HomeMy WebLinkAboutOrdinance - 2009-O0115 - $19,945,000 Tax And Waterworks System Surplus Rvenue Certs Of Obligation 2010 - 12/16/2009Ordinance Ho. 2009-oOllS
ORDINANCE
relating to
$19,945,000
CI1Y OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2010
Adopted: December 16, 2009
136465v.2LUB200/71016
Section 1.1.
Section 1.2.
Section 1.3.
Section 1.4.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MA TIERS
Definitions ................................................................................................................ 1
Findings .................................................................................................................... s
Table of Contents, Titles, and Headings .................................................................. S
Interpretation ............................................................................................................ 5
ARTICLE II
SECURTIY 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.
Payntent of the Certificates ...................................................................................... 5
Interest and Sinking Fund ........................................................................................ 7
Deposits to Interest and Sinking Fund ..................................................................... 7
Issuance of Prior Lien and Additional Obligations .................................................. 8
Certificates Subordinate to Prior Lien Obligations, Covenants and
Agr-eer11mts .. , ................................................................................................................ 8
Section 2.6. Pledge of Revenues .................................................................................................. 8
Section 2.7. System 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 .I 0.
Section 3.11.
Section 3.12.
Authorization ........................................................................................................... 9
Date, Denomination, Maturities, and Interest. ....................................................... 1 0
Medium, Method, and Place of Payment. .............................................................. 1 0
Execution and Registration of Certificates ............................................................ 11
Ownership .............................................................................................................. 12
Registration, Transfer, and Exchange .................................................................... 12
Cancellation. .......................................................................................................... 13
Tetnporary Certificates .......................................................................................... 13
Replacetnent Certificates ....................................................................................... 14
Book-Entry-Only System ....................................................................................... IS
Successor Securities Depository; Transfer Outside Book-Entry-Only System ..... I6
Paytnents to Cede & Co ......................................................................................... 16
13646Sv.2 LUB200fll016
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4 .1. Redemption ............................................................................................................ 16
Section 4.2. Optional Redemption .............................................................................................. 16
Section 4.3. No Mandatory Sinking FWid Redemption ............................................................. 17
Sec.tion 4.4. Partial RederJtption ................................................................................................. l7
Section 4.5. Notice of Redemption to Owners .......................................................................... 17
Section 4 .. 6. Payt11ent Upon Redemption ................................................................................... 18
Section 4. 7. Effect of Redemption .............................................................................................. 18
Section 4.8. Conditional Notice of Red.emption ........................................................................ t 8
Section 4.9. Lapse ofPaYJilent. .................................................................................................. l9
Section 5.1.
Section 5.2.
Section 5.3.
Section 5.4.
Section 5.5.
Section 5.6.
Section 5.7.
ARTICLEV
PAYING AGENT/REGISTRAR
Appointment of Initial Paying Agent/Registrar ..................................................... 19
Qualifications ......................................................................................................... 19
Maintailliltg Paying Aget1t1Registr8I' ..................................................................... 19
Tennination ............................................................................................................ 19
Notice of Chan.ge to Owners .................................................................................. 19
Agreement to Perfonn Duties and Functions ......................................................... 20
Delivery of Records to Successor ........................................................................... 20
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.1. Fomt Generally ...................................................................................................... 20
Section 6.2. Form of the Certificates ......................................................................................... 20
Section 6.3. CUSIP Registration ................................................................................................ 26
Sec.tion 6.4. Legal Opil'lion ........................................................................................................ 26
Section 6.5. Bond lnslU'mce ......................................................................................................... 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 .................................................................................................. 27
Approval of Escrow Agreement. ........................................................................... 27
ii
13646Sv.2 LUB200nl016
ARTICLE VIII
INVESTMENTS
Section 8.1. Investments ............................................................................................................ 27
Section 8 .. 2.. Investment Income ................................................................................................... 28
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
Payntent of th.e Certificates ..................................................................................... 28
Other Representations an.d Covenants ................................................................... 28
Provisions Concerning Federal Income Tax Exclusion. ........................................ 28
No Private Use or Payment and No Private Loan Financing ................................. 29
No Federal Guaranty .............................................................................................. 29
Certificates Are Not Hedge Bonds ........................................................................ 29
No-Arbitrage Covenant. ......................................................................................... 29
Arbittage Rebate .................................................................................................... 30
Information Reporting ........................................................................................... 30
Continuing Obligation ........................................................................................... 30
ARTICLE X
DEFAULT AND REMEDIES
Section 1 0.1. Events of Default. .................................................................................................. 30
Section 1 0.2. Remec:lies for Default ..................................................................................................... 31
Section 1 0.3. Remedies Not Exclusive .......................................................................................... 31
ARTICLE XI
DISCHARGE
Section 11.1. Discharge .................................................................................................................. 31
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.1. Arutual Reports ...................................................................................................... 32
Section 12.2. Material Event Notices .......................................................................................... 32
Section 12.3. Limitations, Disclaimers and Amendments ........................................................... 33
111
136465v.2 LUB200/71016
ARTICLE XIII
AMENDMENTS; AITORNEY 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
Section 14.1. Application of Article XIV .................................................................................... 3 5
Section 14.2. Covenant to Abide with Rules ............................................................................... 35
Section 14.3. Tax Covenant. ........................................................................................................ 35
Section 14.4. Final Accounting. ................................................................................................... 35
Section 14.5. Armual Audit Reports ............................................................................................ 35
Section 14.6. Maintenance and Operation -Insurance ................................................................ 36
Section 14.7. Environmental Indenmification ............................................................................. 36
ARTICLE XV
EFFECTIVE IMMEDIATELY
Section 15.1. Effective lmmediately ............................................................................................ 36
Exhibit A -Description of Annual Disclosure of Financial Information ................................... A-1
IV
136465v.2lUB200J71016
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF
LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2010;
APPROVING A PAYING 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
Govenunent 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 SSt, Texas Govenunent 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.
136465v.2 LUB200171016
"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 Dateu 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 2010."
"City, means the City of Lubbock, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Certificates.
"Codeu 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 Officen means (i) with respect to the initial Paying
Agent/Registrar named in this Ordinance, the Designated Payment/Transfer Office as designated
in the Paying AgenURegistrar 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.
"EMMA" means the Electronic Municipal Market Access System.
"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 January 1, 2010, pertaining to the deposit of the proceeds of the
Certificates.
"Event of Default" means any event of default as defined in Section l 0.1 of this
Ordinance.
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13646Sv.2 LUB200171016
"Fiscal Year'' means such fiscal year as shall from time to time be set by the City
Council.
"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 1 S and August 1 S of each year, commencing August 15, 2010.
"MSRB" means the Municipal Securities Rulemaking Board.
"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 '~et 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) Certificates, Previously Issued Obligations or any Additional Obligations
paid or deemed to be paid in accordance with the provisions of Article XI
hereof; and
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136465v.2 lUB20017t016
(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 Mellon 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 Swplus Revenue Certificates of Obligation, Series 2008A, dated June 15,
2008, issued in the aggregate principal amount of $22,615,000; the outstanding 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 $3,1 00,000; 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 Swplus Revenue Certificates
of Obligation, Series 2002, dated February 15, 2002, issued in the original principal amount of
$6,450,000.
"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.
HRecord 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.
HRepresentations 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 Conunission.
"Similarly Secured Obligations,, means collectively the Certificates, the Previously
Issued Obligations, and any Additional Obligations.
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13646Sv.2 LUB200171016
.. 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. Interpretation.
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 nwnber and vice
versa.
This Ordinance and all the terms and provisions hereof shall be liberally construed to
effectuate the purposes set forth herein.
ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND;
PRIOR LIEN, PREVIOUSLY ISSUED AND ADDITIONAL OBLIGATIONS
Section 2.1. Pawent 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 whiJe 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
13646Sv.2 l.UB200171 016
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
corrunitted irrevocably to the payment of the principal of and interest on the Certificates when
and as due and payable in accordance with their terms 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 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.
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 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 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 senice requirements of all
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13646Sv.2 LUBZ00/71016
obligations payable from the revenues of the System for which the City is budgeting the
repayment of such obJigations, 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.
(t) 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
pennitted 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 AgenVRegistrar 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 2010, 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.
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
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13646Sv.2 LUB200171016
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 benefitst 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.
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 tenns 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.
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13646Sv.2 LUB2001710t6
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 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 pennitted 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 pennittcd 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
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-cWTent 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 20to•• (the
"Certificates"), are hereby authorized to be issued and delivered in accordance with the
Constitution and laws of the State ofTexas, 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 $19,945,000 for the purpose of
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paying contractual obligations to be incurred for the following purposes, to wit: (i) 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 January 1, 2010. 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
numbered 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
2011 $ 740,000 0.000% 2021 s 995,000 1.947%
2012 760,000 0.000% 2022 1,025,000 2.131%
2013 785,000 0.000% 2023 1,060,000 2.280%
2014 810,000 0.174% 2024 1,090,000 2.351%
2015 835,000 0.444% 2025 1,125,000 2.532%
2016 860,000 0.644% 2026 1,160,000 2.463%
2017 885,000 0.854% 2027 1,195,000 2.706%
2018 910,000 1.064% 2028 1,230,000 2.661%
2019 940,000 1.372% 2029 1,265,000 2.815%
2020 970,000 1.642% 2030 I ,305,000 2.822%
(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 ofPavment.
(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
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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.
(t) 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 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
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
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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 fonn provided herein, duly
authenticated by manual execution by an officer or duly authorized signatory of the Paying
Agent/Registrar. It shaH 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
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.
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 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
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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 Paymentffransfer 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
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 Certifi.cates 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
t36%Sv.2 LUB200/71016
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 fonn 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. Re.placem.ent 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,
shall authenticate and deliver a replacement Certificate of like tenor and principal amount,
bearing a nwnber 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 harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Certificate, a bona fide pw-chaser 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
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136465v.2 LUB200niOI6
taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security
or indenutity 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 lieu
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
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 an
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 pW"Suant to this Ordinance. Upon delivery by DTC to the Paying
Agent/Registrar of written notice to the effect that DTC has detennined 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.
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(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 Depository; Transfer Outside Book-Entry-Only
Svstem.
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 DTC 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.
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, 2021 in whole or any part, before their respective scheduled maturity dates, on
February IS, 2020 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.
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136465v.2 LUB200/71016
(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. Ifless 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
an exchange Certificate or Certificates in an aggregate principal amount equal to the unredeemed
portion of the Certificate so surrend~ed, 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.
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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 ofRedemption.
(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
bear interest at the rate stated on the Certificate until due provision is made for the payment of
same by the City.
Section 4.8. Conditional Notice of Redemption.
The City reserves the right, in the case of an optional redemption pursuant to Section 4.2
herein, to give notice of its election or direction to redeem Certificates conditioned upon the
occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned
upon the deposit of moneys and/or authorized securities, in an amount equal to the amount
necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may
be authorized by law, no later than the redemption date, or (ii) that the City retains the right to
rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a
certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to
rescind the redemption notice and such notice and redemption shall be of no effect if such
moneys and/or authorized securities are not so deposited or if the notice is rescinded. The
Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of
redemption to the affected Owners. Any Certificates subject to conditional redemption and such
redemption has been rescinded shall remain Outstanding and the rescission of such redemption
shall not constitute an Event of Default. Further, in the case of a conditional redemption, the
failure of the City to make moneys and or authorized securities available in part or in whole on
or before the redemption date shall not constitute an Event of Default.
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Section 4.9. 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.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.1. Appointment of Initial Paving Agent/Registrar.
The Bank of New York Mellon 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 fonn 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. Tennination.
The City, upon not less than sixty (60) days notice, reserves the right to terminate the
appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to
be terminated written notice of such termination.
Section 5.5. 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.
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136465v.2 LUB200nt016
Section 5.6. Agreement to Perfoun 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 Generallv.
(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 fonn set
forth in this Article, with such appropriate insertions, omissions, substitutions, and other
variations as are pennitted 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 detennined 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. Fonn of the Certificates.
The form of the Certificates, including the fonn of the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the fonn of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially
as follows:
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l36465v.2 LUB2oontOI6
(a) Fonn of Certificate.
REGISTERED
No.
United States of America
State ofTexas
County of Lubbock
CITY OF LUBBOC~ TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
INTEREST RATE: MATURITY DATE: CERTIFICATE
DATE:
CLOSING
DATE:
__ % January 1, 2010
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 whlch 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,
2010.
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 Mellon 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 S I ,000,000 principal amount of the
Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with
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13646Sv.2 LUB200171016
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.
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 $I 9,945,000 (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 IS, 2021, in whole or in part, before their respective scheduled maturity dates, on
February IS, 2020, or on any date thereafter, at a price equal to the principal amount of the
Certificates so called for redemption plu~ accrued interest to the date fixed for redemption. If
less than all of the Certificates are to be redeemed pursuant to an optional redemptio~ 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
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13646Sv.2 LUB20MIOI6
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.
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 perfonned
and have happened in regular and due time, fonn, 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.
[SEAL]
City Secretary,
City of Lubbock, Texas
13646Sv.2 LUB200n1016
Mayor, City of Lubbock, Texas
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(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 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 AccOtmts
of the State of Texas
(c) Fonn of Certificate of Paying Agent/Registrar. The following Certificate of
Paying AgentJRegistrar may be deleted from the Initial Certificate if the Comptroller's
Registration Certificate appears thereon.
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:
13~Sv.2LUB200nl016
The Bank ofNew York Mellon Trust
Company, National Association
as Paying Agent/Registrar
By: -----------------------Authorized Signatory
(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 fonn set forth in paragraphs (a), (b) and (d)
of this Section, except for the following alterations:
(i) inunediately under the name of the Certificate the headings "INTEREST
RA TEu and "MATURITY 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 1 S in
each of the years, in the principal installments and bearing interest at the per annum rates
set forth in the following schedule:
Princigal Installments Interest Rate
(Infonnation to be inserted from schedule in Section 3.2 of the Ordinance)
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136465v.2 LUB200nt016
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-Hili 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; 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 conunitment 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
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J3646Sv.2 LUB200171016
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 2010 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. Amoval 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 VIII
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 Govenunent 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
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13646Sv.2 LUB200171016
timely applied to the making of all payments required to be made from the fund from which the
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. Pament 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 tenns.
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
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13646Sv.2 LUB200nt016
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 marmer 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>t 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 I 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.
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13646Sv.2 LUB200171016
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(f)(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 ann's length and had the yield on the issue not been relevant to
either party.
Section 9.9. Information Rmortina.
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 infonnation statement concerning the Certificates,
all under and in accordance with section 149(e) of the Code and the Regulations.
Section 9.1 0. 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.
ARTICLE X
DEFAULT AND REMEDIES
Section 1 0.1. 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
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13646Sv.2 LUB200/71016
(ii) default in the perfonnance 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 I 0.2. 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
perfonnance 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 cwnulative 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.
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ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.1. · Annual Reports.
(a) The City shall provide annually to the MSRB, 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, (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, and (iii) submitted through the EMMA, in an electronic format with accompanying
identifying information, as prescribed by the MSRB. 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 the MSRB. The City shall provide audited financial statements for the applicable
fiscal year to the MSRB when and if audited financial statements become available.
(b) If the City changes its fiscal year, it will notify the MSRB of the change (and of
the date of the new fiscal year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
referenced to any document (including an official statement or other offering document, if it is
available from the MSRB) that theretofore has been provided to the MSRB or filed with the
SEC.
Section 12.2. Material Event Notices.
(a) The City shall notify 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 serYlce 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;
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I36465v.2 LUB2ooniOI6
(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 repa)'ment of the
Certificates; and
(xi) rating changes.
The City will provide notice of such events to the MSRB in an electronic format and
accompanied by identifying information, as prescribed by the MSRB.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section 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.
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136465v.2 LUB200/71016
(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, talcing
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 fonn, of the reasons for the
amendment and of the impact of any change in type of financial infonnation or operating data so
provided.
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 pennitted 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
thereon, or in any other way modify the terms 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.
-34-
13646Sv.2 LUB200171016
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. Ap,plication 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 ofTexas 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.
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.
136465v.2 LUB200171016
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.
Section 14.7. Environmental Indemnification.
Proceeds of the Certificates shall not be used by the City when sampling, testing,
removing or disposing of contaminated soils and/or media at the project site. The City agrees to
indemnify, hold hannless and protect the TWDB from any and all claims, causes of action or
damages to the person or property of third parties arising from the sampling, analysis, transport,
storage, treatment and disposition of any contaminated sewage sludge, contaminated sediments
and/or contaminated media that may be generated by the City, its contractors, consultants,
agents, officials and employees as a result of activities relating to the project, to the extent
pennitted by law.
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.
136465v.2 l.UB200ntOI6
PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 16th
day of December, 2009, at a regular meeting of the City Council of the City of Lubbock, Texas.
TOM MARTIN, Mayor
ATTEST:
[SEAL]
APPROVED AS TO CONTENT:
APPROVED AS TO FORM:
Signature Page for Order for Issuance
136465v.2 LUB200nJ0/6
EXHIBIT A
DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION
The following information is referred to in Article XII of this Ordinance.
