ALAN HENRY ESTIMATED PROJECT BUDGET Texas Water Development Fund (lWDF) (Costs of Proposed Project and Sources of Funds) December 19, 2007 ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Tenninal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing GeotechnicaJ O&MManual Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other ( describe) Subtotal Issuance Costs Land, Easements, or Row Contingency TOTAL PROJECT COSTS TWOF OTHER FUNDS Total Project TOTAL FUNDS $ 108,357,000 $ 23 725000 $ 19,049,000 $ 15,628,000 $ 4,572,000 $ 171,331,000 $ 2,241,000 $ 13,309,000 $ 5,642,000 $ 21,192,000 $ 500,000 $ 3,966,000 $ 500,000 $ 346,000 $ 204,000 $ 293,000 $ 225,000 $ 6,034,000 $ 5,000,000 2.soo,000 I 31,41s,ooo 1 I $ 243,412.000 I 0 r u C n 0 0 n l 0 C r l.J r L 0 0 n City of Lubbock Lake Alan Henry Water Supply Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&M Manual Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other (describe) Subtotal Issuance Costs Land,Easements,orRow Con11ngency TOTAL PROJECT COSTS TWDF OTHER FUNDS Water Treatment TOTAL FUNDS $ 19,049,000 $ 19,049,000 $ 575,000 $ 2,092,000 $ 882,000 $ 3,549,000 $ 50,000 $ 726,000 $ 25,000 $ 96,000 $ 54,000 $ 228.000 $ 25,000 $ 1,204,000 $ 560,000 I s a02.ooo I 4,1s2,ooo I I$ 2e.sos.ooo I C 0 0 0 0 1 -, ..., ....J J J l l ' City of Lubbock Lake Alan Henry Water Supply Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&M Manual Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other (describe) Subtotal Issuance Costs Land, Easements, or Row Contingency TOTAL PROJECT COSTS TWDF OTHER FUNDS Transmission line TOTAL FUNDS $ 108,357,000 $ 108,357,000 $ 1,100,000 $ 7,374,800 $ 3,136,200 $ 11,611,000 $ 350,000 $ 1,320,000 $ 375,000 $ 150,000 $ 100,000 $ 20,000 $ 150,000 $ 2,465,000 $ 3,150,000 I $ 1,1sa,ooo I Is 21.s12.ooo I I s 14e,023.ooo I 0 0 ri u 0 n J ...., .J J J ] J ] ..J l J City of Lubbock Lake Alan Henry Water Suppy Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&M Manual Corrosion Control Subtotal Speclal Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other (describe) Subtotal Issuance Costs Land, Easements, or Row Contingency TOTAL PROJECT COSTS TWDF OTHER FUNDS Pump Stations TOTAL FUNDS $ 23,725,000 $ 4,572,000 $ 28,297,000 $ 500,000 $ 2,670,000 $ 1,155,000 $ 4,325,000 $ 50,000 $ 1,320,000 $ 50,000 $ 50,000 $ 25,000 $ 35,000 $ 50,000 $ 1,580,000 $ 830,000 I $ so.ooo I I s 1,014,000 r I $ 42. 1s6,ooo I 0 0 n 0 D ...J l J J .... J J J ..J ] .... City of Lubbock Lake Alan Henry Water Supply Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&MManual Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other (describe) Subtotal Issuance Costs Land,Easements,orRow Contingency TOTAL PROJECT COSTS TWDF OTHER FUNDS Terminal Storage Reservoir TOTAL FUNDS $ 15,628,000 $ 15,628,000 $ 66,000 $ 1,172,000 $ 469,000 $ 1,707.000 $ 50,000 $ 600,000 $ 50,000 $ 50,000 $ 25,000 $ 10,000 $ - $ 785,000 $ 460,000 I $ aoo,ooo I I s a,901.000 I I $ 22.1a1,ooo I 0 0 0 u r, ....., J 0 • ~ _, J -, J J J 7 J -, City of Lubbock Lake Alan Henry Water Supply Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan lnspectlon Surveying Testing Geotechnical O&MManual Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other (describe) Subtotal Issuance Costs Land, Easements, or Row Contingency TOTAL PROJECT COSTS TWDF OTHER FUNDS $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 's !$ Is Transmission line Lake Alan Henry to Post TOTAL FUNDS 32,719,000 32,719,000 332,000 2,227,000 947,000 3,506,000 106,000 " 399,000 113,000 45,000 30,000 6,000 45,000 744,000 951,000 sa1,ooo I e,544,ooo I 4s,os1.ooo I 0 LJ r LJ 0 n J ....., _J -, ...J -J J J City of Lubbock Lake Alan Henry Water Supply Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&MManuaJ Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other ( describe) Subtotal Issuance Costs Land, Easements, or Row Contingency TOTAL PROJECT COSTS TWDF OTHER FUNDS Transmission Line Post to Water Treatment Plant TOTAL FUNDS $ 50,998,000 $ 50,998,000 $ 518,000 $ 3.471,000 $ 1,476,000 $ 5,465,000 $ 164,000 $ - $ 621,000 $ 1n,ooo $ 71,000 $ 47,000 $ 9,000 $ 71,000 $ 1,160.000 $ 1,483,000 I$ a65,ooo I !$ 10,200.000 I Is 10,111,000 I D 0 0 0 0 0 J J -, City of Lubbock Lake Alan Henry Water Supply Project ESTIMATED PROJECT BUDGET Texas Water Development Fund (TWDF) (Costs of Proposed Project and Sources of Funds) ITEM Construction Costs Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Basic Fees Special Engineering Fees Environmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&MManual Corrosion Control Subtotal Special Fees Bond Issuance Costs Financial Advisor Bond Counsel Bond Insurance Other (describe) Subtotal Issuance Costs Land,Easements,orRow Contingency TOTAL PROJECT COSTS TWDF OTHER FUNDS $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ I $ I s ts Transmission Line WTP to Pump Stations TOTAL FUNDS 24,640,000 24,640,000 250,000 1,sn,000 713,000 2,640,000 80,000 - 300,000 85,000 34.000 23,000 5,000 34,000 561,000 716,000 31s,ooo I 4,92s,ooo 1 33.ao1.ooo I 0 0 0 0 0 '""I L.J J ] ] J ] J ] Cit~ of L11hhork Tn:t\ T.i\ & \\.t1u·1101·I,, S),lu11 ~u1plu, Rl'lllllll' (\·rtifk,lll'' ol Ohli~;1tion. ~vrk, 2011~ (Tn.1, \\'all'I' Ot·1 dopnR·nl Bo,ll d Prnju·I) .\d1ed1ile of E,1i11111red Cm/\ o/ f "1111nt e Bond Counsel Fee and Expenses (Vinson & Elkins LLP) Financial Advisory Fee and Expenses (RBC Capital Markets) CUSIP Attorney General Paying Agent (The Banlc of New York) OfficaJ Statement Printing and Distribution Miscellaneous.lCon · $29,000.00 48,750.00 600.00 9,500.00 500.00 5,000.00 16,650.00 J J Project Item Construction Costa Improvements Elevated Storage Tank Ground Storage Tank Distribution Lines Transmission Line Pump Station Other (Describe) Water Treatment Terminal Storage Reservoir Electrical Supply Subtotal Construction Costs Basic Engineering Fees Planning Phase Design Phase Construction Phase Subtotal Engineering Fees Special Engineering Fees Envlronmental Assessment Water Conservation Plan Inspection Surveying Testing Geotechnical O&M Manual Corrosion Control Subtotal Special Fees Land, Easements, ROW Contingency TOTAL PROJECT COSTS L ..J L-J J Project Total Costs Request Total $0 $0 $0 $0 $108,357,000 $23,725,000 $0 $19,049,000 $15,628,000 $4,572,000 $171,331,000 $2,241,000 $2,241,000 $13,309,000 $13,309,000 $5,642,000 $21, 192,000 $0 $500,000 $500,000 $0 $3,966,000 $500,000 $500,000 $346,000 $204,000 $204,000 $293,000 $225,000 $6,034,000 $3,750,000 $3,750,000 $0 $39,415,000 $2,000,000 $241,722,000 $22 504.000 J J City of Lubbock Lake Alan Henry Infrastructure Project January 29, 2008 Funds Needed -MIiestone Dates Dylgn1 Planing Phase Mar 1, 2008 Jun 1, 2008 Oct 1, 2008 $0 $0 $0 $641,000 $250,000 $1,350,000 $3,264,000 $1,677,000 $8,368,000 $3,905,000 $1,927,000 $9,718,000 $500,000 $500,000 $204,000 $1,204,000 $0 $0 $3,750,000 $1,000,000 $1,000,000 $9 859.000 $2,927000 $9,718,000 r-C J l J CJ ConsJrycllon Phgy Feb 1, 2009 Jan 1, 2010 Apr 1, 2010 $83,717,000 $24,640,000 $23,725,000 $19,049,000 $15,628,000 $4,572,000 $34,6n,ooo s112,014,ooo $24,640,000 1351000 $3,578,000 $713,000 $1,351,000 $3,578,000 $713,000 $1,326,000 $2,340,000 $300,000 $146,000 $166,000 $34,000 $238,000 $50,000 $5,000 $25,000 $166,000 $34,000 $1,735,000 $2,722,000 $373,000 $8,669,000 $23,818,000 $4,928,000 $46,432,000 $142,132,000 $30,654,000 J Construction Schedule Survey/Permits/Land Acquisition Water Treatment Plant Design Treated Water Pipeline Design Raw Water Pipeline Design Water Treatment Plant Construction Raw Water Pipeline Construction Treated Water Pipeline Construction L.,-_J J J Start Dates March 1, 2008 March 1, 2008 June 1, 2008 October 1, 2008 February 1, 2009 January 1, 2010 Aprll 1, 2010 J J ~ c=J r::=i 0 0 D D C 0 r LI J l j 7 ..:., J l J City of Lubbock, Texas Water Utility Department · TWDB Financial Assistance Application Fiscal Information December 21, 2007 1. Description of the Security for Proposed Debt Issue: The City proposes to use Certificates of Obligation for the proposed debt issue which will be paid for by water utility revenues and backed by the general taxing powers of the City of Lubbock. The City will increase water rates in accordance with our financial planning docwnents to generate the revenue necessary to finance operations and debt service. 2. Depository Trust Company Language The City of Lubbock is aware of and will abide by the Depository Trust Company language. A copy of the language is included with this section for reference. 3. Issues that Affect the Project or Ability to Repay The ability of the City to obtain financing assistance may impact project timing and assist the City with the feasibility of this project. The project cost is significant but necessary to ensure current and future water supplies. Assistance with the financing will have a positive impact on enabling this project to move forward. The City will have to carefully plan for and balance rate increases to generate revenue for operations and debt repayment. As the rates increase, water conservation will also increase which in the long run is a positive, but in the short run will need to be accounted for because lower water sales will impact total revenue collections. An appropriate balance between the fixed monthly base charge and the volume use charge will need to be developed to ensure adequate revenues to pay for operations and debt service. 4. Circumstances Surrounding Prior Default(s) The City of Lubbock has not defaulted on prior debt. Over the past several years, the City has been working through some bond rating issues related to maintaining adequate financial strength and appropriable net assets for Lubbock Power and Light (LP&L, the City's electric utility), but this issue is not related to the City's Water or Sewer Utility's financial strength or appropriable net assets. 0 !...J 0 -u n D 0 0 Q 0 Q Q t L..l J. Trdl .,_,_ti~ c,j'llli,-,,Y for dot ,r,,p,tMI M/1' ~ ,,,.,Jail SQ.I ldlocr ,,f ,.., N1f6 rl/f-4 ~ Jin, qf f,a,4,, tldlld8UI fflll4s ..,.1111,-. al -,. ~ ,_ _, ne Bamll~ apecialoblipliaas ar-..ai,-payable, ~with any c:amm11,-0lll:IIDll!rig~tssucd Boi,ils mdcy ~,-ity-baads 'llltlidl~~ be illlHld by .. Cib', bulb .. topl!Dcipal ail ialamt.8111\ac:cmm. ....,.'lridl CIIDaiaeady oublaDdlDs~IsmedBoadsbyafillitlim.CiDapil,daeot Cl.lD ~ a-(as defim:d in tbs Onllalace) af. 1be City, combiaal WllllsMDb auci Sewer S,-,. 1D 1111 ~ -Cfly laas ~ the li'1lt 1D .. Mdilia:iat h:ity Rmu:i,: BoDfs, JmiiDr Lian ObliaadoJt,1, .Addilioll1I. IIRlior lb Obi(liltm 111d J.imilt:d ~ Oblipiail, Mboat limiallicm. IS to pm;ipll llDOGat bul IUl,p:t1Dllll'fll:IJU$, ~ arftllZidiam • mayb,, ~~ 'IIUda"lw ar ~ 'Ill:~ cloeslJQlaaealimarlllolltppoaGIIISy,ti:m,m,q,tilc:Nd&,em.,,,1, lllldcyjudp:l!XapimtdieCity1D11lllit be~ t,y .,_.,. 111111 ~ l@ilimt 'llll'/ pup:ny ,-cd by 1bt City. n. CKJ '-Dllt ~ er odptldilldfap111t11eBods~malaniial•tv benlfeclfrvm~ CC=:::...-::=.:-=~---~. 1111-.aa.w: ~ mto ~paid.lO llldcmlillld by till: Dcposiq:)'TmaO!mpmly("l)'IC"}. N&,J,-Yld, N""1'Y«lr.~bcati6calia..-o~tiliioll«IDIIIQ-. lllDia!omlaliollilltil-=lion~MC llld triB ~ s,._._ 'bem pro,'idld. by 17l'C 1ar-m ~ IDIIIDIIG1B • u tis Oflicial Slidl!lmut. '& (Jib, ad tie f'lllllj:ial Att..... bdiefe 1--of Ir infnnnllioo 10 bt rr&'bJr.. IJlltab; DO ~ila'dlera=tt:'1«-.-.. 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I ,- l City of Lubbock, Texas Water Utility Development r TWDB Financial Assistance Application Fiscal Information Li December 20, 2007 0 TOT AL BOND DEBT SERVICE REQUIREMENTS (GO & REVENUE) FYE Outstandinl Debt r, 3~p Principal Interest Total I~ 2008 $ 28,940,000 $ 24,711,337 $ 53,651,337 2009 28,660,000 23,749,021 52,409,021 2010 28,730,000 22,552,343 51,282,343 D 2011 29,505,000 21,279,748 50,784,748 2012 28,800,000 I 9,957,613 48,757,613 2013 29,670,000 18,627,281 48,297,281 D 2014 30,630,000 17,221,081 47,851,081 2015 28,770,000 15,855,326 44,625,326 2016 28,915,000 14,510,790 43,425,790 0 2017 29,260,000 13,087,605 42,347,605 2018 29,995,000 11,649,020 41,644,020 2019 28,815,000 10,172,280 38,987,280 r 2020 26,535,000 8,823,020 35,358,020 2021 25,255,000 7,557,641 32,812,641 2022 22,460,000 6,358,568 28,818,568 0 2023 21,900,000 5,254,886 27,154,886 2024 20,400,000 4,181,866 24,581,866 2025 19,730,000 3,187,703 22,917,703 2026 16,245,000 2,286,163 I 8,531 ,..163 2027 10,530,000 1,607,794 12,137,794 !J 2028 5,225,000 1,216,219 6,441,219 2029 5,475,000 967,143 6,442,143 G 2030 5,735,000 712,173 6,447,173 2031 6,000,000 445,949 6,445,949 2032 2,195,000 260,438 2,455,438 r" 2033 2,290,000 159,525 2,449,525 L 2034 2,400,000 54,000 2,454,000 D $ 543,065,000 $ 256,446,529 $ 799,511,529 Total Outstanding Debt Per Capita $2,527.68 C 0 D Q r L r: l ,...., L City of Lubbock, Texas Water Utility Development n TWDB Financial Assistance Application Fiscal Info_rmation December 20~ 2007 C TOTAL BOND DEBT SERVICE REQUIREMENTS (GO ONLY) FYE Outstanding Debt r" 30-Sep PrinciJ?!I Interest Total L 2008 $ 26,4!0,000 $ 23,812,277 $ 50,222,277 2009 26,940,000 22,967,366 49,907,366 r-2010 27,015,000 21,851,398 48,866,398 L 2011 27,800,000 20,654,901 48,454,901 2012 27,440,000 19,410,018 46,850,018 2013 28,310,000 18,142,831 46,452,831 '°'"'I 2014 29,270,000 16,800,791 46,070,791 w 2015 27,410,000 15,500,326 42,910,326 2016 27,555,000 14,221,980 41,776,980 0 2017 27,900,000 12,862,905 40,762,905 2018 28,635,000 I 1,489,560 40,124,560 2019 27,915,000 10,078,060 37,993,060 IT 2020 26,075,000 8,774,720 34,849,720 2021 24,795,000 7,533,491 32,328,491 2022 22,460,000 6,358,568 28,818,568 r .... 2023 21,900,000 5,254,886 27,154,886 L 2024 20,400,000 4,181,866 24,581,866 2025 19,730,000 3,187,703 22,917,703 D 2026 16,245,000 2,286,163 18,531,163 2027 10,530,000 1,607,794 12,137,794 2028 5,225,000 1,216,219 6,441,219 2029 5,475,000 967,143 6,442,143 0 2030 5,735,000 712,173 6,447,173 2031 6,000,000 445,949 6,445,949 2032 2,195,000 260,438 2,455,438 0 2033 2,290,000 159,525 2,449,525 2034 2,400,000 54,000 2,454,000 fl $ 524,055,000 $ 250,793,047 $ 774,848,047 Total Outstanding GO Debt Per Capita $2,439.20 M l J- r L. 0 LJ r- l [l n City of Lubbock, Texas Water Utility Development 0 TWDB Financial Assistance Application Fiscal Info_rmation December 20, 2007 Q, TOTAL BOND DEBT SERVICE REQUIREMENTS (REVENUE ONLY) FYE Outstandi!!I Debt ,.,.., 30-Sep Princil?!I Interest Total u 2008 $ 2,530,000 $ 899,060 $ 3,429,060 2009 1,720,000 781,655 2,501,655 D 2010 1,715,000 700,945 2,415,945 2011 1,705,000 624,848 2,329,848 2012 1,360,000 547,595 1,907,595 2013 1,360,000 484,450 1,844,450 D 2014 1,360,000 420,290 1,780,290 2015 1,360,000 355,000 1,715,000 2016 1,360,000 288,810 1,648,810 0 2017 1,360,000 224,700 1,584,700 2018 1,360,000 159,460 1,519,460 2019 900,000 94,220 994,220 C 2020 460,000 48,300 508,300 2021 460,000 24,150 484,150 2022 r 2023 2024 l ~' 2025 D 2026 2027 2028 2029 0 2030 2031 2032 r-"" 2033 l 2034 ~ $ I 9,010,000 $ 5,653,483 $ 24,663,483 t J Total Outstanding Revenue Debt Per Capita $88.48 j, l. J D 0 0 r"' {_ r. I 0 n l J Q n .o l 0 { .J r LJ w Q 0 n 0 0 0 0 r City of Lubbock, Texas Water Utility Development TWDB Financial Assistance Application Fiscal Info_rmation December 20, 2007 AUTHORIZED BUT UNISSED GENERAL OBLIGATION BONDS Date Amount Issued Purpose Authorized Authorized To Date Sewer System 5/2ln7 $ 3,303,000 $ 2,175,000 Waterworlcs System 10/17/87 2,810,000 200,000 Street Improvements 5/1/93 10,170,000 10,166,000 Street Improvements 5/15/04 9,210,000 5,269,000 Civic Center/Auditorium Renovation and Improvements 5/15/04 6,450,000 Park Improvemenls 5/15/04 6,395,000 6,395,000 Police/Municipal Court Facilities 5/15/04 3,350,000 Library Improvements 5/15/04 2,145,000 Fire Stations 5/15/04 1,405,000 1,405,000 Anima1 Shelter Renovations & Improvements 5/15/04 11045,000 160,000 $ 46J83,000 $ 25,770,000 Unissued $ 1,128,000 2,610,000 4,000 3,941,000 6,450,000 3,350,000 2,145,000 885,000 $ 20,513,000 [1 r L J 0 i-,, 'l.J 0 0 r (._j 0 n ·u n D n n r L City of Lubbock, Texas Water Utility Development TWDB Financial Assistance Application Fiscal Inf(!rmation December 20, 2007 ESTIMATED OVERLAPPING DEBT AND TAX RATES Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax bonds ("Tax Debt") was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council ofTexas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information. and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the City. Taxing Jlll'isdiction Frenship ISO Idalou ISD Lubbock County Lubbock County Hospital District Lubbock ISO Lubbock-Cooper ISO New Deal ISO Roosevelt ISO Estimated Overlapping Debt The City Gross Debt !As of 12/1/07) $ 138,102,346 275,000 85,720,000 140,956,725 46,264,571 9,624,998 $ 524,055,000 Total Direct & Estimated Overlapping Tax Debt As a% of2007 Taxable Assessed Valuation Assessed Valuation Per Capita Estimated% Overlapping 79.41% 6.93% 83.32% 83.32% 98.49% 57.50% 18.33% 4.20% 100.00% Overlapping 2007 Total Tax Debt Tax Rate $ 109,667,073 $1.500050 19,058 $1.265000 71,421,904 $0.306148 $0.116610 138,828,278 $1.235000 26,602,128 $1.285000 $1.170000 404,250 $1.205000 $ 346,942,691 524,055,000 $ 870,997,691 7.99% $50,720.79 r L [ D 0 r J._J f'-1 ! IT n r r TABLE 1-VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2007 Market Valuation Established by Lubbock Central Appraisal District Less Exemptions/Reductions at 100% Market Value: Residential Homestead Exemptions $ 225,084,488 Homestead Cap Adjustment 58,787,272 Disabled Veterans 15,063,118 Agricultural/Open-Space Land Use Reductions 80,099,818 Pollution Exemptions 10,312,389 House Bill 366 163,705 Freeport Exemptions 86,375,634 Tax Abatement Reductions (1) 35,908,583 Tax Freeze Adjustment 195,219 Market Value Reduction for Protested Properties 83,710,458 2007 Taxable Assessed Valuation City Funded Debt Payable from Ad Valorem Taxes: General Obligation Debt (as of 12-1-07) (2) $ 512,250,000 Plus: The Certificates 11,805,000 Total Funded Debt Payable from Ad Valorem Taxes Less: Self Supporting Debt ( as of 10-1-07) (3) Waterworks System General Obligation Debt $ 129,198,872 Sewer System General Obligation Debt 57,270,700 Solid Waste Disposal System General Obligation Debt 12,630,290 Drainage Utility System General Obligation Debt 90,745,324 Tax Increment Financing General Obligation Debt 22,409,789 Electric Light and Power System General Obligation Debt 57,104,440 Cemetery General Obligation Debt 682,149 Gateway General Obligation Debt 41,849,527 Hotel Occupancy Tax Debt 1,218,634 Airport General Obligation Debt 6,652,912 General Purpose Funded Debt Payable from Ad Valorem Taxes (4) Unaudited General Obligation Interest and Sinking Fund as of September 30, 2007 Ratio Total Funded Debt to Taxable Assessed Valuation Ratio General Purpose Funded Debt to Taxable Assessed Valuation 2008 Estimated Population (5) Per Capita Taxable Assessed Valuation Per Capita Total Funded Debt Payable from Ad Valorem Taxes Per Capita General Purpose Funded Debt Payable from Ad Valorem Taxes $11,49.2,911,247 595,700,684 $10,897,210,563 $ $ $ 524,055,000 419,762,637 104,292,363 2,830,583 4.81% 0.96% 214,847 $50,721 $2,439 $485 ( tJ The !.1atement of indebtedness does not include the Citys outstanding Electric Light and Power System Revenue Bonds, payable solely lrom the Net Revenues oflhe City's Electric Light and Power System. <2> As a matter of policy, the City provides debt sernce on genenl obligation debt issued to fund improvements to its Watcrwol'ks System, Sewer S~ Solid Wast.e System, Tax Increment Finance Reinvestmmt Zone, Gateway Streets, Airport, Cemetery, Elecuic Light and Power System and Drainage System from surplus revenues of~ S~ (sec 'Table SA-General Obligation Debt Servi(CI Requirements,• "Table 9-Division of General Obligation Debc Service Requirements," "Table 8B -Interest and Sinking Fund Budget Projection" and "Table 10-Computation of Self-Supporting Debt"). The City's Waterworks System General Obligation Debt has been issued 10 finance or refinance Waterworks System improvements, and is being paid, or is expected to be paid, from Waterworks System ~venues. The City has no outstanding WatelWOlks S)Stem Revenue Bonds but has obligated revenues of the Waterworks System under water supply contracts. 0 (1 r lJ [ 0 0 IT 0 0 n City of Lubbock, Texas Water Utility Development TWDB Financial Assistance Application Fiscal Info_rmation December 20, 2007 MUNICIPAL SALES TAX HISTORY The City has adopted the Municipal Sales and Use Tax Act, Chapter 321, Texas Tax Code, which grants the City the power to impose and levy a 1 % 1cK:al Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to the payment of the Bonds or other debt of the City. In addition, in January, 1995, the voters of the City approved the imposition of an additional sales and use tax of one-eighth of a cent as authorized by Chapter 323 Texas Tax Code, as amended. Collection for the additional tax commenced in October, 1995 with the proceeds from the one-eighth cent sales tax designated for the use and benefit of the City to replace property tax revenues lost as a result of the adoption of the tax. At an election held in the City on November 4, 2003, voters approved an additional on~quarter cent sales and use tax, with the proceeds to be dedicated to the reduction of ad valorem taxation, and an additional one-eighth cent sales and use tax under Section 4A of the Texas Development Corporation Act (Article 5190.6, Texas Revised Civil Statutes), to be used for economic development in the City. The City began to receive proceeds of these taxes in October 2004. Collections and enforcements of the City's sales tax are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits the proceeds of the tax, to the City monthly, after deduction of a 2% service fee. Historical collections of the City's 1.125% local Sales and Use Tax are shown below: o/. of Equivalent of FYE Total Ad Valorem AdValorem Per 30-Sel! Collected (a) TaxLe!l Tax Rate Capita<l>> 2002 $ 28,902,648 68.66% $ 0.4183 $ 143.08 2003 29,092,032 66.63% 0.3962 142.09 2004 30,554,632 76.97% 0.3857 148.11 2005 41,803,092 100.07% 0.4825 199.90 2006 45,576,582 109.10% 0.4556 214.61 2007 47,780,448 103.72% 0.4385 224.99 <•l Excludes bingo tax receipts. (l>) Based OD population estimates of the City. n J Effective as of October l, 2006, the sales tax breakdown for the City is as follows: J J .J 7 City: City Sales & Use Tax City Sales & Use Tax for Property Tax Relief City Sales & Use Tax for Economic Development County Sales & Use Tax State Sales & Use Tax Total $ $ 1.000 0.375 0.125 0.500 6.250 8.250 c::, :7 rJ (=1 ; ') CJ Cl CJ (' ) JJ r ) CJ c:J ::=) WORKING DRAFT City of Lubbock, TX Department of Finance 20 Year Water Fund Plam1ing Model 6/5/2008 Revenue Cumulative Fiscal Funding Pipeline Debt Total Uses of Over/(Under) Appropriable Net Auet Year Sources Oeeradons Debt Service Service Funding Expenditures 2008 $ 46,432,282 32,098,251 16,393,309 48,491,560 (2,059,278) 2009 53,954,572 32,327,247 18,210,098 SO,S37,345 3,417,227 2010 63,080,900 33,423,859 19,242,313 52,666,172 10,414,728 2011 73,498,273 34,096,743 19,795,688 53,892,431 19,605,842 2012 79,714,498 35,084,621 19,511,915 54,596,536 25,117,962 2013 81,468,168 35,889,189 18,783,BSS 54,673,044 26,795,124 2014 82,780,672 36,892,009 20;641,953 S7,S33,962 25,246,710 2015 83,032,543 37,875,178 20,514,200 58,389,378 24,643,165 2016 82,376,400 38,953,497 20,456,034 S9,409,S31 22,966,869 2017 82,311,674 40,134,917 20,423,477 60,558,394 21,753,280 2018 83,192,407 41,373,000 20,200,170 61,573,170 21,619,237 2019 84,085,008 42.414,617 19,577,431 6!,992,o48 22,092,960 2020 84,988,780 43,515,870 15,763,115 59,278,985 25,709,795 2021 85,904,442 44,620,299 13,358,482 57,978,781 27,925,661 2022 86,830,841 45,793,083 10,432,41 I 56,225,494 30,605,347 2023 87,668,255 47,114,866 9,271,217 56,386,083 31,282,172 2024 88,618,975 48,559,449 8,664,921 57,224,370 31,394,605 2025 89,548,706 50,088,588 7,930,407 58,018,995 31,529,711 2026 90,524,961 Sl,783.SIS 6,182,198 57,965,716 32,559,245 2027 91,514,337 53,576,162 4,860,152 58,436,314 33,078,023 2028 92,517,140 SS,473,972 2,003,683 57,477,655 35,039,485 2029 93,533,692 57,545,695 378,205 57,923,900 35,609,792 2030 94,564,328 59,739,503 56,328 59,795,831 34,768,497 2031 95,609,401 62,064,992 62,064,992 33,544,409 2032 96,669,280 64,532.611 64,532,611 32,136.669 Assumptions: I . All Debt is issued at 20 years, with an interest rate of 5% 2. Operations are anticipated to grow at 1-2% 3. Currently CIP Planning en<b at FY 2013 4. Pay-As-You Funding is planned as $1,298,820 in FY 2008, $404,860 in FY 2009, and $346,580 in FY 2010 S. Model includes the debt service for the LAH project and all other existing planned proj eels financed at S% for 20 years. 6. The proforma indicates no rate inc~es arc needed after FY 2011. Net Assets Policy 1 .,.,,,., 9,687,411 13,104,638 23,519,366 43,125,208 68,243,170 95,038,294 120,285,004 144,928,169 167,895,038 189,648,318 211,267,555 233,360,51 S 259,070,310 286,995,971 317,601,318 348,883,490 380,278,095 411,807,806 444,367,051 477,445,074 S 12,484,559 548,094,351 582,862,848 616,407,257 648,543,926 6/5/2008, C:\Dotuments and Setdngs\lm7809\LocaJ Settlngs\Temporary Internet Flles\OLKl\B #10 2nd Sub 20 year proforma JYates.xls 'L_J C:.1 C-1 ,--} ,:-·) L--2!01 PM 1 1 -7 ~ r-J C) CJ ;:_J CJ, r -) r--'J· ~ =..) C J C:) {-=i ~ J t1 r--""J C. 1 WORKING DRAFT Revenues Interest Revenues Revenue from Rentals Revenue From Junk Sales Revenue From Metered Services Metered Revenue Increase (March l Implementation) Revenue from Dept Operations Transfers From Other Funds Total Funding Sources Expenditures Total Salaries Total Benefits Total Supplies Total Maintenance Total Other Charges Total Capital Outlay Total Transfers Pay-As-You-Go Funding in CIP Total Debt Service Annually Total Debt Service New Total Master Lease Total E:i:pendlrures Total Expenditures (Over)/Under Revenues Cumulative Appropriable Net Assets: Less: Appropriable Net Asset Policy Value of Revenue Increase in$ City of Lubbock, TX Department of Finance Water Rate Model 12/19/2007 11:23AM AdoEted Forecast -~~?;~;~; · , -i¼i~'~flffllt!iiiilt. · iiit!MIWJW~••~!®l#tiltr-*41 ~ a•-.· c!';!<'i2008~-/'i~.\ .. , • e . · . •n,:',!I'\•-••' -· . .,.. > ' -)[~:.•.,' ' $ $ 580,949 72,000 10,000 40,028,778 2,501,799 1,664,600 255d_SO 45,113,376 5,296,178 2,308,451 1,442,651 2,408,880 10,848,027 15,196 7,091,%4 1,298,820 17,562,885 1i;o,Rn 49,023,865 (3,910,489) 7,836,200 2,501,799 598,377 77,760 10,000 45,482,699 2,842,669 1,702,558 259L905 50,973,969 5,402,102 2,435,112 1,471,504 2,457,058 11,064,987 15,196 7,374,426 404,860 17,480,306 3,128,624 1 .(>64,7ll 52,298,906 0,324,937) li,Sll,21il 2,842,669 616,329 83,981 10,000 51,679,717 3,229,982 1,741,600 264tl3l 57,62~74{) 5,510,144 2,572,356 1,500,934 2,506,199 11,286,287 15,196 7,670,242 346,580 19,334,897 2,417,851 1,378/JQ 54,539,335 1,086,405 9,S97/,E,R 634,819 90,699 10,000 58,721,079 3,670,067 1,781,757 2681508 1,,;,116,<no 5,620,346 2,721,199 1,530,953 2,556,323 11,512,013 15,196 7,980.153 21,652,606 2,987,853 1,523JRR 58,099,931 7,076,999 16,674,rin7 (16,294,232) 653,863 97,955 10,000 66,721,826 3,336,091 1,607,063 272,693 7?,699,4<ll 5,732,753 2,882,759 1,561,572 2,607,449 11,742,253 15,196 8,304.947 23,755,725 9,210,558 1,600,420 67,413,633 5,285,858 673,478 105,791 10,000 74,127,948 1,649,552 278,680 76,845,4'i0 5,847,408 3,058,263 1,592,803 2,659,598 11,977,098 15,196 8,645,463 32,912,509 8,137,820 1,456,0R7 76,302,246 543.aa,04 221503.729 '\, -1 ~· .... ,. • ~~·; :\ ~:::.H?t ;'t. \t~j-/. •j: ~t;f 1·,:~ /it•~ ~~t:<r: -~Ni~ :.Jf ·:_:i=:-~ ~:A ~1 /·t;_-; ... t\'.f;t:!-·J :t: ;;~-~ .):t:.,:i:~-~:?..~l:lI.~\·J~\·{t~~~\1~~1f A~:;. -~~~~~{ff?~?itt':;,: 1:W! •Revenue Increase is only an example, LWAC will recommend final increase to City Council. Note: 1. This model does not Ind the operatn•I Impact or new l'acllltle!I. 2. Based on Adjusted CIP 3. Total Appropriable Net Assets-aboYe net asset policy. 12119/1007, Q:\B&R\Oper2008\FY 2008 Working Models\FY 2008 Water Fund Model.121707.JY ) l:-:J LJ CJ [ J CJ r-l C l C) CJ C.') c::) I ) CJ (. . ) WORKING DRAff City ofLubbcwk.TX Department of Finance 20 Year Water Fund Planning Model 112912008 Rnenue Cumulative Fiscal Fundl1111 Ex.lsdng Debt New Debt Total OVeTl(Under) Appropriable Year Sourc" Oeeratlon.s Servin Semce De ht Service Expenditures Expenditures NetAIJ.ets 2008 $ 46,432,282 32,098,251 16,393,309 16,393,309 48,491,560 (2,059,278} 9,687,411 2009 53,954,572 32,327,247 16,310,035 2,704,755 19,014,790 51,342,037 2,612,535 12,299,946 2010 63,080,900 33,423,859 18,798,574 10,502,387 29,300,961 62,724,820 356,080 12,656,026 2011 73,498,273 34,096,743 29,200,090 9,908,204 39,108,294 73,205,037 293,236 12,949,263 2012 79,714,498 35,084,621 38,224,166 600,355 38,824,521 73,909,142 5,805,356 18,754,619 2013 81,468,168 35,889,189 37,482,510 613,951 38,096,461 73,985,650 7,482,518 26,237,136 2014 82,780,672 36,892,009 39,348,447 606,112 39,954,559 76,846,568 S,934,104 32,171,241 2015 83,032,543 37,875,178 39,826,806 39,826,806 77,701,984 5,330,5'9 37,501,800 2016 82,376,400 38,953,497 39,768,639 39,768,639 78,722,136 3,654,264 41,156,064 2017 82,311,674 40,134,917 39,736,083 39,736,083 79,871,000 2,440,674 43,596,738 2018 83,192,407 41,373,000 39,512,775 39,512,775 80,885,775 2,306,632 45,903,370 2019 84,085,008 42,414,617 38,890,037 38,890,037 81,304,654 2,780,354 48,683,724 2020 84,988,780 43,SIS,870 35,075.721 JS,075,721 78,591,591 6,397,189 SS,080,913 2021 85,904,442 44,620,299 32,671,088 32,671,088 77,291,387 8,613,0SS 63,693,968 2022 86,830,841 45,793,083 29,745,017 29,74S,017 75,538,100 11,292,741 74,986,709 2023 87,668,255 47,114,866 28,583,823 28,583,823 75,698,689 11,969,566 86,956,275 2024 88,618,975 48.559,449 27,977,527 27,977,527 76,S36,976 12,081,999 99,038,274 202, 89,S48,706 50,088,S88 27,243,013 27,243,013 77,331,601 12,217,105 111,255,379 2026 90,524,961 51,783,SIS 25,494,804 25,494,804 77,278,322 13,246,639 124,502,0 I 8 2027 91,514,337 53.'76,162 24,172,758 24,172,758 77,748,920 13,765,417 138,267,435 2028 92,517,140 SS,473,972 21,316,289 21,316,289 76.790,261 15,726,879 153,994,314 Allaurnptiom: I. All Debt is issued at 20 ycan, with an inleffllt rate of 5% 2. OperatiOIII aro antioipated to grow at 1-2% 3. Cwnntly CIP Planning ends at FY 2013 4. Pay-Aa-You Funding i, planned a. $1,298,820 in FY 2008, $404,860 in FY 2009, and $346,580 in FY 2010 S. Model includca the debt aervice for the LAH projeot and all other elti3ting planned projects fmanccd at S% for 20 years. 6. The proforma indicate. hO nitc increase, arc newed after FY 20 11. lll912008, Q:\B&R\Opel'2008\FY 2008 Working Modeb\Worklng for LWAC\Water and Sewer Single Dbpl.,-,012808.jy,:lla Net Anet Policy Lenl 11,608,071 13,488,643 15,770,225 18.374.568 C:J CJ [j [ 7 8:16AM [.._J r ] I J c:.:J r ) CJ L-'1 ( l C..7 :"] r-) CJ <=1 ;:_-J L.. WORKING DRAFT City of Lubbuck, TX Department or Flna11tt 20 Year Water Fund Planning Model 6/51200I City of Lubbock, Tau Wat« Utility Department 20 Year Proforma for the Lake Alan Henry lnfraatnlctUre Project• TWDB Financial Applltadon J•nuary 30, 2008 Revenue Cunudatlve Flttal FundJng Total Project Total Um of Over/(Unller) Approprlabl• Year SGurees O~ratlons Debt Service Serles 2008 Serie, 2009 Serles 2010 Debt Senke 2008 s 46,432,282 32,098,251 16,393,309 309,072 2009 '3,954,572 32,327,247 18,210,098 1,505,850 1,402,809 2010 63,080,900 33,423,859 19,242,313 l,SOS,27S 3,901,438 6,561,333 2011 73,498,273 34,096,743 19,795,688 l,SOJ,950 3,900,950 lS,089,450 2012 79,714,498 35,084,621 19,511,91S l,SOl,875 3,901,200 IS.089,650 2013 81,468,168 3S,889,189 18,783,855 l,SOJ,97S 3,901.913 lS,087,000 2014 82,780,672 36,892,009 20,641,953 l,SOS,175 3,902,813 1S,08S,4SO 201S 83,032,543 37,875,178 20,514,200 u·os,475 3,903,625 IS,088,650 2016 82,376,400 38,953,497 20,456,034 1,504,875 3,899,213 15,085,400 2017 82,311,674 40,134,917 20,423,477 l,SOJ,37S 3,899,300 15,089,350 2018 83,192,407 41,373,000 20,200,170 l,S00,97S 3,903,338 15,089,000 2019 84,085,008 42,414,617 19,577,431 l,S02,600 3,901,0SO IS,088,000 2020 84,988,780 43,515,870 15,763,115 J,SOJ,175 3,902,163 15,084,850 2021 85,904,442 44,620,299 13,3S8,482 1,502,700 3,901,263 I.S,087,750 2022 86,830,841 45,793,083 10,432,411 1,SOl,175 3,902,938 15,084,900 2023 87,668,255 47,114,866 9,271,217 l,S03,S25 3,901,775 15,089,350 2024 88,618,975 48,559,449 8,664,921 1,504,615 3,902,363 IS,089,000 202S 89,548,706 S0,088,588 7,930,407 1,S04,62S 3,899,288 t.S,086,900 2026 90,524,961 51,783,518 6,182,198 l,S03,37S 3,902,000 lS,08S,800 2027 91,514,337 53,$76,162 4,860,152 l,S00,925 3,899,950 1S,088,ISO 2028 92,517,140 SS,473,972 2,003,683 1,502,200 3,902,SSS lS,086,400 2029 93,533,692 51,545,695 378,205 3,899,363 15,087,850 2030 94,564,328 S9,7l9,S03 56,328 IS,089,SOO 2031 9S,609,401 62,064,992 2032 96,669,280 64,532,611 Assumptions: I. All Debt is issued at 20 years, with an lntcresl rate of5% 2. Operalio11$ a,e antillipated to grow at l-2% 3. Currently CIP Planning ends at FY 2013 4. Pay-As-You Funding is phumell as $1,298,820 in FY 2008, $404,860 in FY 2009, and $346,580 in FY 2010 S. Model includes the debt sernce for the LAH proj~t and all other existing planned projects financed at 5% for 20 yeus. 6. The profonna indicates no rate increases are needed after FY 2011. 309,072 2,908,659 I 1,968,046 20,494,350 20,492,725 20,4?2,888 20,493,438 20,497,750 20,489,488 20,492,025 20,493,313 20,491,650 20,490,188 20,491,713 20,489,013 20,494,650 20,496,038 20,490,813 20,491,17S 20,489,025 20,491,188 18,987.213 IS,089,SOO Funding E1pendltures 48,800,632 (2,368,350) 53,446,004 508,568 64,634,218 (1,553,318) 74,386,781 (888,508) 75,089,261 4,625,237 75,165,932 6.302,237 78,027,400 4,753,273 78,887,128 4,145,415 79,899,019 2,477,382 81,0S0,419 t,261,255 82,066,483 l,12S,92S 82,483,698 1,601,310 79,769,173 5,219,608 78,470,494 7,433,949 76,714,507 10,116,335 76,880,733 10,787,522 77,720,408 10,898,568 78,509,808 11,038,899 78,456,891 12,068,070 78,925,339 12,588,998 77,968,843 14,548,298 76,911,113 16,622,580 74,885,331 19,678,997 62,064,992 33,544,409 64,$32,611 32,136,669 6/5/2008, C:\Docwnenu and &!ttlnp\lm780~al Settlop\Temporary Internet Flles\OLKI\B #10 2nd Sub 20 year proforma DHonea MGdlfted byTA.:ds Net Asffls 9,687,411 10,195,979 8,642,662 7,754.154 12,379.391 18,681,627 23,434,900 27,580,315 30,057,696 31,318,951 32,444,876 34,046,186 39,265,793 46,699,742 S6,8l6,076 67,603,598 78,502,166 89,541,064 101,609,134 l 14,198,132 128,746,430 145,369,009 165,048,006 198,592,415 230,729,084 C l 1-) r-=i r J ~=:i i 2,06PM Net A..-.. t --~ '-l 1--J L-.J i-J l_J I.. J L-J l_J .. 'J C-J C-:1 C:l CJ C-1 CJ City of Lubbock, Texas Water Utility Department Top 10 Water Customers .. Revenue and Consumption October 1, 2006 to September 30, 2007 Customer# Customer Name Total Charggs Water Cons~mQtion I tgals % of Total Usag! 1 9975088 TEXAS TECH UNIVERSITY $ 785,759.13 264,692 2.49% 2 9975117 LUBBOCK SCHOOLS $ 419,250.11 149,782 1.41% 3 9925939 PARK DEPARTMENT $ 408,586.89 99,154 0.93% 4 9975017 COVENANT HEAL TH SYSTEM $ 175,924.74 134,192 1.26% 5 9925915 CJTYLIGHT $ 132,578.49 126,731 1.19% 6 9714295 (PRIV) X-FAB TEXAS $ 123,660.42 131,734 1.24% 7 9831559 (PRIV) TOWN OF RANSOM $ 103,680.10 69,TTO 0.66% 8 9763423 TDCJ $ 81,903.42 66,113 0.62% 9 9913773 UNIVERSITY MEDICAL CENTER $ 57,661.99 38,476 •0.36% 10 9815768 Souther Cotton 011 Co $ 49,178.58 43,559 0.41% <-J l_) l_J \_..I l--1 l.. J L J l_j L J l-J L_J C:J ( '"'J C7 C _l D C 1 C J r. J City of Lubbock Water Fund Balance Sheet For Fiscal Years Ended S.9?.temher 30 4am 1997 1998 1999 2000 2001 2002 2003 2004 200S 2006 Current Alsets: Pooled cash and cash equivalents s 2,740 S 247,590 S 977,602 $ 1,093,365 $ 315,985 S 1,735.481 $ 5,594,897 S 9,646,398 $ S,20S,IS6 S 6,167,041 Investments 18,339 1,656,972 6.542,433 7,317.132 2,114,666 1,601,932 3,318,366 2,336,705 186,781 5,362,050 Accounts and notes receivable (ncl) 2,059,653 2,111,852 2,243,465 2,727,746 2,804,919 3,687,945 4,891,306 3,93S,7S9 4,113,761 4,292,453 Interest receivable 122,542 23,403 50,750 19.0SS 18,446 43,372 16,474 34,961 19,769 25,R~l Due from other govemmenlS 141,907 72,040 28,161 31.577 57,522 33,722 46,367 28,081 42,444 Due !tom other funds 3,750,000 7,620,000 6,615,810 3,940,000 261,SOO 70,919 lnven10ry, at cost 1391698 67,768 911531 94,004 97,874 87,905 117,150 170,483 215,806 273,979 Total current assets i;,aJ•,879 4,179,625 9,933,942 11,282,879 13.029,412 13,806,217 17,924.560 16,413,887 9,783,717 16,192,293 Rulricted Alsets: 21,470,576 30J46132S 31,186,576 41,779,213 25,009,888 23,013,815 29,a9s1284 22,sos,183 21,910,438 27,193~56 Total oestricttd assets ",470,576 3!!,246,325 31,186,576 41,779,213 25,009,888 23,013,815 29J951284 221sos,1s3 21,910,438 27.193.7~6 Advance to other funds 7SS,342 63S,342 5JS,342 232,190 169,491 2,000,000 Propeny, plant and equipment: Land \,70S,8S4 l,705,SS4 1,705,854 1,705,854 l,10S,8S4 1,599,297 12,724,3$0 12,724,350 12,724,350 12,724,350 Buildings 4,765,632 S,324,SSl S,324,SSI 21,879,079 21,575,981 21,552,272 21,573,970 21,573.970 21,570,924 21,640,589 Improvements other than buildings 140,142,067 141,381,408 142,196,437 ISl,773,069 157,181,460 161,S22,S65 197,784,829 200,308,490 222,401,681 261.S78,561 Machinery and equipment S,663,885 6,041,539 8,218,756 16,473,953 16,836,SOS 19,314,649 19.9S3,421 19,405,223 20,304,008 31,342,138 ConslJUCtion in progress 44,200,069 48,326,826 52,373,986 34,193,745 45,237,000 46,905,378 37,132,719 45,999,985 S0,601,987 32,078,599 Allowaoce for depreciation !36, 120,214) (39,163,797) (42,388,790) (45,338,357) (49,856,496! (54,294,448) {72,61 t,965! !77,889,6171 !83,35 I 1900! l2Q,024,387! Net property, plant and equipment J 60,357,293 163,61~381 167,430,794 180,687,343 192,680,310 196,599.713 216,557,324 222,122,401 244,251,050 __ 2.§9,339.850 Other Assets: Water Righls 32,905,862 32,905,862 32,905,862 32,905,862 32,905,862 32,905,862 Allowance for amortir.atlon 1 I I 12261706 ! (11,613,834) 112,000,962) J:12~88,089) !12177SJl:?l {13,162,345) Net Other A1sets 21,679,156 21J92,028 20,904,900 20,517,773 20,130,645 19,743,517 iota! Auets 210.497,46 21919691701 22919711554 2541499~98 25110\91746 2551163,62 263i7771168 26110441471 21s194s1zos 312172S1399 6/S/2008 C:IDocurnenlS and Sctlinp\ln,7809\l.ocal Scainp\Tempolll)l lnfomtl Filcs\OLKl111 t 12 $ Year Opaalini Slmuls -> I.. --' \. J L-J i__J t_J L__J L J <...-,..J L_J \--1 L...:J CJ Cl CJ Cl C:..-.:1 CJ City of Lubbock Water Fund Balance Sheet For Fiscal Y cars Ended S5?tember 30 LiobililiH and Euod f.Qu.in: 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Current liabilities: ACCOllllts and vouchers payable 544.400 558,270 465,231 606,901 6S7,163 589,566 856,685 730.385 882.905 2.635.560 Due to ollter funds 100,000 120,000 150,000 170,000 A«rucd general obligation interest 567,920 S78,000 676,077 903,850 802,807 800,800 741,710 700,818 986,739 Other accrued expemes 129,450 139,.SIO 160,140 89,850 563,569 284.236 139,636 166.986 172,906 165,716 Cwn,nt bomb payable 3,574,616 3,840,402 3,972,668 4,342,923 4J36,403 4.a10,101 418S31534 5,908,680 s,9111004 7,503,179 Total cunent liabilities 4,81~386 s,1 •~1s2 513741116 6,063,524 6,509,942 611151303 6,591,565 7,506,869 7,953,554 I 0,3!)4,4, ~ Liabilities payable lion\ ratricted assets: Accounts and vouchers payable 219,426 107,541 270,169 262,346 104,379 470,994 46,199 Accrued interest 1,750,107 Cum:nt revenue bond, payable l,OS9,S03 1,093,794 Custo111er deposits 325,141 3121S03 303,969 354,829 24,715 29,355 S8171n Total liabilities (payable fn:>m restricted IISSCIS) t,604,070 115131838 574,138 617,175 104,379 470,994 46,199 24,7\S 29,355 1,808,817 Long,tenn liab!llties: Revenue bonds (net of current portion) 48.198,556 47,088,SJS 46,060.307 Advance ftom other l\utds 44,870,566 43,63S,82S 42,336,085 40,961,344 38,727,602 Contract& payable • pro rata 412,028 481,204 Clenenll obligation bonds 509,880 779,760 831,887 923,m (net of current portion) 39,175,SIS 41.882,103 47.505,850 68,157,763 64,068,280 6S,191,8S2 70.569,921 66,093,381 122,319,849 148,948,252 Noles and leases payable 1,020,101 Rebatable amitrage IS,669 Accrued va,;ation and sick leave 480,974 549,198 604,707 634,645 643,092 621,329 620,409 742.146 , 916,96) 963,961 Tolal long-term liabilities 88,267,076 90,001,320 94,680,744 114,442,734 109,179,084 109,072,798 112,151,674 10515631 I 29 123,236,810 15019471983 Total Liabilities 94,687,532 96,631,340 100,62~998 121,)23,433 11 S,7931405 11516591095 11817891438 113,094,713 131,219,719 163,061,255 Fund equity: • Contributed Cnpital 36,331,750 36,831~00 37,567~70 38,288,11117 • Retamcd Earnings: Reserved for capital proje,cts 11,887,892 Reserved for lltcilities/system IS,869,499 21,992,429 33,175,482 imp,ovemcnb 4,156.312 3,253,783 3,458,564 2,529,372 Reserved for system Improvements 237,396 252,508 254,432 277,569 Reserved for rate stabilization 8,079,695 10,298,167 4,8SS,37S S,113,S04 Reserved for bond indentures UbrCSCrved SS111~669 5~832,904 61,a14,486 S319911i71 Total retained earnings 79,477,%4 86,506,861 91,775~86 95,087,098 Total llmd equity llS,8091714 123,338,361 129.342,556 13313 751 965 Total liabilities arul rund equiiy i 210.4971246 ! 21919691701 ! 22919711554 ! 25414991398 • Net Assets Invested in capital assets, net of related debt Reslricted for: s 63,74S,43S S 60,643,428 S I 19,079,304 S 125,39S,032 S 130,126,9S4 S 132,649,091 Capital projects 10,357,621 8,•76,l92 Debt Service 7,781,030 6,136,977 Other purpcms Unralrieted 71,480,906 78,860,739 1.s,sso,sos 14,07!z334 618l71S02 10,878,076 Total net assets s I 3 S,226.341 S 1391s041r67 $ 1441987.730 $ 14719491758 $ 1«.125i4s6 s 149M41t44 61$/2008 C:ID..,,,,,..., ancl Sclllop\lm7309\Local ~Tcmpo,a,y 1n1cmet Files\OLKl\11 #Jl S YcarOpmnng SlmlS.xls t--1 L_I '--' ~l L ) (.__J l-.1 C-J l bity v. ~ .. JhociJ"' J r=J CJ C 1 C 7 r] CJ c=i [ 7 Water Fund Statement of Revenues, Expenses, and Changes in Fund Net Assets/Retained Earnings For Fiscal Years Ended Se.l!,tember 30 1997 1998 1999 2000 2-001 2002 2003 2004 2005 2006 Opa'lliog"""""'": Ctwa:a lbr lttVil"S $ 26.G47.146 S 28,983,013 s 26.973,895 s 28,9)4,443 $ )0,1)1,971! $ 32,451,225 S 32,761,250 S 32.222,280 $ 33,500,269 S 37,lJ0,953 ~ llpS and ""'°"neci. 131.305 142.660 143,615 103,280 3)1,116 275,9R2 110.no& 42\.7lR Total Opcntin1 TCVcnues 2§,178,4~1 29,125,§73 271117JIO 2910371723 l0,4631694 311727~07 ll,271JS6 l2~10IS 33J00~69 37133019SJ Opa'llinz expcm .. : l'<nonal ICIVicc, 3,824.811 4.047.212 4,405,268 4.500,320 4,742,9JS 4,957,742 S,424,239 5.274,209 5,423,288 S,910,861 Supplies 780,464 857.593 78ll,494 922,973 892,661 889,6S9 998,017 1.021,166 992,173 1,210,729 Mlintcnan.u 1,120,235 1,262,188 1,611,164 1,750,287 2,401,497 1,790,015 1,791.818 2,019,918 2,171,179 2,4$8,)57 Uncollecliblc occouru. 180.212 235,285 222.090 B8.42S 231.305 24l.l47 300,475 m.m !9].483 Collcctionexpenac 1,328,807 1.451,900 l,192,623 1,457,484 1,844.170 2,094,377 !,948,649 1.850.565 l,460.41 l l,482,000 Olhct!ffl'ica add di.uses 4.429,750 4,847,309 4,562,749 S,0S1,731 5,790,492 5,354,659 5,712.515 6,118.536 7.572.617 9.658,448 Deprocwion Md amormarion i,0§1~14 3J27,096 3,781,015 5,317,091 5,382,462 5,!76,409 S,960,230 S,958,903 S,9S0,47S 7,118,132 Total opcn,lias OJ<JICll'CII 14,747,!93 16;128J93 !6&23,403 19J54Jl7 21J85J22 2IJ04;108 22,135,943 l~&Ql14l2 23,763~26 27.§38J27 Opetatli,s ;.~ ... 11 ... 1 ! l,!30J58 12,897,080 !0,494,107 9,783,406 9,178,172 IJJ221999 I0,93SJl3 9~J96 9,736~1 9.492,426 Non,opmiia& ,..... .. ..,. (°"penses~ lnt<ml 1.637.478 1.607.022 1,999,453 l.lJS.737 2.192,970 879.650 861.556 588,435 788,431 1.321.864 Dispo1i1ion of Propcnies (54,878) (62,391) (110.298) (155,691) (93,400) SS.005 1.356 88.773 (174.325) {110.320) Fodmlarants 59.296 Miaccllll!OOUI 112.865 118,447 237,451 424,806 ]92,)20 348,994 474,•18 {ll7.79SJ 269,718 407,216 Interest on bonds and notes {4,7431081j (S l081834j (4,927J9Sl j?J94,§88j (61946Jllj !5J57.:l~l !517391929! 15~84~22! ! 4,632,649! j4,7H,ll2l Total oon,op<ralina ..._.,. (<>pemes) !3,047.§:16! !3,645,756j !2.!00,789j 13.§89.Sl&l !4,4S4~ll (4J43168SJ !4,402J99! !5~5,109! !3,7481825! jl,097,276! Income Ooss) bcft>reoperatina lrlnSmS 8J82,942 . 9;151,324 7,§93J18 51893J68 4,723,!ll 7,279Jl4 6,532,714 4J99,487 s,987,818 6J9S,l5Q Tronsfm: OpcminJ imuren in 4,290j92 4.296,085 4,762.)66 7.288.500 Opcmlna lmul'en out !6,378.§:24! j6J6SJISj (!~2JS~ 19,939,191 ! Total ir.n,r,.. out !21:!88Jl2! 12J~;130l !2,479,989! ,2~~91} Net in«>me (loss) be(ore ~i,u,yitom 6,294.710 6,912,094 5,213.329 l.242.877 Exlt1IO!diomy it<tn • loss on ntio,uW,mcnl of debt Net i11CCCnc (loss) 6,294,710 6,982,094 5,213,329 3,242,877 Dq,rcci&!ioa on fixed -IC<!Uircd by contribu~on, 43,.165 46,80) 5S.ll96 68.935 Relained eaniinp at bqinoin& of year .. pceviou1ly ttpOrttd 73,139,689 79.411.964 86,506,861 9l,77S.lU PliOI' period odjUllmenl ReU!ned eanilop at bqilllli•& oryeM aralalCd 73,1~9A89 79,477,9~ 86J06,!!61 91,775J§6 Retaiaocl ean,iap It elld of year 79,477,964 86.:!06,861 91,m~ 95 08?,228 , Coninoutcd <11>ital II bqiaaina of)ICII' lS,822.766 36,)31,750 36,831.500 37,567.270 Capital cootnburioat SS2.549 546.SSJ 790,866 790.532 0.,-iation on contributcd capital !43~51 146,803! 1ss~1 !68 935! Coobibuted capital at end of year l6Jll,7SO l~31J2!! ~7.:!67,370 38J88~7 Toi.I equity 1t 011d of year S IIS,!09 714 I 123~38~1 1 129~42~S6 I 133,375,965 • Capital Contribution, 675,693 (646,410) l.672.213 2,642,778 l,814,01 I 2.754,SSl l'mlsfmia 7,592,796 7,784,608 7,006,.179 6,891,766 147,802 1163.221 T"""f'<n (out) !ll,141,944) {10,139,686} 11o~s~ jll1172,2g3j (41536,8121 !4.§74;164} CbouJe in llCI ISSCb bclbtc special i tcm 1,850,376 4.,277,826 4,646.252 2,962,028 3,412,819 4,938.658 Termiaation ofinkrat U awep !6,637~)1 Chan1e in IICI assei. aftorspccla] item l,350.376 4,277,826 4,646,252 2.962.028 (3,224.274) 4,918.658 Total 11e1 asaeis -beaiania& of)ICII' L33J7S1965 135J26,;J41 14~1,478 144,2J;1,7~0 l47~9,760 144,725,486 Total na asscu • cndina s ma~41 s 139~04,167 S 1441987,730 S 14719491758 S i«;ns1486 s 1491664,144 • OASB 34 fl>fmat ofp,acn~na aeos,et> 815/2008 C-.\Ooc:umenle and Settlr,gsUm780W.ocal SetUngs\Temporary Internet Files\OLKIIB #12 s Year Operating Stmtuds r w City of Lubbock, Texas r Statement of Net Assets Proprietary Funds w September 30, 2007 r Enterprise Funds u r, \.-' Electric Water Wastewater WfMPA ASSETS 0 current assets: Cash and cash equivalents $ 677,237 $ 125,438 $ 113,870 $ 1,163,606 Investments 48,834,947 9,045,220 8,211,077 386,016 n Accounts receivable 16,719,031 4,900,490 2,349,337 718,957 L, Interest receivable 315,994 54,896 58,956 D Due from others 33,714 118,296 Due from other funds 8,890,468 Inventories 229,463 2211430 -, Total current assets 66,776,672 14,381.188 10,851,536 11,159,047 ....., Noncurrent assets: ....... Restricted investments 4,995,904 5,525,055 3,008,905 Restricted investments 7,632,150 26,063,215 13,582,176 w Restricted interest receivable 3,693 1,557 J Restricted accounts receivable Deferred charges 2,944,444 15,572,498 311591,963 16,592,638 J Capital assets: Land 756,714 12,724,350 12,578,774 Conslruction in progress 10,295,363 19,989,416 11,170,884 ] Buildings 8,054,811 22,240,589 24,013,170 Improvements other than buildings 191,579,813 287,819,541 123,292,696 Machinery and equipment 54,328,662 33,060,070 17,565,261 -i Less accumulated depreciation {I 18,192,554} {91,102,198l !68.6071595~ Total capital assets 146,822,809 278,131,768 120,013,190 Total noncurrent assets 162,395,307 309,723,731 136,605,828 Total assets $ 22911711979 $324! 1041919 $14714571364 $ 11,159,047 1 l See accompanying Notes to Basic Financial Statements D City of Lubbock, Texas r Statement of Net Assets Proprietary Funds w September 30, 2007 0 Enterprise Funds r, l-1 Electric Water Wastewater WfMPA r LIABll..lTIES I Current liabilities: u Accounts payable $ 1,077,200 $ 2,071,279 $ 1,361,699 $ 9,645,457 0 Accrued liabilities 1,686,858 279,475 175,699 Accrued interest payable 1,288,005 1,098,62 I 357,311 Due to other funds 8,890,468 0 Customer deposits 3,203,484 62,315 Compensated absences 1,121,895 473,664 227,996 Accrued insurance claims Leases payable 770,605 391,881 364,071 Bonds payable 517091323 8,673,559 4,814!663 Total current liabilities 23,747,838 13,050,794 7,301,439 9,645,457 D Non current liabilities: !"""l Compensated absences 1,360,783 574,523 276,544 J Accrued insurance claims Landfill closure and post closure care J Leases payable 2,804,049 1,391,079 1,001,256 Bonds payable 73,070,580 158,246,275 54,075,135 Deferred revenue J Rebatable arbitrage 72,193 161,546 183,482 Total noncurrent liabilities 77,307,605 160,373,423 55,536,417 -, Total liabilities 101,055,443 173,424,217 62,837,856 9,645,457 NET ASSETS J Invested in capital assets, net of related debt 72,100,402 135,492,189 73,340,241 Restricted for: ...., Passenger facility charges Debt service 4,995,904 5,525,055 3,008,905 .J Unrestricted 512020~30 9,663:458 8,270,362 1!513~90 .... J Total net assets $ 128,116,536 $150,680,702 $ 84,619,508 $ 1,513,590 .., J l -. 0 [ 0 r L 0 r 0 D n u D n u -.J J l J l l City of Lubbock, Texas Statement of Net Assets Proprietary Funds September 30, 2007 See accompanying Notes to Basic Financial Statements Enterprise Funds Electric Water Wastewater WTMPA 0 0 0 D 0 D 0 D D ,...., -r J J J -, ..) J Stormwater $ 139,936 10,090,619 759,596 23,349 11.013,500 1,625,014 14,277,499 30,858 15,933,371 283,337 41,171,676 64,580 47,823,806 3,447,648 {I 0.085,396} 82,705,651 98,639,022 $ 109,652,522 Enterprise Funds Noomajor Enterprise Funds $ 147,808 10,118,783 3,320,009 83,062 4,881,153 1,100,000 645,800 20,296,615 2,575,291 4,954,088 14,761 7,544,140 5,619,632 7,888,326 42,023,984 119,149,560 57,571,776 {1221752,085) 109,501,193 117,045,333 $ 137,341,948 Total Enterprise Internal Service Funds Funds $ 2,367,895 $ 79,672 86,686,662 5,745,131 28,767,420 536,257 102,174 5,033,163 123,636 9,990,468 1,0961693 210912348 134,478,558 8,141,961 17,730,169 14,068,077 66,509,128 50,869 66,932 92,723 2,944,444 87J34,610 14,227,732 31,962,807 65,343 90,515,665 96,397,134 1,608,618 769,665,416 649,868 165,973,417 8,431,395 (417.339,828} {8,018,147} 737,174,611 2z737,077 824,409,221 16,964,809 $ 958,887,779 $ 25,106,770 D 0 0 Enterprise Funds D Nonmajor Enterprise Total Enterprise Internal Service Stormwater Funds Funds Funds 0 $ 1,153,482 $ 1,380,765 $ 16,689,882 $ 1,760,613 0 44,568 676,189 2,862,789 159,498 516,771 195,507 3,456,215 747 3,765,616 12,656,084 0 7,372 3,273,171 49,356 600,010 2,472,921 227,710 4,577,652 0 38,175 1,161,526 2,726,258 422,409 1,952,507 1,157,556 22,307,608 ri 3,754,859 8,944,541 66,444,928 7,148,629 LI D 59,865 446,797 2,718,512 287,349 1,150,518 3,531,611 3,531,611 r; 225,945 4,843,685 10,266,014 726,845 79,967,602 19,342,592 384,702,184 79,694 79,694 ,..., 62,312 85,482 5651015 _J 80,315,724 28,329,861 401,863,030 2,164,712 84,070,583 37,274,402 468,307,958 9,3131341 J 14,798,921 87,949,922 383,681,675 1,587,823 ~ 2,132,578 2,132,578 J 1,625,014 442,713 15,597,591 9,158,004 9,5421333 89,167,977 14,205,606 J $ 25,581,939 $ 100,067,546 $ 490,579,821 $ 15,793,429 ] J J 0 D 0 • D D • D 0 J Q 0 • J J J J Stormwater Enterprise Funds Nonmajor Enterprise Funds Total Enterprise Funds Internal Service Funds Month 2002 JAN 71100 FEB 71,153 MAR 71,230 APR 71,301 MAY 71,407 JUN 70,952 JUL 71,444 AUG 71,050 Sijnteffil>e'rt~l:otalir:'JKi'.ii& rtt·N.,1H~~:~:i'.-11~812 (Fiscal Year Total) OCT 79,031 NOV 70,927 .1>.ecembefa<Tota1 ~::~-"J · ~ . . )if f,' • ~70i9.99 (Calendar Year Total) Water Customer Account History Lubbock, Texas Water Utlllty Department TWDB Financial Assistance Appllcatlon Fiscal Information December 20, 2007 Number of Water Utlllty Customers for the City of Lubbock 2003 ·2004 2005 70,948 72,699 74,029 71,019 78,821 74,122 71,067 72,921 74,354 71,324 73,037 74,625 71,905 73,291 74,882 71,783 73,471 75,067 71,799 73,516 75,233 72,051 73,535 75,378 ~i~tA~tl!l2;207> ~7.3\7i69 l. !, I • :+,.;~f;P.f~mrsr~ 72,376 73,788 75,642 72,419 73,891 75,770 I~~ ~~~~72¥505. ~~~~~7.4!026, 1ii,~i~l~.msi8l6. CJ c:J Cl • c=l c:! l=:l c=l I=:! c=l { ; 2006 2007 75,953 76,818 76,006 76,862 76,075 76,879 76,183 77,383 76,243 77 421 76,348 77,489 76,353 77525 76,513 77,641 ~~&i761!$0 , =• , .• .J~~,:&~~04.3 76,573 77,706 76,682 77,681 ~~A6t1Si ,m~.!i,~''"''""°'"':";.<~.:'368 6/5/2008 7 r-, r-i "' r ..., J J J L J (._J I --1 r C_] ~ CJ CJ Cl t=J CJ c=J t=I C=:l City of Lubbock, Texas Water Utlllty Department TWDB Flnanclal Assistance Appllcatlon Fiscal Information December 12, 2007 Prellmlnary Water Rate Projections Flscal Vear 2007 2008 2009 2010 2011 2012 Percent Increase 12.50% 12.50% 12.50% 12.50% 10% Average Winter Average Average Average Average Average Average 7,000 BIii Rates mu Rates .§Ill Rates BIii ~ em Rates BIii BltH Gallons 1. Base $7.66 $8.62 $9.69 $10.91 $12.27 $13.50 2.Use 3. Blocks 1 $14.63 $2.09 $16.46 $2.35 $18.52 $2.65 $20.83 $2.98 $23.43 $3.35 $25.78 $3.68 Block2 $2.61 $2.94 $3.30 $3.72 $4.18 $4.60 Block 3 $3.61 $4.06 $4.57 $5.14 $5.78 $6.36 Average Winter $22.29 $25.08 $28.21 $31.74 $35.70 $39.27 BIii Average Summer 15,000 gallons 1. Base $7.66 $8.62 $9.69 -$10.91 $12.27 $13.80 2.Use 3. Blocks 1 $14.63 $2.09 $16.46 $2.35 $18.52 $2.65 $20.83 $2.98 $23.43 $3.35 $25.78 $3.68 B1ock2 $20.88 $2.61 $23.49 $2.94 $26.43 $3.30 $29.73 $3.72 $33.45 $4.18 $36.79 $4.60 Block 3 $3.61 $4.06 $4.57 $5.14 $5.78 $6.36 Average Summer $43.17 $48.57 $54.64 $61.47 $69.15 $76.37 BIii I ...