Annual Financial Statements and Operating Data
The financial infonnation 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 1 above.
A-1
136465v.2 LU8200/71016
)
US 197328v.l
TRANSCRIPT OF PROCEEDINGS
pertaining to
$19,945,000
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES2010
Dated: January 1, 2010
Delivered: January IS, 2010
VINSON & ELKINS
ATTORNEYS AT LAW
3780 Tnmmell Crow Cater
2801 Rim Aveue
Dallas, Texas 7SliU-297S
Telepboll~ (214) 220-7700
)
TABLE OF CONTENTS
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2010
Document Tab
Certified Resolution Authorizing Publication of Notice of Intention to 1
Issue Certificates
Affidavit of Publication of Intent Notice and Newspaper Certification 2
Certified Ordinance Providing for the Issuance of Certificates 3
Paying Agent/Registrar Agreement 4
Escrow Agreement 5
Application to Texas Water Development Board 6
Resolution of Texas Water Development Board 7
General Certificate 8
Receipt of Paying Agent/Registrar 9
Instruction Letter to Attorney General and Comptroller 10
Specimen Certificate 11
Opinion of Bond Counsel 12
Attorney General Opinion and Comptroller Registration Certificate 13
Tax Certificate 14
8038-G and Evidence of Transmittal 15
US 195388v.l
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MINUTES AND CERTIFICATION PERTAINING TO
PASSAGE OF A RESOLUTION
STATE OF TEXAS §
COUN1Y OF LUBBOCK §
CITY OF LUBBOCK §
On the 5th day of November, 2009, 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 prescnoed 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 [R .A. 1 . 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 ful1, 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: 7
NOES: 0
ABSTENTIONS: o
US 195522v.1
)
)
MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to
correctly reflect the duly constituted officers and members of the City Council of said City, and
the attached and following copy of said Resolution is hereby certified to be a true and correct
copy of an official copy thereof on file among the official records of the City, all on this the 5th
day of November, 2009.
City sdretary
City of Lubbock, Texas
(SEAL]
-2-
US 19S522v.l
)
)
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, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 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 form 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.
124964v.l LUB200/l
)
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ADOPTED THIS 5th day of November~ 2009~ by the City Council of the City of
Lubbock, Texas.
CITY OF LUBBOCK, TEXAS
Mayor~ City of Lubboc~ Texas
ATTEST:
APPROVED AS TO CONTENT:
c!~ City of Lubbock, Texas
APPROVED AS TO FORM:
Signature Page for Notice of Intent Resolution
124964v.l LUB200/I
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'
Exhibit A
NOTICE OF INTENTION TO ISSUE CITY OF LUBBOC~
TEXAS COMBINATION TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
NOTICE IS HEREBY GIVEN that on December 16,2009, 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 MWlicipal 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 $19,945,000 principal amount of certificates of obligation for the purpose of paying
contractual obligations to be incurred for the following purposes, to wit: (i) construction of a raw
water transmission line and pump station and water treabnent 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 November 5, 2009.
A-1
124964v.l LUB200/l
THE STATE OF TEXAS COUNTY OF LUBBOCK Before me Susan E. Smith ....... •> . ,;;:· . ' a Notary Public in and for Lubbock County, Texas on this day personally appeared _ln_e;;...z_L_o ..... pl.;...e.;.;;z;;..,_ ________ _ of the Southwestern Newspaper Corporation, publishers of the Lubbock Avalanche-Journal • Morning, and Sunday, who being by me duly sworn did despose and say that said newspaper has been cotinuously for more than fifty-two weeks prior to the first insertion of this _L_e_,g._a_I_N_o_t_lc_e __________________________ _ No. printed copy of the ____________ at Lubbock County, Texas and the attached Legal Notice is a true copy of the original and was printed in the Lubbock · lR ~ \ ~ 1 ;)oo4 5o~ v,ro n!s: •to10. ~'-l G.~fk-£()~ --· ·v ... ~~,-u Classified Inside Sales Manager LUBBOCK AVALANCHE-JOURNAL Morris Communication Corporation Subscribed and sworn to before me this FORM 58·10 o~_/£~ NOTARY PUBLIC in and for the State of Texas my commission Expires /tl .... /9-? ttl~ q«vvgEv .... -~ .:-... , ... ... ...... .,
)
)
MINUTES AND CERTIFICATION PERTAINING TO
PASSAGE OF AN ORDINANCE
STATEOFTEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
On the 16th day of December, 2009, 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
Paul Beane
John W. Leonard, III
Paul Beane &
)
)
)
)
)
Members of
the Council
and all of said persons were present except John Leonard, III 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 2010;
APPROVING A PAYING 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: 5
NOES: o
ABSTENTIONS: 0
US J95520v.l
)
)
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 16th
day of December, 2009.
City ecretary
City of Lubbock, Texas
[SEAL]
Minutes and Certification of Order Authorizing Issuance
us /95520v./
'
)
Ordinance No. 2009-()0115
ORDINANCE
relating to
$19,945,000
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2010
Adopted: December 16, 2009
136465v.2 LUB200171016
)
)
Section 1.1.
Section 1.2.
Section 1.3.
Section 1.4.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER 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.
Paytnent of the Certificates ........................................................................................ 5
Interest ail.d Sin.king FlUld ........................................................................................ 7
Deposits to Interest and Sinking Fund ..................................................................... 7
Issuance of Prior Lien and Additional Obligations .................................................. 8
Certificates Subordinate to Prior Lien Obligations, Covenants and
Agt"eetnents ................................................................................................................ 8
Section 2.6. Pledge ofRevenues .................................................................................................. 8
Section 2. 7. System 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 3.1 0.
Section 3.11.
Section 3.12.
Authorization ......................................................................................................................... 9
Date, Denomination, Maturities, and Interest. ....................................................... ! 0
Medium, Method, and Place of Payment. .............................................................. ! 0
Execution and Registration of Certificates ............................................................ 11
Ownership .......................................................................................................................... 12
Registration, Transfer, and Exchange .................................................................... 12
Cancellation ........................................................................................................... 13
Temporary Certificates .......................................................................................... 13
Replacement Certificates ....................................................................................... 14
Book-Entry-Only System ....................................................................................... IS
Successor Securities Depository; Transfer Outside Book-Entry-Only System ..... 16
Payments to Cede & Co ......................................................................................... 16
136465v.2 LUB200171016
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)
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 4.9.
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.
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Redemption ............................................................................................................ 16
Optional Redemption ............................................................................................. 16
No Mandatory Sinking Fund Redemption ............................................................. 17
Partial Redemption ................................................................................................. 17
Notice of Redemption to Owners .......................................................................... 17
Paytnent Upon Redemption ................................................................................... 18
Effect of Redemption ............................................................................................. 18
Conditional Notice of Redemption ........................................................................ 18
Lapse of Paytnent. .................................................................................................. 19
ARTICLE V
PAYING AGENT/REGISTRAR
Appointment of Initial Paying Agent/Registrar ..................................................... 19
Qualifications ......................................................................................................... 19
Maintaining Paying Agent/Registr'ar' ..................................................................... 19
Tem1ination ............................................................................................................ 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
Fonn 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 ............................................................................................... 27
Approval of Escrow Agreement. ........................................................................... 27
11
136465v.2 LUB200nt016
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ARTICLE VIII
INVESTMENTS
Section 8.1. Invest:Inents ............................................................................................................ 27
Section 8.2. Investment Income ................................................................................................. 28
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
Payment of the Certificates .................................................................................... 28
Other Representations and Covenants ................................................................... 28
Provisions Concerning Federal Income Tax Exclusion ......................................... 28
No Private Use or Payment and No Private Loan Financing ................................. 29
No Federal Guaranty .............................................................................................. 29
Certificates Are Not Hedge Bonds ........................................................................ 29
No-Arbitrage Covenant. ......................................................................................... 29
Arbitrage Rebate .................................................................................................... 30
Information Reporting ........................................................................................... 30
Continuing Obligation ........................................................................................... 30
ARTICLE X
DEFAULT AND REMEDIES
Section 10.1 . Events of Default ................................................................................................... 30
Section 10.2. Retlledies for Default. ............................................................................................ 31
Section 10.3. Retlledies 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
I3646Sv.2 LUB200nJ016
)
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
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 14.5. Annual Audit Reports ............................................................................................ 35
Section 14.6. Maintenance and Operation-lnsurance ................................................................ 36
Section 14.7. Envirorunental Indenutification ............................................................................ .36
) ARTICLEXV
EFFECTIVE IMMEDIATELY
Section 15.1. Effective Inunediately ............................................................................................ 36
Exhibit A-Description of Annual Disclosure of Financial lnfonnation ................................... A-1
)
)
IV
136465v.2 LUB200171016
' .I
)
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF
LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2010;
APPROVING A PAYING 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 ofthis 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 MATTERS
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.
136465v.2 LUB200171016
)
....
)
)
)
"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 2010."
"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 Wlder 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.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"EMMA'' means the Electronic Municipal Market Access System.
"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 January 1 , 2010, 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.
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"Fiscal Year'' means such fiscal year as shaii from time to time be set by the City
Council.
"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, 2010.
"MSRB" means the Municipal Securities Rulemaking Board.
''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
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) Certificates, Previously Issued Obligations or any Additional Obligations
paid or deemed to be paid in accordance with the provisions of Article XI
hereof; and
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(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 Mellon 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 Certificates of Obligation, Series 2008A, dated June 15,
2008, issued in the aggregate principal amount of $22,615,000; the outstanding 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 $3,1 00,000; 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.
"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
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
and DTC.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Similarly Secured Obligations" means collectively the Certificates, the Previously
Issued Obligations, and any Additional Obligations.
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"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. Intetpretation.
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.
This Ordinance and all the terms and provisions hereof. shall be liberally construed to
effectuate the purposes set forth herein.
ARTICLE II
SECURITY FOR THE 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
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redemption at maturity or a sinking fund of two percent per annum (whichever amoWlt 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 when
and as due and payable in accordance with their terms 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 shaH determine:
(i) The amoWlt 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 Coiiection 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.
The amount of taxes to be assessed and collected annually each year to pay the debt
service requirements on the Certificates shaii be the amount established in paragraph (iii) above
less the sum 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 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
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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 legaiiy 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
pennitted 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 detennining 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 2010, 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.
Section 2.3. Dtmosits 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 amowtt 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
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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
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.
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 tenns 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.
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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 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 pa}ment 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 pennitted 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
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 2010" (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$19,945,000 for the purpose of
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paying contractual obligations to be incurred for the following purposes, to wit: (i) 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 January 1, 2010. 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.
(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
2011 $ 740,000 0.000% 2021 $ 995,000 1.947%
2012 760,000 0.000% 2022 1,025,000 2.131%
2013 785,000 0.000% 2023 1,060,000 2.280%
2014 810,000 0.174% 2024 1,090,000 2.351%
2015 835,000 0.444% 2025 1,125,000 2.532%
2016 860,000 0.644% 2026 1,160,000 2.463%
2017 885,000 0.854% 2027 1,195,000 2.706%
2018 910,000 1.064% 2028 1,230,000 2.661%
2019 940,000 1.372% 2029 1,265,000 2.815%
2020 970,000 1.642% 2030 1,305,000 2.822%
(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 ofPavment.
(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
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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 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 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
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
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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.
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 pa)'lllent 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 sums paid.
Section 3.6. Registration. Transfer. and Exchange.
(a) So long as any Certificates remain outstanding, the City shall cause the Paying
AgenVRegistrar 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
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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/Transfer 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
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
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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 swn sufficient to cover any tax or other govenunental charge that is
authorized to be imposed in connection therewith and any other expenses connected therewith.
(b) Jn 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,
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 harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement 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
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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 lieu
of which such replacement Certificate is delivered.
Section 3.10. Book-Entzy-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
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 an
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 DTC has detennined 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.
l36465v.2LUB200171016
(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 Depository; Transfer Outside Book-Entty-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 DTC 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.
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, 2021 in whole or any part, before their respective scheduled maturity dates, on
February 15, 2020 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.
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(b) If less than all of the Certificates are to be redeemed pursuant to an optional
redemptio~ 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 Mandatoa 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
an exchange Certificate or Certificates in an aggregate principal amount equal to the unredeemed
portion of the Certificate so surrendered, such ex.change 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.
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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 amoWlts 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 Paymentffransfer 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
bear interest at the rate stated on the Certificate until due provision is made for the payment of
same by the City.
Section 4.8. Conditional Notice of Redemption.
The City reserves the right, in the case of an optional redemption pursuant to Section 4.2
herein, to give notice of its election or direction to redeem Certificates conditioned upon the
occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned
upon the deposit of moneys and/or authorized securities, in an amount equal to the amount
necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may
be authorized by law, no later than the redemption date, or (ii) that the City retains the right to
rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a
certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to
rescind the redemption notice and such notice and redemption shall be of no effect if such
moneys and/or authorized securities are not so deposited or if the notice is rescinded. The
Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of
redemption to the affected Owners. Any Certificates subject to conditional redemption and such
redemption has been rescinded shall remain Outstanding and the rescission of such redemption
shall not constitute an Event of Default. Further, in the case of a conditional redemption, the
failure of the City to make moneys and or authorized securities available in part or in whole on
or before the redemption date shall not constitute an Event of Default.
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Section 4.9. 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
PAYING AGENT/REGISTRAR
Section 5.1. Appointment of Initial Paying Agent/Registrar.
The Bank of New York Mellon 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 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.
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Section 5.6. Agreement to Perfonn 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 perfonn 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 Generaiiy.
(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 fonn 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, 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:
136465v.2 LUB200nl0l6
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(a) Form of Certificate.
REGISTERED
No.
United States of America
State ofTexas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
INTEREST RATE: MATURITY DATE: CERTIFICATE
DATE:
CLOSING
DATE:
__ % January 1, 2010
REGISTERED
$ ___ _
CUSIP
NU~ER:
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 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,
2010.
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 Mellon 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
136465v.2 LUB200/71016
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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.
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!fransfer 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 $19,945,000 (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, 2021, in whole or in part, before their respective scheduled maturity dates, on
February 15,2020, 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
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herein provided (except interest shaii 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.
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.
[SEAL)
City Secretary,
City of Lubbock, Texas
136465v.2 LUB200171016
Mayor, City of Lubbock, Texas
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(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 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 Paving 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 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:
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136465v.2 LUB200/71016
The Bank ofNew York Mellon Trust
Company, National Association
as Paying Agent/Registrar
By: ---------------Authorized Signatory
)
)
(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 "MATURITY 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)
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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.
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 coMection 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
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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 tenns 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 2010 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 ·FWld.
Monies deposited to the Escrow Fund shall be applied as provided in the Escrow Agreement.
Section 7.5. Approval ofEscrow Agreement.
) The Escrow Agreement, in substantially the form presented at this meeting, and the tenns
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and provisions thereof, are hereby approved, and its execution and delivery by the Mayor, are
hereby authorized and approved.
ARTICLE VIII
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
pennitted 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
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timely applied to the making of all payments required to be made from the ftmd from which the
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. Pavment 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 perfom1, 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
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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 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 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.
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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
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 amowtt 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 9.1 0. 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.
ARTICLE X
DEFAULT AND REMEDIES
Section 1 0.1. 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
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(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 1 0.2. 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.
ARTICLE XI
DISCHARGE
Section 11.1. Discharge.
The Certificates may be defeased, discharged or refunded in any manner permitted by
applicable law.
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ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.1: · Annual Reports.
(a) The City shall provide annually to the MSRB, 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, (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, and (iii) submitted through the EMMA, in an electronic format with accompanying
identifying information, as prescribed by the MSRB. 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 the MSRB. The City shall provide audited financial statements for the applicable
fiscal year to the MSRB when and if audited financial statements become available.
(b) If the City changes its fiscal year> it will notify the MSRB of the change (and of
the date of the new fiscal year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
referenced to any document (including an official statement or other offering docwnent, if it is
available from the MSRB) that theretofore has been provided to the MSRB or filed with the
SEC.
Section 12.2. Material Event Notices.
(a) The City shall notify 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;
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(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, substitutiont or sale of property securing repayment of the
Certificates; and
(xi) rating changes.
The City will provide notice of such events to the MSRB in an electronic format and
accompanied by identifying information, as prescribed by the MSRB.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section 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 Cityt 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 fN 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.
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(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.
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 pennitted 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
thereon, or in any other way modify the terms 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.
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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 TWD B
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 ofbonds 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.
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.
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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.
Section 14.7. Environmental Indemnification.
Proceeds of the Certificates shall not be used by the City when sampling, testing,
removing or disposing of contaminated soils and/or media at the project site. The City agrees to
indemnify, hold harmless and protect the TWDB from any and all claims, causes of action or
damages to the person or property of third parties arising from the sampling, analysis, transport,
storage, treatment and disposition of any contaminated sewage sludge, contaminated sediments
and/or contaminated media that may be generated by the City, its contractors, consultants,
agents, officials and employees as a result of activities relating to the project, to the extent
permitted by law.
ARTICLE XV
EFFECTNE 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.
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PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTNE on the 16th
day ofDecember, 2009, at a regular meeting of the City Council of the City of Lubbock, Texas.
TOM MARTIN, Mayor
ATTEST:
REB~CCA GARZA, City Seer
[SEAL]
APPROVED AS TO CONTENT:
By: b.~~
ANDYRciiAM)Chief Financial Officer
APPROVED AS TO FORM:
Signature Page for Order for Issuance
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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:
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 accotmting 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
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PAYING AGENT/REGISTRAR AGREEMENT
between
CITY OF LUBBOCK, TEXAS
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION
Pertaining to
) City of Lubbock, Texas
Tax and Waterworks System Surplus Revenue Certificates of Obligation
Series 2010
Dated as of January 1, 2010
)
195988v.l LUB200171016
TABLE OF CONTENTS
Page
ARTICLE I
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. ........................................................................................................... 1
Section 1.02. Compensation .......................................................................................................... 1
ARTICLE II
) DEFINITIONS
Section 2.01. Definitions ............................................................................................................... 2
Section 2.02.. Oth~ Definitions ...................................................................................................... 3
ARTICLE III
PAYING AGENT
Section 3. 0 l. Duties of Paying Agent ........................................................................................... 3
Section 3.02. Paytllettt Dates ......................................................................................................... 3
)
ARTICLE IV
REGISTRAR
) Section 4.01. Trat1sfer md Exchange ............................................................................................ 4
Section 4.02. The Certificates ....................................................................................................... 4
Section 4.03. Form 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 Infonnation to Issuer ........................................................................... 6
ARTICLEV
THE BANK
Section 5.01. Duties of Bank ......................................................................................................... 6
Section 5.02. Reliance on Documents, Etc ................................................................................... 6
Section 5.03. Recitals of Issuer ..................................................................................................... 7
Section 5.04. May Hold Certificates ............................................................................................. 7
) Section 5 .. 05. Money Held by Bank .............................................................................................. 7
Section 5.06. Indetnnification ....................................................................................................... 8
Section 5.07. Interpleader .............................................................................................................. 8
(i)
195988v.l LUB200171016
ARTICLE VI
) MISCELLANEOUS PROVISIONS
Section 6.01. Amendment ............................................................................................................. 8
Section 6.02. Assignment .............................................................................................................. 8
Section 6.03. Notices ..................................................................................................................... 8
Section 6.04. Designated Payrnentffransfer 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 Agreetnent ............................................................................................ 9
Section 6.09. Entire Agreement .................................................................................................... 9
Section 6.1 0. Counterparts .............................................................................................................. 9
Section 6.11. Tennination .............................................................................................................. 9
Section 6.12. Governing Law ...................................................................................................... 10
) Annex A-Schedule of Fees for Service as Paying Agent/Registrar
)
)
(ii)
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PAYING AGENT/REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT (the or this "Agreement"), dated
as of January 1, 2010, is by and between CITY OF LUBBOCK, TEXAS (the ''Issuer''), and THE
BANK OF NEW YORK MELLON 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 2010 (the "Certificates"),
dated January 1, 2010, 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 tenns, 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 premiwn, 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 PAYING 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 premiwn, 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.
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(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 2010, dated January 1, 2010.
"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 goverrunent 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
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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:H 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.
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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.
(d) The Bank may request any supporting documentation it feels necessary to effect a
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 form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Owners. (a) The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the cost, if any, of reproduction, a copy of the
information contained in the Register. The Issuer may also inspect the information in the
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Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
(b) The Bank will not release or disclose the content of the Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a subpoena or court order or as otherwise required by law. Upon receipt of a
subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the
subpoena or court order.
Section 4.05. Cancellation of 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 Bank 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 indenmity as may be
required by the Bank to save and hold each of them harmless, then in the absence of notice to the
Issuer or the Bank that such 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.
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(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.
(t) 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 terms of any such bond, provided that the amount of such bond is not reduced below the
amount of the bond on the date of execution of this Agreement. The blanket bond then utilized
by the Bank for lost, stolen, or destroyed Certificates by the Bank is available for inspection by
the Issuer on request.
Section 4.07. Transaction Information to Issuer. The Bank will, withln 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
THE BANK
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,
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direction, consent, order, certificate, note, security, or other paper or docwnent 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 perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
(g) The Bank is authorized to transfer funds relating to the closing and initial delivery
of the Certificates in the manner disclosed in the closing memorandum as prepared by the
Issuer's financial advisor or other agent. The Bank may act on a facsimile or e-mail transmission
of the closing memorandum acknowledged by the financial advisor or the Issuer as the final
closing memorandum. The Bank shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Bank's reliance upon and compliance with such instructions.
Section 5.03. Recitals of Issuer. (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 Bank, 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
Bank with respect to such monies shall thereupon cease.
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(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
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. Internleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demands or controversy over its persons as welt 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 pennitted 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:
I95988v.l LUB200171016
City of Lubbock, Texas
1625 13th Street
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(b) if to the Bank:
Lubbock, Texas 79457
Attention: Chief Financial Officer
The Bank of New York Mellon Trust Company,
National Association
2001 Bryan Street, gth 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 ofNew York Mellon Trust Company,
National Association
2001 Bryan Street, gth 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 bind its successors and assigns, whether so expressed or not.
Section 6.07. Smarability. 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 6.1 0. Counter.parts. This Agreement may be executed in any nwnber 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 tenninated 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
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Agent/Registrar may petition any court of competent jurisdiction for the appointment of a
successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying
Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60)
days after the giving of notice of resignation.
(c) The provisions of Section 1.02 and of Article Five shall survive and remain in full
force and effect following the termination of this Agreement.
Section 6.12. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
CITY OF LUBBOC~ TEXAS
By: -~_,£.Z:....L.AIW~,,4n;z:::~~:....__ __ _
Tom Marti~ Mayor
ATTEST:
Signature Page for Paying Agent/Registrar Agreement
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THE BANK 01-NEW YORK MELON
TRUST COMPANY,
NATIONAL ASSOCIATION
By. Wi&
Title: Senior Associate
Signature Page for Paying Agent/Registrar Agreement
ANNEX "A"
) SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT/REGISTRAR
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AnnexA
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BNY MELLON
CORPORATE TRUST
Fee Schedule
City of Lubbock, TX Tax and Waterworks System Surplus Revenue
Certificates of Obligation Series 2010
Acceptance Fee None
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 attorney(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. Our pricing is based on the assumption that the bonds are DTC-eligiblelbook-entry only. If the bonds
are certificated or physical, then we will have to charge an additional $1000 per year as a paying agent. This
fee is payable annually, in advance.
Extraordinary ·Servlcea/Miac Fees: At Appraisal
•• ->1<..
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 commensurate with the service to be
provided and may be charged in BNY Mellon's sole discretion. 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.
These extraordinary services may include, but are not limited to, supplemental agreements, consent operations,
unusual releases, tender processing, sinking fund redemptions, failed remarketing processing, the preparation
of special or interim reports, custody of collateral, a one-time fee to be charged upon termination of an
engagement Counsel, accountants, special agents and others will be charged at the actual amount of fees and
expenses billed, 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 at $300 per event.
Other Miscellaneous Fees: At Appraisal
2001 Bl)'an -11~~> Floor Dallas, TX 75201
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BNY MELLON
CORPORATE TRUST
FDIC or other governmental charges will be passed along to you as incurred.
Terms and Disclosures
Terms of Proposal
Final acceptance of the appointment under the Indenture is subject to approval of authorized officers of BNYM
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
document 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 infonnation 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 BNYM, we will ask you to provide certain
information (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 nwnber 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.
We thank you for your assistance.
2001 Bryan-II"' Floor Dallas, TX 7S201
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ESCROW AGREEMENT FOR TEXAS WATER DEVELOPMENT
BOARD TRANSACTIONS
This Escrow Agreement (the "Agreement") is entered into as of January 1, 2010 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 2010, dated January 1, 2010, in the
aggregate principal amount of $19,945,000 (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 Company") 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 Goverrunent 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:
US 137556v.l
Section 1: The Funds shall be deposited with and held in escrow in TexPool to the credit of an
account entitled City of Lubbock Escrow 2010 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 tenninate 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. All losses resulting from the investment of the Funds shall be charged
against the Account.
) Section 3: The Issuer reserves the right to secure release from the Trust Company of all or a
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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 2010 TWDB CO Account, or 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 terminate 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 performance of its duties hereunder, or in
the exercise of any of its rights or powers.
Section 8: To the extent permitted 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
2
US 137556v.l
of, 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 10: 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.
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Notice Address:
City of Lubbock
P.O. Box 2000
Lubbock, Texas
Attention: Chief Financial Officer
Notice Address:
208 E. 10m Street
Austin, Texas 78701
Attn: Kathy Bueltel
Contracts Administrator
Fax: 512-463-5971
Phone:512-463-0823
) US 137556v.l
City of Lubbock, Texas, as Issuer
By: ~4?2
Name: Tom Martin
Title: Mayor of the City of Lubbock, Texas
Texas Treasury Safekeeping Trust Co.
as Escrow Ag
By:
Chief Executive Officer
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Section
A.
B.
City of Lubbock, Tuas
Teus Water Development Board WIF Application
Table of Content for WIF Applicaiton
June2~2001
Detail
~-General Information
1. Legal Name and Authority
2. Official Representative
J. 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
WRD-006-PiKaJ 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 Fonna for Water System Revenues
11. Top ten (1 0) customers
12. Five-Year System Operating Statements
a. Operating Statements
b. 2007-08 Year to Date Operating Statement
c. History on Number of Customers
13. Schedule of Current and Proposed Rates
a. Current Rates
b. Proposed Rates and Sample Bil1s
c. Water and Sewer Rate Ordinances
14. Preceding Five Year Historical Data
15. Current Top Ten Taxpayers
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16. Maximum Tax Permitted by Law
17. Annual Audit (Separate Document) l~~ o...~\ ~ \
a. Management Letter 7
b. Management Response
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CityofLub~ Teus
Te:us Water Developmeat Board W1F Application
General Information (WRD-006)
June 20, 2008
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 corporation as provided
under authority of Article XI, Section S (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 ofthe Local Government
Code, effective April I, 2009.
2. Official Representative
Thomas L. Adams
Deputy City Manager and Water Utility Director
P.O. Box 2000
Lubbock, TX 79457
Phone-8()6..775·2015
Fax-806-775-2051
Cell Phone-806-577-3498
Email Address-tadams@mylubbock.us
3. Names a.od Tides of Principal Officen
a. Mayor-Tom Martin
b. Council Members
(1) Linda DeLeon
(2) Floyd Price
(3) Todd Klein
( 4) Paul R. Beane
(5) John W. Leonard ill
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d. Bond Counsel:
Jennifer Webster Taffe
Attorney
Vinson & Elkins) L.L.P
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
214-220-7941
Email: jtaffe@velaw.com
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City of Lubbock, Teus
Teus Water Development Board WIF Application
General Information (WRD-006)-Comprehensive Description of the Project
June 20, 2001
5. Comprehensive Description of the Project:
Lake Alan Henry Water Tnnsmission Line, Pump Stations, Water
Treatment Facility and Related Improvements Project
The City of Lubbock has an immediate need for additional water supplies when
considering the impact of drought on water provided by the Canadian River
Municipal Water Authority from Lake Meredith, and when considering the declining
water levels in the Ogallala Aquifer generally and from the City's Bailey County
Well Field in particular. The 2006 State Water Plan recognizes this need, and
Addendum No. I to the January 2006 Llano Estacado Regional Water Plan
recognizes Lubbock's water supply needs by 2010.
The City of Lubbock has completed the preliminary engineering report entitled City
of Lubbock Lake Alan Henry Water Transmission Line, Pump Stations, Water
Treatment Facility and Related Projects Engineering Report, that provides a
comprehensive description and in depth evaluation of the entire project. Copies of
this report have been provided to the TWDB with the previous application, and
additional copies can be provided upon request.
This application for Water Infrastructure Funds (WIF) is for the construction of the
fust of three sections of a SO-mile transmission pipeline that will bring raw water
from Lake Alan Heory to Lubbock Texas. This first section consists of21.3 miles of
42·inch diameter raw water transmission line that will begin at a planned pump
station below the John T. Montford Dam at Lake Alan Henry and then continue
northwest ending at the planned second pump station located near the City ofPost,
Texas. The cost of the proposed transmission line has been estimated by project
engineers at $40,705,000.
The Montford Dam was completed in October of 1993 and Lake Alan Henry began to
fill with water. The Dam and Lake are located approximately 60 miles southeast of
the City ofLubbock primarily in Garza County, Texas.
The City of Lubbock is theownerofPermit No. 4146A(Application No. 41SSA) for
the impoundment of 115,937 acre-feet of water in Lake Alan Henry on the South
Fork of the Double Mountain Fork of the Brazos River. The pennit authorizes up to
35,000 acre-feet of water diversion from Lake Alan Henry per annum with a 2007
estimated safe yield of 19,000 acre-feet. The next step in the project is to construct
the raw water transmission lines, pump stations, water treatment plant, and related
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City ofLubbockt Teus
Teus Water Development Board WIF Applieation
General Information (WRD-006)-Participating Political Subdivisions
June 20, 2008
6. Participating Political Subdivisions:
The City of Lubbock will own and operate the facilities and have sole responsibility
for all 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 City of Lubbock provides a treated water supply by contnct to the following
political subdivisions who are water customers of the Lubbock Water Utility: (1) City
of Ransom Canyon, (2) City of Shallowater, (3) City of Littlefield (emergency basis
only), ( 4) Lubbock Cooper Independent School District, (5) Lubbock County Water
Control & Improvement District 1 (Buffalo Springs), and (6) Lubbock Reese
Redevelopment Authority. The City ofLubbock recently completed a raw water
contract with the Lake Alan Henry Water District. The population served through
these contracts totals to about 4,026 people.
The City of Lubbock has pending negotiations with the City ofWilson, The City of
Wolfforth, White River Municipal Water District (the cities ofPost, Spur, Crosbyton
and Dickens), Roosevelt Independent School District, and the Lake Alan Henry
Water District. The City ofLubbock is working with these entities on various water
supply projects that may benefit directly or indirectly from the Lake Alan Henry
project.
Through CR.MW A water supplies, the City of Lubbock also treats water for the cities
of Brownfield, Lamesa, Levelland, New Deal (by means of a contract with Slaton),
O'Donnell, Slaton, and Tahoka These cities may benefit on an emergency basis
from the Lake Alan Henry project. The population served through these contracts
totals to 40,468 people.
J O..lgn Schedule Survey/Permits/Land Acquisition Water Treatment Plant Design Treated Water Pipeline Design Raw Water Pipeline Design Conatructlon Schedule .., Raw Water Pipeline -LAH to Post Water Treatment Ptant & Terminal Storage Pipeline Pump Stations Raw Water Pipeline -Post to Southland Raw Water Pipeline • Southland to WTP Treated Water Pipeline-WTP to COL .., Start OatH March 1. 2008 March 1, 2008 June 1, 2008 October 1, 2008 June 1, 2009 January 1, 2010 January 1, 2010 June 1, 2010 January 1, 2010 FebNary 1, 2010 _, _, "' .., -' .--... .-.. ,
Prolect 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&MManual Corrosion Control Subtotal Special Fees Land, Easements, ROW Contingency TOTAL PROJECT COSTS i '-" Project Total Coats $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 13,309,000 5,642,000 $21,192,000 $500,000 0 3,966,000 500,000 346,000 204,000 293,000 225,000 $6,034,000 3,750,000 39,526,000 $241,833,000 r-. ,.. ~ City of Lubbock, Texas Texas Water Devteopment Board WIF Application Lake Alan Henry Infrastructure ProJect Budget June 20, 2008 Current Cycle Jan08Cycle Construction Pha!e Request Total Total Funded RawLine1 WTP PumpStatJons $0 0 0 0 32,719,000 32,719,000 0 23,725,000 0 0 19,049,000 0 15,628,000 0 4,572,000 RawLine2 Rawline3 TreatedUne 25,499,000 25,499,000 24,640,000 $32,719,000 $0 $32,719,000 $34,677,000 $28,297,000 $25,499,000 $25,499,000 $24,640,000 $0 $2,241,000 0 13,309,000 947,000 947,000 1,351,000 1,155,000 738,000 738,000 713,000 $947,000 $15,550,000 $947,000 $1,351,000 $1,155,000 $738,000 $738,000 $713,000 $0 $500,000 0 399,000 399,000 1,326,000 1,320,000 310,500 310,500 300,000 0 500,000 45,000 45,000 146,000 50,000 35,500 35,500 34,000, 0 204,000 I 6,000 6,000 238,000 35,000 4,500 4,500 s.oool 45,000 45,000 25,000 50,000 35,500 35,500 34,0001 $495,000 $1,204,000 $495,000 $1,735,000 $1,455,000 $388,000 $388,000 $373,000! 0 3,750,000 6,544,000 2,111,000 6,544,000 8,669,000 7,074,000 5,100,000 5,100,000 4,928,000 $40,705,000 $22,615,000 $40,705,000 $48,432,000 $37,981,000 $31,723,000 $31,723,000 $30,854,000 ·."-""/ -j / r I"' ,. r--~-r-. r
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City of Lubbock, Tens
Teus Water Development Board WIF App6cation
Financial and Statistical Information
June 20, 2008
B. Financial and Statistic:al Information
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
documents to generate the revenue necessary to finance operations and debt service.