-·· ;__-... LJ 0 0 D D ..... J ..J .., J J J 03/08/2007 16:41 Fr.inklin Legal DMSI.ONl. 7753027 RA TES AL'ID CHARGES PUBLI~ PAGE 01 Page tot~ The city manager shall have authority to decide any question which may arise and which is not fully covered by any of the provisions of this article and he shall have the right to fix and detennine any water rate not provid.ed for iJl this article and bis decision in such cases shall be final, subject to moclH'ieation by the maYQr and City Council. (Ord. No. 348, § 13, 8-S-26; Code 1959, § 34-13) (a) The city, through the city manager, shall charge and colJect from cvecy customer and every customer shall pay a monthly base charge for water which shall be billed to a11 customers based upon the water meter size as follows: MeterSiie TbTee-.quarter-inch (3/4") m~ One-inch (l '') meter One-and-a-half inch ( 1.5") meter Two-inch (2") meter Three-inch (3") meter Four-inch (4") meter Six-inch (6") meter Eight-inch (8") meter Ten-inch (10") meter Water .Base Charge $7.66 $12.79 $25.51 $40.83 $81.73 $127.69 $255.31 $408.51 $587.29 (b) The water base charge as set forth in this section shall be effective Aprill, 2007. (Ord_ No. 1241, § 3, 6-26-52; Ord. No. 1882, § l. 4-26-56; Ord. No. 4229, § l, 10..24-63; Ord. No. 5694, § 1, 7-2-69; Ord. No. 7488~ § 1, 7-14-77; Ord. No. 8046, § 2, 5-22--80; Ord. No. 8082. § 2, 8-28- 80; Ord. No. 8454, § 1, 6-23-83; Ord. No. 9102, § 2(1), 8-27-87; Ord. No. 9301, § 7, 8~10-89; Oro. No-9551, § l, 9-10-92; Ord. No. 101831 ~ 1, 8-26-99; Ord. No. 2001-00078, § 1~ 9-13-01; Code 1959, § 3-1 l; Ord. No_ 2002-00097, § 1, 9-17-02; Ord. No. 2005-00113, § 1, 10.13-05; Ord. No. 2006-00097, § 1, 9-13-06; Otd. No. 2007-00010, §§ l, .3, 2-22-07) ( a) In addition to the base charge, the city, through the city manager, shall determine the amount of water used by each customer through monthly meter readings and shall charge to and collect from every customer and every customer shall pay for water fumished by the city to the customer. The water furnished by the city shall be measured on a per one thousand (1,000) gallons basis and billed as http://www.ctspublish.com/lubbock-fip-lpflpext.dll/Infobase/heading%201ooo... 3/8/2007 f l. I' 1 · fr 0 D r (L.c r-, LJ 0 D 0 0 0 ,_, @IF . , L C D '7 u 0 - n 03/08/2007 16:41 Franklin Legal follows: Block 1 Block 2 Block 3 7753027 PUBLIO<JORKS $2.09 per 1.000 ga11ons $2.61 per 1,000 gallons $3.61 per 1,000 gallons PAGE 02 Page 2of 8 (l) Single-family residential. The Block 1 volume is the amount of water used up to 100% of the average winter consumption (A WC) of each respective cust.omer•s premises, the A WC being the average volume of water used as measured by the nonirrigation meter readings for the months of September, October, November, December. January and February. and updated in Mar~ of each respective year; the Block 2 volume is the amount of water used in addition to the Block 1 volume up to an additional 40,000 gallons; and the Block 3 volume is the volume of water used in excess of the Bfock 1 and Block 2 volumes. For new customers that do not have an A WC calculated for their service, an A WC of seven thoU!and (7,000) gallons shall be used for Block l volume purposes. (2) Single-family residential irrigation. Does not include a Bl~k l volume; the Block 2 volume of water is from 1,000 gallons used up to 40,000 gallons; and the Block 3 volume is the amount of water used in excess of the Block 2 volume. (3) Multi-family ~idential, commercial and public. The Block 1 volume is the amount of water used up to 100% of the average winter consumption (A WC) of each multi-family residential. commercial and public premises, respectively, the.A WC being the average volume of water used as measured by the nonimgation meter readings for the months of September, October, November, December. January and February, and updated in March of each re.sp~tive year; the Block 2 volume is the amount of water used in addition to tb.e Block 1 volume up to an additional SO% of the A WC (total of Block 1 and Block 2 is equal to lS00/4 of the AWC); and the Block 3 volume is the amount of water used in excess of the Block 1 and .Block 2 volumes . (4) Nonresidential irrigation. Does not include a Block 1 volume; the Blodc 2 volume of water shall be the average monthly use by all nomesidential irrigation users by meter siu fur nonresidential ini.gation services. The Block 3 volume is tile volume of water used in excess ofBlock 2 volume. (5) Schools. All water used will be charged at a Block 1 rate. (b) The water volume rates as set forth in this section shall be effective April 1, 2007. (Ord. No. 1241, § l, 6-26-52; Ord. No. 1882, § I, 4-26-56; Ord. No. 4229, § 1. 10-24-63; Ord. No. 56941 § 1, 7-24-69; Ord. No. 7488, § 1, 7-14-77; Ord. No. 8046. § 1. 5-22-80; Ord. No. 8082, § 1, 8- 28-80; Ord No. 8454, § 2, 6-23-83; Ord. No. 9102, § 2(2), 8~27-87; Ord. No. 9301, § 8, 8-10-89; Ord. No. 9551, § 2, 9-10-92; Ord. No. 10183, § 2, 8-26-99; Ord. No. 2001-00078, § 1, 9-13~01; Code 1959, § 34-10; Ord No. 00097, § 2, 9-17--02; Ord. No.2005-00113, § 2, 10-13-05; Ord. No. 2006- 00097, § 2, 9-13-06; Ord. No. 2007-00010, §§ 2, 3. 2-22-07) The rate for water supplied to Texas T~h University shall be the same rate as established for and applicable to $chools in sections 2.~ and 2,8-53._ of the Code of Ordinances of the City of Lubbock http:/ /www.ctspublish.com/lubbock-flp-lpflpextdll/Infobase/heading%2010oo... 3/8/2007 0 0 cc·: D 0 D 0 fl 0 0 0 D r, t (\·) l n 03/08/2007 16:41 7753027 Franklin Legal PIJELI~ PAGE 03 Page3 of8 (Ord. No. 1241, § 5, 6-26-52; Ord. No. 12S8, 8-4-52; Ord. No. 1882, § 1, 4-26-56; Ord. No. 4229, § l, 10-24-63; Ord. No. 5035, § I, 6-23-66; Ord. No. 7488, § 1, 7•14-77; Ord. No. 8046, § 3, S-22-80; Ord. No. 8082, § 3, 8-28-80; Ord. No. 8454, § 3, 6-23-8~; 9rd. No. 9551, § 3., 9-10-92; Code 1959. § 34-12) The rate for water supp lied to Lubbock Christian University shall be the same :rate as established for and applicable to schools in sections 2$-:~2 and 28-53 of the Code of Ordinances of the City of Lubbock. (Ord. No. 5558, § 1, 10-24-68; Ord. No. 9551, § 4, 9-10-92; Code 1959, § 34--12.2) The rates for water supplied to the Buckner Baptist Home shalt be the same rate as established for and applica.ble to multiple-family in sections 28-52 and~ of the Code of Ordinances of the City of Lubbock. (Ord. No. 525'5, S-25-67; Ord. No. 9551, § S, 9-10-92; Code 1959, ~ 34. \2.1) (a) All hills for water consumed shall be due and payable twenty-one (21) days after issuance. Simple interest of five {5) percent shall be charged to the con.sumer if the consumer pays his bill after twenty-one (21) days from issuance. The five (S) paccnt interest on latopayments shalt apply to all classes of consumers scrYed. Provided, however, that this section shaU be subject to Cbapter l 82, subchapter A oftbc Texas Utilities Code. "Payment of Utility Bill for Elderly Individual." (b) A,J1, used in this section, date ofissuan~ shall mean the date when a bill is placed in the United States Mail, properly addressed to the consumer. (Ord. No. 1241, § 2, 6-26-52; Ord. No. 8~89, § 1, 1-27-83; Otd. No. 2001-00044, § 2, 6-26-01; Code 1959, § 34-14) The following fees sha11 be margcd on alt water instaJlatious requiring the following sizes of service connections: For service connections of one inch and smaller ..... .$290.00 For service connections of one and one-half inches ..... 615.00 Fot service connections of two inches ..... 750.00 For service connections exceeding two inches ..... Cost as determined by city water engineer. For each item listed above an additional charge will be added to cover paving repair costs. Paving repair costs shaJ1 be estimated by the City of Lubbock Water Utilities Enginccring Department with http;/ /www.ctspuhlish.com/lubbock-flp-lp/1pextdil/Info~/headfng%20109o... 3/8/2007 n r i' ., 0 D D D 0 D D l.J D r ,~,:.; .. L.. l/ :·. '/ r ll 0 03/08/2007 16:41 Franklin Legal 7753027 PUBUCWffil<S PAGE 04 Page4of8 the cost tbereof tQ be based on cun-ent prices oflabor, equipment and materials established by the Ci1y ofLubb~k Street Engineering Department. These prices shall be reviewed annually to ensure the adequacy of the prices to cover the total cost of construction of the water and sanitary sewer utility and will be adjusted as the director of water utilities deems necessary. (Ord. No. 1005, § 1, 7-27-50; Ord. No. 1960, § l, 7-12-56; Ord. No. 4705, § 1, 5-27-65; Ord. No. 5743, § 1, 9-11-69; Ord. No. 7506, § 11 8-11-77; Ord. No. 8059, § 1, 6-26..SO; Ord. No. 9411, § 8, 2- 1.4-91; Ord. No. 9725, § 1, 9-8-94; Code 1959, § 34-1.5) (a) The city council reaffirms its prior policy adopted March 8, 1984, to prohibit the sale of water to individuals, businesses, agencies or organizations that lie outside the coq,orate limits oftbe city of Lubbock. (b) In order to compromise and settle protests and threatened litigation regarding the dispQlial of treated municipal effluent by city, the city council authorizes the city's water department to extend the city's water distributiOfl facillties outside the corporate limits and to offer to sell water to the Town of Ransom Canyon for resale within its corporate limits as of January 1, l 988, and to Lubbock County Water Control and Improvement District No. I for resale ~ithin the corporate limits of the Village of Buffalo Springs as those limits existed as ?f Januazy l, 1988, provided the offer to sell water and the sale of water shall be subject to the condinons and limitations specified tn the provisions of this section, the applicable provisions of City Code, Chapter~ where such provisions arc not inconsistent with this section. and the agreements approved and accepted by the city council. By adopting and implementing Ordinance No. 92491 it is not the intention of the city to offer to sell water to persons located outside the corporate limits other than the Town of Ransom Canyon and Lubbock County Wau:r C-ontrol and Improvement District No. 1. (c) The antborityto extend city's water distribution. system outside the corporate limits and to offer to sell water to the Town of Ransom Cany0t1 and Lubbock County Water Control and Improvement District No. 1 shall be subject to the conditions and limitations, as follows: (1) In order to accept the city's offer to seU water, the Town of Ransom Canyon and Lubbock County Water Control and Improvement District No. 1, each shall request service and each shall enter into a written contract approved and accepted and signed by the mayor on behalf of the city. (2) As a part of the written eon tract for water service, the Town of Ransom C31Jyon and Lubbock Councy Water Control and Improvement District No. 1 shall agree to limit the voltm1e of water delivered, pursuant to such contract, to each entity respectively, durins any twenty-four (24) consecutive hours; and any tbree lnmdred sixty-five (365) consecutive days. The volume limitation for each value shall be agreed to bet\veen the city and the Town of lwlsom Canyon and Lubbock County Water Control and Improvement District No. I, but in no event shall such volume exceed that which is necessary to allow complete service within the corporate limits of the Tovvn of Ransom Canyon as such limits exist as of January l i 1988, or the service area of the Lubbock County Water Control and Improvement District No. 1 actively being served by such district in the corporate limits of the Village of Buffalo Springs as meh limits existed on January 1, 1988. (3) As part of the application, the Town of Ransom Canyon .and Lubbock County Water Cont:ro! and Improvement District No. 1 shall ~ach agree to provide retail service only and to limit service to consumers located within their respective service area ( as herein.above described) as that area existed http://www.ctspublish.oom/lubbock~flp-lp/lpext.dll/Infobase/heading%2010oo... 3/8/2007 D D r u r u D r LI 0 LI D D ..., l. Ott· I L, 03/08/2007 16:41 Franklin Legal on January 1, 1988. 7753027 PUBLio.,.mKs PAGE 05 Page5of8 (4) As part of the application and agi;eemcnt, the ToWJ10,fRansom Canyon and Lubbock County Water Control and Improvement District No. l shall each agree to pay for water delivered by city at the rate established from time to time by the city council. The city, acting through the city council, reserves the right to adjust the rate from rime to time based upon the methodology recommended by the city's consultants. (S) As part of the resolution approving tbc agrccm~ts between tbis city and the Town of Ransom Canyon and Lubbock County Water Control and Improvement District No. 1, the city council shall expressly find that there is adequate untreated water supply and water treatment capacity and treated water storage. pumping. and distribution capacity within the citys water system to satisfy the demands of the Town of Ransom Canyon and Lubbock County Water Control and Improvement District No. I to the extent described in their RSpective agreements, together with a11 other service commitments of the city that are existing or anticipated at the time the wholesale customer applies for service. (6) The water department of the City of Lubbock is l'lereby authorized to adopt policies and procedures, not inconsistent with the terms or this section, as may be necessary to implement the provisions for the intent of the city council herein expressed. (d) The city council approves and accepts the methodology of determining the city's cost of providing services to the Town of Ransom Can;,on and Lubbock County Water Control and Tmprovcmcmt Distri(;t No. l as descnbed in the report prepared by Freese & Nichols, the city's consultin,g engineers, dated June. 1988; and based upoo the methodology set fo~.in such report the city council adopts the initia1 rates for providing services to the Town of Ransom Canyon and Lubbock County Water Control and Improvement District No. t as follows: Eighty-one and seventeen-hwidredths (81.17) percent of the rate established for "commemal" as set forth in 28-5~ of the Code of OrdJrumees of the City of Lubbock. In additi~ there &hall be added to such rate the proportionate costs of inst.ailing capital improvements necessary to furnish $uch water which shall be repaid over a period of thirty (30) years on either an annual or monthly basis at six and ono-balf(6 1/2) percent simple interest (e) The authority granted ft> tll.e water department to offer the sale of water to the Town of Ransom Canyan and Lubbock County Water Control and Improvement District No. 1 and any offer made by the wattr department pursuant to this authority, shall cease at miduight. February 15, 1989, unless the off or is accepted. Any offer sball be accepted by de1ivery t<i city of a contract acceptable to the city, signed by the authorized representatives of the prospective customer. Acceptance of the offer by one of the two (2) prospective oustomers shall not extend the authority or the offer to sell water to the other prospective customer. (f) The prior policy adopted March 5, 1984, and this section shall not be constxued to prohibit the sale of water to federal. state or local governments, governmental agencies or governmental subdivisions pntsuant 10 appropriate intergovernmental contracts. (g) The prior policy adopted March S, 1984; and dilii sectiQn shall not be construed to prohibit water service to city owned property and/or facilities located thereon regardless of whether such facilities arc located inside or outside of the boundaries of the City of Lubbock. (Ord. No. 9249, § 1, 1-12-89; Ord. 'No. 9551, § 6, 9-10-92; Ord. No. 9648, § 1, 9·23-93) http://www.ctspublisb..comjlubbock-flp-lp/lpext.dl)/Infobase/heading%201ooo... 3/8/2007 ( f.; •.,; [j D C Ci:. D D D 0 L.! C r (=·· w <L D 0 • n l.J 0 Or:·. ',._. 0 0 03/0~/2007 16:41 Franklin Legal 7753027 PUBLICWORl<S (a} Requirements for the reimbursement of water and se~er tap charges are as follows: PAGE 06 Page 6of 8 (1) The agency applying for reimbursement of water and tap charges meets all the qualifications set fonh in this section; (2) Only the cost of water and sewer taps will be reimbursed under this se.ction. AJly associated costs for the tap, including, but not limited to paving repairs, are not reimbursable; (3) Only one (1) three-quarter-inch meter and one (1) four-inch sewer will be reimbursable per house; ( 4) Only new construction of one-family dwelling units, as defined purswmt to section 29-3(39) of this Code of Ordinances, is eligi'ble for reimbursement; (S) Eligible homes must be built in the designated Community Development Block Grant areas, as determined by the United St.ates Department of Housing and Urbaa. Development; (6) Eligible homes must be sold to housd.1.olds at or below eighty (80) percent of the median family income, as determined annually by the United States Department of Housing and Urban Development; and (7) The new hcmteown~ must reside in the house. (b) An. agency must meet all oftbe following requirements in order to qualify for reimbursement of water and sewer tap charges: (1) The agency must be a non-profit organization that builds affordable housing withi1l the litnits of the City of Lubbock; (2) The builder and/or the agency are responsible for all water charges from the time the tap is made W1.t:il the time the house is sold Said water charges are not reimbursable; (3) Agencies must initiate and pay for the costs of tbe water and sewer taps during the construction phase of the house; (4) After closing the sale of the house, the agency may apply for reimbursement of costs of water and sewet taps; and (5) Agenc.y representative shall presait all required documentation to the City of Lubbock Commuruty Development Department in order to apply for the reunbursement (c) At the time of application for reimbursement, the following documentation shall be required in order for an agency to be eligible: (1) A letter or other proof from the State of Texas detailing the agency's nonprofit status; (2) Documents proving the sale of the house to new homeownm; http://www.ctspublish.com/lubbock-flp-lp/lpext.dll/Infobasejheading%2.01000... 3/8/2007 r r '. I l: L [: L r c·-... L...., w 0 D 0 0 u 0 0 0 0 r LJ D r : (Q> D D 03/08/2007 16:41 Franklin Legal 7753027 PI.JBLICMORKS (3) Income verification of the new hotneowners; and PAGE 07 Page7of8 (4) Siie of the household to be living in the house and any other appropriate demographic information as may be required. (Ord. No. 2000-00016, § 1, 4-6-2000) Se~. 28--61. Variance and appeal. (a) The water board of appeals, as established in Section 28-44 of the Code of Ordinances ofth.c City of Lubbock. may grant in writing a temporary variance determining the average winter consumption (A WC) of a customer as prescribed in Section 2.8'753 of the Code of Ordinances of the City of Lubbock above. in the event that it is determined by the water board of appeals that failure to grant such variance would cause an emergency condition adversely affecting the health. or sanitation, or would work an unnecessary hardship due to fundamental unfairness of the application of the A WC to tbe customer n:qucsting the variance. (b) Customers requesting a modification from the computation of the A WC, as set forth in Section 28-53. of the Code ofOrdlnanees of the City of Lubbock. shall file a petition for variance with the water board of appeals. All peritiot\$ for variances shall be reviewed by the water board of appeals and shall include~ in addition to the information provided in Section 2.8-:44 of the Code of Ordinances of the City of Lubbock, the following: (1) Detailed statement as to how the city's computation of the A WC would cause an emersency condition adversely affecting the petitioner or fundamentally unfair to the petitioner. (2) Description of the relief requested. (3) Period of time for wb.ich the variance is sought. ( 4) Other pertinent information. (c) Variance& granted by the water board of appeals shall be subject to the following condition: (1) Variances g,:anted shall expire on the later to occur of: (A) The last day of the last month utilized to compute the AWC; or (B} The implementation of tbe A WC, next following the granting of the variance by the water board of appeals. (d) In the event (bat a customer disputes the accuracy of the city's billing for water, the customer may appeal su.ch billing in accordam;e with the internal adroinisttative procedures prescribed by the city manager and/or his/her designee. The disput.es shall be limited to situations or occuneo.ces wherein actual inaccuracies in the quantity of water consumed by the customer and/or inaccuracies or errors in rates or fees billed for wster are asserted. Ex.amp Jes of such situations or occurrenees are: (1) Inaccurate meter readings; http:/ /www.ctspublish.oomjlubbock-flp-lpflpext.d11/Infobase/heading%201ooo... 3/8/2007 u 0. r e 0 I] 0 C r-, ,.,.--· Ll l.._;_:. 0 0 n C [] r L t:·-· 1., ___ .• r L LJ 03/08/2007 16:41 · Franklin Legal 7753027 Pl.JBLIOIJ(H(S (2) Inaccurate rates ~d/or fees applied to such customer; and PAGE 08 Page 8 of 8 (3) Inaccurate volumes of water due to leaks, so long a_s ~e customer exercised reasonable diligence ir, the discovery and remediation oftl,e leak. (e) In the event that a customer desires to appeal the decision of the internal administrative appeal process, the customer may appeal to the water board of appeals, by making application within five (5) business days of the dwial of the internal administrative appeal prescribed in subsection 28-.6l(b) of the Code of Ordinances of the City of Lubbock. (Ord. No. 2007-00010, § 4, 2-22-07) Secs. 28..62--28-70. Reserved. http:/ /www.ctspublish.com/]ubbock-flp-lp/lpextdU/Infobase/heading%201ooo... 3/8/2007 i j· ,. I· i' t i: 0 City of Lubbock, Texas Water Utility Development 0 TWDB Financial Assistance Application Fiscal Info~mation December 20, 2007 0 TAXABLE ASSESSED VALUATION BY CATEGORY -Taxable Ael!raised Value for Fiscal Year Ended S r 2007 2006 %of %of w Cateso!I Amount Total Amount Total D Real, Residential, Single-Family $ 5,889,918,195 55.53% $ 5,517,769,306 55.55% Real, Residential, Multi-Family 873,394,391 8.23% 795,689,400 8.01% Re~,VacantLotsffracts 186,939,508 1.76% 166,089,379 1.67% 0 Real, Acreage (Land Only) 104,443,417 0.98% 80,067,791 0.81% Real, Farm and Ranch Improvements 10,601,986 0.10% ll,038,895 0.11% Real, Commercial and Industrial 1,968,271,689 18.56% 1,827,901,763 18.40% D Real, Oil, Gas and Other Mineral Reserves 28,446,050 0.27% 17,526,510 0.18% Real and Tangible Personal, Utilities 179,562,657 1.69% 177,838,907 1.79% Tangible Personal, Business 1,245,600,988 11.74% 1,228,428,632 12.37% ---Tangible Personal, Other 13,940,265 0.13% 14,527,171 0.15% I Real Property, Inventory 37,577,657 0.35% 26,685,491 0.27% i.-,1 Special Inventory 68,621,321 0.65% 67,329,545 0.68% 0 Other/Adjustments 2201192 0.00% 1,499,616 0.02% Total Appraised Value Before Exemptions $ 10,607,538,316 100.00% $ 9,932,392,406 100.00% Less: Total Exemptions/Reductions ~604,8121679} !585,778,455} r Taxable Assessed Value $ I 0,002, 725,637 $ 9,346,613,951 u Tauble ~Eraised Value for Fiscal Year Ended S 2004 2003 0 %of %of Category Amount Total Amount Total 0 Real, Residential, Single-Family $ 4,690,158,161 55.50% $ 4,282,214,635 56.78% Real, Residential, Multi-Family 561,569,488 6.64% 455,993,262 6.05% Real, Vacant Lots/Tracts 108,625,954 1.29% 93,473,144 1.24% D Real, Acreage (Land Only) 65,880,410 0.78% 59,644,977 0.79% Real, Farm and Ranch Improvements 10,835,088 0.13% 11,391,782 0.15% Real, Commercial and Industrial 1,638,846,765 19.39% 1,370,730,397 18.18% 0 Real, Oil, Gas and Other Mineral Reserves 8,923,810 0.11% 7,909,460 0.10% Real and Tangible Personal, Utilities 185,761,346 2.20% 192,138,423 2.55% Tangible Personal, Business 1,090,862,579 12.91% 974,534,729 12.92% r Tangible Personal, Other 16,287,022 0.19% 15,336,364 0.20% Real Property, Inventory 4,774,287 0.06% 11,087,603 0.15% u Special Inventory 68,663,514 0.81% 67,339,159 0.89% Total Appraised Value Before Exemptions $ 8,451,188,424 100.00% $ 7,541,793,935 100.00% Less: Total Exemptions/Reductions ~5291598,044} p99,4491068} Taxable Assessed Value $ 7,921,590,380 $ 7 ,3421344,867 0 NOTE: Valuations shown are ceritifed taxable assessed values reported by the Lubbock Central Appraisal District to the Cit establishing and levying the City's annual ad valorem tax rate and to the State Comptroller of Public Accounts. Certified val, i' change throughout the year as contested values are resolved and the Appraisal District updates records. LJ Q 0 City of Lubbock, Texas 0 Water Utility Development TWDB Financial Assistance Application Fiscal Info_rmation December 20, 2007 0 ;eptember 30, 0 2005 %of Amount Total 0 $ 5,169,490,706 56.09% 615,453,250 6.68% 137,411,731 1.49% 0 64,532,486 0.70% 10,406,299 0.11% 1,712,457,490 18.58% 0 12,167,754 0.13% 173,908,469 1.89% 1,226,369,118 13.31% r· 15,465,413 0.17% u' 9,863,035 0.11% 68,232,264 0.74% 0 0.00% $ 9,215,758,015 100.00% ~580,763,1532 0 $ 8,634,994,862 ,eptember 30, 2002 0 %of Amount Total D $ 3,935,486,660 53.59% 466,775,473 6.36% 96,407,484 1.31% 60,171,506 0.82% 12,003,318 0.16% 1,445,748,160 19.69% 0 8,849,390 0.12% 185,588,935 2.53% 1,039,521,384 14.16% r, 15,296,446 0.21% 10,279,056 0.14% LJ 671429,634 0.92% $ 7,343,557,446 100.00% 0 {432,980,275} $ 62910,577,171 0 ty for purposes of ues are subject to n r l Ii u [] 0 L 0 r C 0 lJ 0 0 0 L 0 0 0 r w n r. l Fiscal Year End 09/30 2003 $ 2004 2005 2006 2007 2008 City of Lubboc~ Texas Water Utility Development TWDB Financial Assistance Application Fiscal Information December 20, 2007 TAX RATE, LEVY AND COLLECTION HISTORY Tax Rate Distribution General Economic Interest and Tax Tax Fund Develol!ment Sinkins Fund Rate Le~ 0.43204 $ 0.03000 $ 0.10796 $ 0.57000 $ 42,093,153 0.41504 0.03000 0.10066 0.54570 43,659,111 0.33474 0.03000 0.09496 0.45970 39,697,452 0.35626 0.03000 0.06094 0.44720 41,775,367 0.36074 0.03000 0.07125 0.46199 46,068,744 0.35380 0.03000 0.07125 0.45505 49,195,247 PercentC Current 97.67% 97.02% 97.73% 98.15% 98.12% (In process of 0 0 D 0 0 D D t J 0 r w 0 r LI 0 City of Lubbock, Texas Water Utility Development TWDB Financial Assistance Application Fiscal Inf ~rmation December 20, 2007 'ollected Tax Total (II) Year 99.21% 2002 98.64% 2003 100.28% 2004 99.71% 2005 99.02% 2006 · Collection) 2007 n u n r u r 0 0 0 r-, t.J w 0 r LJ 0 D 0 0 0 0 0 City of Lubbock, Texas Water Utility Development TWDB Financial Assistance Application Fiscal Info_rmation December 20, 2007 Name Macerich Lubbock Ltd. Wal-Mart Stores. Inc. Southwestern Bell Telephone United Supermarkets OFC PYCO Industries, Inc. Southwestern Public Services Co. Lubbock Property, LLC Atmos Energy West Texas Division TYCO Fire Products Fountains Club Lubbock Acquisitions, LP TOP TEN TAXPAYERS · 2007 Taxable Assessed Valuation $ 120,319,460 69,696,472 65,675,631 49,479,682 48,047,230 42,711,124 33,316,729 33,181,890 31,136,879 28,036,483 $ 521,601,580 None of the above taxpayers have filed for bankruptcy. % of Total Taxable Assessed Valuation 1.10% 0.64% 0.60% 0.45% 0.44% 0.39% 0.31% 0.30% 0.29% 0.26% 4.79% D n 0 D 0 r LI 0 0 LJ 0 n LJ 0 C r u 0 0 r lJ D 0 City of Lubbock, Texas Water Utility Development TWDB Financial Assistance Fiscal Information December 20, 2007 16. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 taxable assessed valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 taxable assessed valuation. 17. Copy of Comprehensive Annual Financial Report (CAFR) for September 30, 2006 included as a separate docwnent. 18. Bond insurance is not expected to be purchased for the loan. However, this matter will be discussed with the TWBD to see how potential credit enhancement could affect the ultimate borrowing rate of the City. If bond insurance will lower the ultimate borrowing rate then bond insurance may be purchased. 19. The City does not expect to use the pre-design funding option. 20. The City does not expect to use any other credit enhancement. 0 0 -, L 0 0 D C r lJ 0 L..J n L 0 0 0 0 0 0 City of Lubbock, Texas Water Utility Texas Water Development Board Financial Assistance Application December 26, 2007 21. City's underlying ratings on its presently outstanding general obligation debt are "Aa3" by Moody's Investors Service Inc ("Moody's), "AA" by Standard and Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc. ("S&P") and "AA" by Fitch Ratings ("Fitch"). The City's underlying ratings on its presently outstanding electric system revenue debt are "A3" by Moody's, "BBB" by S&P and ''BBB+" by Fitch. I I I -------- s-11\ND/\RD I .