2. Depository T111st Compaay 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 City of Lubbock has the ability to repay the debt for the project, and we are not
aware of any issue that would impact om ability to repay. The project cost is significant
but necessary to ensure current and fi.Jtme water supplies. Assistance with the financing
will have a positive impad on eaabling this project to move forward in a timely manner.
The City continues to enjoy slow but steady growth.
The City implemented a 16% rate increase in the 2007-08 fiscal year, and it is anticipated
that three more comparable increases will be neeessary over the next three years to
finance the project. This represents over a 600.4 increase in water rates for this project.
The City will have to carefully plan for and balance rate increases to generate revenue for
operations and debt repayment. As the rates inCI"e8SeS;. water conservation will also
increase which in the long nm is a positive. Rate increases will have to include
allowances for decreased water use in order to generate sufficient revenue for operations
and debt service for this and other projects. 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.
The City uses the services of Red Oak Consulting, a division of Malcom Pimie, to assist
with the development and use of a rate model We are now looking at using the model to
project future increases as a result of this project.
City of Lubbock, Teus
Water Utility Development
TWDB FiDaudal Assistance Applicatioa Fiscallafomaadoa
( December 20, 2007
~ TOJ'AL BOND DEBT SERVICE REQUIREMENTS (GO ONLY)
FYE OutttaadiDI Debt
30-Sep Prilld!!l Jnternt Total
2008 $ 26,410,000 $ 23,812).77 $ 50.222,217
\ 2009 26,940,000 22,967.366 49,907.366
2010 27,015,000 21,851.398 48,866,398
2011 27,800,000 20,6~,901 48,454,901
2012 27,440,000 19,410,018 46,850,018
2013 28,310,000 18.142.831 46,452.131
2014 29,2.70,000 16,800,791 46,070,791
2015 27,410,000 1,,500,326 42,910,326
2016 27,555,000 14.221,980 41,776.980
2017 27,900,000 12.862,90S 40,762.905
2018 28.635,000 11,489,560 40,124,560
2019 27,915,000 10,078,060 37,993,060
2020 26,075,000 8,714,720 34,849,720
) 2021 24,79S,OOO 7,533,491 32.328,491
2022 22,460,000 6.358,568 28,818,~
2023 21,900,000 5,254,886 27,1S4,886
2024 20,400,000 4,181,866 24,581,866
2~ 19,730,000 3,187,703 22.917,703
' 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
2030 S,13S,OOO 712,173 6,447,173
2031 6,000,000 445,949 6,445,949
\ 2032 2,195,000 260,438 2,455,438
2033 2,2~,000 lS9,S2S 2,449,.525
2034 2,400,000 54,000 2,4S4,000
$ S24,0SS,OOO $ 250.793,047 $ 774,848,()(7
Total Outsauding GO Debt Per Capita $2,439.20
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' City of Lubbock, Tuu
Water Utility Development
TWDB Finaadal Assistuc:e Applieation Fiscallaformation
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December 20, 2007
AUTHORIZED BUT UNJSSED GENERAL OBUGAnON BONDS
Date Amo••• Issaed
Purpose Authorized Aatborized To Date Uniuued
SCWCI' System 5!2tn7 $ 3,303,000 $ 2,175,000 $ 1,128,000
Wat.crworla System 10/17/87 2,810,000 200,000 2,610,000
Street Improvements 511193 10,170,000 10,166,000 4,000
Street Improvements 5/15/04 9,210,000 5,269,000 3,941,000
Civic Ceater/Auditorium Renovation and lmpro\'Cmtllts 5/15/04 6,450,000 6,450,000
Park lmprovanaJts S/lS/04 6,395,000 6,395,000
) Police/Municipal Court Facilities 5/15/04 3,350,000 3,350,000
Library Improvements 5/15/04 2,145,000 2,145,000
FireStaaioDs S/IS/04 1,405,000 1,405,000
Animal Shelter Rc:D.ovltions & Improvc:mcots S/15104 1!045,000 160,000 885,000
s 46,283,000 $25,770,000 $ 20,513,000
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City of Lubbock, Texas
Water Utility Development
TWDB FiDucial Assistance App6eatioo FiseallafoJ'Diatioa
December 20, 2007
ESTIMATED OVERLAPPING DEBT AND TAX RATES
Expenditures of the various tBxiog entities within the tetritory 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 expendit\lres.
This statement of direct and estimated overlapping ad valorem tax bonds ("Tax Debt") was developed from information
eoatained iD "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for lhe 8DIOUil1s .reJatiog
to the City, the City has not independently verified the accmacy or completeness of such informatiODt and no person should rely
upon such infoimation as being Kcurate or complete. Furthermore, certain of the eutities listed may have issued additional Tax
Debt since the date hereo~ aod sucb entities may have progrm:ns requiring the issuance of substmtial amounts of additioDal Tax
Debt. the amo\Dlt ofw!W:h c::aDDOt be determined The followiDg table reftc:ds tbe esriou•trd share of overlapping Tax Debt of
the City.
Ta!iy Jarildlctloa
Frenship lSD
Idalou ISD
Lubbock County
Lubbock County Hospital District
Lubbock lSD
Lubbock-Cooper lSD
New Deal lSD
Roosevelt lSD
Estimated Overlapping Debt
The City
GI"'OS Debt
(As of ll/1107)
$ 138,102,346
215,000
85,720,000
140,956,725
46,264,571
9,624,998
s 524,055,000
Total Direct & Estimated Overlapping Tax Debt
As a% of2007 Taxable Assessed Valuation
Assessed Valuation Per Capita
Estiluted%
Overlllppiac
79.41%
6.93%
83.32%
83.32%
98.49%
57.50%
18.33%
4.20%
100.00%
OverlapplDI
TuDebt s 109,667,073
19,058
71,421,904
138,828,278
26,602,128
404,250
$ 346,942,691
524,055,000
$ 870,997,691
7.99%
$S0,710.79
1007 Total
Tulbte
$1.500050
$1.265000
$0.306141
$0.116610
$1.235000
$1.285000
$1.170000
$1.205000
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City ofLabbock, Tens
Water Utility Development
TWDB Finueial Aasistuce Applicadoa Fiseallaformation
December 20, 2007
MUNICIPAL SALES TAX HISTORY
The City bas adopted 1he Municipal Sales and Use Tax Act. Chapter 321, Texas Tax Code, which grants the City the power to
impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged
to the paymem of the Bonds or other debt of1he City.ln addition, in Ianway, 1995, tbe voters oftbe City approved the imposition
of an. additiOD&l sales and use tax of ooe--eigbdl of a cent as authorizM by Cblpter 323 Texas Tu Code, as amended. Collection for
the additional tax commenced in October, 1995 with tbe proceeds from the onwigbth cent sales tax deslgoated for the use aod
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 8D additional Oll6-qWIIter cent sales and use tax. with the proceeds to be dedicated to tbe
reduc:tion of ad vaklrem taxation.md an additional one-eigbtb cent sales md use tax UDder Section 4A of the Texa Dewlop:DeDt
Co1p0ratioo 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 enfon:ements of the City's sales tax are effec:ted through the
offices oftbe Comptroller of Public ACCOUids, State of Texas. who RIDi1s the proceeds of the tax, to the City mombly, afta'
deduction of a 2% service fee. Historical collectioas of the City's 1.125% loc:al Sales and Use Tax are shown below:
FYE
30-Sep
2002
2003
2004
2005
2006
2007
Total
Collected (It)
$ 28,902,641
29,092,032
30,554,632
41,803,092
45,S76,S82
47,780,448
00 Excl1lde& bm.,-ftiCIIiJIU.
'Y.or
Ad Valorem
TuLevy
68.66%
66.63%
76.97%
100.07%
109.10%
103.72%
~ Based oa populaDoa estiaiiiiiS oftbc City.
Equivalent of
Ad Valorem
TuRate
s 0.4183
0.3962
0.3857
0.4825
0.4556
0.4385
Per
Caplml'l
s 143.08
142.09
148.11
199.90
214.61
224.99
Effective as of October 1, 2006, the sales tax breakdown for the City is as follows:
City:
City Sales & Use Tax
City Sales &t Use Tax for Property Tax Relief
City Sales & Use Tax for Economic Development
County Sales & Use Tax
State Sales a: Use Tax
Total
s
$
1.000
0.315
0.125
o.soo
6.250
8.250
.., J .,., .,., ...... ..., -.,., ,-. -·, . .--.. W01tK1NG uiKAYT ctty or LobiiGCir. TX 9;)7AM Dep.nmt~~t offtllgce ltYeer'WaterPw,..Mia&Modd &ll4llOOI Oty ofLabbodl, T-WaterUIIICJ Dqla..._t lO Year Prafenaa for die Lake AlaD llal17 ~Project -'IWDB Fblaaclal ApplfcadH lnul)'lO, 3001 ~118 ComolaliYe NtfAat&s Meta red Plical FIIJIII.ia1 TetaJ Project Total V.. of Overi(V ..... ) Apprapriable NetAuet Oftrf(UIIder) Senka Year .so.-. Operatiou Debt&cmce SeriealOIII kritallm Scria 21110 .,... Service ,....... ~:.,...... .. Net A.-P.UC,t-d ..., --2008 $ 46,432,282 32,098,2SI 16)93,309 309,072 309,072 48,100,632 (2,368,.3~0) 9,687,411 11,608,071 (1,.920,660) 16.00% 2009 53,954,572 32.327,247 18,210,098 I,SOS,ISO 1,402,109 2,908,659 53,446,004 SOI,$68 10,19$,979 13,488,643 (3,292,66f) 16.80% 2010 63,080,900 33,423,859 19,242,313 1,SGS,l7S 3,901,08 6,S(il)33 11,961,046 64,~,.218 (l,S53,31&) 1,642,.662 IS,170,22S (7.127,563) IUt% 2011 73,491,273 34,096,743 19,795,618 1,503,.950 3,900,.950 IS,OR9,4SO 20,494,.350 74,316,781 (81&,S08) 7,7S4,1S4 18,374,561 (I 0,620,415) 16.00% 2012 79,714,498 35,084,621 l9,Sil,915 t,S01,87S 3,901,200 15,()89 ,650 20,492,725 75,089,261 4,62S,237 12,379)91 19,928,625 (7,S49JJ4) 0.00% 2013 81,461,168 35,819,189 11,78l,BSS 1,503,9'75 3,901,913 IS,G87,000 20,492,118 7S,16S,93l 6,301,237 11,611,627 20,167,042 {l,61S,4U) 0.00% 2014 82,710,672 36,892,009 20,641,953 1.$05,175 3,.902,813 U,085,450 20,493,431 78,027,400 4,753,.273 23,434,900 20,69,,168 2,73!1,732 0.00% 201S 13,032)43 37,17S,178 20,S 14,2.00 1,SOS,47S 3,903,625 15,088,"0 20,497,750 78.117,128 4,14,,415 27,S80,31S 20,758,136 6,822,179 0.110% 2016 12)76,400 31,953,497 l0,4S6,034 1)04,875 3,1.99,213 IS,08S,400 20,48!1,488 79,899,019 2,477.312 30,057,696 20,594,100 9,463,596 0.00% 2017 82,.]11,674 40,134,917 20,423,477 l,S03,37S 3,199,300 IS.QI9.350 20,.4!12,025 81.~0.419 1,261,2SS 31,318,951 20,517,919 10,741,033 0.00% 2011 83,192,407 41,371,000 20,200,170 1,500,.975 3,903,331 15,089,000 20,493,313 82,066,483 1,125,925 32,444,876 20,791,102 11,646,'174 0.00% 2019 14,085,008 42,414,617 19,571,431 1,502,600 3,901,050 u,oaa.ooo 20,491,650 12,413,698 1,601,310 34,0(6,116 21,1)21,252 13,02A.934 0.00% 2020 84,981,780 43,515,870 15,763,115 I,S03,17S 3,902,163 U,0114,850 20,490,188 79,769,173 5,219,608 39,265,793 21,247,19S 1&.018.$98 0.00% 2021 85,904,442 44,620,299 13,351,482 1,502,700 3,901,263 15,017,,0 20,491,713 78,470,494 7,433,949 46,699,742 ;n,476,1ll 2SJ23,631 0.00% 2022 86,830.,841 45,7!13,0113 10,432,411 l,SOI,l75 3,902,938 1,0114,900 20,.419,013 76,714,507 10,116,335 56,816,076 21,707,710 35,108,366 0.00% 2023 87,661,255 47,114,866 9,211,217 I,SOJ,S2S 3,901,775 15,089,350 20,494,650 76,110,733 10,787,522 67,603,598 21,.917,064 45,686)34 0.00% 2024 88,618,97S 48,559,449 8,664,921 1,504,675 3,902,363 1$,089,000 20,496,031 ?7,720,401 10,89&,568 78,.$02,166 22,154,744 56,347,422 0.00% 2025 19,548,706 50,081.588 7.930,407 1)04,625 3,899,2111 I 5,086,.900 20,490,813 71,509,808 11,031,899 89,541,064 22,387,177 67,1S3,8a& 0.00% 2026 90,S24,961 SI,713,S11 6,182,198 1)03,375 3,902,000 IS,OIS,IOO 20,491,175 78,456,191 12,068,070 101,609,1.34 22,631,240 78,977,894 0.00% 2027 91,514,337 53,576,162 4,860,152 1,S00,925 3,899,950 15,081,150 20.419,1)25 78,925,339 12,581,998 114,198,132 22,878,584 91)19,$48 0.00% 2021 92,Sl7,J4() 55,413,972 2,003,683 1,502,200 3,902,588 IS,086,400 20,491,181 77,968,1143 14,$41,298 128,746,430 23,129,215 10S,617,14S 0.00% 2029 93,533,692 ,1,S4S,69S 371,205 3,899,363 15,087,150 18,987,213 16,911,113 16,622)80 145)69,009 l3,38l,423 l21,.91j,$86 0.00% 2030 94,564,328 59,739,503 S6,328 lS,089,$00 U,089,SOO 74,885,331 19,671,1197 165,048,006 23,641,082 141,406,924 0.00% 20.H 9S,609,401 62,064,.992 . 62,064,992 33)44.,409 l98,S92,41S 23,902,350 I 74,690,065 0.00% 2032 96,669,280 64,.532,611 . . 64,532,611 32,136,669 230,729,084 24,167,320 206,561,764 0.00% " SllllllfiCicos: I. All Debt ia iuued 8120 yws. wilh an iotettsl nu: of S% 2. ~Ire llltkiplled fO pow lll-2% l. Cunaltly CIP l'llauliq elida a1 FY 2013 4. Pay·.V.Yw F\llldillaia piallllod aa $1,298,820 in FY 2001,$404,860 iB FY 2009, 8lld $346)80 ill FY 2010 S. Model iDcludoos tb& debt laViooiOr tba LAH project IIIII all odllr exiltiq p!lmled projecb s-ed at 5'4 for 20 yeen. 6. n. proftlmm iodicalll mo rite illaoua are Mldod aft« FY 2011. 6I14IZ008, Qa\W•te.U..ke AI .. llmJY Plpdl• Pn~jed\TWDB 1-. ApplcatlaUGOI JUUJY AppJicatiH\tpp GIOlOllleli.-for Wonutla\8 MIO ld Sub 20 year proC.n~a DO.. ModlW by TA
J .--Customer ## 1 9975088 2 9925915 3 9975117 4 9925939 s 9975017 6 9714295 7 9763423 8 9975087 9 9831.559 10 9815768 ._, .r-City ofLubboc)4 Texas Texas Water Development Board WIF Application Top 10 Water Customers-Revenue and Consumption October 1, 2007 to March 31 ~ 2008 J Cuatomcr Name TotaiCbaraa Water Couumotlou I tgls TEXAS TECH UNIVERSITY $ 327,677.23 121,039 CITY LIGHT $ 249,438.81 91,842 LUBBOCK SCHOOLS s 205,901.18 60,632 PARK DEPARTMENT $ 165,308.66 27,152 COVENANT HEALTH SYSTEM $ 125,589.43 48,587 X-FABTEXAS $ 121,414.71 55,016 TDCJ $ 57,126.64 25,558 PYCO INDUSTRJES,INC. $ 56,145.80 16,834 TOWN OF RANSOM $ 48,955.41 31,997 SOUTHERN COTTON OIL CO $ 47,453.40 17,803 _, -~ . ,.. or Total Uaue 2.45% 1.86% 1.23% 0.55% 0.98% 1.11% O.S2o/o 0.34% 0.65% 0.36%
··' , ... -........ AIHil CurRat Aucla: Pooledcallal-aequi~ liMIIIImcall ACCOUII!IIIId oata recei*le (oct) a..r...t.-iwllla Du. .tom Oilier IOvemiiiA:IIta Due &... acw 1\.-!s hmadlory,. GOil TOIIII-. Uldl Ralrictcd Auc(s: Tolll nlllricl>ed UHlJ ~toOIWIIDb Pro,crty, --equiplloal: L.ud Bllildiap ~ ~-buildillp t.UdUDcly llld eqWpm.eol ~ill~ A1lowaDce for~ Nt:1 Pf11P'11Y, pllld ..S equipln.d Otbcr Auots: w .. Riallll AIJ--..Iilr~ N4lt Odltt,..... Total A11et1 s 1991 l47,S90 1,656,971 2,111,1Sl 23,403 72,040 1999 977,602 6,$42,433 2.243,46$ ~.750 21,161 '-' ,/ ..---. City of Lubbock Water Fund Balance Sheet '-" For Fiscal Years Ended September 30 2000 1.1193.36$ 7.317,132 2,727,7% 19,05.5 31,577 lOOt 2002 2003 2004 2005 lU,91! 1,735,411 S,S94,197 9,646.391 S.2QS,JS6 2,114,666 ),601,982 3,311,366 2,336,705 116,711 2,804.!119 3,617,94.5 4,191,306 3,935,759 4,lt3,761 18,446 43.372 16,474 34,961 19,769 57,.522 33,722 46,367 21,011 42,444 ,/ 2006 6,167,041 5,362,050 4,292,453 25,851 7,620,000 6,615,110 3,940,000 261)00 -70,919 .·· ·-..... 2007 125,431 9,045,220 4,900,490 54,896 33,714 67.763 9J.~m 94.004 97.874 87.905 n7.t5o 170,483 2U.806 273.979 _ 22t.~3o _ 4,179.62.5 9~3.942 --11.211.8~ 13.029.412 -i3.106.217 17.924.560 -16,413.817 -9.783,717 16.192.»3 -1~1.111 30.246.325 31,116,576 41.719.213 25,009.118 23,013.815 29.29!.2S4 ----'2.5()__!.18l_ __1_1,!11M~8 __ 11.193~ __ _31,591,963 30.246,325 _ 31,)16,576 41,719.213 25.0()9,118 23.013,81.5 29.295.284 _ 22).,.,113::-_ 2l,91C1,_438 _:.::: -JJ,I93.!_S6 _.::::_ 31391,963 635,342 515)42 232,190 169,491 2,000,000 32,905,162 32,905,162 32,90'.162 31,905,162 32,90.5,862 UL613,834) (11.000~) (12.311.01~> . (12,77.5.217) (13.162.34.S} 2l.l92.011 20....904.900 -lO.Sl7)73 l0,130,64S 19.743,517 S 2l9.ffi'.701 229,971,554 254.499,391 2SI,OI9,7% 2SS.I63,262 263,777,168 261,044,.171 27,?'5:2(M l1Ul.S,399 324,104,919 '117/20GI C:1DOCUME-IU IIS27J\UJCALS-I\Tooapla 112 J v-o,..mo,-_t _,
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City of Lubbock, Tuas
Statement of Net Assets
Proprietary Funds
September 30, 2007
ASSETS
Current assets:
Cash and cash equivalents
llmstmmts
Aa:owrts receivable
luterest receivable
Due tiom others
Due from OCher fim.ds
lovc:otories
Total current assets
Nonc:urrcut assets:
Rcstticted ilm:stmrms
Restricted investments
Restricted interest receiwble
Restricted accouuts receivable
Defcm:d cbargcs
Capital assets:
Land
ConsUudion in progress
Buildings
~ro~tsolli~~bw~
M.achiDcry and equipment
Less accumulated dqnc:imao
Total capital assets
Total noocurrent 8SICts
Total assets
Electric
$ 677;137
48,834,947
16,719,031
315,994
2291463
66,776,672
4,995,904
7,632,150
2,944&444
15~72,498
756,714
10,295,363
8,054,811
191,579,813
54,328,662
(118,192,554)
146,822,809
162J95,307
$229,1711979
Eoterprise Faads
Water Wutewmr WTMPA
$ 125,438 $ 113,870 $ 1,163,606
9,045,220 &;111,077 386,016
4,900,490 2.349,337 718,957
54,896 58,956
33,714 118;196
8,890,468
2211430
14,381,188 10,851,536 11,159,047
5,525,055 3,008,905
26,063,215 13,582,176
3,693 1,557
31&5911963 16,5921638
12,724,350 12,578,774
19,989,416 11,170,884
22,240,589 24,013,170
287,819,541 123,292,696
33,060,070 17,565,261
(97,702,198) (68,607,595)
27811311768 12010131190
309,723,731 136,605,828
$3245104.219 $147;457~64 S 11,1591047
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City of Lubbock, Tuas
Statement of Net Assets
Proprietary Funds
Sep~ber30,l007
LJABILll1l'3
Cumlnt liabilities:
Accounts payable
Aa:nJcd liabilities
Accrued interest payable
Due to other funds
Customer deposits
Compeuslled abseoccs
Accrued iGsurac:e claims
Leases payable
Bonds payable
Total cmrcut liabilities
NOilCU!1'Cirt liabilities:
Compensated absences
Accruc:d insurance claims
Llmdfill closure IDd post closme care
Leases ptl)'able
Bonds payable
Defcm:d revenue
Rcbalable arbitrage
Total noncmmrt liabilities
Total liabilities
NET ASSETS
Invested in capital assets. net of related debt
Resb:ic:tal for:
Pusalger &ct1ity cbllrFs
Debt service
Unrestricted
Total net assets
$ 1,017,200
1,686,858
1,288,005
8,890,468
3,203,484
1,121,895
770,605
51709223
23,747,838
1,360,783
2,804,049
73,070,580
?2.193
77,307,605
101,055,443
72,100,402
4,995,904
51,020,230
$ 128,116,S36
Eaterprite Fuads
Wtter Wutewater WTMPA
s 2,071,279 s 1,361,699 $ 9,645,457
279,475 175,699
1,098,621 357.311
62,315
473,664 227,996
391,881 364,071
8~6732559 418141663
13,050,794 7,301,439 9,645,451
574,523 276,544
1.391,079 1,001,256
158,246,275 54,075,135
161,546 183,482
160,373,423 55,536,417
173,424,217 62.837,856 9,645,457
135,492,189 73,340,241
5,525,055 3,008,905
9,663,458 8.270,362 1,513,590
$150,680,702 s 84,619,508 $ 1,513,590
City of Lubbock, Teus
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietuy Fuads
\. . For The Year Ended September 30, 2007 .,
EII!BJ!ri-Fntll
:Electric Water Wutewater WTMPA
OPERATING REVENUES
Charges for sc:rvic:es (net) $ 145,953,649 $ 35,454,426 Sl9,141.S03 $ 94,964,919
MiscelJIDCIOUS
Total operating revenues 145,953,649 35,454,426 19,841,503 94,964,919
OPERATING EXPENSES
Pcrscmal sr:niccs 13,763,044 6,814,703 3,930,397
Insurance
Supplies 1,041.200 1,302,892 911.261
Materials
MainlaliDC:e 3,026,095 1,839,067 1,446,735
Purdwe of fuel md power 102,861,131 94,880,615
Other services and c:harges 5.210,063 8,824,918 4,415,139 491,041
Deprcciltioa mid llll¥lrtizatioo 819971473 821461118 5!4412892
Total opel atiua expc::IL'IeS 134,899,006 261927,691 1621451424 95~71&656
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Operating income (loss) 11,054,643 8,526,728 3,696,079 (406&737)
NONOPERATING REVENUIS (EXPENSES)
lntaat~ 2,006,776 1,465,228 1,167,249 19,763
Paue!lger facility cllarges/Fedcral grmts
• Disposition of assets 68,390 (221,985) 84.286
Misee1lmeous 4,390,174 503,600 289,910 108,040
lnt.elest ape.!ISC {31126,892} !5~09101~ ~1 18St4SS}
Net nonopmting revenues (expenses) 3,338,448 (3,562.172) (644,010) 127,803
Jnc:omc Ooss) before contn"butions IDd tnDsfcrs 14,393,091 4,964,556 3,052,069 (271,934)
Clpital comn'budom 225,713 3,082.SSS 3,031,.530
Transfers in 5,116,801 528.237 370,707 485,697
Transfers out !1,3021082} F15581790} (3&8811533}
Chanae ia. Det MlleiS 18,433.523 1,016,558 2.572,773 206,763
Total net assets • beginning of year, as restated 109,683,013 149,664,144 82,046,735 1,306,827
Total Dd ISSCIS • eDdins s 128,116,536 s 150,680,702 $84,619.508 $ 1,513,590
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See accompanying Notes to Basic Financial Statements.
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.. ~------Month 2002 JAN FEB MAR I APR MAY JUN JUL AUG September Total 1Flscal Year Total)_ OCT NOV Dacamber Total i(CaJendar Year Total) J ~-Water Custome. I"\CCCunt History Lubbock,Texu Te:xae Water Development Board WIF Application 71100 71153 71230 71.301 71,407 70952 71,444 71,050 71.872 79031 70927 70,998 Number of Water Utility Cuatomera for the City of Lubbock June 20, 2008 2003 2004 2005 70948 72699 74029 71019 78821 74122 71067 72 921 74.354 71324 73_._037 74,625 71905 73291 74882 71783 73471 75067 71,799 73_,_516 75233 72051 73,535 75,378 72,207 73.788 76,543 72_.376 73788 75,642 72,419 73,891 75770 72_~_506 74.028 75.876 u ...--.. .' 2006 2007 75953 76 818 76,006 76,862 76,075 76879 7Q..183 77,383 76243 77421 76348 77489 76353 77.525 76513 77641 78,650 77.643 76573 77,706· I 76,682 77_._681 76,757 77,388 6/412008
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City of Labbock, Teus
Teus Water Developaent Board WIF Application
FiDucial and Statistical Information
June 20, 2008
13. Water Rates ud Projected Rates
In March of2007 the City ofLubbock implemented an increasing block rate for water
used as a major component of its water conservation efforts. Prior to 1991, the City had a
decreasing block rate for wa1er used, and from 1991 through 2006, the City bad a flat
water rate for use. Under tbe increasiDg block rate method, customers pay more per
gallon for additional water used.
The City's water rate bas a base monthly fee as well as three block rates for water used.
The monthly base rate for a three quarter inch meta' aod the block rates as of March of
2008 are listed below, with use rates based on 1,000 gaiJons used:
Monthly Base Rate for% inch meter-$8.89
Block 1 Rate for t•7,000 gallons·
Block 2 Rate for next 40,000 gallons •
Block 3 Rate above 47,000 gallons-
$2.42
$3 .03
$4.19
A detailed spread sheet showing actual rates and sample bills from 2007 and 2008
follows, along with projected rates in order to fund tbe Lake Alan Henry Project. In
addition, a copy of the latest water rate ordinance is also included. The City increased
water rates 16% in 2008, and will need three additional 16% rate increases iD order to
fund the Lake Alan Henry project.
The City bas actually adopted what is called an Average W'mta" Consumption Block Rate
or AWC Rate. This is a more progressive rate and eocourages greater conservation.
While the above volumes are reflective of the average water use by customers, the AWC
rate adjusts the block 1 volume according to the average winter oonsumption. This
allows the lowest water rate for water-needed tor liviDg purposes -drinkiu& bathing, etc.
and generally forces the higher b1ock 2 rate to be paid for lawn and yard irrigation that is
generally in excess of the average winter use.
The goal .ofthe City ofLubbock is to encourage water conservation through an increasing
block rate that uses the average winter coosumptioo approadl in order to charge the lower
block 1 rate for living purposes and the higher block 2 rate for irrigation. The block 3
rate is applied to what would be considered ex:cessive water use.
£..../ , ,.---._ ~ ... City of Lubbock, Texas Texas Water Development Board WIF Application Water Rates and Projections June 20, 2008 Fhlcal Year mz 2008 201 ~ Percent Increase 16.00% 1&.oo·~ 18.00% Average R .. identlal Winter Months Average Average Average Average 7,000 1m Rates IW! Rates !m! BI1H Bill .B!l!! Gallons 1. Base $7.66 $7.66 $8.89 $8.89 $10.31 $10.31 $11.96 $11.96 2.Use Blocks 1 $14.63 $2.09 $16.94 $2.42 $19.65 $2.81 $22.79 $3.26 Block2 $2.61 $3.03 $3.51 $4.08 Block 3 $3.61 $4.19 $4.86 $5.64 Average Winter $22.29 $25.83 $29.98 $34.76 8111 Average Residential Summer Months 15,000 GalloD§ 1. Base $7.66 $7.66 $8.89 $8.89 $10.31 $10.31 $11.96 $11.96 2.Use Blocks 1 $14.63 $2.09 $16.94 $2.42 $19.65 $2.81 $22.79 $3.26 Block2 $20.88 $2.61 $24.24 $3.03 $28.12 $3.51 $32.62 $4.08 Block 3 $3.61 $4.19 $4.86 $5.64 Average Summer $43.17 $50.07 $58.08 $87.37 Bill -Au water use rates are set on a per 1,000 gallons basis. v· ) 2011 18.00% Average !1!! B!l!! $13.88 $13.88 $26.44 $3.78 $4.73 $6.54 $40.32 $13.88 $13.88 $26.44 $3.78 $37.84 $4.73 $6.54 $78.15 ~ 0% Average I ......-..... .' Bill Rates $13.88 $13.88 $26.44 $3.78 $4.73 $6.54 $40.32 $13.88 $13.88 $26.44 $3.78 $37.84 $4.73 $6.54 $78.15 ....J
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ORDINANCE NO. 2008-00018
Sec:ODd lteadia&
l'ebrury u. 2008
It-lo. 5.3
AN ORDINANCE AMENDING CHAPTER 28 OF THE CODE OF
ORDINA.i.~CES OF THE CITY OF LUBBOCK, TEXAS, BY AMENDING SECTIONS
1 28-52 AND 28-53 OF THE CODE OF ORDINANCES OF THE CITY OF LUBBOCK I BY REVISING WATER RATES AS CONTAINED THEREIN; PROVIDING A
l SAVING CLAUSE; AND PROVIDING FOR PUBLICATION. I
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lj WHEREAS. the City Council of the Ciry of Lubbock deems it to be in the best
ii interest of the citizens of lhe City of Lubboclc to adjust water rates to reflect the cost of
li service; NOW THEREFORE: I• ,. ~~BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
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I. SECTION 1 ~ THAT Section 28-52 of the Code of Ordinances, City of Lub~
Texas is hereby amCDdcd to read as follows:
I Section 28-52. Water Base Charge.
The City. through the City Manager, shall charge and collect from every customer
i and every customer shall pay a monthly base charge f« water which shaJJ be billed to all
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1 customers based upon the water meter size as follows:
1 Meter Size Water Base Charge
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Three-quarter inch (3/4 .. ) meter
One inch (I") meter
One and a half inch (1.5") meter
Two inch (2j meter
Three inch (3'') meter
Four inch (4 .. ) meter
Six inch (6j meter
Eight inch (8•') meter
Ten incb ( 1 0") meter
$8.89
$14.84
$29.59
$47.36
$94.81
$148.12
$296.16
$473.87
$681.26
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;! SECTION 2: THAT Section 28-53 of the Code of Ordinances, City of Lubbock, il Texas. is hereby amended to read as follows:
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!1 Section 28-53. Water Volume Rate Generally
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(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 furnished by the City to the customer. The water furnished by I ' I i
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6). Wholesale-The following Water Volume Rate shall be applicable for
those federal. state or local governments, governmental agencies or
governmental subdivisions that are authorized to pun:base water by
City onfinance and enter into contracts with the City of Lubbock for
wholesale purchases. The Block 1 volume is the amount of water used
up to 100% of the Average Winter Consumption ("AWC") of the
wholesale customer, the A We being the average volume of water used
as measured by the meter reading for the months of September,
October, November, December. January and February, and updated in
March of each respective year; the Block 2 volume ia the volume of
water used in excess of the Block 1 volume up to an additional 200%
of the A WC (total of Block I and Block 2 is equal to 3000A of the
A WC); and the Block 3 volume is the amount of water used in excess
of the Block I and Block 2 volumes. For wholesale customers that do
not have an A WC calculated for their service, the A WC shall be
established by contract based upon the average voJume of water
authorized in the contract for delivery in the months of September,
October. November, December, January and Felmlary. Thereafter, an
A we sba11 be calculated based upon the volume of water actua.Uy
used as provided for in this section. Solely for the purposes of
wholesale customers. the Water Volume Rate shall be 1.3 times the
Water Volume Rate for all other customers as set forth above, as
applicable to each Block; said Water Volume Rate being:
Block 1-$3.15 per 1,000 gallons
Block 2-$3.94 per 1,000 gallons
Block 3-$S.45 per 1,000 gallons
Nothing contained herein. absent agreement otherwise by the
wholesale customer, shall affect existing valid and subsisting
wholesale contracts by and between the City of Lubbock and
wholesale customers. Any renewal or extension of such contract,
other than renewals and eacnsions that may be exercised unilaterally
by the wholesale customer, shaD provide for the rates prescribed in this
ordinance.