~:J)(j°()l{S __ ,. _______ _ PUBLIC FINANCE City of Lubbock, Texas Rationale Standard & Poor's Ratings SelVices assigned its 'AA' standard long-term rating, and stable outlook, to Lubbock. Texas' series 2007 GO bonds and series 2007 A tax and waterworks system surplus revenue certificates of obligation and affirmed its 'AA' standard long-term rating and Standard & Poor's underlying rating (SPUR), with a stable outlook. on the city's parity GO debt. The ratings reflect the city's: • Role as a regional economic center in the Texas Panhandle, anchored by health care, higher education. and a rapidly growing commercial sector; • Willingness to adjust utility rates, as necessary, especially given that a majority of its tax- secured debt outstanding~ issued on behalf of various different municipally owned enterprises; and • Moderate overall net debt burden-Growth-driven needs, however, will remain a challenge for the city. A limited ad valorem property tax pledge secures the certificates. An unlimited ad valorem property tax pledge secures the bonds. Officials will use cerUficate proceeds to fund various general government improvements and projects for the benefit of various dty-owned utility 0 r. l LJ D 0 0 0 r Li 0 l r L 0 0 0 D 0 CltyofLubbock, Tex.u- systems and bond proceeds to finance electorate-approved park and street improvements from 2004. Overall property tax base growth has been solid and has come from all sectors; taxable assessed value (AV) grew by nearly 9% to $ 10.9 billion for fiscal 2008. a gain of roughly 50% from five years earlier. Despite the city's recent adoption of the electorate-authorized ~ over-65 • property tax freeze through Proposition 13, as well as management's self-imposed target to limit property tax revenues to reflect only new growth and an lnflatlonary adju.stment. the tax rate was a stable 46.1 cents per $100 of AV in fiscal 2007; the proposed fiscal 2008 tax rate is 45.5 cents. The city is not dependent on any of its principal taxpayers. Lubbock completed fiscal 2006 with a $19.8 million unreserved, undesignated general fund balance, or about 17 .6% of general fund expenditures. Reseives have more than doubled since fiscal 2003, which saw a $9.2 milllon transfer out to sub5idize the electric fund, as well as forgoing payments in lieu of taxes to the general fund from surplus net utility revenues. At the time, payments In lieu of taxes were equivalent to about 7% of recurring general ftmd revenues, forcing management to cut costs in all areas, including personnel. Through the third quarter of fiscal 2007. management Is still projecting another general fund surplus because of continued growth in all major revenue categories; the city council recently adopted a fiscal 2008 balanced budget. Lubbock Power & Light operates in an openly competitive retail environment against a subsidiary of Xcel Energy Inc. Given management's sensitivity to customer base defection due to rate increases, the city tried to absorb significant wholesale cost increases to the detriment of Lubbock Power & Light's financlal position. New management, however, has since adjusted base rates and its fuel-<:ost a4Justor -management implements the fuel-<:ost a4Justor monthly-and undertaken a number of steps to reduce operating risks to the system. All of these steps have restored structural stability to Lubbock Power & Llght's finances, allowing it to operate without direct subsidization from the general fund. In addition, city management expects Lubbock Power & Light to resume its transfer payment into the general ftmd eventually. Officials do not plan to adjust rates for any city-owned utilities for fiscal 2008. Standard & Poor's deems Lubbock's financial management practices 'strong' under its Flnancial Management Assessment (FMA) methodology. indicating practices are strong, well embedded, and likely sustainable. Overall, the $870 mlllion capital plan through 2012 will continue to rely heavily on additional t.ax- secured debt. Roughly $569 million of the projecls, however, will benefit various city utilities and $99 million will benefit gateway street projects, all of whlch are self-supported by other dedicated revenue sources. Each of the city's enterprise ftmds continue to demonstrate self-support of its respective share of allocable tax-secured debt; and management will, in large part, use franchise fees to ftmd gateway street projects. Self-support has allowed the overall net debt burden to hover atjust above 4% of AV. which management almost completely attributes to overlapping taxing entities. Outlook The stable outlook reflects the expectation that all of the city's enterprise funds. including Lubbock Power & Ught. will continue to fully self~support their allocable shares of tax-secured debl We further believe uibbock Power & Light's improved operational and financial performance will allow it to continue to function without support from the city's general fund. "These factors should allow city management to sustain strong financial performance In light of the growth-driven capital and operating pressures it faces. Standard & Poor's I ANAL YSJS 2 0 D 0 [] 0 r L r l.J D 0 0 n r u 0 0 n u J CJty of Lubbock, Te.gs Economy: Retail Growth Is StlH Creating lnaeased Diversity Lubbock, with a population of about 213,000, is in the southern Texas Panhandle. The 115-square- mlle city acts as a regional employment center· for retail and setvices. Higher education and health care. - however, anchor the city's economy. Leading employers include: • Texas Tech University (9,919 full-and part-time employees, as well as 28.000 students), • Covenant Health Systems (4,310), and • Texas Tech University Medical Center Hospital (2,310). Since Lubbock includes these employers, unemployment has historically been among the state's lowest rates. 1he city serves as a retail center for Lubbock County and the surrounding area The large student population, however, skews wealth and Income indicators somewhat low: Per capita income is 93% of the national level. Market value is a steady $51,400 per capita. Still, per capita retail sales are 1300/4 of state and national levels; same-store sales and new additions to the existing b~. including the opening of two new Wal-Mart Stores Inc. supercenters and a Target Corp. location, continue to drive these levels higher. Shearer's Foods lnc.'s announcement that it will take over a production facility vacated by Frito-Lay Inc. in 2006 will almost completely offset the lost 280 Frito-Lay jobs. The city has had a number of other successful redevelopment projects, lncluding a major tax-increment finance project near the Texas Tech campus and the ever-expanding Reese Technology Center -A former U.S. Air Force base that is now home to more than a dozen tenants with several thol&ll.d employees. Lubbock F.conomic Development Alliance. a '4A' corporation, has also demonstrated early success, including 2005-2006 announcements of the hotel and convention center project that has broken· ground, several new residential developments. and a number of potential commercial interests. The city has aJso periodically annexed land because it makes sense to control the rate, direction, and manner of development on its periphery. Financial Management Assessment: 'Strong' Standard & Poor's deems wbbock's financial management practices 'strong' under its FMA methodology, indicating practices are strong, well embedded, and likely sustainable. Highlights include management's: • Conservative revenue and expenditure assumptions based not only on trend analysis but also economic modeling and input from external expert consultants; • Regular monitoring and reporting of the cicy's budgetary performance and Investment portfolio to the city council and the city's ad hoc audit committEe; • Reserve policies that establish high perfonnance standards for the cily -The city continues to Improve annually and is already nearly in-line with those standards; and • Comprehensive long-term financial and capital planning that incorporates all known effects on operations, as well as identifies funding sources for projecls and equipment outlays. www.standardandpoors.com 3 0 0 CityofLubbock, Te.as 0 0 ,-. u r L D ,.., L.J r w 0 r LJ 0 L 0 r w l Standard & Poor's I ANALYSIS 4 r LJ 0 0 0 0 0 0 0 r L.J J D 0 D 0 r w 0 LJ 0 • • l'lblished by Staldard & Poof's, a Oivisia, d The McGraw· Hill Canpanies. Inc. Exeanive offices: 1221 Aveooe d lhe Amerkas. New Yoril. NY lCXW. Edimrial offices: 55 Water Slreet New YOl1<. NY 10041. SubsaibEr services: (1) 212•438-nao. Cop'figlt 2007 lrjThe McGiM'•Hil! Companies. 11c. Rep-ocluctioo in Yoi1ole c,-in pert Jl'dlibiled eroipt by pe-mis,;ion All rigits reseived. lnf<nnatia, ~ been oblained by Sl31dll'd & Poa's f'rom S(UQ!S belia-ed to be rel aile. Howewr. because d 1he possibility d h.nnan or medlanical emr by cur sou-ces. S131daro & Poor's oc «xhErs. Saindaro & l'oor's does noc guarantl!e the acancy. ~. a c°""'eleness cl any ilfOlmati<J> and is nol~e for My emrs or omissions c,-Ille result oblained from Ille use d sutll information. Rll~ngs are statanEnts cl qiinicn, rd:·s1a1anems d fact or recomrnendatiais to buy. hold. CJ' sell fSrJ securities. 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The fees generally vary from US$2.000 to <Nef US$1,500,000, While Standard & Poor's reserves the right to dissemiriate the rating, it receives no payrllElllt f()" dOing so, except fa-suluriptions to its publitations. Permissions: To rep-int. lranslate, a-quote Standard & Poor's publieatiOns, contact: Client Services, 55 Water Street. New Yorll. NY 10041; (1) 212-438-9823; or by e-mail to: rese,ntuequest®standcrdandpoc.-s.com. rhe McGraw Iii/I Con;,J .. ,cs .' -~ D 0 0 D 0 LI [l r t..J 0 D 0 0 r L, l J FitchRatings KNOW fOUR RISK Tax Supported New Issue Ratings New Issues General Obligation Bonds, Series 2007 ........................................ AA Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2007 A ..................................... AA Outstanding Debt General Obligittion Bonds ..................... AA Certificates of Obligation ....................... AA Rating Oudook ...................................... Stable Analyst& Jose Acosta +1512 215-3726 jose.acosta@fitchratings.com Gabriela Quiroga +l 512 21S-3731 gabriela.quiroga@fitcbratings.com Issuer Contact Jeff Yates Chief Financial Officer +1806 775-2161 jyatos@mylubbock.us New Issue Details $1,195,000 General Obliglltion Bonds (GOs), Series 2007, and $63,250,000 Tax and Walerworks System Surplus Revenue Certificates of Obliglltion (COs), Series 2007 A. are scheduled to sell on Aug. 22 via negotiation through a syndicme led by Merrill Lynch and Co., Inc. Security: The GOs and COs are direct obligations of the city payable from a direct annual ad valorem tax levied, limited to $2.50 per $100 of assessed valuation, on all taxable property in die city. The COs are additionally payable from a pledge of surplus net revenues of the city's watetworks system. Purpose: The proceeds of the GOs will be used to fund street and recreational improvements. CO proceeds will be used to fund various public improvements and pay oosts of issuance. August 16, 2007 Pu-blic Finance Lubbock,· Texas • Outlook The 'AA' rating reflects the city of Lubbock's restoration of solid financial reserves, the prevailing health and stability of the local economy, and the moderate direct tax-supported. debt burden on city residents. Also considered in the rating is the city's relationship with its electric utility, Lubbock Power and Light (LP&L, revenue bonds rated 'BBB+', with a Stable Rating Outlook, by Fitch Ratings), the financial posture of which has improved, minimizing its potential impact on the city's general fund operations. • Rating Considerations A significant transfer of funds to LP&L in fiscal 2003 depleted Lubbock's general fund cash and reserves, but the city, through a combination of administrative action and strong revenue performance, largely restored. general fund reserve levels by fiscal 2005. In addition, LP&L had operating SUipluses and improved cash balances in fiscal years 2004-2006. The general fund recovery bas been more rapid than anticipated, and the need for additional general fund financial support for LP&L appears less likely. For fiscal 2006, general fund operations contributed more than $2.5 million to the fund balance, primarily due to strong revenue collections. As a result, the city's unreserved, tmdesignated fund balance grew to almost $20.0 cnillion, allowmg it to meet its general fund goal of 20% of operating revenues. A Sllllil.ar operating surplus is probable for f1SCal 2007, as sales taxes continue to exceed projections. In addition, no more transfers to LP&L were required in f1SCal years 2004-2007. Two of Lubbock's major economic indicators, its Wlemployment rate and taxable assessed. valuation (TA V), are performing well. The latest available unemployment rate was 4.1% for June 2007, well below the Texas ( 4.6%) and national ( 4. 7%) averages for the same month. TA V gains have been good at almost 9% for the current tax year and an annual average of more than 8% over the past five fiscal years. The city's TAV for fiscal 2008 is approaching $II billion, and prospects for growth are favorable. More than 60 residential and commercial developments are under way in Lubbock, a portion of which is expected to add as much as $3 billion in new TAV during the next 10-15 years. However, for the first seven months of fiscal 2007, residential and nonresidential building permits have declined by 18% and 25%, respectively, after peaking in fiscal 2006, although the valuation of nonresidential permit valuations is nearly level to that of the same period in fiscal 2006. The city maintains a moderately low direct debt position of $549 per capita, or l . l % of TA V. When debt from overlapping municipal entities is included, the debt burden rises but remains moderate at $1,903 per capita, or 3.7% of TAV. Amortization is average, with www.fitehratings.com 0 • 0 0 r LJ 0 D 0 0 D 0 D 0 0 L -, J ...., FitchRatings KNOW YOUR RISK 55% of debt outstanding retired in 10 years. In the fiscal 2007 capital improvement plan (CIP), anticipated project costs rose to $485 million through fiscal 2012 from $323 million in the fiscal 2006 CIP. While the increase is sizable, it is overwhelmingly attributable to development of additional water supplies and rehabilitation of the city's wastewater facilities, both of which were anticipated. These projects will likely be supported through tax- supported debt, but, per the city's practice, the debt for the respective utilities will be self-supporting. LP&L faces direct competition and risks loss of market share should its rates become significantly higher than those of its competitor. LP&L's significant operating deficit in fiscal 2003 reflected power generation costs attributable to high natural gas prices and its previous reliance solely on natural gas power generation, along with its inability to pass on these costs immediately to customers without risking market share. The city subsequently hedged this risk through long-term purchased power contracts, thereby removing its dependence on gas-generated power. Additional administrative policy, operational, and capital improvements have enhanced LP&L's Public Finance competitive posture and financial viability. Although looat economic indicators are pos1ttve, the competitiveness of the local electric power market suggests that LP&L's desired financial position may take several years to regain. However, it appears less likely that additional support from the city's general fund will be reqwced, given LP&L's steady fiscal improvement • Strengths • Restoration of solid reserve levels through improved financial management and revenue e,owth. • Strong local economy and city's position as a regional business center. • Steady, stable gains in the tax base and sales tax revenues. • Low direct debt burden, with manageable capital needs. • Risks • Somewhat limited, albeit steadily growing and diversifying, economy and tax base. • Vulnerability to potential liquidity pressures until LP&L regains finan9ial posture. CopytiaJd O 2007 by F\1<11, In<. Film RaliJ,p Ltd. C>d i1I nboidiarioo. Ono Stale SlrUI Plan, NY, NY IOOGI. Telepl,ooe; l.8Q0.75l-4824, (212) 908--0SOO, Fax: (212) 480--4-0S. ~"" er -..ion in 'lllbole or in part is p,vbibiled -i,t by pemilriou. All 1iab11 r.......i. All of &o infonnlbOD.~ Ufflll ,_ l>ec ~ 1n,,n...,.,.. wl,idi F"ddt bdi8Vel m reliahle, liat l'itcl, doeo aotw,olyO.. wlb wtoounoyofU., iafoaatioa. Tho infomn,ti'"' in du Rl"'rtia povidod-.. ;.~witlu,utonynpraam,tion orwmantyof m,y md. A fildi nliogil.., opi,,ionu tolhe ~ cf 11""'8ity, aota""'°"""mdatioD to boly,..U orb>ld 111yooourily, Lubbock, Texas 2 L n u 0 D 0 D D 0 LI j u ..... J l • New Issue: Lubbock (City of) TX Global Credit Research New Issue 19 OCT 2007 MOODY'S ASSIGNS Aa3 RATING TO CITY OF LUBBOCK'S $11,635,000 TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, TAXABLE SERIES 2007 Aa3 RATING AFFECTS $523.8 MILLION IN PARITY DEBT, INCLUDING CURRENT ISSUE Municipality TX Moody's Rating ISSUE RATING Tax and Waterworks System Surplus Revenue Certificates of Obligation, Taxable Series 2007 Aa3 Sale Amount $11,635,000 Expected Sale Date 10/30/07 Rating Description GOLT Opinion NEW YORK, Oct 19, 2007 -Moody's Investors Service has assigned a Aa3 rating and a stable outlook to 1he City of Lubbock (TX) $11,635,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Taxable Series 2007. In April of 2007, Moody's upgraded the general obligation rating to Aa3 from A1. Proceeds from the Bonds will used to fund the construction of a city civic center. The certificates are secured by an ad valorem tax levied against all taxable property within the City within the limits prescribed by law and the Certificates are addi1ionally secured by net revenues of the City's Waterworks and Sewer System not to exceed $1,000. Assignment of the Aa3 rating reflects strengthened financial operations resulting from the implementation of prudent fiscal management Moody's believes the City's management team has demonstrated a willingness and ability to substantially improve the financial position of the General Fund. The Aa3 rating also continues to reflect the City's importance as a regional economic center with a siZable and diverse tax base and manageable debt burdens. GENERAL FUND BALANCE REPLENISHED The Aa3 rating recognizes Moody's belief that new management's efforts to improve financial operations have been demonstrated and a positive trend has been established. In fiscal 2003, the General Fund balance was reduced by approximately half of the 2002 amount to $9.4 million, or 11.6% of General Fund revenues. City officials used the General Fund balance to offset financial stresses that were occurring in the City's electric utility fund. In fiscal 2004, new management at the City was able to demonstrate an improved financial position. To achieve balanced operations in the City's General Fund, staff reductions and budget a.its were made, which resulted in an increase in the General Fund balance to $12.7 million, or 13% of General Fund revenues. For fiscal 2005, the fund balance increased again to $17 .3 million, which equates to 16.7% of General Fund total revenues. The increase was achieved through ongoing expenditure con1rols and conservative budgeting for revenues and expenditures as well as a one time transfer from the risk management fund. In 2005, the fund balance was 19.9% of General Fund total revenues. Consistent with earlier projections, the fund balance increased to $19.9 miUion, which was 17% of General Fund revenues, for fiscal 2006. The unreserved portion of the fund balance increased from $17.2 million in fiscal 2005 to $19.7 million in fiscal 2006 and this level achieves the City's reserve po~cy. On March 23, 2006, the fund balance policy was changed from 2 months of operating expenses to 20% of operating revenues which Moody's believes is consistent with our expectations of municipalities at this rating level. General Fund revenues are supported 36% from sales taxes and 37% from property taxes. Given the reliance on sales tax revenues, it is relevant to note that this revenue source increased an average of 3.9% annually between the 2000 and 2004 fiscal years. In fiscal 2005, sales taxes increased 36% with an additional 218th percent sales tax implemented to offset a property tax reduction and an additional 1/81h implemented for economic development Sales tax revenues increased a notable 9% in fiscal 2006 over 2005 and year-to-date totals fur fiscal 2007 are 4.8% over fiscal 2006. 0 n 0 D 0 C r L u Management utilizes five year financial forecasls and induding them in financial documents. Additionally, monthly financial updates are presented to the City Council and expenditure forecasts for the year are revised after every payroll period. These forecasts are examples of long term planning and reflect positively on management. The Aa3 reflects the demonstrated trend of steady financial improvements and tiJe implementation of policies that will ensure healthy financial operations for the long term. MODEST DEBT BURDENS REMAIN VI/Ith the current bond issuance, 1he City's debt burdens are moderate at 2.3%·on a direct basis and 4.4% on an overall basis. These debt burdens are net of general obligation self-supported debt from the water and sewer fund. Debt payout is about average with 53.3% of principal retired in 10 years. The City currently has $16.6 million in authorized but unissued debt from a bond authori.zation approved by voters on May 15, 2004. Moody's believes the City will continue to maintain a manageable debt profile considering steady tax base growth and prudent debt management practices. REGIONAL ECONOMIC CENTER CONTINUES STEADY GROWTH The City continues to realize healthy economic growth consistent with historical trends. The rate of growth has been increasing in recent years and the five year average increase is 7.7% annually from 2002 to 2007. In 2003, the five year average annual increase had been 4.1 % indicating the pace of new construction is accelerating. In fiscal 2007, the tax base grew 6.8% and totaled just over $10 billion. The new certified value for fiscal 2008 is $10.8 billion. The increased value is derived 35% from new construction and 65% from reappraisals. High growth areas are located in the southwest portion of the City with residential and commercial developments underway. Overton Park is a new mixed use development located between downtown and Texas Tech University that previously included neighborhoods of older, dilapidated homes but now boasts high end apartments, condominiums, shops and restaurants. The project is in a tax increment financing district to allow increased property values to encourage further development. Other similar mixed use developments are occuning throughout the City and conbibuting to tax base grow1h. The University provides strong stability in the local economy and enrollment has been increasing over the last few years. Enrollment is currently around 27,000 and the new Chancellor's goal is to take enrollment up to 40,000 in the near to medium term. Wealth levels in the City are bela.v the state and nation, which reflects the large student population. The 2000 PCI was $17,511, or 89.3% of the state and 81.1% of U.S. Moody's believes tax base growth rates will continue to follow the historical trend over the long term given the developments that are taking place throughout the City. Outlook The stable outlook reflects Moody's belief that financial operations have improved and will remain stable over the long term with ongoing prudent fiscal management KEY STATISTICS: 0 Population: 211,187 r- LJ u l 2008 Full Valuation: $10.8 billion Full Value per Capita: $51,314 2000 PCI: $17,511 (89.3% of State) Direct debt burden with self-supporting debt 2.3% Overall debt burden with self-supporting debt 4.4% Payout, 10 years: 53.3% 2005 General Fund balance: $17.3 million (16.7% of General Fund revenues) 2006 General Fund balance: $19.9 million (17.4% of General Fund revenues) Post-sale parity debt $523.8 million Analysts Kristin Button Analyst Public Finance ~roup r !..J 0 0 r Li u D 0 J 1 ...J .., Moody's Investors Service Douglas Benton Backup Analyst Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 © Copyright 2007, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. ALL INFORMATION CONTAINED HEREIN 15 PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY SE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRl&JTED 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. A!! information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the posslbility of human or mechanlcal error as well as other factors, however, such information is provided •as is" without warranty of any kind and MOODY'S, In partirular, makes no represeritatlon or warranty, express or Implied, as to tile accuracy, timeliness, completeness, merch,mtabllity or fitness for any particular purpose of any such lnfNmation. Under no clrrumst,mces shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or In pa1t caused by, resulting from, or relating to, any error (negligent or othe1wlse) or other circumstance or contingency within or outside the control of MOODY'S or any of its <llrectors, officers, emplo~s or agents in connection with the p1ocu rement, collection, compilation, analysis, interpretation, communication, publicat!on or delivery of any such information, or (b) any direct, Indirect, special, consequential, compensatory or incidental damages whatsoever (including without IJmitatlon, lost profits), even if MOODY'S Is advised in advance of the possibility of such damages, resulting from !he use of or inability to use, any such Information. The credit ratings and fl11cmdal repo1tlng analysis observations, If any, constituting part of the lnformatiori 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 IMPUED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS. MERCHANTABILITY OR ITTNESS FOR ANY PARTIOJLAR 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 lriformatlon contained herein, and each such user must accordingly make Its own study and evaluation of each security and of each issuer and guararitor of, and each provider of credit support for, each security that It may consider purchasing, holdlng or selling. MOODY'S hereby discloses that most issuers of debt securities (including corporate and munielpal bonds, debentures·, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignmerit or any rating, agreed to pay to MOODY'S for appraisal and rating se1vlces rendered t>y it fees ranging from $1,500 to approximately $2,400,000. Moody's Corporation (MCO) and its wholly-owned credit rating agency su bsidtary, Moody's Investors Service (MIS), also maintain policies and procedures to address the Independence of MIS's ratings and rating processes. Information regarding certain afflllatlons that may exist between directors of MCO and rated entitles, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, ls posted annually on Moody's website at www.moodys.com under the headlllg "Shareholder Relations -Corporate Governance -Director and SharehOlder Affiliation Policy.· r w 0 D r LJ C 0 u D Li J J -, City of Lubbock, Texas Water Utility Department TWDB Financial Assistance Application Community Information (WRD-006) December 20, 2007 1. Median Household Income: $31,844 2. Unemployment Rate: 6.0% 3. Persons below Poverty: 18.4% 4. Median Age of Work Force We have not been able to find a statistic for the median age of Lubbock's work force. We do however have a median age for Lubbock in general. Median Age of Population: 30.4 years 5. Largest Employers A list is provided separate from this written portion of the application. 0 0 Major Employers -Lubbock.MSA November 2007 0 Company Name Type ofBusinaa Telepbone CEO Employment Mlliling Ad4ras Fu# CEOTide Physical Address Website Addras Tens Tech U~nlty University (Also includes location a1 (806) 742-3853 KtlllHa!K:e 9740 Reese Tecmology Con1e:r) (806) 742-1371 Chancellor P.O. Box 41093 Broadway snd University Lubbock. TX 79409 WWW .t!u.cdu Covenant Hnlth Sy.um General Medical and ~I Hospital (806) 725-1011 Charley Trimble 4870 (806) m-6S52 CEOIPruident P.O. Box 1201 3615191hSl=t Lubboclc, TX 79408 www.covenanhcaltlimg Lubbock Independent School Diltrlct Elemma,y and Secondary Schook (806) 766-1086 Wayne Havens 3566 (806) 766-1210 Superinte~nt 1628 191h Street Same Lubbock. TX 7940 ! WWW .Jubbockisd.mg Unlwnlty Medital Ceatrr General Medical and SuJijcal Hospilal (806) 775-9222 David Allison 2828 (806) 775-9220 PresidM P.O. Box S980 6021.ndiana Avenue Lubbodc. TX 79417 WWW .teamumc.OI]! United Supermarllcts (C...ponte lkadquanen) Supennarke1s (806) 791-m20 Gart!Bumsteed 2570 ...... (806) 791-7492 President. P.O. Box 6840 7830 Orlando AYemr Lubboclc, TX 79493 www.uniledlel<aS.com AT&T Coaomunk:atiom T elcphone, lnlernet, Cellular and (806) 741-6361 DaYid R. George 2370 Vidro products (806) 141.m1 Rtgioml. Dirccw P.O. Box 2878 2010 AYCnue R. Room 138 Lubboclc, TX 79408 WWW .sit.com -J ITU Ho1hh Sclentts Center Hcallh Sciences Caller (Univemty) (806) 743-286.5 Bc:mhmd T. ~. MO. 2257 (806) 743-2882 Acting President 3601 41h Street, Rm. lB-100, Mail Stop 8100 .., Same Lubbock. TX 79430 www.llllhsc.edi J Coawrgys Corporatlcn CallCcller (806) 47Ui600 Shari Barnes 1000 (806)472~1 Directer, Operations 3701 West Loop 289 Same Lubboclc, TX 794fJ7 WWVII.C01l~COQI -, LubbGck Couaty Counly Government (SOS) 775-1000 Tom Head j (806) 775-1689 (:Qwy!udge P.O. Box 10536 904 Broadway Lubbock, TX 79408 www .co.lubboc:lc.tx.us -- Monday, November 26, 2007 Pagel of23 7 0 Company Name Type of Business Telephone CEO Employment C MaUi.n; Address Fu# CEOTitle Physical Address Website Address Lubboek &.le School Residential Care-Mental Retafda1ion (805) ~J-7041 Jacquolino Pon:h 801 0 (806) 741-3407 Superintendm P.O. Box 5396 3401 N. Univc:rsity Lubbock, TX 79408-5396 FrmsblpISD Independent School District (806) 866-9541 John Thomas 166 (806) 866-4135 Superintendent of Schools P.O. Box 100 300 Main Street Wolfforth, !X 79410 WWW, frmwp.k 12 IX. US bell SerricN Inbouncl Call Cemer (806) 747-2474 Charlie Anderson 500-999 (806) 766-6872 CEO & President, North America 5302 Avenue Q Same Lubbock, TX www.excellsvcs.co,n Tyco Fin Proledian Man.lfacturing-Fire spri,,ltlen (806) 472-2400 Len Schi&vooe 639 (806) 472-24 72 P1m:tMamgc:r u P0Bo><2806 8902 N. lnl=tatc 27 Lubbock, TX 79408-28(X; SuddenLlnk Communications C&lle TV Scl'Vicx:s and High Spet.d (806) 771-5000 Dave Gillos 613 Jmcmot (806) 771-6148 R.qponal Via: Presidail. 6710 Hartford Avcnuo Saine Lubbock. TX WWW .suddcnlink.can U.S. PMIIII Servlc~ Paital Sc:rvice (806) 799-1756 Ted Tyler 500-999 (806) 799-1470 Pcmnsster 1515 Avenue: G D Lubbock. TX 79402 G Bonn Semees, Inf. S1>1ff'~ of career and temp (806) 197-4161 Geneva Boren 516 employces./HR Consulting (806) m-2620 CEO. Founder 811d Olainn8n 6413 Univc:rsity Avenue Same Lubbock, TX 79413 www.goboren.c:om Teus Department of Criminal Justiu -Jolin T. Psychiatric/Medical Facility (806) 74.S-I 021 JohnAdams 510 Moalford Unit (806) 743-1726 Senior Warden 8602 Peach Stn:et Same 0 Lubbock, TX 79404 Sonic Drive Jn (806) 687-3758 Rooney Warren (806) 785-7141 P.O. Bo>< 16249 D 307 Franlcfotd Avenue Lubbock. TX 79490 Gtoe ~ F«d lac. Vehicle Sales and Service (SOS) 793-2727 P<uRuiz 493 • (SOS) 793--0886 CFO P.O. Box 16305 6000 w. 19th Street Lubbock, TX 79490 WWW.gencll!CSSCl'.COIII u Monday. November 26, 2007 Pagc:2of23 J J 0 0 CompanyN•-Type of Business Telephone CEO Empleyment D Mailing Address Fa!i# CEO Title Physical Address Website Addr-ess Tel185 ffi&bway Dept orTnmportalion Highway and Slm:t Comtructian (806) 745-4<1 II Randy Hopmann 475 (806) 748-4379 Disu-ict Engineer 135 Sla!M Road Same WWW.dot stale. IX.US Lubbock, TX 79404-520 l • Walmart Supo1unur # l !Wail (806) 193-209 I Let Scott (806)793--0004 Presidem an:I CF.O 4215 s. Loop 289 Same Lubbock, TX 79423 www.walman.COQl Wells Fargo PIion! Bank Bank Phone Cenier {300) 869-3557 Lori Loeascio 456 (806) 795-2319 Cenler Manager 4320 Huron Avcnw: r Same www.wcUsfaJgo.eom l.J 1.ubbock. TX 79407-37S5 Interim He•llhcare of Wm Tens Horoe Heallh CaR (805) 791-0042 Karl Stinson 435 (805) 797-6694 OwncrfAdminis!lator 2232 Indiana Avenue Same Lubbodc. TX 79410 www.inlerimheal!hcan,.c,om ...... W•lman Supen:eater (3 Locatlom) Retail (806) 793-9686 Lees.:«t 420 Li President and CEO 702 w. Loop 289 Lubbock, TX 79416 www.waknan.com ..... Lubbock-Cooper ISD Independent School District (806) 863-2282 Pat Hmdoison (806) 863-313-0 Suporinlemcnt ..... 16302Loop493 Same Ulbbodc. TX 79423 www.lc~t .... LubbockRqlonal MHMR Center Human Services (806) 766-0212 DBnettc Castle 395 (806) 766-0232 Chief ExeoJtivc Oflicer P.O. BOK 2828 1602 IOI!, St. Lubbodt,. TX 7940 I www.lrl.mlmu.stete.tx.us CClm'lKare Inc.JPenlicafl'errlck l'rGp. HealthCare (806) 780-1000 Richard Rublo 385 (806) 780-7400 Owner 4208 19th Stn:et Rear Same ---, Lubboc:lc, TX 79407 J American &Ide Buk State Canmercial Bank (806) 741-2500 W. R Collier 374 {806) 767-7166 Presidt.nl P.O. Box 1401 1401 Avenue Q Lubbock, TX 79408 www.asbonlinc:.com LulalJodl Clrlstian Unlveniey Ccllep. Univasities & Professicoal {806) 796-8800 Dr. Ken Jones Sc:hDols (806) 720-7255 Pmidalt 560119111.~ Same Lubbock, TX 79407-2099 WWW .lcu.cdu - Monday, November 26, 2007 Pago3of23 -, J ] 0 D • D • • • 0 l J ..J J City of Lubbock, Texas Water Utility Department TWDB Financial Assistance Application Legal Information December 21, 20_07 1. Application Resolution: One (1) certified copy and three (3) additional copies included. 2. Application Affidavit: One (1) certified original and three (3) copies included. 3. Other Contract Documents: The city has some contracts for water service, but they are customer service contracts and not for large volwnes of water. The revenues from these sources are not used as a pledge for repayment. 4. Contracts for Consultant Services: Three (3) copies of the consultant contracts are included. 5. Proposed Revenue Issue Secured by a Subordinate Lien: Since Certificates of Obligation will be issued by the City, this item is not applicable. 6. Status of Certificate of Convenience and Necessity: The City has a certificate of convenience and necessity with the State of Texas. A map showing the City of Lubbock's service area is included with this section. The map has been stamped (seal) with a December 15, 2006 date by the Texas Commission on Environmental Quality. 7. Citation to the Specific Legal Authority: . Legal authority document included, referencing the Texas Constitution, State Statutes, and City Charter provisions . n u 0 D r LI LI 0 - ..J J 7 .., ~ ~~ /'::-~ CITY OF LUBBOCK § COUNTY OF LUBBOCK § STATE OF TEXAS § CERTIFICATE TO COPY OF PUBLIC RECORD I hereby certify, in the pcrfonnana: of the functions of my office, that the attached instrument is a full, true and correct copy of the Resolution No. 2007-R0563 as the same appears of record in my office and that said document is an official record from the public office of the City Secrewy of the City of Lubbock, Lubbock County, State of Texas, and is kept in said office. I further certify that I am the City Secretary of the City of Lubbock, that I have legal custody of said record, and that I am a lawful possessor and keeper and have legal custody of the records in said office. In ,-.itness whereof I have hereunto set my hand and affixed the official seal of said office this 17th day of December, 2007. ~ .(City Seal) ~--~ c~-City of Lubbock Lubbock County, State ofTexas 0 D 0 0 0 0 l.J J D l J J j -, ,I lesolutlon Ro. 1007-llDS6l RESOLUTION Deceaber 14. 2007 Itea Ro. 5.7 WHEREAS, the City Cowicil of the City of Lubbock, T~ requesting financial assistance from the Texas Water Development Board; authorizing the filing of an application for assistance; and making certain findings in connection therewith. WHEREAS, the City of Lubbock, Texas hereby finds and detennines that there is an urgent need for the City to constract the raw water transmission line, pump stations, and water treatment plant improvements to enable Lake Alan Henry to serve as a water supply, and such .capital improvements cannot be reasonably financed unless .financial assistance is obtained from. the Texas Water Development Board; now, therefore, BE IT RESOLVED BY TIIE CITY COUNCIL OF THE CITY OF I LUBBOCK: SEcnoN 1: Thal an application is hereby approved and authorized to be filed with the Texas Water Development Board seeking financial assistance in an amount not to exceed $243,472,000 to provide for the costs of designing and constructing the raw water transmission line, pump stations. and water treatment plant improvements to enable Lake Alan Henry to serve as a water supply. SECTION 2: That Thomas Adams, Deputy City Manager be and is hereby designated the authorized representative of the City of Lubbock, Texas for purposes of furnishing such infonnalion and executing such documents as may be required in connection with the preparation and filing ofsuch application for financial assistance and the rules of the Texas Water Development Board. SECTION 3: That the following finns and individl1als arc hereby named as points of contact regarding subject matters specified below with regard to such application. Financial Advisor: Matthew Bol~ 214-989-1672 Managing Director RBC Capital Markets Cityplace, Suite 2500 2711 N. Haskell Avenue Dallas, Texas 75204 Engineer. John Kelly1 P.E. 806-473-2200 Vi~ President Parkhill, Smith and Cooper 42.22 85th Street Lubbock. Texas 79423 0 0 0 D D 0 Li 0 u ...I Bond Counsel: Jennifer Taffe 214-220-7941 Vinson & Elkins, L.L.P 3700 Trammell Crow Center 2001 Ross Avenue Dallas, Texas 75201 EXECUTED AND APPROVED this 14 day of Dec ... 2007. AITEST: ~-9 ii;City Secretary APPROVED AS TO FORM: ~' r= ;') : i>, i.__ .~YA<~ .. ~; . -/~~~ David Mill;, J ao/Anlia/Te.xas Wa11:r Dew:lopment Board.res n--a.~-tJ'I "WV\1 ::, 0 .., •• '-••tllC'\ .,,., .. __ ] • -~ ---;::, / / .l WRS-102 GENERAL HIGHWAY MAP ~~~ fB~~XA~OUNTY ,._ I), STAJ'r 0(,...lfflM;TO, HIC11WA'lll ~~~ AND l'IIIUC T'RMSl"OIUATIOII ni.wwotfAiltclNPlMIIIIMIDMS'Of -~ ......... ,,.., \) S. ~PARlMDIT Of' TAANSl'ORTATr<lN rJOCAli&NC."-M't--.-1,aft ~ -·--~~9 1978 .. C,l....,.....J ~--.-~,.~ -·-----.. -··--===-=::c--·------------.. ·-----,....--.-, .. ~.iiliiil:'-· er·~ '"' ~ C:01.M"t 1,0, I! -.._.,., .. j ,. ,.,_.,_ .. ) r:::1 Cl ) ] C:l 1 l c·1 -• t.l(ll'l°'t • ~ •ti!.• ' , ' : 0 0 0 0 r [ City of Lubbock, Texas Water Utility Department TWDB Financial Assistance Application Legal Information December 21, 2007 7. Specific Legal Authority: As to the legal authority of the City to conduct the Lake Alan Henry pipeline and water treatment plant construction activities, the City is a home rule municipal corporation as provided under authority of Article XI, Section 5 ( commonly called the home rule amendment) and by home rule charter adopted by election of December 27, 1917. Article II, Section 10 of the City Charter provides that the City has the power to, among other things, own or construct, within or without the city limits, water systems. Additionally, Section 402.017 of the Local Government Code provides similar authority. Please note that Section 402.017 will be renumbered to Section 552.017 of the Local Government Code, effective April 1, 2009. Lubbock City Charter provisions related to the ownership, acquisition, and control of public utilities follow: Sec.10. Ownership of public utilities. Said City shall have the power to buy, own or construct, and to maintain and operate within or without the city limits, complete water system or systems, gas or electric lighting power plant or power plants, telephone or telegraph systems, street railways, sewer systems, sewage plants, fertilizing plants, abattoirs, municipal railway terminals, or any other public service utility, and to demand and receive compensation for services furnished by the City for private purposes or otherwise, and to have the power to regulate, by ordinance, the collection of compensation for such services. Said City shall have the power to acquire by lease, purchase or condemnation, the property of any person, finn or corporation now or hereafter conducting such business, for the purpose of operating such public utility or utilities and for the purpose of distributing such service within or without the City, or any portion thereof. Sec. 11. Funds for acquisition of any public utility, security for same, etc. Should the City determine to acquire any public utility by purchase, condemnation or otherwise, as herein provided, said City shall have the power to obtain funds for the purpose of acquiring said public utility and paying the compensation therefor, by issuing bonds or notes, or other evidence of indebtedness, and may secure the same by fixing a lien upon the property constituting the public utility so acquired, and said security shall apply alone to said property so acquired. 0 0 r w r i.J 0 0 r L., r L 0 D 0 D D J Sec. 12. Manufacture or purchase of public utility products. Said City shall have the authority to manufacture its own electricity, gas or anything else that may be needed or used by it or the public; to make contracts with any person, firm or corporation for the purchase of gas, water, electricity or any other commodity or articles used by it or the public, and to sell same to the public as may be determined by the governing authorities. Sec. 13. Exclusive right to operate and maintain public utility required. In the event said City shall acquire by purchase, gift, devise, deed, condemnation or otherwise, any waterworks system, electric light or power system, gas system, street railway system, telephone system or other public service utility to operate and maintain for the purpose of serving the inhabitants of said City, the right to operate and maintain such public service utility, so acquired, shall be exclusive. n r ,.... 0 - ..., ..... A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE FROM THE WATER INFRASTRUCTURE FUND THROUGH THE PURCHASE OF $22,615,000 CITY OF LUBBOCK COMBINATIONTAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2008 (08.31) WHEREAS, CITY OF LUBBOCK (the "City") has made application for financial assistance in the amount of$22,615,000 from the Water Infrastructure Fund ("WIF') to finance the implementation of water projects recommended through the state and regional water planning process; and · WHEREAS, the City seeks financial assistance from the Texas Water Development Board (the "Board'') through the Board's purchase of$22,615,000 City ofLu~bock Combination Tax-and Waterworks System Surplus Revenue Certificates of Obligation, proposed Series 2008; for the· City's Lake Alan Henry Water Supply Project, all as is more specifically set forth in the application and in recommendations of Project Finance and Construction .Assistance administration, to which documents express reference is made; and · WHEREAS, in accordance with §15.975, Water Code, the ;Board hereby finds: . - 1. that the revenue pledged by the City will be sufficient to meet the all of the 1 obligations assumed by the City; 2. that the projects will meet water needs in a manner consistent with the state and regional water.plan for region 0, as required by §16.053(j)~ Water Code; and 3. that the project is a recommended water management strategy in·a B()ard-approved regional water plan adopted pursuant to§ 16.053, Water Code, ~d/or in the State Water Plan adopted in accordance with § 16.05 I, Water Code; 4. that the application and assistance applied for meet the requirements of Chapter 1'5, Subchapter Q, Water Code, and the Board's rules set forth in 31 Tex. Admin. Code (TAC) Chapter 363, Subchapters A and L; 5. that the current water audit required by §16.0121 Water Code has been completed by the City and file4 with the Board. NOW THEREFORE, based on said considerations and findings, the Texas Water Development Board resolves as follows: A commitment is made by the Bqard to the City of Lubbock for financial assistance in the amount of $22,615,000 from the Water Infrastructure Fund, to be evidenced by-the Board• s purchase of$22.615,000 City of LubbocJc Combination Tax and Waterworks System Surplus Revenue Certificates ofObHgation,"proposed Series 2008. This commitment will expire on March 31, 2009. Such commitment is conditioned as foJlows: 1. that the bond counsel opinion must include an opinion that the interest on the obligations is excludable from gross income or is exempt from Federal income taxation. Bond counsel may rely on covenants and representations of the issuer in rendering this opinion; 2. that the bond counsel opinion must include an opinion that the obligations are not "private activity bonds." Bond counsel may rely on covenants and representations of the issuer on rendering this opinion; 3. that the ordinance/resolution authorizing the issuance of the obligations must include that the proceeds of the obligations and the facilities financed with the proceeds of the obligations will not be used in a manner that would cause the obligations to be ''private activity bonds"; 4. that the ordinance/resolution authorizing the issuance of the obligations must include that the issuer will comply with the provisions of Section l 48 of the Internal Revenue Code of 1986 (relating to arbitrage); 5. that the ordinance/resolution authorizing the issuance of the obligations must include that the issuer will make any required rebate to the United States of arbitrage earnings; - 6. that the ordinance/resolution authorizing the issuance of the obligations must include that the issuer will take no action which would cause the interest on the obligations to be includable in gross income for Federal income tax purposes; 7. that.the ordinance/resolution authorizing the issuance of obligations will state that obligations can be called for early redemption only in inverse order of maturity, and on any date beginning on or after the first interest payment date which is 10 years from the dated date of the obligations, at a redemption price of par, together with accrued interest to the date fixed for redemption; 8. that the ordinance/resolution contain a provision that the ·city will maintain rates and charges sufficient to meet the debt service requirements on outstanding obligations of the City that are supported by such revenues derived from the operation of its waterworks and sewer system. 9. that the transcript must include a No Arbitrage Certificate or similar Federal Tax Certificate setting forth the issuer's reasonable expectations regarding the use, expenditure and investment of the proceeds of the obligations; I 0. that the transcript must demonstrate that the infonnation reporting requirerne~ts of Section 149(e)-ofthe Internal Revenue Code of 1986 will be satisfied. This requirement is currently satisfied by filing JRS Fonn 8038 with the Internal Revenue Service. A completed copy of IRS Fonn 8038 must be provided to the Executive Administrator of the Board prior to release of funds; 2 1 ' r .. t...J w D D 0 J 7 11. 12. thai the City will not cause or pennH the obligations to be treated as ''Federally Guaranteed" obligations within the meaning of section 149(b) of the Internal Revenue Code; that the City, or an obligated person for whom .financial or operating data is presented either.individually or in combination with other issuers of the City's obligations or obligated persons, will, at .a minimum, covenant to comply with requirements for continuing disclosure on an ongoing basis substantially in the manner required by Securities and Exchange Commission (SEC) rule 15c2-12 and detemiined as if the Board were a Participating Underwriter within the meaning of such rule, such continuing disclosure undertaking being for the benefit of the Bo~ and the beneficial owner of the. City's obligations, if the Board sells or otherwise transfers such obligations, and the beneficial "Owners of the Board's bonds if the City is an· obligated person with respect to such bonds under SEC rule 15c2-12; 13. that this commitment is contingent on a future .sale of bonds or on the availability of funds on hand; · 14. that the ·ordinance/resolution contain a provision that the City will at all times maintain and collect sufficient rates and charges to_produce net system revenues in an amount necessary to meet the debt service requirements of all outstanding revenue bonds and to maintain the funds established and requi.red by this ordinance; · 15. that the ordinance/resolution will ~ontain a provision that requires the City to at all times maintain ·sufficient rates and charges fotthe payment.of system.operations and/or maintain ~tes and charges sufficient for debt service requirements as fo11ows: a. if syste~ revenues a~ actually on deposit iil the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to 1:ie levied for any year, theri the amount of taxes which otherw:ise,wouid have been required to be levied and coilected may be reduced to the extent and by the amourit of revenues then on deposit in the Interest and Sinking Fund; or b. if surplus revenues are based upon budgeted amounts: i. that the ordinance/resolution authorizing the issuance of the obligations must include a requirement that the City transfer and deposit.in the Interest and Sinking Fund each month an amount of not less than I/12th of~e an~ual debt service on the Obliga~ons until,the amount on deposit iQ the Interest and Sinking Fund equals the amount required for annual debt service on the Obligations;, further l that the . ordinance/resolution authorizing· the issuance of the obligations must include a requirement that the City shall ~ot transfer any fu~s from the City's pledged system revenues to any fund other than the Intere-st and Sinking Fund until such time as an amount equal to the annual debt service on the Obligations for the then-current fiscal year has been deposited in the Interest and Sinking Fund; 3 11. that the ordinance/resolution authorizing the issua~ce of the obligations must include a requirement thaf for each year that the Obligations are outstanding, and prior to the time taxes are to be levied for such year, the City shall establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient surplus pledged revenues and/or tµ revenues, the monthly deposit of any other legally available funds on hand a\ the time of the adoption of the annual budget, or a combination ·thereof, into the · Interest and Sinking Fund for the repayment of the Obligations; and iii. that the ordinance/resolution authorizing the issuance ofthe bond or·· certificates shall include a requirement that the City shall at all times maintain and coJ1ect sufficient rates and charges in conjunction with any other legally available funds so that aftel'. payment of the costs of operating and maintaining the system, it produces revenues in an amount not less than 1.10 times debt service requir~ents of all outstanding bonds of the City and other obligations ofth~ .. City wJrich are secured in whole or in part by the pledged revenues, for which the City is ~udgeting the repayment of such obligations, or the City shall provide documentation which evidences the ~evy and coilection of an ad vatoiem tax rate dedicated to the Interest and •Sinkjng Fund, in conjuncti~ with any other legally available funds," sufficient "for the repayment of debt service requirements; 16. i that the loan is approved for funding und~r the Board's pre-design funding option, as specified in Board rule 31 T~C §363.1406, and initial ~d·future releases of - funds are subject to all rules of the Board relating to such funding option; ·. 17. that prior to the. release of funds for the costs of planning and design activities and work to obtain regulatory authority, to conserve, mitigate, convey and· develop water resources of the state which are recommended water management strategies in the Board approved Region O water: plan. and State Water Plan, the Executive Administrator of the Board ·must either issue a written finding that the City has the right to use the water that the project financed by the Board will provide or a written determination that a reasonable expectation exists that such a finding will be made before the release of funds for construction; · 18. that prior to the release of construction funds for that portion of a project •that proposes surf ace water development, the Executive Administrator must have made a written finding that the City has the right to use the water that the project financed by the Board wiU pro~ide; · 19. that the·ordinance/resoluti6n authorizing the issuance of the obligations must include that the Issuer shall ·use any surplus proceeds from the obligations. remaining after completion of the water supply proj~ct, to redeem, in inverse annual order, the obligations owned by the Texas Water Development Board; 4 ,. • ·-- 0. D 0 w ,..., l 20. that the ordinance/resolution authorizing the issuance of the obligations must include that the Issuer shall use any surplus proceeds from the obligations remaining after completion of the water supply project, to redeem, in inverse annual order, the obligations owned by the Texas Water Development Board. PROVIDED, however, the foregoing resolution is subject to the following additional requirements prior to ~ding of the loan: 1. 2. issuance of a written approving opinion of the Attorney General of the State of Texas stating that all of the requirements of the laws wider which 'Said obligations were issued have been complied with; that said obligations were issued in confonnity with the Constitution and laws of the State of Texas; and that said obligations are valid and binding obligations of the issuer; and compliance with all applicable requirements contained in the rules, regulations and policies of the Texas Water Development Board. APPROVED ~d ord~ of record this, the 25th day ofM~ch, 2008. TEXAS WATER DEVELOPMENT BOARD es E. Hening, Chairman 0 ATTEST: 0 J)ft~=t- Executive Administrator 0 ...., J J s D D D D D Li u r !....I D D D 0 J J GENERAL CERTIFICATE We, the undersigned, Mayor, City Secretary and Chief Financial Officer, respectively, of the City of Lubbock, Texas (the "City"), do hereby certify the following information: 1. This certificate relates to the City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A (the "Certificates"). Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the ordinances (the "Ordinance") of the City Council authorizing the issuance of the Certificates. 2. The total tax supported debt of the City, after giving effect to the issuance of the proposed Certificates, is $655,680,000. 3. The assessed value of property for the purpose of taxation in the City of Lubbock, Texas, as shown by its official tax rolls for the year 2007, being its latest approved official assessment rolls is $10,897,210,563, which amount is net of the amount of any exemptions to which property otherwise subject to taxation was entitled pursuant to applicable provisions of the Constitution and laws of the State of Texas. 4. A true and correct copy of the debt service schedule for the Certificates and all other outstanding indebtedness of the City payable from ad valorem taxes is set forth in Exhibit A hereto. 5. The City of Lubbock, Texas, is a duly incorporated Home Rule City, and is operating and existing under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of the City. The Home Rule Charter was last amended at an election held in the City on November 2, 2004. 6. The following are the duly qualified and acting, elected or appointed officials of the City of Lubbock, Texas: Tom Martin, Mayor Jim Gilbreath, Mayor Pro Tern Lee Ann Dumbauld, City Manager Jeffrey A. Yates, Chief Financial Officer Rebecca Garza, City Secretary Linda DeLeon Floyd Price Todd R. Klein Paul Beane John W. Leonard, III ) ) ) Members of ) the Council ) ) From April 24, 2008, until the election and swearing in of Mayor Tom Martin on May 16, 2008, David A. Miller served as Mayor. From April 24, 2008, until the election and swearing in of Paul Beane on June 13, 2008, Phyllis S. Jones served as councilmember holding the seat now held by Paul Beane. 