The rates prescribed herein for wholesale customers reflect the
increased cost of service by the City of Lubbock for such customers.
including without limitation, costs related to water distribution
infrastructure and remote metering and service issues. stand-by water
demands, and the impact of advancing the timing of water supply
projects to meet additional water supply demands for wholesale
customers.
d '' SECTION 3: THAT the Water Base Charge and Water Volume Rate as set forth
J: in this Ordinance, except as otherwise provided herein, shall be effective for an billings
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Water Ra1e C>rcliDaKe
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!I AND IT IS SO ORDERED.
/j Passed by the City Council on first reading this 1~ day of Pebrya ~ 2008.
' Passed by the City Council on second reading this .2ldL day of l•lu:un 2008.
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!I DAVIDA.-:;AYOR
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11ATIEST:
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~.a-.~~ a Garza. City Secretal}f
I i I APPROVED AS TO CONTENT;
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l J at , 'efFi cial Officer
1 APPROVED AS TO FORM:
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)j Richard K. Cuner, First Assistant City Attorney
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11 tJtD!cr;docsiW., Rile <mfinlnce 020i01
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W~r Rate Ordinance
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i· l' ! December, January and February. This volume shall be defined as the Average Winter
J Consumption (AWC), and it shall be updated for billing purposes in March of each year.
ll ln the event a residential CU!tomer or premises (i.e.~ a new premises) does not have a
'• water consumption history for such months. a wa1er volume of 7.000 gallons per month lJ shall be utilized by default. The volume of sewer flow produced by other customers shall ii be determined as provided for in Section 28-88 of the Code of Ordlllances of the City of
1 Lubbock.
I j SECOON 2: THAT the Sewer Base Charge and Sewer Flow Rate as set forth iD
I this Ordinance shall be effective for all billings for such services dated on or after Marcll
t. 2008. The Sewer Base Charge and Sewer Flow Rate currently in effect shall remain in
effect until the effective date of the Sewer Base Charge and Sewer Flow Rate as set forth
~hemn.
SECTION 3: TiiAT the City Council finds and declares that sufficient written
notice of the date, hour, place. and subject of this meeting of the COWICiJ was posted at a
designated place convenient to the public at the City Hall for the time required by law
preceding this meetin& that such place of posting was readily accessible at all times to
the general public, and that all of the foregoing was done as required by law at all times
~~· during which this Ordioance and the subject matter thereof has been discussed,
; considered and formaUy acted upon. The City Council further ratifies, approves and
• confinns such written notice and the contents of posting thereof.
1
/ SECTION 4: TIIAT should ony pangroph, section, senteu<e, phrase, clause or
. word of this Ordinance be declared unconstitutional or invalid for any reason. the I remainder of this Ordinance shall not be affected thereby.
I I SECfiON S: THAT the City Secretary is hereby authorized and diRcted to cause
publication of the descriptive caption of this Ordinance as an alternative method of
1/ publication provided by law.
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.,/ ..) ,--..., ..; City ofLu1 tk, Teus Water Utillty Development v TWDB FiDaneial Assiltanee Application Fiscal Information December 20, 2007 TAXABLE ASSESSED VALUATION BY CATEGORY u J Tauble A(!(!nlted Value for Fiseal Year Ended Se(!tember 30, 2007 2006 2005 o/,of %of Category Amount Total Amount Total Amount Real, Residential, Single.Family $ 5,889,918,195 55.53% $ 5,517,769,306 55.55% $ 5,169,490,706 Real, Residential, Muhi-Family 873,394,391 8.23% 795,689,400 8.01% 615,453,250 Real, Vacant Lots/Tracts 186,939,508 1.76% 166,089,379 1.671'/0 137,411,731 Rea~ Acreage (Land Oaly) 104,443,417 0.98% 80,067,791 0.81% 64,532,486 Real, Farm and Ranch Improvements 10,601,986 0.10% 11,038,895 0.11% 10,406,299 Real, Commercial and IDdustrial 1~68,271,689 18.56% 1,827,901,763 18.40% 1, 712,457,490 Real, Oil, Gas and Other Mmeral Reserves 28,446,050 0.271'/0 17,526,510 0.18% 12,167,754 Real and Tangible Personal, Utilities 179,562,657 1.69% 177,838,907 1.19% 173,908,469 Tangible Personal, Business 1,245,600,988 11.74°.4 1,228,428,632 12.37% 1,226,369,118 Tangible Personal, Other 13,940,265 0.13% 14,527,171 0.15% 15,465,413 Real Property, Inventory 37,577,657 0.35% 26,685,491 0.27% 9,863,035 SpeciallDventory 68,621,321 0.65% 67,329,545 0.68% 68,232,264 Other/ Adjustments 2202192 0.000;{, 1,4992616 0.02% -Total Appraised Value Before Exemptions S 10,607,S38.316 100.00% $ 9,932,392,406 100.00% $ 9,21S,7S8,0l.S Less: Total Exemptions/Reductions ~6041812,6792 ~58517782455} ~580,763,1532 Taxable Assessed Value $ 10,002,725,637 $ 9,346,613,951 $ 8,634,994,862 J ._) /---. \ %of Total 56.09% 6.68% 1.49% 0.70% 0.11% 18.58% 0.13% 1 .894';{, 13.31% 0.17% 0.11% 0.74% 0.00% 100.00%
J ..) .) Flseal YearEnd Genenl 09130 Fund -2003 $ 0.43204 2004 0.41504 2005 0.33474 2006 0.35626 2007 0.36074 2008 0.35380 ....) J ,) ,,-......~ City of Lu.. ..ek, Texas Water Utility Development l...) TWDB Flnaneial Astiatanee Applieatio11 Fiseallnfonnatio11 Deeember lOt 2007 TAX RATE, LEVY AND COLLECTION IDSTORY Tas: Rate Distribution Economic loterest and T1:1 Tu Development SIDkbaa Fund Rate Levy S 0.03000 $ 0.10796 $ 0.57000 $ 42,093,1S3 0.03000 0.10066 0.54510 43,6S9,11l 0.03000 0.09496 0.45970 39,697,452 0.03000 0.06094 0.44720 41,775,367 0.03000 0.07125 0.46199 46,068,744 0.03000 0.07125 0.45505 49,195,247 '..,) J u ... ·-·· Perc:ent Collected Tax Curreat Totafl') Year 91.61% 99.21% 2002 97.02% 98.64% 2003 97.73% 100.28% 2004 98.15% 99.71% 2005 98.12% 99.02% 2006 (In process of Collection) 2007
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City of Lubbock, Texas
Water Utility Development
TWDB Finaneial Assistanee Application Fiscallnformatioa
Deeember 20t 2007
Name
Macerich L\lbboc:k Ltd.
Wal·Mart Stores, Inc.
Southwestern Bell Telephone
Un.ited Supermarlcets OFC
PYCO lnduslries, Inc.
Southwestern Public Services Co.
Lubbock Property, LLC
Aanos Energy West Texas Division
1YCO Fire Products
Fountains Club Lubbock Acquisitions, LP
TOP TEN TAXPAYERS
2007
Tauble
Assessed Valuaeioa
$ 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
None of the above taxpayers have filed for bankruptc:y.
% ofTotal
Tauble
A.ssessed Valoatiog
1.100.4
0.64%
0.60%
0.45%
0.44%
0.39%
0.31%
0.3~.4
0.290.4
0.26%
4.790.4
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City of Lubbock, Texas
TeDI Water Development Board WIF Application
Financial and Statistical Information
June 20, 2008
16. Article XI, Section S~ 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,
2007 included as a separate document.
18. Bond insurance is not expected to be purchased for the Joan. However, this
matter will be discussed with the TWBD to see how potential credit enhancement
could affect the ultimate bonowing rate of the City. Ifbond insurance will lower
the ultimate borroWing rate then bond i.nsunmce may be purCbasect.
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.
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Audit Committee. Honorable Mayor,
Membezs of the City Council and Management
CityofLubbock, reus
Lubboc.t. Texas
As part of our a1Jdit of the finaru:ial statements of the City of Lubbock. Texas (the "City") as of
and for the year ended September JOt 2007, we wish to cOIDDWilicate the foUowing to you.
AUDIT SCOPE AND RESULTS
Afdittr't Rapowibility Upder A!ditia• Stydards Ggsnlly Asgpted ia the llaited
Strfe a( AJ!edg
An audit performed in acc:ordance with auditing standards generally acceptecl in the United
States of America (GAAS) is designed to obtain reasonable, rather than absolute, assurance
about whether the fiDaDciaJ statemeats are flee of ma1l:ria1 .l1lisstafcment In performing GAAS
procedures. we establish scopes of audit tats in .relation to tbe finloclal statemcDts 18b.n as a
whole. Our ea.p.scment does not include a detailed audit of every tnmsactioll. Our engagement
lcUer more specifically desaibes our responsi'biliUes.
The City's signifiamt accounting policies are deacribcd iD Footnote I of tbe audited finaacial
S1atameuts.
Ac:couat.ina atirnata are an mtqral part of financW statcmc:at preparaboa by managantm,
baed on its judgmalts.. The foUowing areas involve sipific:ant areas of such estimat.cs for
whidl we are prepared to discuss manqement's estimafum process and our procedures for
testina the .reaonableuess of those estimates:
• Depreciation of capital assets
• Self·imured claims and judpleots liabilities
• Ellvironmen1al remediation liabilities
• Allowance for doubdW a«ounts receivable
• Landfi11 closun: and postclosu:re care liabilities
• Pc:Dsioo obliplioos
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l , Audit Committee, HoMI&ble Mayor,
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Members of the City Council aud Management
City ofLubbodc, Texas
Material Weabeues
No matters are reportable
SfpifteaDt DetlcMada
See lndepaldeftt Accountants' Report OD Intemal Comrol Over FiDancia1 Reporting and on
Q)mpliaace ml Other Matters Based on 1D Audit of tbe F'mancial Statemmas Performed in
A.ccordaDce with GoverfiiMIIt A.udittlrg Standtlrdl.
Coatnl Deftdlacla
Maoaaemcm is respoosible for establishina &Dd maintaining ef'fectivc iDte:rnal tot1trol over
fi.aaacial rqJOI1iq. Several individuals within the emit)' have incompatible chdies in several
tiDmcial statcJDent NpOrtina traDSaetioDS cycles. Duties iD these transarion cycles.,. DOt
adequately sesxepted to safeguard the entity's assets. Following is a summary of various
incompatible duties we identified:
C~~y of LuliiJod
• Oae iDdividual within the payroU cycle has the ability to sip checks or submit electro.raic
pa.ymeat. access a mcch•aical signatwe dc:Yice, access siped c:hecb to be issued, record
payroll thecb i~ record electronic fiuxls traa.sftn. cbaDae eomputar eatrie:t
affectiDa pa)'ND and checks issued. chaoge compute~' master tiles aff'ectiag employee
paynill infonDa.tion aod electro.aie fi.mAs tnmsft:n, 8Dd make joumal emria a1fcctiDa
expaiSC ICCOUDtS and payrollliabilliy accouu1s.
• Two iadividuals withill1he payroll cycle have the ability to add an employee to payroll
master file, make a computer emry to am=• a payroU payment, edit/modify payroll
cWa after initial iDput, includina hours workc:d. sip checks or submit elect!oaic paymau,
~csa sipteel chcdc.s to be issa:acd, record payroll checks issued, record elecUaoic funds
ti8D.Sfas, 8Qd chanp computer muter files affec:tiaa employee payroll informatioa and
e!ednJDic fi.mds traasfezs.
• One individual within ·the purcbascs, cash disbutscmcots aocl accouors payable cycle has
the ability to enter an elearonic elm intachmge purchase insuuctioa, make a computer
cmry to p:llllftte a paymart, sip checks, accas mecbaDical signatun: devic:c, access
sipcd checks to be issued to veadors, mail chects, record accoums payabl~ rcccrd
cllccks issued aod record eJectn>nic fUnds traDsfen.
• ODe individual within the purchues, cash disburscmenta and accounts payable cycle has
the ability awhorize a purchase document or EDI emry ~ared by others, make a
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Audit Committee, Honorable Mayor,
Members af the City Council and Management
City ofLubbock, Texas
NEW AtiDITJNG STANDARDS
The s.rtJana..Oxley Aet and other evcms have dramatically affected tbe setting of auditiDg
stadlrds aud tbe focus oftbe audit PfO"SS primarily for pUblic companies. Not surprisingly,
1he iOC\JI bas bceu exteDcled to DOn-public entities. 1Jl2006, the Auditina Samdards Board
(ASB) oftbe American Institute of Certified Publk: Accowrtams (AICPA), the staDdaJd settina
body for lliCtits of non-public entities, issued eleven uew auditiDg standards. 1'hese auditing
staDdards fnclude a documentation standard. a suite of eight risk assessment Sbll1dards, a
SIIDdard tat defiaes professional n:quiremcots iD staSane:D1S on auditin& Sbll1dards, aad a
S1BDdard that provides guidance on commUDicatiJia matters related to an entity's iJrtenua1
~over financ:jal reportina. The mllowiaa summarizes some of the more sipificaat
cbanp-
StaraDcDts on Auditins Stmclards (SAS) No. 104-111 relate to the asaessmc:m of risk in an
audit offinandal Slatements. These StateaJeats establish SWidards aDd provide guidance
coJX:aDioa tbe auditor's asaessmem of1be risb of material missbltemem (wbether caused by
error or hud) iD a finac:ial stateme.m audit. aod tbe desigD IDA perfonDIDCe of audit
proeedures whose nature, tim in& and cxteut uc respoosive to the assessed risks. Additionally,
the StJtmnents establish st8bclards and povide guiclmce 011 plannina and supervision, the
Dlbn of udit evidlla, aad ewluatina wbdlcr tbe audit evidence obtaiDed afrords a
reaouble basis for an opiDion reprdina tbe finaacial statemen1a uncle~' audit.
The primary objective of these Statemmts is w eallaDcc auditors' application of the audit risk
model in practice by speeifying. amona 01ber1hinp:
• More in-depth UDdetstaodina oftbe ea!ity aDd its enviroDme"Dt. inc1udiDa its imemaJ
conaml. to ideati(y the risks of material mi~t in. the finwocial statemmlt and wbat
lbe entity is doiDa to mitipte them.
• Men riaorous assessmen1 oftbe riJb of material miss1alenwlt of the financial
siiiiCmeiiiS buecl on that \lDdastao4ina.
• Improved linkqe between the aacsscd risks and tbe nawre, timiD& and eX1eDt of audit
procedures peafonoed iD respoo1e 10 those risk&.
Tbae Staremmts wiU be effective for the City's September 30, 2008 audit
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Audit Committee, Honorable Mayor,
Members of the City Council aDd Management
City of Lubbock, Texas
postemploymcnt bcnctit plans in which the City participateS. This Statement will apply to your
post c:mploymcnt benefits plan. and will be effective for the City for the year ending
Scplanber 30, 2008.
GASB No. 4! generally requm:s recopitioG of C'JtpeiiSCS for postemploymcnt benefits as
serrices are performed, reprdlcss of tlu: timins of tbe related benefit pa.ymcnts. Previously, the
City bas accouated for beadits UDder this plan an a "pay...,.)'OU-IO" basis. This method of
acaMUIIilll will DO loBI« be permittm wbc:n dle sbiDdanl is effective. .
OASB No. 4S requires periociic actuarial valuations based OD the size of the plan. For tbe City's
plan, this wlualico will be n:qWred at least ODCe every two years. We encouraae tbr: City to
iclal1ify aad capp a lmowledgable and reputable aauarial fiml in advaace of your n:qum:d
implCIDCIItatiDD date to smooth the traDsition.
This communicaDoa is ilrtended solely for tbe information and use of maJliiCIDCD!, the aadit
committee. city COUDCil, otbml within the orpnizatioc and fedcml and state awardins aaencies
and .is not iofaldec1 to be and sbould not be used by anyone other than these speci1ied parties.
Fc:bnwy 21, 2001
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COPIES
Officeofthe City Manager
Febnwy 27. 2008
Honorable Mayor. David A. Miller
Members of the City Council
Jeffrey A. Y~Financial Officer
Audit Committee
SUBJECT Management Response to Audit Concerns
When evaluating intemal controls, it is important to considez' the cost/benefit of the control
procedures to help avoid intt:mal controls with costs that far outWeigh the benefit The
cost/benefit considerations of internal controls include cross--training personnel, adding
personnel, changing job duties. and the ensuring that the cur:reat control structure remains intact.
There arc however. other cost effective compensating controls that may be implemented to
ensure the control structur:e. These controls include active monitoring and supervisory nwiew.
These compensating controls have been in place for the noted control deficiencies and are
sufficient to mitigate the risk of misstatement and/or misappropriatio
The City bas a documented history of effeetive intemal controls and those controls have not
changed. What bas changed is the auditing standards that the auditors are cuaently using to
evaluate the intema1 control structure. In prior yeats, the ooutrols have fidled to gamer any
comment ftom BKD, LLP. but are only mentioned now as the evaluation criteria have changed.
Management agrees with the intent of the more stringent auditing standards, and will review
each identified deficiency in detail to ensure the compensating controls are sufficient without
additional cost
The following is a brief discussion of each audit comment and the compensating control that is in
place to mitigate the risk of misstatement or misappropriation:
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Wheo a manuaJ check is issued, one individual enters the check on the Wells Fargo web site and
a second individual approves the check. Wells Fargo ~ill not pay a check that has not been
entered and approved. Also, this requires a manual stamp, which these two individuals do not
have access.
Comment: One individual within the purchases. cash disbursements and accounts payable eycie
has the ability to enter an electronic data interchange pl.D'Ch.ase instruction, make a computer
entry to generate a paymen~ sign checks, access mechanical signature device. access signed
checks to be issued to vendors, mail checks, record accounts payable. record checks issued and
record electronic funds transfers.
CompmtSating Control: Multiple checks and balances are in place to avoid fraud in relation to
the comment. Purchasing Department pcJSODnel are the only personnel that can set up new
vendors or change remit to addresses related to paper checks. On ACHs/Wires, all individuals
are set up with either data entry security or data approval security. No individual can enter ACH
routing i.nfonnation and also approve ACHIWU"eS. All ACH!Wires are reviewed by the Director
of Accounting.
All ACH/Wires and paper checks have multiple approvals that include department penonnel.
All department personnel are required to monitor all generalled.ger expenditures within their cost
centers and capital projects.
Prompt master bank account reconciliation identifies any ACHs or checks that are not teCOrded.
A log is updated that mODitors check stock on a daily basis. All paper cbecb produced on the
system must be recorded in the general ledger in order to transmit the positive pay file. Any
check that is attempted to be cashed that does not match the data sent to the bank via positive pay
is questioned by the bank and will not be credited to a customer's account unless the City of
Lubbock approves the data.
Commem: One individual within the purchases, cash disbursements and accounts payable cycle
has the ability to authorize a purchase document or EDI entry prepared by others, make a
computer entry to generate a payment, authorize a payment by check or electronic funds transfer,
sign checks, access mechanical signature device, record accounts payable, record checks issued,
record electronic funds transfers, and make journal entties effecting expense, cash. and accounts
payable accounts.
Comperrsalin.g Co.,trol: Purchasing Department personnel are the only personnel that can set up
new vendors or change remit to addresses on the system related to paper checks. On
ACHs!Wires. al1 indhidua1s are set up with either data entry security or data approval security.
No individual can enter ACH routing information and also approve ACH/Wires. All ACHIWi.res
are reviev~ed by the Director of Accounting.
All ACH!Wi.res and paper checks have multiple approvals that include department personnel.
All ACH!Wires are recorded on the general ledger by an individual other than the one referenced
above. A separate spreadsheet is kept by an individual other than the one referenced above and
reconciles the ACH!Wires that are entered into the general ledger with the spreadsheet. that tracks
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credit memo or billing adjustment for issuance, and make a computer entry to coot customer
accounts for payments received.
Compensating Control: Field service workers do not have the ability to create service orders or
create termination service orders, nor do they have the ability to adjust accounts with credits.
The dispatcher has tbe ability to transfer money in Banner. All work is re\iewed by the Field
Service Workeri manager.
Comment: Customer service representatives have the ability to create a delivery of service
document, make a computer entry to generate a service delivery document, change delivery
instructions, make a computer entry to generate a billing document, prepare a credit memo or
billing adjustment, make a computer entry to g.cnerate a credit memo or billing adjustment, and
approve a credit memo or biDing adjustment for issuance.
Compensating Conrrol: The activities of the Customer Service Representatives (CSRs) occur in
an environment that records the actions of the CSRs. The environment does not allow for
anonymous changes and the changes are documented in various repons. Management reviews
the CSR•s activities. The resulting docwnents are also reviewed by others for appropriate action.
Comment: Certain managers have the ability to create a delivery of service document. authorize
a service delivery document prepared by others, change delivery instnJctions, receive pa)'D'Jents
in currency or checks, prepare a billing document, make a computer entry to generate a billing
document, prepare a credit memo or billing adjustment for issuance, make a computer entry to
credit customer accounts for payments recejved, and make a joumal entry.
Compensating Control: Management oversees the customer care activities. As a group,
management can perfonn all tbe duties necessary to care for customers and record that activity in
the inform.ation systems. Separately, there is no manager that can perform all the activities
independently. Hence, all Il18DaFDICDt activity is reviewed and is reported as to appropriateness.
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City of Lubbock, Teus
Water Utility Department
Texas Water Development Board WD' Application
Community Information (WRD-006)
June 20, 2008
1. Median Household Income: $37,575
2. Unemployment Rate: 3.5%
3. Penoas below Poverty: 18.5%
4. Median Ap of Work Foru
We have not been able to find a statistic for the median age ofLubbocles work force.
We do however have a median age for Lubbock in general.
MediaD Age of Population: 31.2 yean
5. Largest Employen
A list is provided separate fiom this written portion of the application.
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City of Lubbeck, Tau
Te:us Water Development Board WIF Application
Legallofennation Overview Sheet
June 20, 2008
1. Application Resolution:
One (I) 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 volumes of water. The revenues from these sources are not used as a pledge
for repayment.
The contract for preliminary engineering services, eotitled the Lake Alan Henry Water
Transmission Line, Pump Stations, Water Treatment Facility and Related Projects, is
attached under tab D:3b because this contract for service addresses ultimate system
capacity. The facilities will ultimately transport, treat and deliver from Lake Alan Henry
as well as reuse waters.
4. Coatraets for Coosultant Services:
Three (3) copies of the consultant contracts are included. The contracts provided for
include the following:
Tab D:4a-Bond & Finance Legal CoUDSel Agreement
Tab D:4b -Financial Advisor Agreement
Tab D:4c -Pending Engineering Services Agreement. A final, signed copy will be
provided as soon as the agreemeut is approved by the City Council.
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 or Certificate of Coavenienee and Necessity:
The City has a certificate of convenience and necessity with the State of Texas. A map
showing the City ofLubbock's service area is included with this section. The map has
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CITY OF LUBBOCK §
COUNTY OF LUBBOCK §
STATE OF TEXAS §
CERTIFICATE TO COPY OF PUBLIC RECORD
I hereby certify t in the performance 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 Secretary of the City of Lubbockt 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 witness whereof I have hereunto set my hand and affixed the official seal of
said office this 5th day of June, 2008.
(City Seal) ~L,uA~-
Rebec Garza
City Secretary
City of Lubbock
Lubbock County, State of Texas
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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 this14 day of Dec •• 2007.
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ATTEST:
1:)~-~ 9 ~ ~ • City retary
Anrta. Burgess, City Attorney
ao/Anita/Teus Water Devdopmem Board.res
Deeemhcr 10, 2007
-anager
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Application Affidavit
Tiffi STATE OF TEXAS §
COUNTY OF LUBBOCK §
BEFORE ME, the undersigned, a Notary Public in and for tbe State of Texas, on
this day personally appeared Thomas Adams, Deputy City Manager of the City of Lubbock, as
the Authorized Represeotative of the City ofLubbock, Texas who being by me duly sworn, upon
oath says that:
1. the decision by the City ofLubbock, Teus (the •city•) to request financial assistance
from the Texas Water Development Board ("Board•) was made in a public meeting held in
accordance with the Open Meetings Act (Government Code, §SSl.OOJ, et seq.) and after
providing all such notice IS required by such Ad IS is applicable to the City;
2. the information submitted in the application is true and comet according to my best
knowledge and belief~
3. the City has DO pending. threatmed, or outstanding judgments, orders, fines, penalties,
taxes, assessment or other enforcement or compliance issue of aoy kind or nature by the
Environmental Protection Agency, Texas Commission on Environmental Quality, Texas
Comptroller, Texas Secretary of State, or any other federal, state or local government, other than
that specifically desaibed below and various inspection issues and notices of violation that have
been cured or in the process ofbeing cured ("Notices}, none of such Notices would materially
or adversely affect the financial condition of the City or the ability of the City to issue debt, to-
wit:
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CITY OF LUBBOCK §
COUNTY OF LUBBOCK §
STATEOJ'TEXAS §
CERTIFICATE TO COPY OF PUBLIC RECORD
I hereby certify, in the performance of the functions of my office, that tbe auacbed
instrament is a full. tn1e and correct copy of the Relohdioa No. 2806-R0412 u the same
appears of record in my office and that said doauncnt is an official rec:ord fi'om the public
office of the City Secretary of the City of Lubbock, Lubbock Cotmty, S1ate of Texas, mel
is kept in said office.
I further certify that I am the City Secretary of the City of Lubbock. tbat I have
legal custody of said record. aad that I am a Jawful possessor and keeper and have legal
custody of the records in said office.
ID witDess whereof I have hereunto set my hand and affixed the official seal of
said office this 1st day of October, 2007.
(City Seal) ~ .... hf" ~ {)
City ofLubbodc
Lubbock County, State ofTexas
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PROFESSIONAL SERVICES AGREEMENT
day of ___ .... ....;z;;;;;;.;t;____,, 2006. by md between the City of Lubbock (She~ a
Texas home rule municipal corporation. and Parkhill, Smitb & Cooper. Jnc. (the
"Engineer"), a prvfcssiooa! engmeedna COipOrltioa.
WlTNESSEnl
WHEREAS. Engineer bas substantial skill aocl cxperic:uce in the plannina IIIII
desip of watel' supply, coaw:yauce md trataneut facilities, aad such planning savices
are needed in tbe PrelimiDary Eqineering Pblse of the cin'elopmeat of lbe Lab: Alan
Hemy Water Transmission Pipeline. Pump Statioaa. Water Tra!meut Fadlity and
Related Projects as outlined in RFQ # 06-712-BM dated July 2006 (the .. Activities"');
WHEREAS, the City desires to contnlct with FngiDeer to perform services related
to lhe Activities ud Engineer dcsin=a to provide the aervica related to --.
NOW, THEREFORE, for aoocl and valuable c:ousideration, the receipt aod
sufficiency of which is heRby adcnowledaed, tbc City IDd EngiDeer agree u follows:
ARTICLE I
Scryigs
1.01 Engineer shall conduct all activities aud within sudl time frames, as set f011h on
Exhibit .. A", •'Scope of Services", attached hereto (dle ~ervices").
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Dming the perf01'D181l<:e of the Services under 1his Agreement, Engii'JCIG" and
Engineer's employees will DOt be considered. for any p111p01e, emplO)":CS or
agents of the Cit;y within the meaaing or the apptication of my federaJ. state or
local Jaw or regulation, includina without limitation, Jaws, rules or regulations
regarding or related to unemployment insurance, old age bmcfits. wodcers
compensation. labor, personal injury or taxes of any kind.
ARTICLE IV
the performance of any term or provision of dlis Asreemem for any reason other
than fail~ by Engineer to perform hereunder,. EDgiDcer may, if said def.anft sball
be continuing after five (S) days notice of such de&ult is deemed received by the
Cit;y, exercise any risbt or raDCdy available to it by law, contract, equity or
otherwise.
b. lffisiDeet's Defaults/Citv's Remedies. In the event Engineer shall clcf4ult in
the perfonnmce of any term or provision of 1f!is AareemaU for any reaaoD odlcr
than failure by the City to perform hereunder, tbe City may, if said default sba1l
be continuing after Jive (S) days notice of such default is deemed received by
Engineer, exercise any right or remedy available to it by law, contnct, equity or
otherwise, including without limitation, specific performance aad/or the rigllt to
tennioate this Agr=neut without additional notice.
The remedies set forth herein are cumulative and not exclusive, and may be
exercised concurrently.
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of Insurance to lhe City u evidence of coverage. 1be Certificate ahall provide 30
days ootice of cancellation. A copy of the add.itiODil iDiuml endonemcm and
waiver of subrogation attached to the policy wiJJ be iDdwled ia the C~ficate.
Engineer sbiD elect to obtain worter•a COillpC'.IJIIIi ~ puriUIIIt to
Section 406.002 of tbe Texas Labor Code. Furtbf:r, fnaineer shall majntain said
covaage tbrougbout the term of thiJ AJI1lC'IDCDt md abaU comply with all
pnMsiou of Title S of the Texas Labor Code to eusure that the '£nainea'
main«ajm said CCMIIp. ne FqiDeer may Dllintlin OccupeQcmal Accidc:m and
Diability Jnsunnce in lieu ofWorb:r's Compeasation. la aitber cvmt. tbe policy
must be endorsed to iDcJwlc a waiver of lllbroption in favor of the City of
Lubbock.
lf at any time during the life of tbe Aareement or aay extension hereot
Ensi~ wla to maiD.taia the teqlliral iDswwe iD fttJl tDrce IDd etTec:t. Eqineer
shall be ill bradJ hereof and all wort undclr the Agreemmt shaJI be ctiJcontillne"
immediately.
Engineer sbaJI indemnify IDd hold City aud City'1 elected officials,
olficen, apats, employees aad indcpcadeal COD1racton harmless. to 1be filllcst
extent p:nnitted by law. &om and apinst any aad all claims, demands, damaga,
com. liabilities and expcmes, and includinJ reuonable attomey•s fees, 11 a result
of, related to or arising ftom En,meer•s use or occupation of City owned JaDds.
and/or any matter related to Engineer's Ktivities, pcrfonnlftCt'.l. openlioas or
omissions under this Agreement. The iMemnity provided herein sball survive the
expiration or termination of this Agreement.
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Lubboc:t. Texas 79423
FICiimile No. 806-473-3SOO
6.03 nus AGREEMENT IS TO BE CONSTRUED UNDER TEXAS LAW
WilHOtiT REGARD TO CONFLlCf OF LAW RULES THAT WOULD
DIRECT APPUCATION OF THE LAWS OF ANY O'lliER. JURISDICTION.
11IE OBLIGATIONS OF 1liE PARTIES CREATED BY nilS AGREEMENT
ARE PERFORMABLE. AT LEAST IN PART, IN LUBBOCK COUNTY,
TEXAS. VENUE FOR ANY ACI'ION BROUGHT PURSUANT TO nus
AGREEMENT, OR ACTIVITY CONTEMPLATED HEREBY, SHALL
EXCLUSIVELY BE IN Lt.JBBOCK COUNTY, TEXAS.
6.04 This ApermeDt Jepresadl the Clltire IDd sole aansemem betweea the City IDd
.Engineer with 1espect to the subject mlita' hereof md supcnedes my IDd all
prior neaotiaJiODS, UDderstaDdinp. repn:seatatiool CR' other qreemcats. whether
writtaJ or oraL This AgrecmeDt may DOt be modified or "Deelded accpt in
writiug and duly crxecuted by each party benJro.
6.05 Nothing contaiDed baein sbaU be construed to imply a joint YeD1IIIe, joillt
enterprise. partnership or principal-apnt rclatioosbip between &Jineer aad tbe
City.
6.06 If any provision of this Agreancnt is dedared invalid or uaaafotcelble, auch
provision shall be deemed modified to the extent necessary to render it valid and
enforceable so long as said modification is reasonably within tbe intaJt the parties
as originally expressed. Jn the event such provision may not be so modified, tbe
unenftm=eability or invalidity of any provisioa sball oot afl'ect any other provision
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CITY OF WBBOCIC
DA-:::i/1¥~
ATI'EST:
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APPROVED AS TO CONT.ENT:
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APPROVED AS TO FORM:
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Ricblftl K. Cuner,
F'lllt Ass.istaat City Attomey
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b. IdentifY and quandfy risks associated with each supply soun:c 1hat could impact the
City's ability to m=t demaad projcctiom.
c. Prepare a wata' bllamce spreadsheet model to evaluate 1he coajuoct:ift use of tbc
potential supply sowccs.
d. Ewluatr: lbt: model tD optimi2e 1be usc of the resources on a daily. -weetiy. or montbJy
timwtep to help 1he City use its raoun:cs u effectively as poaible to ma'~~i'nJir# tbdr
yield.
2. Establish dw: basie desip tlow. IIIIXimlam flow. flow J11111CS and paa&ms. 8Dd h,draulic
capacity of the CCJftveyance. storap. aud tratment facilities. Eatablish water quality
trcatnaent aoaJs for nc'IV ficilities.
3. Evaluate and ctiscusa wi1h 1he City the pcaatud iqllct of abe Jocatioa oftbe ...-
aeatmeat plant (ehher nar uibboci;. ... Post. or at LaJg: A1m Beary) em tbe Blldfin.c and
opcnticm of the plant and em tbe associaa:cl capacity and budptaryn:qubeaaea:dl oftbc
1I'II1IIDiuiaD pipeline. tr•usmissial pump stations. tamjnaJ ltol'al'e n:sawir, aod Wlter
treatment plant
4. Evaluate the ex1a1t of additional facilities DCCdcd to iDcorporate cxistina aacl proposed
faCilities owned mel operated by 1he White ltiw:r Muaioipe1 Wata' District, incfudiDa the
piOposed Post Reservoir.