7. No litigation of any nature has been filed or is now pending to restrain or enjoin the issuance or delivery of the Certificates or which would affect the provisions made for their payment or security, or in any manner questioning the proceedings or authority concerning th<? issuance of the Certificates, and so far as we know and believe, no such litigation is threatened. Doc #1400547 D n D D 0 r w 0 0 0 J J J 8. Neither the corporate existence nor the boundaries of the City, nor the title of its present officers to their respective offices is being contested, and so far as we know and believe no litigation is threatened regarding such matters, and no authority or proceedings for the issuance of the Certificates have been repealed, revoked or rescinded. 9. There has not been filed or presented to the City Secretary or the City Council any petition protesting, challenging or otherwise questioning the issuance of the Certificates. 10. The Ordinance was duly adopted by the City Council on June 12, 2008. 11. A true and correct statement of the revenues and expenses of the Waterworks System for fiscal years 2003, 2004, 2005, 2006 and 2007, together with a true and correct statement of current rates and charges for the services of the System, is attached hereto as ExhibitB. 12. Except for the pledge of income and revenues of the System to the payment of: (i) water supply contracts with the Canadian River Municipal Water Authority, (ii) the Certificates, and (ii) the obligations set forth in Exhibit C hereto, none of the City's debts or obligations will be secured by a lien on and pledge of the revenues or income of the System. 13. The City is not in default in the payment of principal and interest on its debt obligations. 14. The undersigned Mayor and City Secretary officially executed and signed the Certificates, including the Initial Certificates delivered to the initial purchasers of the Certificates, by manually executing the Certificates or by causing facsimiles of our manual signatures to be imprinted or copied on each of the Certificates, and we hereby adopt said manual or facsimile signatures as our own, respectively, and declare that said facsimile signatures constitute our signatures the same as if we had manually signed each of the Certificates. 15. The Certificates, including the Initial Certificates delivered to the initial purchasers of the Certificates, are substantially in the form, and have been duly executed and signed in the manner, prescribed in the Ordinances. 16. At the time we so executed and signed the Certificates we were, and at the time of executing this certificate we are, the duly chosen, qualified, and acting officers indicated therein, and authorized to execute the same. 17. We have caused the official seal of the City to be impressed, or printed, or copied on each of the Certificates; and said seal on the Certificates has been duly adopted as, and is hereby declared to be, the official seal of the City. [EXECUTION PAGE FOLLOWS] -2- 0 D 0 D 0 0 D u 0 J 0 0 D J EXECUTED AND DELIVERED this :l""° . ..J. \c, J ~ 0 "f' . MANUAL SIGNATURE STA TE OF TEXAS § § COUNTY OF LUBBOCK § OFFICIAL TITLES Mayor, City of Lubbock, Texas Before me, the m1dersigned authority, on this day personally appeared Tom Martin, Mayor of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. ti,. --1 GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS~ ~ 1J ~ Jldo [SEAL] Notary PubliQ' ELISA SANCHEZ Notary Public, State of Texas My ConmlsS1on Expires 11-07-2011 In and for the State of Texas Signature Page for General Certificate D D D 0 D 0 D D D D ,.., u 0 0 0 - l EXECUTED AND DELIVERED this _-_,.s_,_,JQ...., ... """•-=----.....::l~~,,,,.., =-J-_o..;:_o "'i_ .. MANUAL SIGNATURE STATE OF TEXAS § § COUNTY OF LUBBOCK § OFFICIAL TITLES Chief Financial Officer, City of Lubbock, Texas Before me, the undersigned authority, on this day personally appeared Jeffrey A. Yates, Chief Financial Officer of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS l:)fh dig lj ~Jpj/ thh~ ~ .._ In and for the State of Texas Signature Page for General Certificate 0 0 D 0 D D D 0 0 ,.... 0 0 D D 0 0 D 0 0 EXECUTED AND DELIVERED this --:f u ~ ~ \o J .}. t> a<f' . MANUAL SIGNATURE STATE OF TEXAS § § COUNTY OF LUBBOCK § OFFICIAL TITLES City Secretary, City of Lubbock, Texas Before me, the undersigned authority, on this day personally appeared Rebecca Garza, City Secretary of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE IBIS/I dd.ty of -J;11t.1 3c;.oQ [SEAL] Notary Public, LINDA B HART Notary Public, Suit• of TellCff My Cammlsslgn Expirff Junt io, 1011 In and for the State of Texas Signature Page for General Certificate n w 0 Exhibit A D (Attached.) 0 D 0 D 0 0 D D D 0 0 n D D 0 0 0 t""') . I w f1 L; [] D 0 r l.J ..... u ..... LI r7 L G 0 0 0 0 0 1 L 0 FYE Outstanding Debt 01 30-Sep Priocleal Interest Total Princl£al 2008 s 26,410,000 $ 25,177,765 s 51,587,765 $ 2009 31,825,000 30.669,002 62,494,002 975,000 2010 33,090,000 27,952,909 61,042,909 980,000 2011 34,150,000 26,474,424 60,624,424 985,000 2012 34,090,000 24,936,629 59,026,629 995,000 20l3 35,255,000 23,365,186 58,620,186 1,005,000 2014 35,615,000 21,727,721 57,342,721 1,020,000 2015 34,035,000 20,138,400 54,173,400 1.035,000 2016 33,570,000 18,577,979 52,147,979 1,050,000 2017 34,195,000 16,944,851 51,139,851 1,065,000 2018 35,235,000 15,266,040 50,.501,040 1,090,000 2019 33,660,000 13,546,153 47,206,153 1,110,000 2020 32,120,000 l l,947,S63 44,067,563 1,135,000 2021 31,150.000 10,395,796 41,545,796 1,160,000 2022 29,140,000 8,894,435 38,034,435 1,190,000 2023 28,920,000 7,447,666 36,367,666 1,220,000 2024 27,775,000 6,027,206 33.802,206 1,250,000 2025 27,470,000 4,667,566 32,137,566 1,285,000 2026 24,380,000 3,368,450 27,748,450 1,320,000 2027 19,080,000 2,272.219 21,352,219 1,360,000 2028 14,215,000 1,441,369 15,656,369 1,385,000 2029 5,475,000 967,143 6,442,143 2030 5,735,000 712,173 6,447,173 2031 6,000,000 44S,949 6,445,949 2032 2,195,000 260,438 2,455,438 2033 2,290,000 159,525 2,449,525 2034 2,400,000 54,000 2,454,000 s 659,475,000 $ 323,838 .s 52 $ 983,313,552 s 22.615.000 Average Annual Debt Service Requirements All General Obligation Debt (2008-2034): Maximum Annual Debt Service Requirements All General Obligation Debt (2009): ''' Does not inclu<k lease/pwchasc obligations. The Certificates Total Interest Total Debt Service $ 62,903 $ 62,903 $ 51,650,667 460,079 1,435,079 63,929,081 454,964 1,434,964 62,477,873 447,316 1,432,316 62,056,741 436,985 1,431,985 60,458,614 424,701 1,429,701 60,049,887 410,845 1,430,845 58,773,567 395,345 1,430,345 55,603,745 378,055 1,428,055 53,576,034 358,930 1,423,930 52,563,780 337,932 1,427,932 51,928,972 315,123 1,425,123 48,631,275 289,852 1,424,852 45,492,414 261,983 1,421,983 42,967,779 232,237 1,422,237 39,456,672 200,769 1,420,769 37,788,435 167,673 1,417,673 35,219,878 133,009 1,418,009 33,555,574 96,822 1,416,822 29,165,272 59,104 1,419,104 22,771.323 19,923 1,404,923 17,061..292 6,442,143 6,447,173 6,445,949 2,455,438 2.449,525 2,454,000 s 5,944,548 $ 28.559,548 $ 1,011.873,101 $ 37,476,782 s 63,929,081 0 0 D 0 D 0 i1 w 0 0 r L.J 0 r I LI n l ) 0 ExhibitB (Attached.) 0 0 0 0 D 0 D 0 0 D D r LI C r, 0 Monthly Water Rates On September 26, 2001 the Lubbock City Council adopted a four year 12% total increase in water rates. On September 26, 2002, the Lubbock City Council added a fifth year rate increase of 3%. On September 13, 2006, the Lubbock City Council adopted a roughly 11% increase in water rates, effective October 1, 2006. The previous rate increases were used mainly to fund the North Panhandle Project. On February 28, 2008, the Lubbock City Council adopted a roughly 16% increase in water rates, effective March 1, 2008. It is anticipated that a 16% increase will be necessary in 2009, 2010 and 20 I 1 to finance the alternative water supply for the City, the Lake Alan Henry Project. The new water rates are set forth below: BaseRatern 3/4" meter l" meter (single family residential) l" meter (other than residential) Flow Rate Charge per 1.000 Gallons Single Family Residential Multi-Family Residential Commercial Schools Sprinkler Systems Cll The Base Rate is l'or water sctvK:C; higher Base ~ apply to metas ranging from I.S" ID 10". Old Rate $ 7.66 12.79 12.79 2.09 2.00 2.09 1.73 2.61 Effective 03/01/2008 8.89 14.84 14.84 2.42 2.42 2.42 2.42 3.03 0 LJ n [ 0 D L..: u 7 -, _J Waterworks System Condensed Statement of Operations 2007 REVENUE Fiscal Year Ended S~ember 30, 2006 2005 2004 2003 Operating Revenues $ 35,454,426 37,330,953 33.106,786 31,907,893 32,770,781 Non-Operating Revenues 1,7461843 116781056 8831824 5391413 1,337~30 Gross Revenues 37,201,269 39,009,009 34,190,610 32,447,306 34,108,111 EXPENSE Operating Expense Ill 18,781,580 20,720,395 17,619,668 20,550,379 20.137,448 Net Revenues $ 18,419,689 18,288,614 16,570,942 11,8%.927 13,970,663 Number of Water Meters 77,Jgg 77,147 75,876 72,500 72,505 11 > Opcming expense includes 00IIS1nlction Rpayment costs and ope111lion and maincenance charges paid to Canadian River MUDicipal W•IC1' Authority and excludes depreciation Uld capital eitpc:ndimrcs. / r L 0 r w r L 0 ,._J Li J ] ] J ] .., J ] J Exhibit C Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008, dated. April 15, 2008, issued in the original principal amount of$80,485,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Taxable Series 2008, dated December 15, 2007, issued in the original principal amount of $11,805,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2007A, dated August 15, 2007, issued in the original principal amount of $60,820,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2007, dated January 1, 2007, issued in the original principal amount of $25,255,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2006, dated April 15, 2006, issued in the original principal amount of $76,950,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2005, dated August 15, 2005, issued in the principal amount of $46,525,000 Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 2005, dated July 1, 2005, issued in the original principal amount of $43,080,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2004, dated September 15, 2004, issued in the original principal amount of$3,100,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2003, dated July 15, 2003, issued in the original principal amount of$9,765,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2002, dated February 15, 2002, issued in the original principal amount of $6,450,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 1999, dated September 15, 1999, issued in the original principal amount of $24,800,000 Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 1999, dated April 1, 1999, issued in the original principal amount of $12,300,000 Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1999, dated January 15, 1999, issued in the original principal amount of $15,355,000 Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1998, dated October 1, 1998, issued in the original principal amount of $10,260,000 Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1993, dated October 1, 1993, issued in the original principal amount of $1,470,000 C-1 r u 0 r, I u r L.J C C r LJ w J ]. ] -, CITY OF LUBBOCK, TEXAS The Attorney General of Texas William P. Clements Building 300 West 15th Street, 9th Floor Austin, Texas 78701 Attention: Public Finance Division Comptroller of Public Accounts Thomas Jefferson Rusk Building 208 East 10th Street, Room 448 Austin, Texas 78701-2407 Attention: Economic Analysis Center June 12, 2008 Re: City of Lubbock, Texas Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A To the Attorney General: The executed hritial Certificate for the captioned series has been or soon will be delivered to you for examination and approval. In connection therewith, enclosed is a General Certificate executed and completed except as to date. When the Initial Certificate has received your approval and is ready for delivery to the Comptroller of Public Accounts for registration, this letter will serve as your authority to insert the date of your approval in the General Certificate and deliver the Initial Certificate to the Comptroller. Should litigation in any way affecting such Certificate develop the undersigned will notify you at once by telephone and telecommunication. You may be assured, therefore, that there is no such litigation at the time the Initial Certificate is finally approved by you, unless you have been advised otherwise. To the Comptroller: The approved Initial Certificate for the captioned series of Certificates will be delivered to you by the Attorney General of Texas. You are hereby requested to register the Initial Certificate as required by law and by the proceedings authorizing such Initial Certificate. Following registration, you are hereby authorized and directed to notify and deliver the Initial Certificate to Vinson & Elkins L.L.P ., Dallas, Texas, which has been instructed to pick up LUB200nt012 Dallas 1406709v.l 0 0 same a your office.Please also deliver to Vinson & Elkins L.L.P ., Dallas, Texas, four copies of each of the following: 0 L 0 0 D u D D --, I. 2. LUB200171012 Dallas 1406709v. l Attorney General's approving opinion; and Comptroller's signature certificate. Very truly yours, CITY OF LUBBOCK, TEXAS By: Tom Martin, Mayor -2- D D D D L r l.J 0 ESCROW AGREEMENT FOR TEXAS WATER DEVELOPMENT BOARD TRANSACTIONS This Escrow Agreement (the "Agreement") is entered into as of June 15, 2008 by and between the City of Lubbock, Texas (the "Issuer"), a political subdivision of the State of Texas, and the Texas Treasury Safekeeping Trust Company (the ''Trust Company"). WITNESSETH: WHEREAS, the Issuer has authorized and sold City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, dated June IS, 2008, in the aggregate principal amount of$22,615,000 (the "Certificates"); and WHEREAS, the Certificates were sold to the Texas Water Development Board (the "Board"), which required as a condition of the sale that proceeds of the sale, less amounts to pay costs of issuance, (the "Funds") be deposited in escrow subject to withdrawal only with the approval of the Development Fund Manager of the Board or an authorized representative; provided, however, the Funds can be transferred in accordance with this Agreement; and WHEREAS, the Texas Treasury Safekeeping Trust Company (the "Trust Compant') is authorized to receive, transfer and disburse money and securities belonging to the state, agencies and local political subdivisions of the state, and nonprofit corporations, foundations, and other charitable organizations created on behalf of the state or an agency or local political subdivisions of the state under Section 404.103, Government Code; and WHEREAS, pursuant to Section 404.103, Texas Government Code~ the Interlocal Cooperation Act. Chapter 791, Texas Government Code, and the Public Funds Investment Act, Chapter 2256, Texas Government Code, the Trust Company manages the Texas Local Government Investment Pool ("TexPool"), a public funds investment pool; and WHEREAS, Section 2256.016(d), Texas Government Code, authorizes the Issuer to delegate to an investment pool the authority to hold legal title as custodian of investments purchased with its local funds. NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Issuer and the Trust Company agree as follows: n Dallas 1411557v.l D 0 r LI D D • J ] l J Section I: The Funds shall be deposited with and held in escrow in TexPool to the credit of an account entitled City of Lubbock Escrow 2008 Escrow Account (the "Escrow Account.,) until released or transferred as provided in this Agreement. The escrow period shall begin on the date money is first deposited to the credit of the Escrow Account and shall terminate when all money so deposited, together with all interest earnings has been released or transferred in accordance with this Agreement. Section 2: Funds shall be invested in accordance with the Participation Agreement between the Issuer and the Trust Company. All interest earned shall be deposited in the Escrow Account and shall become part of the Accounts. Al1 losses resulting from the investment of the Funds shall be charged against the Account. Section 3; Toe Issuer reserves the right to secure release from the Trust Company of all or a portion of the Fund upon presentation to the Trust Company of an executed escrow agreement with another financial institution. Upon receipt of such an agreement and with the written authorization from the Board, the Trust Company shall transfer or release the Funds held in the Escrow Account to the successor escrow agent. Section 4: Upon written authorization from the Executive Administrator or his authorized representative authorizing release of all or a portion of the Funds in the Escrow Account, the Trust Company will authorize the release of Funds into the 2008A TWDB CO Account, or use as directed by the Issuer. Section 5: If only a portion of the Funds in the Escrow Account are released pursuant to Section 4, or transferred pursuant to Section 3, the Trust Company shall continue to maintain the Escrow Account in accordance with the tenns hereof until all Funds in the Escrow Account have been released or transferred. The Trust Company shall have no further obligations or responsibilities in connection with this Agreement and this Agreement shall tenninate when no funds remain on deposit in the Escrow Account. Section 6: The Trust Company may rely on, and shall not be liable for acting or refraining from acting in accordance with any written notice, instruction, request or other document furnished to it and believed by it to have been signed, approved or presented by the proper _party or parties. The Trust Company may consult with counsel regarding its duties or responsibilities under this Agreement and shall not be liable for action taken or not taken in good faith in reliance upon such counsel. The Trust Company shall not be liable for any exemplary, consequential or incidental damages by reason of performance of its duties under this Agreement. Section 7: No provision of this Agreement shall require the Trust Company to expend or risk its own funds or otherwise incur any financial liability in the perfonnance of its duties hereunder, or in the exercise of any of its rights or powers. Section 8: To the extent pennitted by law, the Issuer will indemnify and defend the Trust Company from and will hold it harmless from, any and all losses. costs, damages, claims and expenses, including attorney's fees, incurred or suffered by the Trust Company in connection with, or arising out of, 2 Dallns 141 l557v. I D C. J 0 - LJ ,..., u D .... J ] J this Escrow Agreement, except for such acts or omissions resulting from the negligence or willful misconduct of the Trust Company. Section 9: The Trust Company may resign from its duties hereunder at any time by giving written notice to the Issuer, but only if a successor Escrow Agent is appointed and approved by the Board. If an instrument of acceptance by a successor to the Trust Company hereunder shall not have been delivered to the Trust Company within 30 days after giving such notice of resignation, the resigning Trust Company may petition any court of competent jurisdiction for the appointment of a successor to the Trust Company's duties hereunder. Section JO: This Agreement shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties have executed this Escrow Agreement in four originals, each of which shall be deemed to be an original, as of the date and year first written above. Notice Address: City of Lubbock P .0. Box 2000 Lubbock, Texas Attention: Chief Financial Officer Notice Address: 208 E. I 01h Street Austin. Texas 78701 Attn: Kathy Bueltel Contracts Administrator Fax: 512-463-5971 Phone: 512-463-0823 Dallas l411557v. I City of Lubbock, Texas, as Issuer By:~~ Name: Tom Martin Title: Mayor of the City of Lubbock, Texas Texas Treasury Safekeeping Trust Co. ::E~ro~ Paul Ballard . Chief Executive Officer 3 0 r, L.J 0 ...., u 0 0 r l.J '7 l..J J -, l l REGISTERED No. 1 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $975,000 CUSIP NUMBER: and to pay interest on such nncipal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. 0 0 0 0 0 0 I 0 0 7 ...., l J REGISTERED No.2 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $980,000 CUSIP NUMBER: 0.623% February 15, 2010 June 15, 2008 June 6, 08 549188 BN9 received, hereby promises to pay to N1t!!!!...~ TY TIIOUSAND DOLLARS and to pay interest on s~'"'l:~ amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. 0 D r ' L..' u r l.J 0 0 ~ D 0 0 D ...J -, REGISTERED No. 3 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $985,000 CUSIP NUMBER: 0.933% February 15, 2011 June 15, 2008 Ju 6, 08 549188 BP4 received, hereby promises to pay to N N~ ED HTY-FIVE THOUSAND DOLLARS and to pay interest on ~rincipal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. 0 0 0 C 0 0 0 r-- 1 w L 0 D 7 REGISTERED REGISTERED No. 4 $995,000 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION MATURITY DATE: SERIES 2008A CERTIFICATE DATE: CLOSING DATE: CUSIP NUMBER: 1.153% February 15, 2012 June 15, 2008 June 26, 2008 549188 BQ2 The City of Lubbock (the "City''), in the County of ~~\e of Texas, for value received, hereby promises to pay to .. '~ ,, or registered assigns, on the Maturi ~!sum of E THOUSAND DOLLARS and to pay interest on s al amount from the later of the Closing Date specified above or the most recent intere ent date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Paymentffransfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. 0 0 0 0 0 0 ,..., I I. .J D Li J J REGISTERED No. 5 INTEREST RATE: 1.303% United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: February 15, 2013 CERTIFICATE DATE: June 15, 2008 CLOSING DATE: June 26, 2008 REGISTERED $1,005,000 CUSIP NUMBER: 549188 BRO The City of Lubbock (the "City"), in the County of Lub te of Texas, for value received, hereby promises to pay to or registered assigns, on the Ma · ~ HOUSAND DOLLARS and to pay interest on ~Xpal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. C 0 0 0 r, L D ,- w 0 0 0 D fi LJ Li D • REGISTERED No.6 United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A REGISTERED $1,020,000 INTEREST MATURITY CERTIFICATE CL$ CUSIP RATE: DATE: DATE: D · NUMBER: 1.433% February 15, 2014 June 15, 2008 , 549188 BS8 received, hereby promises to pay to and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. D 0 0 LJ 0 D 0 D n lJ 0 ..., REGISTERED REGISTERED No. 7 $1,035,000 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOC~ TEXAS TAX AND WATER WORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION MATURITY DATE: SERIES 2008A CERTIFICATE DATE: CUSIP NUMBER: and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 3 60-day year of twelve 3 0-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary ban.king arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date . 0 L 0 r L 0 0 0 0 D 0 r w w r D REGISTERED No. 8 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $1,050,000 CUSIP NUMBER: 1.733% February 15, 2016 June 15, 2008 June 26, 20 549188 BU3 received, hereby promises to pay to or registered assigns, o cf., ~v~ ilie sum of I~~y THOUSAND DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. C D 0 0 0 D 0 0 0 0 0 0 0 J j REGISTERED No.9 INTEREST RATE: 1.883% United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: February 15, 2017 CERTIFICATE DATE: June 15, 2008 CLOSING DATE: June 26, 2008 REGISTERED $1,065,000 CUSIP NUMBER: 549188 BVl The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. r w D 0 0 0 0 r u w D 0 0 D D D J l REGISTERED REGISTERED No. 10 $1,090,000 INTEREST RATE: 2.013% United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION MATURITY DATE: February 15, 2018 SERIES 2008A CERTIFICATE DATE: June 15, 2008 CLOSING DATE: The City of Lubbock (the "City"), in the County CUSIP NUMBER: and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Paymentffransfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. r Ll 0 D I""") I LJ 0 D 0 0 0 D D REGISTERED No. 11 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $1,110,000 CUSIP NUMBER: 2.133% February 15, 2019 June 15, 2008 Jwie 26, 08 549188 BX7 received, hereby promises to pay to ONE ~ E DRED TEN THOUSAND DOLLARS and to pay interest on ~rincipal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. M u D 0 D u 0 D D 0 0 0 D 0 0 0 0 REGISTERED REGISTERED No. 12 $1,135,000 INTEREST RATE: 2.367% United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION MATURITY DATE: February 15, 2020 SERIES 2008A CERTIFICATE DATE: CUSIP NUMBER: 549188 BYS , State of Texas, for value and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Banlc of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/fransfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date, D D 0 0 r L D 0 n r u 0 0 0 ,..... w D 0 0 REGISTERED REGISTERED No. 13 $1,160,000 United States of America State of Texas County of Lubbock CITY OF LUBBOCK. TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION INTEREST RATE: 2.489% MATURITY DATE: February 15, 2021 SERIES 2008A CERTIFICATE DATE: June 15, 2008 The City of Lubbock (the "City"), in the County o received, hereby promises to pay to or registered assigns, on the CLOSING DATE: CUSIP NUMBER: ONE MliQJ H RED SIXTY THOUSAND DOLLARS and to pay interest on su'ilncipal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. ...., .. J n u D D n u 0 r u 0 0 r w 0 0 D REGISTERED No. 14 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $1,190,000 CUSIP NUMBER: 2.573% February 15, 2022 June 15, 2008 June 26, 0 549188 CA6 received, hereby promises to pay to N ONE MILLI~ D D NINETY THOUSAND DOLLARS and to pay interest on such ~al amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. D r-, L.J ,..., u l""""l u L.J 0 0 0 0 0 r L D D n n REGISTERED No.15 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CLOSING REGISTERED $1,220,000 CUSIP NUMBER: and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"}, of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. D D D D ,..... u • D D • D • 0 • r u D D n REGISTERED REGISTERED No. 16 $1,250,000 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION MATURITY DATE: SERIES 2008A CERTIFICATE DATE: CLOSING DATE: CUSIP NUMBER: 2.710% February 15, 2024 June 15, 2008 June 549188 CC2 received, hereby promises to pay to & ~ ONE MILL _ HUNDRED FIFTY THOUSAND DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Paymentff ransfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. .J '7 - u 7 w L [1 D 0 0 REGISTERED No. 17 United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A REGISTERED $1,285,000 RATE: DATE: DATE: T NUMBER: INTEREST MATURITY CERTIFICATE C~ CUSIP 2.759% February 15, 2025 June 15, 2~08 ~l 549188 COO The City of Lubbock (the "City"), · ,~ ~Vck, State of Texas, for value received, hereby promises to pay to I' ft co. or registered assigns, o \J~ty ate specified above, the sum of ONE MILLI O HUNDRED EIGHTY-FIVE THOUSAND DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Paymentffransfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/fransfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. ] J u REGISTERED REGISTERED No. 18 $1,320,000 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY CUSIP NUMBER: o or registered assigns, on the Maturity Date specified above, the sum of 0 D 0 r 0 ONE MILLION THREE HUNDRED TWENTY THOUSAND DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360~day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. ] j ] l .J ..., D D ,-. L, D REGISTERED REGISTERED No. 19 $1,360,000 INTEREST RATE: 2.832% United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION MATURITY DATE: February 15, 2027 SERIES 2008A CERTIFICATE DATE: The City of Lubbock (the "City"), i received, hereby promises to pay to or registered assigns, on ty Date specified above, the sum of CUSIP NUMBER: ONE MILLION THREE HUNDRED SIXTY THOUSAND DOLLARS and to pay interest on such principal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. D D D 0 0 D D D r w D D • D REGISTERED No. 20 INTEREST RATE: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A MATURITY DATE: CERTIFICATE DATE: CLOSING DATE: REGISTERED $1,385,000 CUSIP NUMBER: 2.877% February 15, 2028 June 15, 2008 J 6, 08 549188 CG3 received, hereby promises to pay to D N ONE MILLI~ H RED EIGHTY-FIVE THOUSAND DOLLARS and to pay interest on ~rincipal amount from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2008. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. 0 D r LI '7 L.J 0 D D D D D • w D n 0 If the date for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Certificate is one of a series of fully registered certificates specified in the title hereof issued in the aggregate principal amount of $22,615,000 (herein referred to as the "Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance"} for the purpose of paying contractual obligations to be incurred for authorized public improvements (collectively, the "Project"), as described in the Ordinance, and to pay the contractual obligations for professional services of attorneys, financial advisors and other professionals in connection with the Project and the issuance of the Certificates. The City has reserved the option to redeem · ng on or after February 15, 2019, in whole or in part, before their d maturity dates, on August 15, 2018, or on any date thereafter, at a principal amount of the Certificates so called for redemption plus acm r ate fixed for redemption. If less than all of the Certificates are to r eeme ant to an optional redemption, the Certificates shall be redeemed in i v f ·ty. If less than all of the Certificates within a maturity are to be rede t "thin such maturity shall be called by lot or other customary method t~ · selection of the Certificates. Notice of such red f r redemptions shall be given by first class mail, postage prepaid, not less than 30 day efore the date fixed for redemption, to the registered owner of each of the Certificates to be redeemed in whole or in part. Notice having been so given, the Certificates or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Certificates or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Certificates or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Certificate is transferable upon surrender of this Certificate for transfer at the designated office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Certificates of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided ( except interest shall be paid to the person in whose name this Certificate is registered on the Record Date) and for all other purposes, whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. -2 - !423921 v. I LUB200/7\013 C LJ D D LJ D 0 0 D r LJ 0 0 r D D 0 IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the series of which it is a part is duly authorized by law; that all acts, conditions, and tlrings to be done precedent to and in the issuance of the Certificates have been properly done and performed and have happened in regular and due time, form, and manner as required by law; that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Certificates witlrin the limit prescribed by law; tha~ in addition to said taxes, further provisions have been mlBe payment of the debt service requirements of the Certificates to be additionally.a and secured by a lien on and pledge of the Net Revenues (as defined in the Ordin · 's Waterworks System (the "System"), such lien and pledge, however, bei ( • . ordinate to the lien on and pledge of the Net Revenues of the System se of Prior Lien Obligations ( as defined in the Ordinance) currently outst issued by the City and (ii) on parity with the lien on and pledge of the t e System securing the payment of the Previously Issued Obligations inance) and any Additional Obligations (as defined in the Ordinance) t in the Ordinance, the City reserves and retains the right to issue Prio ati ile the Certificates are outstanding without limitation as to principal amou to any terms, conditions or restrictions other than as may be required by law or oth , as well as the right to issue Additional Obligations payable from and, together with the ertificates and the Previously Issued Obligations, equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System; and that the total indebtedness of the City, including the Certificates, does not exceed any constitutional or statutory limitation. - 3 - 142392 Iv.\ LUB200/71013 LI D D w 0 LJ D 0 r- u 0 0 0 0 D 0 0 IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Certificate. -7 City Secretary, City of Lubbock, Texas _-;::..~~ ~ Lt, l,JJ,::,,, ,-,;--,. 0 o; -lJ "-!°v, i' A,. ........ '.··•• ••• _ ~ ·-~~ if f.. / _/\ ··~ O t ::';'-,;,~:C'lt; '-<., .... ' ·' ·--· ik-:;; : .... ;; ~ \,-,,/ .l ff ~~· ............ • * § ~1/,-q, 7' • $ ,.;;,..-iF ''//• .F.:X,f',. # ·l!i11!111,.1'-\\'l.~~ -4- 1423921v.l LUB200/71013 C D n 0 r- u D D 0 D D 0 C fJ CERTIFICATE OF PAYING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Certificate of this series of Certificates was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates referred to in the within-mentioned Ordinance. Dated: - 5 - 1423921 v. I LUB200/71013 C 0 0 D l.J D D D r w D 0 D 0 D D 0 0 0 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): ______________ _ Signature Guaranteed By: Authorized Signatory !423921v.l LUB200/710\3 -6 - e within Certificate and appoints books kept for 0 0 D D D D • D D D D D D D D D D D D Vinson&Elkins June 26, 2008 $22,615,000 CITY OF LUBBOCK, TEXAS TAX AND WATER WORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2008A WE HA VE represented the City of Lubbock, Texas (the "City"), as its Bond Counsel in connection with an issue of certificates of obligation (the "Certificates") described as follows: CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008, dated June 15, 2008, issued in the principal amount of$22,615,000. The Certificates mature, bear interest, are subject to redemption prior to maturity and may be transferred and exchanged as set out in the Certificates and in the ordinance adopted by the City Council of the City authorizing their issuance (the "Ordinance"). WE HA VE represented the City as its Bond Counsel for the sole purpose of rendering an opinion with respect to the legality and validity of the Certificates under the Constitution and laws of the State of Texas and with respect to the exclusion of interest on the Certificates from gross income for federal income tax purposes. We have not investigated or verified original proceedings, records, data or other material, but have relied solely upon the transcript of proceedings described in the following paragraph. We have not assumed any responsibility with respect to the financial condition or capabilities of the City or the disclosure thereof in connection with the sale of the Certificates. IN OUR CAPACITY as Bond Counsel, we have participated in the preparation of and have examined a transcript of certified proceedings pertaining to the Certificates, on which we have relied in giving our opinion. The transcript contains certified copies of certain proceedings of the City, customary certificates of officers, agents and representatives of the City and other public officials, and other certified showings relating to the authorization and issuance of the Certificates. We have also examined executed Certificate No. 1 of this issue. BASED ON SUCH EXAMINATION, IT IS OUR OPINION THAT: Vinson & Elkins LLP Attorneys at Law Austin Beijing Dallas Dubai Houston London Moscow NewYorl( Tokyo Washington Dallas l 40O538v. I Trammell Crow Center, 2001 Ross Avenue, Suite 3700 Dallas, Texas 75201-2975 Tel 214.220.7700 Fax 214.220.7716 www.velaw.com 0 0 D D D 0 0 0 l D ..... u L l V&E (A) The transcript of certified proceedings evidences complete legal authority for the issuance of the Certificates in full compliance with the Constitution and laws of the State of Texas presently effective and, therefore, the Certificates constitute valid and legally binding obligations of the City; and (B) A continuing ad valorem tax upon all taxable property within the City, necessary to pay the interest on and principal of the Certificates, has been levied and pledged irrevocably for such purposes, within the limit prescribed by law, and the total indebtedness of the City, including the Certificates, does not exceed. any constitutionaJ, statutory or other limitations. In addition, the Bonds are further secured by a subordinate lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's Waterworks System in the manner and to the extent provided in the Ordinance. THE RIGHTS OF THE OWNERS of the Certificates are subject to the applicable provisions of the federal bankruptcy laws and any other similar laws affecting the rights of creditors of political subdivisions generally, and may be limited by genera) principles of equity which permit the exercise of judicial discretion. IT IS OUR FURTHER OPINION THAT: (1) Interest on the Certificates is excludable from gross income for federal income tax purposes under existing law; and (2) The Certificates are not "private activity bonds" within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"), and interest on the Certificates is not subject to the alternative minimum tax on individuals and corporations, except that interest on the Certificates will be included in the "adjusted current earnings" of a corporation (other than an S corporation, regulated investment company, REIT, REMIC or F ASIT) for purposes of computing its alternative minimum tax liability. In providing such opinions, we have relied on representations of the City, the City's financial advisor and the purchaser of the Certificates with respect to matters solely within the knowledge of the City, the City's financial advisor and the purchaser respectively, which we have not independently verified, and have assumed continuing compliance with the covenants in the Ordinance pertaining to those sections of the Code that affect the exclusion from gross income of interest on the Certificates for federal income tax purposes. If such representations are determined to be inaccurate or incomplete or the City fails to comply with the foregoing provisions of the Ordinance, interest on the Certificates could become includable in gross income from the date of original delivery, regardless of the date on which the event causing such inclusion occurs. -2- Dallas 1400538v.l D 0 D D 0 0 D D D D D 0 0 D D 0 0 V&E Except as stated above, we express no opinion as to any federal, state or local tax consequences resulting from the receipt or accrual of interest on, or acquisition, ownership or disposition of, the Certificates. Owners of the Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to financial institutions, life insurance and property and casualty insurance companies, certain S corporations with Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, taxpayers owning an interest in a F ASIT that holds tax-exempt obligations and individuals otherwise qualifying for the earned income credit. In addition, certain foreign corporations doing business in the United States may be subject to the "branch profits tax" on their effectively-connected earnings and profits (including tax-exempt interest such as interest on the Bonds). The opinions set forth above are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement these opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any changes in any law that may hereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service (the .. Service"); rather, such opinions represent our legal judgment based upon our review of existing law and in reliance upon the representations and covenants referenced above that we deem relevant to such opinions. The Service has an ongoing audit program to determine compliance with rules that relate to whether interest on state or local obligations is includable in gross income for federal income tax purposes. No assurance can be given whether or not the Service will commence an audit of the Certificates. If an audit is commenced, in accordance with its current published procedures the Service is likely to treat the City as the taxpayer. We observe that the City has covenanted in the Ordinance not to take any action, or omit to take any action within its control, that if taken or omitted, respectively, may result in the treatment of interest on the Certificates as includable in gross income for federal income tax purposes. -3- Dallas 1400538v. L ,.., -117 r- LI ,- ~ l .J Q 0 0 i"' L D LJ .-, u 0 0 D n r-i l..J 0 0 n L "" 6) I ' ATTORNEY GENERAL OF TEXAS GREG ABBOTT June 18, 2008 THIS IS TO CERTIFY that the City of Lubbock, Texas (the "Issuer"), has submitted to me City of Lubbock, Texas Tax and Waterworks System SUll,?lUS Revenue Certificate of Obligation. Series 2008A (the "Certificate") in the principal amount of $22,615,000, for approval. The Certificate is dated June 15, 2008, numbered T-1, and was authorized by an Ordinance of the Issuer passed on June 12, 2008 (the "Ordinance"). I have examined the law and such certified proceedings and other papers as I deem necessary to render this opinion. As to questions of fact material to my opinion, I have relied upon representations of the Issuer contained in the certified proceedings and other certifications of public officials furnished to me without undertaking to verify the same by independent investigation . I express no opinion relating to the official statement or any other offering material relating to the Certificate. Based on my examination, I am of the opinion, as of the date hereof and under existing law, as follows ( capitalized terms, except as herein defined, have the meanings given to them in the Ordinance): (I) The Certificate has been issued in accordance with law and is a valid and binding obligation of the Issuer. (2) The Certificate is payable from the proceeds of an annual ad valorem tax levied upon all taxable property in the Issuer, within the limit prescribed by law, and, to be additionally payable from and secured by a lien on and pledge of the Net Revenues of the Issuer's System, such lien and pledge, however, beingjunior and subordinate to the lien on and pledge of the Net Revenues of the System securing the payment of Prior Lien Obligations currently outstanding and hereafter issued by the Issuer and on parity with the lien on and pledge of the Net Revenues of the System securing the payment of the Previously Issued Obligations and any Additional Obligations hereafter issued, all as provided in the Ordinance. POST 01'1'!CE Rox 12548, AuSTl:-1, TEXAS 78711-2548 "l"F.t.,(512)463-2100 W\\'W.oM;,$TATE.TX.US A" l.:."qH11l limpl".]lrlt1tl OppatlHn;,y Empl~11r · Pri111,,I aN Rr-!y,lul Puptr D f] f1 0 [1 n 0 D 0 • D 0 D 0 LI D 0 0 / , City of Lubbock, Texas Tax and Waterworks System Surplus Revenue Certificate of Obligation, Series 2008A -$22,615,000. -Pa e 2- Therefore, the Certificate is approved. No.47929 Book No. 2008-S JCH D 0 0 r- w 0 r- I.. 0 t..J n n 0 D r w u f} D D 0 OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I, SUSAN COMBS, Comptroller of Public Accounts of the State of Texas, do hereby certify that the attachment is a true and correct copy of the opinion ·of the Attorney General approving the: City of Lubbock. Texas Tax and Waterworks System Surplus Revenue Certificate of Obligation. Series 2008A numbered T-1. of the denomination of $ 22,615,000, dated June 15, 2008, as authorized by issuer, interest various percent, under and by authority of which said bonds/certificates were registered electronically in the office of the Comptroller, on the 18th day of June 2008, under Registration Number 74376. Given under my hand and seal of office, at Austin, Texas. the 18th day of June 2008. SUSAN COMBS Comptroller of Public Accounts of the State of Texas 0 0 0 0 Li 0 r- LI 0 0 0 r w __, l 0 0 D n n ::-. ....... I -✓ , ,., -~ , .,,, OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I, Melissa Mora. D Bond Clerk [!] Assistant Bond Clerk in the office of the Comptroller of the State of Texas, do hereby certify that, acting under the direction and authority of the Comptroller on the 18th da,y of June 2008. I signed the name of the Comptroller to the certificate of registration endorsed upon the: City of Lubbock. Texas Tax and Waterworks System Surplus Revenue Certificate of Obligation. Series 2DDBA, I, Susan Combs, Comptroller of Public Accounts of the State of Texas, certify that the person who has signed the above certificate was duly designated and appointed by me under authority vested in me by Chapter 403, Subchapter H, Government Code, with authority to sign my name to all certificates of registration, and/or cancellation of bonds required by law to be registered and/or cancelled by me, and was acting as such on the date first mentioned in this certificate, and that the bonds/certificates described in this certificate have been duly registered in the office of the Comptroller, under Registration Number 74376. GIVEN under my hand and seal of office at Austin, Texas, this the 18th day of June 2008. Susan Combs Comptroller of Public Accounts of the State of Texas r u 0 0 0 0 [ 0 0 D [l 0 ,- lJ 0 D u C FEDERAL TAX CERTIFICATE I, the undersigned officer of the City of Lubbock, Texas (the "Issuer"), make this certification for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest to be paid on the Issuer's Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, (the "Certificates of Obligation") which are being issued and delivered simultaneously with the delivery of this Certificate. I do hereby certify as follows in good faith as of the Issue Date: 1. Definitions. Each capitalized term used in this Certificate has the meaning or is the amount, as the case may be, specified for such term in this Certificate or in Exhibits to this Certificate and shall for all purposes hereof has the meaning or be the amount therein specified. All such terms defined in the Code or Regulations shall for all purposes hereof have the same meanings as given to those terms in the Code and Regulations unless the context clearly requires otherwise. 2. Responsible Officer. I am the duly chosen, qualified and acting officer of the Issuer for the office shown below my signature; as sue~ I am familiar with the facts herein certified and I am duly authorized to execute and deliver this Certificate on behalf of the Issuer. I am the officer of the Issuer charged, along with other officers of the Issuer, with responsibility for issuing the Certificates of Obligation. 3. Code and Regulations. I am aware of the provisions of sections 141, 148, 149 and 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations (the "Regulations") heretofore promulgated under sections 141, 148, 149 and 150 of the Code. This Certificate is being executed and delivered pursuant to sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, l.149(b)-1, l.149(d)-1, l.149(g)-1, 1.150-1 and 1.150-2 of the Regulations. 4. Reasonable Expectations. The facts and estimates that are set forth in this certificate are accurate. The expectations that are set forth in this certificate are reasonable iri light of such facts and estimates. There are no other facts or estimates that would materially change such expectations. In connection with this certificate, the undersigned has to the extent necessary reviewed the certifications set forth herein with other representatives of the Issuer as to such accuracy and reasonableness. The undersigned has also relied, to the extent appropriate, on representations set forth in the certificate of RBC Capital Markets (the "Financial Advisor"), attached as Exhibit A to this Certificate. The undersigned is aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of all or any portion of such documents. 5. Description of Governmental Purpose. The Issuer is issuing the Certificates of Obligation pursuant to the resolution, order or ordinance, as the case may be, adopted by the Issuer for purposes of authorizing the issuance of the Certificates of Obligation (the "Bond Document") for the purposes of funding (a) the Project as described more fully in the Bond Document and (b) the costs of issuance of the Certificates of Obligation. The primary pwpose of C 0 0 n n 0 ,..., L, w 0 D 0 D D 0 0 0 n 0 each transaction undertaken in connection with the issuance of the Certificates of Obligation is a bona fide governmental purpose. The Project is described as follows: acquisition of land, easements and rights-of way, and planning, design and engineering services, as well as special engineering services that include supporting environmental investigations, surveying and geotechn.ical studies, all in connection with the planning, design and construction of a raw water transmission line, pump station and water treatment plant improvements to enable Lake Alan Henry to serve as a water supply for the City of Lubbock. 6. Texas Water Development Board. The Certificates of Obligation will be sold to the Texas Water Development Board (the "Board") at a price of par. The Certificates of Obligation will be purchased out of the proceeds allocable to the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds), which were issued by the Board on May 22, 2008. The Issuer has been informed that the yield on the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds) is equal to 4.239986 percent. 7. Amount and Expenditure of Sale Proceeds of the Certificates of Obligation. (a) Amount of Sale Proceeds. The Sale Proceeds from the issuance of the Certificates of Obligation is $22,615,000. Such amount represents the Stated Redemption Price at Maturity. (b) Expenditure of Sale Proceeds. The Sale Proceeds of the Certificates of Obligation will be expended as follows: (i) The amount of $90,000 will be disbursed to pay other Issuance Costs on the Certificates of Obligation (including any rating agency fees charged to the Issuer by the Bond insurer). (ii) The amount of $22,525,000 will be deposited in the Construction or Project Fund and is expected to be disbursed to pay or reimburse the costs of acquisition and construction of the Project. The aggregate amount of the costs of acquisition and construction of the Project is anticipated to be not less than such amount. Any costs of the Project not financed out of original or investment proceeds of the Certificates of Obligation will be financed out of the Issuer's available funds. (c) Reimbursement. Other than to the extent of preliminary expenditures (i.e., architectural, engineering, surveying, soil testing, Certificate of Obligation issuance, and similar costs that are incurred prior to commencement of acquisition, construction, or rehabilitation of the Project, other than land acquisition, site preparation, and similar costs incident to commencement of construction), no portion of the amount described in paragraph 7(b) above will be disbursed to reimburse the Issuer for any expenditures made by the Issuer prior to the date that is 60 days before the earlier of the Issue Date or the date the Issuer adopted a resolution (the "Declaration"), if any, describing the Project, stating the maximum principal amount of obligations expected to be issued for the Project, and stating the Issuer's reasonable expectation on that date that it would reimburse expenditures for costs of the Project with proceeds of an obligation. The Declaration, if any, is not an official intent to reimburse that was declared as a matter of course, or in an amount substantially in excess of the amount expected to be necessary -2- 0 n u 0 0 0 0 0 Q r u 0 ,....., ' • (.J 0 C r I LI D r w D for the Project. The Issuer has not engaged in a pattern of failure to reimburse original expenditures covered by official intents. Such reimbursed portion will be treated as spent for purposes of paragraph 11 below. Any such Declaration is attached hereto as Exhibit B. (d) No Working Capital. Except for an amount that does not exceed 5 percent of the Sale Proceeds of the Certificates of Obligation (and that is directly related to capital expenditures financed by the Certificates of Obligation), the Issuer will only expend proceeds of the Certificates of Obligation for (i) costs that would be chargeable to the capital accounts of the Project if the Issuer's income were subject to federal income taxation and (ii) interest on the Certificates of Obligation in an amount that does not cause the aggregate amount of interest paid on all of the Certificates of Obligation to exceed that amount of interest on the Certificates of Obligation that is attributable to the period that commences on the date hereof and ends on the later of (A) the date that is three years from the issue date of the Certificates of Obligation or (B) the date that is one year after the date on which the Project is placed in service. (e) No Sale of Conduit Loan. No portion of the sale proceeds of the Certificates of Obligation has been or will be used to acquire, finance, or refinance any conduit loan. (t) No Overissuance. The proceeds of the Certificates of Obligation will not exceed by more than a minor portion the amount necessary to accomplish the governmental purposes of the Certificates of Obligation and, in fact, are not expected to exceed by any amount the amount of proceeds allocated to expenditures for the governmental purposes of the Certificates of Obligation. (g) Allocations and Accounting. The proceeds of the Certificates of Obligation will be allocated to expenditures not later than 18 months after the later of the date the expenditure is made or the date the Project is placed in service, but in no event later than the date that 60 da~ after the fifth anniversary of the date hereof or the retirement of the last Certificate of Obligation, if earlier. The allocation of proceeds will be made by employing the direct-tracing method of accounting, unless the Issuer elects otherwise. 8. Expenditure of Investment Proceeds. The best estimate of the Issuer is that Investment Proceeds resulting from the investment of any proceeds of the Certificates of Obligation pending expenditure of such proceeds for costs of the Project will be retained in the Construction Fund and disbursed to pay or reimburse Project costs in addition to those described in paragraph 7 above. 9. No Replacement Proceeds. Other than amounts described herein, there are no amounts that have a sufficiently direct nexus to the Certificates of Obligation or to the governmental purposes of the Certificates of Obligation, other than solely by reason of the mere availability or preliminary earmarking, that the amounts would have been used for such purpose if the proceeds of the Certificates of Obligation were not used or to be used for such purpose. (a) No Sinking Funds. Other than to the extent described herein, there is no debt service fund, redemption fund, reserve fund, replacement fund, or similar fund reasonably expected to be used directly or indirectly to pay principal or interest on the Certificates of Obligation. -3- Q 0 0 0 0 0 0 r u D 0 0 0 ,.., u 0 • 0 n 0 (b) No Pledged Funds. Other than amounts described herein, there is no amount that is directly or indirectly pledged to pay principal or interest on the Certificates of Obligation, or to a guarantor of part or all of the Certificates of Obligation, such that such pledge provides reasonable assurance that such amount will be available to pay principal or interest on the Certificates of Obligation if the Issuer encounters financial difficulty. For purposes of this certification, an amount is treated as so pledged if it is held under an agreement to maintain the amount at a particular level for the direct or indirect benefit of the holders or the guarantor of the Certificates of Obligation. (c) No Other Replacement Proceeds. There are no other replacement proceeds allocable to the Certificates of Obligation because the Issuer reasonably expects that the tenn of the Certificates of Obligation will not be longer than is reasonably necessary for the governmental purposes of the Certificates of Obligation. The Certificates of Obligation would be issued to achieve the governmental purpose of the Certificates of Obligation independent of any arbitrage benefit as evidenced by the expectation that the Certificates of Obliga,tion reasonably would have been issued if the interest on the Certificates of Obligation were not excludable from gross income (assuming that the hypothetical taxable interest rate would be the same as the actual tax-exempt interest rate). (d) Weighted Average Maturity. The Weighted Average Maturity of the Certificates of Obligation will not be greater than 120 percent of the weighted average estimated economic life of the portion of the Project financed, determined in accordance with section 147(b) of the Code. Such weighted average estimated economic life is determined in accordance with the following assumptions: (a) The weighted average was detennined by taking into account the respective costs of each assets financed by the Certificates of Obligation, (b) the reasonably expected economic life of an asset was detennined as of the later of the date hereof or the date on which such asset is expected to be placed in service (i.e., available for use for the intended purposes of such asset); (c) the economic lives used in making this determination are not greater than the useful lives used for depreciation under section 167 of the Code prior to the enactment of the current system of depreciation in effect under section 168 of the Code (i.e., the ''mid-point lives") under the asset depreciation range ("ADR") system of section 167(m) of the Code, as set forth in Revenue Procedure 83-35, 1983-1 C.B. 745, where applicable, and the "guideline lives" under Revenue Procedure 62-21, 1962-2 C.B. 418, in the case of structures; and ( d) land or any interest therein has not been taken into account in determining the average reasonably expected economic life of such Project, unless 25 percent or more of the net proceeds of the Certificates of Obligation is to be used to finance land. 10. Yield on the Certificates of Obligation. For the purposes of this certificate, the yield on the Certificates of Obligation is the discount rate that, when used in computing the present value as of the issue date of the Certificates of Obligation, of all unconditionally payable payments of principal, interest and fees for qualified guarantees on the Certificates of Obligation, produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of the Certificates of Obligation as of the issue date. The yield on both the Certificates of Obligation and any investments allocable to the Certificates of Obligation will be calculated by the same frequency interval of compounding interest. The Board has agreed to purchase all of the Certificates of Obligation with proceeds of the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds). However, the yield on the -4- n LJ 0 0 [] 0 0 0 0 r 1J LI n 0 D LI D r ' LJ D Certificates of Obligation is lower than the yield on the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds); thus, for purposes of restricting the yield on the investment of gross proceeds of the Certificates of Obligation, when necessary, and for purposes of computing the amount rebatable to the federal government, if any, the Issuer will utilize the yield on the Certificates of Obligation. The yield on the Certificates of Obligation is computed as follows: The Yield on the Certificates of Obligation is the discount rate that, when used in computing the present value as of the Issue Date of the Certificates of Obligation, of all unconditionally payable payments of principal, interest and fees for qualified guarantees on the Certificates of Obligation, produces an amount equal to the present value, using the same discount rate, of the aggregate Issue Price of the Certificates of Obligation as of the Issue Date. For purposes of determining the yield on the Certificates of Obligation, the Issue Price of the Certificates is the sum of the issue prices for each group of substantially identical Certificates of Obligation. For each group of substantially identical Certificates of Obligation, the issue price is the first price at which a substantial amount (i.e., ten percent) is sold to the Purchaser (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters and wholesalers). The Issue Price is based upon the representations of the Purchaser set forth in Exhibit A hereto. No Purchaser's discount, issuance costs, or costs of carrying or repaying the Certificates of Obligation is taken into account for purposes of computing the yield on the Certificates of Obligation. The Yield with respect to that portion of the Certificates of Obligation subject to optional redemption is computed by treating such Certificates of Obligation as retired at the stated redemption price at the final maturity date because (a) the Issuer has no present intention to redeem prior to maturity the Certificates of Obligation that are subject to optional redemption; (b) no Certificate of Obligation is subject to optional redemption at any time for a price less than the retirement price at final maturity plus accrued interest; (c) no Certificate of Obligation is subject to optional redemption within five years of the Issue Date of the Certificates of Obligation; (d) no Certificate of Obligation subject to optional redemption is issued at an issue price that exceeds the stated redemption price at maturity of such Certificate of Obligation by more than one-fourth of one percent multiplied by the product of the state redemption price at maturity of such Certificate of Obligation and the number of complete years to the first optional redemption date for such Certificate of Obligation; and (e) no Certificate of Obligation subject to optional redemption bears interest at a rate that increases during the term of the Certificate of Obligation. The Issuer has not entered into a hedging transaction with respect to the Certificates of Obligation. The Issuer will not enter into a hedging transaction with respect to the Certificates of Obligation unless there is first received an opinion of nationally recognized bond counsel to the effect that such hedging transaction will not adversely affect the exclusion of interest on the Certificates of Obligation from gross income for federal income tax purposes. 11. Temporary Periods and Yield Restriction. As described in paragraph IO above, the Certificates of Obligation will be purchased by the Issuer out of proceeds of the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds), which were issued on the date stated in paragraph 6 above. Therefore the proceeds of the Certificates of -5- 0 0 LI 0 D 0 D 0 0 0 0 0 0 0 r u 0 0 0 [ Obligation may be invested at an unrestricted yield until three years following such date. Therefore, the Board has instructed the Issuer that all proceeds remaining after three years after the issue date of the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds) must be invested at a yield not "materially higher" than the yield on the Bonds. The Issuer reasonably expects that work on or acquisition of the Project will proceed with due diligence to completion and that the proceeds of the Certificates of Obligation will be expended on the Project with reasonable dispatch. The Issuer reasonably expects that all of the original and investment proceeds of the Certificates of Obligation will have been expended on the Project prior to three years after the issue date of the Board's Water Financial Assistance Bonds, Series 2008A (Water Infrastructure Bonds). · 12. Debt Service Fund. Pursuant to the Bond Document, the Issuer has confirmed the debt service fund designated the "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, Interest and Sinking Fund" (i.e., the Debt Service Fund) which will be used primarily to achieve a proper matching of revenues and debt service on the Certificates of Obligation, within each Bond Year. The revenues are anticipated to be sufficient to pay debt service each year on the Certificates of Obligation. The Debt Service Fund will be depleted at least once each year except for a reasonable carryover amount not to exceed the greater of (a) one year's earnings on the Debt Service Fund or (b) one-twelfth of annual debt service. The Issuer reasonably expects that any such revenues deposited in the Debt Service Fund will be disbursed within 13 months of the date of receipt of such revenues by the Issuer. Any such amount not expended within such period will be invested at a yield not "materially higher" than the yield on the Certificates of Obligation. 13. Issue. There are no other obligations which (a) are sold at substantially the same time as the Certificates of Obligation (i.e., within 15 days), (b) are sold pursuant to the same plan of financing with the Certificates of Obligation, and ( c) will be paid out of substantially the same source of funds as the Certificates of Obligation. 14. Compliance With Rebate Requirements. (a) General. The Issuer has covenanted in the Bond Document that it will talce all necessary steps to comply with the requirement that ''rebatable arbitrage earnings" on the investment of the "gross proceeds" of the Certificates of Obligation, within the meaning of section 148(f) of the Code be rebated to the federal government. Specifically, the Issuer will (a) maintain records regarding the investment of the "gross proceeds" of the Certificates of Obligation as may be required to calculate such ''rebatable arbitrage earnings" separately from records of amounts on deposit in the funds and accounts of the Issuer which are allocable to other bond issues of the Issuer or moneys which do not represent "gross proceeds" of any bonds of the Issuer, (b) calculate at such intervals as may be required by applicable Regulations, the amount of "rebatable arbitrage earnings," if any, earned from the investment of the "gross proceeds" of the Certificates of Obligation and (c) pay, not less often than every fifth anniversary date of the delivery of the Certificates of Obligation and within 60 days following the final maturity of the Certificates of Obligation, or on such other dates required or permitted by applicable Regulations, all amounts required to be rebated to the federal government. Further, the Issuer will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by -6- C 0 0 0 0 0 0 r LJ 0 • 0 0 LI 0 0 r L.J r L D entering into any investment arrangement with respect to the "gross proceeds" of the Certificates of Obligation that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at rum's-length and had the yield on the issue not been relevant to either party. 15. Not an Abusive Transaction. (a) General. No action taken in connection with the issuance of the Certificates of Obligation will enable the Issuer to (i) exploit, other than during an allowable temporary period, the difference between tax-exempt and taxable interest rates to obtain a material :financial advantage (including as a result of an investment of any portion of the gross proceeds of the Certificates of Obligation over any period of time, notwithstanding that, in the aggregate, the gross proceeds of the Certificates of Obligation are not invested in higher yielding investments over the term of the Certificates of Obligation), and (ii) issue more bonds, issue bonds earlier, or allow bonds to remain outstanding longer than is otherwise reasonably necessary to accomplish the governmental purposes of the Certificates of Obligation. To the best of our knowledge, no actions have been taken in connection with the issuance of the Certificates of Obligation other than actions that would have been taken to accomplish the governmental purposes of the Certificates of Obligation if the interest on the Certificates of Obligation were not excludable from gross income for federal income tax purposes ( assuming the hypothetical taxable interest rate would be the same as the actual tax-exempt interest rate on the Certificates of Obligation). (b) No Sinking Fund. No portion of the Certificates of Obligation has a term that has been lengthened primarily for the purpose of creating a sinking fund or similar fund with respect to the Certificates of Obligation. (c) No Window. No portion of the Certificates of Obligation has been structured with maturity dates the primary purpose of which is to make available released revenues that will enable the Issuer to avoid transferred proceeds or to make available revenues that may be invested to be ultimately used to pay debt service on another issue of obligations. 16. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is expected that the gross proceeds of the Certificates of Obligation will not be used in a manner that would cause any of the Certificates of Obligation to be an "arbitrage bond" within the meaning of section 148 of the Code and the Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that woulq. materially change such expectations. 17. No Private Use, Payments or Loan Financing. (a) General. The Issuer reasonably expects, as of the date hereof, that no action or event during the entire stated tenn of the Certificates of Obligation will cause either the ''private business tests" or the ''private loan financing test," as such tenns are defined in the Regulations, to be met. (i) No portion of the proceeds of the Certificates of Obligation will be used in a trade or business of a nongovernmental person. For purposes of determining use, the Issuer -7- 0 0 r L..J 0 r LJ r u [l C 0 r w 0 D 0 0 0 0 D will apply rules set forth in applicable Regulations and Revenue Procedures promulgated by the Internal Revenue Service, including, among others, the following rules: (A) Any activity carried on by a person other than a natural person or a state or local governmental unit will be treated as a trade or business of a nongovernmental person; (B) the use of all or any portion of the Project is treated as the direct use of proceeds; (C) a nongovernmental person will be treated as a private business user of proceeds of the Certificates of Obligation as a result of ownership, actual or beneficial use pursuant to a lease, or a management or incentive payment contract, or certain other arrangements such as a take-or-pay or other output-type contract; and (D) the private business use test is met if a nongovernmental person has special legal entitlements to use directly or indirectly the Project. (ii) The Issuer has not taken and will not take any deliberate action that would cause or permit the use of any portion of the Project to change such that such portion will be deemed to be used in the trade or business of a nongovernmental person for so long as any of the Certificates of Obligation remains outstanding (or until an opinion of nationally recognized bond counsel is received to the effect that such change in use will not adversely affect the excludability from gross income for federal income tax purposes of interest payable on the Certificates of Obligation). For this purpose any action within the control of the Issuer is treated as a deliberate action. A deliberate action occurs on the date the Issuer enters into a binding contract with a nongovernmental person for use of the Project that is not subject to any material contingencies. (iii) No portion of the proceeds of the Certificates of Obligation will be directly or indirectly used to make or finance a loan to any person other than a state or local governmental unit. (b) Dispositions of Personal Property in the Ordinary Course. Dispositions of personal property components of the Project will occur in the ordinary course of an established governmental program and will satisfy the following requirements: (i) The weighted average maturity of the portion of the Certificates of Obligation financing personal property is not greater than 120 percent of the reasonably expected actual use of such personal property for governmental purposes; (ii) The reasonably expected fair market value of such personal property on the date of disposition will be not greater than 25 percent of its cost; (iii) Such personal property will no longer be suitable for its governmental pwposes on the date of disposition; and (iv) The Issuer is required to deposit amounts received from such disposition in a commingled fund with substantial tax or other governmental revenues and the Issuer -8- 0 0 0 D 0 0 0 D D D 0 0 u D 0 0 reasonably expects to spend such amounts on governmental programs within 6 months from the date of commingling. 18. Weighted Average Maturity. The Weighted Average Maturity of the Certificates of Obligation set forth on Exhibit A attached to this Certificate is the sum of the products of the Issue Price of each group of identical Certificates of Obligation and the number of years to maturity ( determined separately for each group of identical Certificates of Obligation and taking into account mandatory redemptions), divided by the aggregate Sale Proceeds of the Certificates of Obligation. 19. Certificates of Obligation are Not Hedge Bonds. Not more than 50 percent of the proceeds of the Certificates of Obligation will be invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of section 149(g)(3)(A)(ii) of the Code. Further, the Issuer reasonably expects that at least 85 percent of the spendable proceeds of the Certificates of Obligation will be used to carry out the governmental purposes of the Certificates of Obligation within the three- year period beginning on the date the Certificates of Obligation are issued. CITY~XAS • I By: ~ a~~t--- Title: Chief Financial Officer Date: Attachments: Exhibit A: Certificate of Financial Advisor -9- 0 D r LI n u 0 D 0 r u Li 0 D n 0 0 D 0 n lJ D EXHIBIT A CERTIFICATE OF FINANCIAL ADVISOR I, the undersigned officer of the Financial Advisor, make this certificate for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest on the Certificates of Obligation. Each capitalized term used herein has the meaning oi- is the amount, as the case may be, specified for such term on Exhibit A attached to the Federal Tax Certificate to which this Exhibit A is attached (the "Federal Tax Certificate"). I hereby certify as follows as of the Issue Date: 1. I am the duly chosen, qualified and acting officer of the Financial Advisor for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Financial Advisor. I am the officer of the Financial Advisor who has worked with representatives of the Issuer in structuring the financial terms of the Certificates of Obligation. 2. The Issue Price of the Certificates of Obligation is not more than $22,615,000. The yield on the Certificates of Obligation, based on such Issue Price is not less than 2.4104 percent (the "Yield"). For purposes of this certificate, the term "yield" means that yield which is computed as described in paragraph IO of the Federal Tax Certificate. 3. The Financial Advisor computed the Weighted Average Maturity of the Certificates of Obligation to be 10.786 years, as set forth in paragraph 18 of the Federal Tax Certificate. 4. To the best of my knowledge the statements set forth in paragraph 15 of the· Federal Tax Certificate are true. 5. The Issuer may rely on the statements made herein in connection with making the representations set forth in the Certificate and in its efforts to comply with the conditions imposed by the Code on the exclusion of interest on the Certificates of Obligation from the gross income of their owners. Vinson & Elkins L.L.P. also may rely on this certificate for purposes of its opinion regarding the treatment of interest on the Certificates of Obligation as excludable from gross income for federal income tax purposes. A-1 0 0 r u r LI D r LJ r, C D D 0 0 D 0 D RBC CAPITAL MARKETS By: \.\..,\~ ~ Title: M4,"""~: ':5 {)H...,J.c.., Date: ~,e \1 1 iYC:>~8 A-2 0 0 Vinson&Elkins Steven H. Gerdes SGerdes@velaw.com r Tel 713.758.4516 Fax 713.615.S503 l.J D 0 0 D D 0 0 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7003 0500 0003 0176 3117 District Director Internal Revenue Service Ogden, UT 84201 August 8, 2008 Re: $22,615,000 City of Lubbock, Texas Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A Dear Sir: Enclosed please find an originally executed Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) for the above-captioned bond issue. Please acknowledge receipt of the Form 8038-G by stamping and returning the copy of the Form 8038-G attached to the self-address~ postage-paid envelope that we have provided. cc: Meagan Hom/ Leslie Morgan Houston 2935778v. l Vinson & Elkins LLP Attorneys at Law Austin Beijing Dallas Dubai Houston London Moscow New York Shanghai Tokyo Washingtlm Very truly yours, 2801 Via Fortuna, Suite 100 Austin, TX 78746-7568 Tai 512.542.8400 Fax 512.542.8612 www.velaw.com C n L 0 D n 0 D 0 0 0 n [1 Form 8038-G (Rev. November 2000) Information Return for Tax-Exempt Governmental Obligations • Under Internal Revenue Code section 149(e) • See separate lnsttuctlons. 0MB No. 1545-0720 Caution: H the issua price Is under $100,000, use Form 8038-GC. Authority If Amended Return, check here• Texas 2 IHuer'• employ« Identification number 75-6000590 3 Number and slreet (or P.O. box 11' mail is not dell~ to street address} P .0. Box 2000 Room/suite 4 Report nlm!ber 3 05 5 Clly, town, or post office, Slate, and ZIP coda Lubbock Texas 79457 6 Dale or issue June26 2008 9 Nama 1t1d tide of offloer or legal representaUw whom th& IRS may call ror more lnfarmatlon Jeffre A. Yate Chief Finance Officer 806 775-2016 T e of Issue check ap llcable box es and enter the lasue price See instructions and attach schedule 11 D Education ........................•....................................•.. : . 1-1 ... 1--+------ 12 0 Health and hospital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . ...,1 ..... 2.....,. _____ _ 13 D Transportation .............................. , ....... , . . . . . . . . . . . . . . . . . . . . . . . r-1.,_3-t------- 14 O Public safety ..................................................... _ . . . . . . . . . . r-1._4-t------- 15 D Environment (including sewage bonds) ......•• , • . . . . . • • • . . . . . . . . • • • • . . . . . . . . • . . . • . ~1:,,.;::5'-+------- 16 0 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . t-1 .... e"""T'_--::-::--:::-:-".=-:::-::-::-- 17 Ii] Utilities.......................................................... . . • . . . . . . . ~1 __ 7-+-_-=22=6 ___ 1=5,__0...._00 ..... 18 0 Other. Describe•-----------------------18 19 If obligatfons are TANs or RANs, check box• D If obligations are BANs, check box . . . . . . • D 20 If obligations are In the form of a lease or Installment sale, checJ< box . . . • . • . . . . . . . . . . . • }liif Description of Obll atlons. Com lete for the entire issue for which this form is being filed.) (II Final maturity date (bl Issue price (Cl Stated redemption (di Welaht.ed llrite at mallJrity awraga maturity 21 2/15/2028 $ 2 615 000 $ • i1 ~--1.: . ·, Uses of Proceeds of Bond Issue lncludln 22 Proceeds used for accrued interest ...........•..•..•..............................•. 23 Issue price of entire Issue (enter amount from Urie 21, column (b)) ......................... . 24 Proceeds used for bond Issuance casts (Including underwriters' discount) i,-::24~----"-' ........ ~ 25 Proceeds used for credit enhancement. . . . . . . . . . . . . . . . . . . . . . . . . . . ~25~-----~ 26 Proceeds allocated to reasonably required reserve or replacement fund . . ~26~-----~ 27 Proceeds used to currently refund prior Issues . . . . . . . . . . . . . . . . . • . . . t--ZT-t-----~ 28 Proceeds used to advance refund prior Issues . . . . . . . . . . . . . . . . . . . . . ....._28""-" _____ .......,. 29 Total (add lines 24 through 28) ...................................................•. 30 Nonrefundln roceeds or tfle Issue subtract line 29 from line 23 and enter amount here ....... . f . ·. -: . · Description of Refunded Bonds Complete this part onl for refunding bonds. (el Yleld 2.4105 % 22 615 000 90000 22 525 000 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . • . . . . . . • • • years ------~-32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . . . . . . . . • years 33 Enter the last date on which the refunded bonds will be called . . . . . . . . . . . . . . . . • . . . . • . . . . . . • 34 Enter the dat s the refunded bonds were issued• -------- Miscellaneous 35 Enter the amount of the state volume cap allocated to the Issue under section 141 (b)(5) . . . • . . . . . t-35-----t-----~•~ 36a Enter the amount of gross proceeds Invested or to be invested in a guaranteed mveslmerrt contract (see instructions) . • • . 36a~ ____ ......._O....., b Enter the final maturity date of the guaranteed Investment contract• _________ _ 37 Pooled financings: a Proceeds of this Issue that are to be used to make loans to other governmental units . • • . • • • • • • . ...3_7_a...__:--____ O b If this issue is a loan made from the proceeds of another tax--exempt issue, check box• D and enter the name of the issuer• ______________________ and the date of the issue•------= 38 If the Issuer has designated the Issue under section 265(b)(3)(B)(i)(III) (small issuer exception}, check box ............ • D 39 If the issuer has elected to pay a penalty In lieu of arbitrage rebate, check box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • D 40 If the issuer has Identified a hedge, check box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • Sign Here Under penal · or pa~ury, are tllat I ha thl return and accompanying schedules and statements. and to lhe best or my knowledge and belief, tney a 8 p1e1e. ~..,_____ Jeffrey A. Yates 6/26/2008 • Chief Finance Officer "?.==:,,'&~9'7~~~ll£.-=---:J9L:::..---------::~==~ TYl)eorprlntname and title ISA Form 8038-G (Rev: 11-20001 D n L D D C .. • ; OMPLETE THIS SECTION COMPLETE THIS SECTION ON DELIVERY • Complete items 1, 2, and 3. Also complete item 4 If Restricted Delivery Is desired. A. Signature X D Agent • Print your name and address on the reverse so that we can return the card to you. D Addressee B. Received by ( Printed Name) IC. Date of Deli~ery • Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: 0. Is delivery-address different from item 11 D Yes If YES, enter delivery address below: D No District Director Internal Revt:nue Service c~nter Ogden, UT 84201 3. Se~ice Type -i1 Certi~ed Mall a' Registered • Insured Mail 0 Express Mail 2. Article Number (T'ransfer from service /abeQ PS Form 3811, August 2001 D Return Receipt for Men::handise • c.o.o. 4. Restricted Delivery? (Extra Fee) • Yes 7003 0500 00•3 0176 3117 Domestic Return Receipt 102S95-01-M-2509 , U.S. Postal Servicem -. , . , r-r-r-'l .-'I .-'I .-'I CERTIFIED MAILM RECEIPT (Domestic Mall Only; No Insurance Coverage Provided) fTl ,,, -----:-: City of Lubbock. Teic.as Tall and re twaterworks System Suq,\us r-'I ,-:::i Revenue CO 0 CJ ,,, rn Certified Fee CJ 0 Pcsta<;ie $ 1-----------t 0 CJ P0S1mai1< CJ 0 Return Reciepl Fee Here (Endorsement Required) CJ 0 Restrfcled Oellvery Fee c::::J 0 (Ernl0rsement Required) l..t'J Lil c::::J • Total Postage & Fees $ rn rn~--,-,a.----------------------, CJ CJ SentTo ~ ~ ~--,:.··,,;•t········· District Director l ,..,t o.; I nt~-ma 1 Revenue Service Ce11ter ~:.'::!.~-~---······· Ogden UT 84:?.01 City, Stale, ZJP+4 • PS Forro 3800, June 2002 , , , S.~• Reverse lof Instructions