S. Review sunoundiDg area and comrmmity water sapply demaDdB aDd prqicctacl cleficieacicl
u idcmifiecl ill the Jtesianal Wata' Pia, aad evaluate 1bc implct of1boal: llddi1iGall
demmds on tbe project. Evaluate the impact oltbose meds oa the ability of the system to
provide treated waw versus nrw wm:r to those cities. acbowJccJaiDidW most of the
sutrOUDCiiD& communities do not t.ve IUiface water 1RUmeat flcilitiet.
6. ldcmify a.istiq CI1CI'IY and power provicfas available in 1be project areas. Evaluate
potcD1ia1 feasibility of iatqrated renewable sources. such as aa-site wind CllCl'IY u m
opportunity in Diltribull:d Power GcoaatiOil.
C. Objectives. Selection Criteria and Data Review
1. The rou~e study wiJI include v.aious alternatives:
L Most direct route
b. Route mn.imi.zing use of highway right of way. as aftilable
c. Rome best accommodating potential conncctioas with lbe proposed Post Reservoir
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2. Eftluare abanati11e hydnulic SCCDirioa, pipiDa mataials. di.netas. pipe pressue c1un.
W\'e typel md locatioas.IDd appw1l:nlnCa such u blow~ff ud air releue Yll~
3. E'VIluate Jdati11e route difti:tcuces in cost. 1md Usues. ad hydraulic&. u well as
enviroamaual issues IISOCiated wifh ach ab&:mati11e route. u af&ds panaittin&
constructian time requircmc:nls, lad caastructioa c:GIIJ. iDdudiq:
a. Daiptions of waters oftbe United Stata
b. Archeological Sites
c. Hisr.oric sites
d. Wdlllnds
e. Playa la£s
f. 'I1RarcDed ad endaqered specks
•. Preplre IUIUUill)' metDOiablm.
L ~ adYintages a diSidvlatases otlbe buic a~;~~""""t a~~ each aJrenume
aJipmear. CCJnBidaiJia ~ CODditioas. ....... ~ caactiticml, ICI"Yic:c
requiremen1s, canstrucaiaD cWficukies, m•iawlalDctan, md CMnll COlli.
b. PI ~e atinwtr:s ofprabeble CCIIlStructiaa colt far the llllem.aiws ad IDib a COlt
~ lmllysis oftbe allaDatiws ._. GD the opiaiGDII atprobele CDIIIIrUctioa
com, opaatiDJ md maildaumce COliS. IDil odMir projcd coa.
c::. Prepae rec.JIIii""'aclatioa for I'Oldc, iacludillg idec•itbdan of'lemponay IDd pcrmaeDt
cucmeat requiremems.
d. Pwepue a draft memorandum containina the ..... iDformatiao a:ad ft8JUitiaaa act
forth in this p8l'lll"'pb A. "Metbodotogy" tad subait ID the aty oa ar before May 1?
2007.
e. Review draft with Owner llld revile u requind ODor before 30 days after tbe draft
mcmonndum has been deiM:red to tbe City.
(. Prepae a memcNaudum JistiDa majcr review CUbWitiltl aad the RSOiubon of the
conidiiDIII» on or before 30 da)'l after receivina Wlldl61ts hiD the City.
g. Issue final memonaldum ill sufficient clarity ad demit for City to iDitWe field .urwy
work for the rilfrt4-way IIICI cuement acquisi1ial process on ar before Se~mtJer 1,
2007.
B. Raw Water lntaR
1. Review raw wmer intaR concept md planned facilities.
L Verify lbe intake pump station site
b. ldmltify and evalum access 8Dd utilities fD sene tile iiPake pump stltion
c. Verify 1be tailwata' elevatioos of the Probable MaJimum Flood for 1M plannecl pump
.statim location.
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c. Pc~ e a draft mcmormdum conlaiaiDg tbe mUaiall. iDfonaaticm and evaluatiaas set
Cordi in 1his pnp'llpb c. ,.etbodolod" md submit 10 tbc City Oil 01' bcfcn May 1.
2007.
d. Review draft wi1b Owner BDd revise as rtqlired oa or before 30 days aft!r tbe draft
memorandum bas been ddivaed &o the City.
e. Preplre a memoriDdum listina major review cowts and 1bc zaolulioa oftbe
C01al1Dell1S oa or before 30 days after receivins comments &om the City.
t. fsaue final memoriDdum on or before SepCember I, 2007.
D. Water Trmmart Facilities Plan
1. Rmew existing rcplaticn aad ardicipmd fUture~ IDd cnluafe tbc potadial
implcts of these reJUiations on 1be Owaer. Pafarm de*tDp review of IIOUft:le Wiler cp;aJity
.&om Ula: Alan Hc:my, fUture Post Raa voir,IDd fidlm: WIIRwUa' llfthneat plat
cftlacnt.
a. .Detau&iue bisturica1 meas. raaps, IDCIIzalds ofWida' qullity coutituaa baed 011
•n~lable da1L
b. Eltima1c Wiler quality cblmp:a which may occur clue ID 1mn1pe11t from IOURC to poa
of delivery.
c. Jmatipte cbe P*DtiaJ for water quality problems md iwpaOYCUU1& due 1D mix:i:na of
treatal wata-supply IOUI'CCI doc to toea) diaaolwd IOtidl. pH. elblinity, di@nfa.1eata,
and other ractiYe cb8ncraistics.
d .Recommend additionalleSDDa to be pea bmcd by OwDcr -additional cilia u reqvirecl
by the Teus Commissiao em F..avil•""lf.:idal Quality IDd dJe bealmeat recbDolaps to
be evaluated. upon rmew of Qistiag.... Develop sampJiDa ad tatiaapoUJcol f«
purpose of ob!aining meanialfi.d resulcs.
2. Evai1Ja raw Wider storaac Deeds. Identify loc:ationa IDd buic c.pecities oeedecl. Optimize
Bia aad lcalioo to minimiali~le cost ofnw Mler COill'C)'IDCC &c~ tatiq imo
aa:ouat initial capi1al c:osts and ICJ1114am opera1iaa llld ainten~~w:e COlli.
3. Evaluale up 10 tine ahemative liquid trealmaJt procesa altaDatiw:s that c:ould be ClpUie
of aedng lhe finished waJr:r quality puameras desired by the City of Lubbock.
4. Ewluate up 1D dne sludt= dispoal altematiws 10 ddamiDe their ability 1D meet the
Owner's pals and objectiws and meet aistin& md filbft reauJaay requirema2ll.
Potentra.l disposal alta'llatM:s will include dischqe 1D 1he IBitlry sewa-system, eo-use
with WliteWita' treaDnent plant biosoJicfs. ludfiJJ CCMI', OIHite IDDIIOfill, mel potential
market to outside sources for aoil arnenduitiids.
Upoa c:ompletion of evaluation of sludge ctisposal altanativa, evalum: up to three solids
dewaterins allanatives to meet the Owner's sludJe disposal goals and objectives aac1
regulatory n:quiiemenis.
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a. Pl!;pare a draft memorandum cooWnina tbe mataials. mformatian aDd e'Yaluatioas set
forth in this puqrlpb E. ~ethoclology" and submit 10 Owner oa «belen Aupst I,
2007.
b. Review draft with Owner and mise as required oa 01' before 30 da}s afta' the draft
me11111X'8ndum bas bcal delivered to the City.
C. P'Jepare a IDWIOJatidum JisdDa major nMew CO.IDIUCatl aDd the JUOJutioD Of die
couma1ts on or before 30 days after n!CeMDa ctNunw:nts 6om the City.
d. Issue fiDa1 maraormdum oa. or befom Decen .. er 1, 211J1.
F. Power Delivc:IY Plan
The eff'ectivc use of eDa'IY for the Jarse J1U121Pi.n1 Joeclmd water uatmeat pn~e m •• wt"U be
cribcal to 1he klnB·tmn ecoaomic oper:a1iaD of this project. OD-cite electric paatiOD may
offi::r savings owr elec1ricity punmued di'Dap the local utility bccaule OIHite powet is DOt
subject to losses thmuJh the utility's tnmsmiuiOD md dislributioa system and the remote
pumping stations may R:qUft substantial c:oastNctioa of IIII:W tnNmiasiaa. subasaticm IDd
distribulioo facilities to scnicc dae scatioas. All malysis of the electric: loads of the facilities
and altanalivc cJeotric supply optioDa to deve1op a lellt-cost tife.cycle CllCI'IY&upply plm for
the prajec:t will be pcrf«mccl Tltil S1Udy will include tile followiaJ majarmab.
1. Energy Demand AnaJysis • DefiDe the electric peak demad IDd demaDd profiles fortbe
facility based oa the cmaptual desips far the pumpiDa statioaa I1'Ml water t1u1ment plaDt.
The cost of the local utility providina electricity to 1he &cility will be ._minecl as a basis
for comparisoD to-OIHite wiDd erlCIIY aaaamon optiGD. Dt:veJop optioas for Gil-lite
wiDd cnqy projects, iDducliua 1he impact of a aiDaJe utility-ecale wind turbiDc. caoeiJh
turbines to 11M:Ct the project's minimnm cfar•li'J, atld tulbiaes1D provide adliciat
acneration to ofraet 1he &cility's expected anm..J caaaY CGD:IUDiptioD. The feuibility of
each project option will be diaeussed m CC~D~~~:Xt with mcar ildaCOl'D'leCtiGa aUowaaca..
2. Wind Energy Technical Feasibility Jt.mew ·The wind rarourt1C of the JRject si1e will be
evalued usiDJ1be Texas wind n:sotRe map IDd 1be pafonDaDce cbarlc:aistia of
nearby wind CDC1JY projects. EstimaRs of the likely amwal and moothly I'Vel8p craagy
produc:tioa o1 candidate winclturbiae desisns mu he per-ed.
3. Hip·level Coaceptual Desip lllld Cost Estimate ·A high level coaceptua1 desip will be
developed for each peratiorl allanative that is deamd to be fasable iD dJc pn:vious taak.
The conceptual design will include a dta:liption of the electric gaxratian aptian. a
prelimiDary power generation layout diapm. and a major equipment Wt.IDdicaiw
capital and operations and maintalanc:e (oaM) cost estimata will tben be dewloped for
each alb:mative to support 1hc economic mduatiOD.
4. Economic Evaluation· The levclizedcostofdcctricitywill be c::akulated forudl ofehc
short·listed power generation options. 1be tevetized cost is the li~le cost per kWh of
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EXHIBITB
PAl'MENTS TO ENGINEER
LUMP SUM METBOD
AltnCL£ D-PAYMENTS TO THE ENGINEER
Reloladoll No. 20CJ6..R4N12
Aqaatl4.20M
lte.No.6.11
84.01 Ftw Btuic Slrriccl Hiltl&lf A Dttterabt«< ~ S...ltlt!IJ#od t(PtlytNiu
A. OWNER. slllll pay ENGINEER. ftlr 8aic Services set fonb iD !mibit A as follows:
1. A t.uq, Sam amoaDt of$525,000.00 ctia1ri'balec1 per work lama illlowa:
~Worklll:ml
ltOUII: SIDdy
Raw Water lalab ...... ~
Waw T,..,.,,.. Fldli!ies Pllll
Waa:r DillribulioD SyslanEvalultioQ
Power Delivery Plio
~ &cirwrilla Report
s 75.000
$125,000 s 20,000 s 60POO
SlotO.OOO s 25,000 s 25,000 s 55,000
2. Tbe Lump Sam iDcJuda ~ fill' ENGINEER's seMcc:l ad seiYka oC
ENOINEElt. '1 CoaaubaDIL Apprapriarr: mm•Dh have becD illcorpotlted ill tbr: Lalllp SUIDID 1CC01111t
for labor. cmrflead. profit. aad expalllel
3. Tlw: ponioD of 1be t.uq. Sam IIIIDWit biDed t. ENGINEER'& .mea will be buecl upoe
.ENGJNEER•a reaiOIIIblc euim• ottbr: papodiaa afdle 111*1 8CMca ICCIIIJly C~«•• .. tted dariiJ die
triWug period 1D tbe Lump Som.
84.02 FfR' AfiiiiDriztltl A.tlditlDIIIII Scnlica --$tmltltml. HC1111'1)1 JlJIIa MMIIDtl of~
A. OWNER sbaJl pay ENGtNED for 8111borized ldditiGNI.vica, if ad • aetilnb iD w.ridD&
tom lhe Qy Muaaa'. or hillhlr desipec. sudt a!Jdlority to....,.., die wLfiti9rwl.mca IJciDa IBeby
dc:lepled by die City CouDciJ. sMU be billed ud pl)'lbJe u follows:
l. Far labor on au IJourly Iaiii bail iD aa:ordaa::e with tbe a1llched ICbeclule
2. For rein6DI'IIlble QPC!'SCS. oa die basis of COlt times a &ctDr of lJ.!..
B. The hourly rife sebeclule Will &e adju.aed each Jamary 1st 1D reffect cost of 1iviDa ldjU~aDeldl,
limill!d r.o a mariiii!IIJI .iQcrase of L % per IIDIID.
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CITY OF LVBBOCK I
COUNTY Of LUBBOCK I
STATEOFTEXAS I
CERTIFICATE TO COPY OF PUBUC RECORD
Illaeby ccrcify. in 1he perfonDIIIICe of the fimc:dODS of my oftice. tbat 1hc attlcbecl
iD.mumcmt is a fiall. true aDd COl'ft!d f»PY of &.ehdioa No.. ., .. Jll536 as the same
appears of IOCOl'd iD my office and 1bat said documeat is an o8icial reconl fiom 1be public
oftice of the City Secre11ry of the City of Lubbock, Lubbock Couaty, State otTcxa, ad
is kept in saki oftice.
I fiD1ha' cadfy that Iam1be Deputy City Seclltaly of daD City ofLubhoct.1bat I
have lepl c:ustocly of said NCOid. md that I am a lawM poSMDOI ad bcpcr IDd ~
lepl custody of tile records in saicl oflice.
ID witDc88 whaeof I haft hcn:uato Jat my haad IDd affixed 1be affidel at of
said office this 2Ha.., ofN.w.ber, 2M7.
(City Seal)
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RESOLt.mON
•••llhltta. ... 2007-18536
• •• ·-•• 2807 J:c. Wo. S.21
rr RESOLVED BY 11IE CITY COUNCIL OF DIE CITY OF LUBBOCK:
111AT 1be Mayor of die City of l.uWiock BE ad is llcnby lldhcllized IIIII
lb!dld 1D cuc:utc a ad oe bcbllf of 1be City of LuiiiJoc:l a YUil A....,.._ of
Pmtirssiol. 1111 ScrW:ea Apeemad betweca the Cit;y of Luhboct IDII Pllthill. Smidl &
·~U)illllil. IDe.. Said Fiat Am«Mmem of Profatio8ll Savica Aareemall • .a..w ~~=-• iDcolporatal m dais Raoludca .. if fidly set fGith bereiD a an • iacfudal 1be mimas of1bt COUDCiJ.
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Apem• • follows:
I. .MdaMfum •A •, IUidaed baclo, is JDide a )1111 oftbe ()riaiaii.Aptcmmt
tbe -• if sadl A.Ma:N .... had .......• pllt of the Orip.1
Ap:ement • or Auaust 24. 2006.
2. Except • 8IIIIIDJocl hcnby, the Orip.1 Apecmcaa lballlemaiD valid 8Dd
suhsistiJc. on,m.Dypovided. .._........,..c..,..,.._
CI'IY OP LOBBOCK
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DAVID A. Mll.t,ER
Richn IC. c.a:r. ..
First Aai-City AUomey
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(I) 'lk.{tllll1wlllfdaft,...., lfletllltlwl:bfor., ....
(J) The ncipicDt may at .., time, by writta ..., IDd witboat DOiice to tbe sureties,
make cbnF' wi1lliD 1br: aeea'll scope of dsis caat11Ct ill 1he • vices ar ...t to be
pedoaaiiiCl If_. •.--. • •-arclecreac iD die COidluan COil or time
nqllired to.pafbwa _, terrices uadc:r tiU CODIIICS. wllclller or DOt c:hlaaal by 1DY
~ 1be .............. ecpaillble tdj&.a ... -....., til --iD
~~~--~-~-~~~~~m~ widJiD 30 _,. fiam de dale it nam. tile n=c:ipia6110ti6ca1kaa ot dlaDp. .tea the
rec:ipirtlt-........ time Ware 1he-offiall,.,.....
(2) No cllirD by the cadi..-fiJr • cquhable ll4jllstSJaeat sbiU be....,.._ if' made after
fiDal )II)Giall UDder dais---
(3) No....-. awlichdaecaa~~ldor wm-.mtdditiaaal .. ..,....._au 11e
fbmishecl widaom; the wdtlt:u ..... ioa of tho ncipicat,
(1) Tbe ndpicllt-.,. It aydme. by wrileD Older 8llld without DOtice 10 the mn:des,
IDib c:ltanps widaiD die aaxnJ .:ope of tis COIIbltt iD ay oae or more of1be
foDowiDa:
(i) ~ clesip or specifialtica wba. dao supplies to be fbmished 11e
speci8caiJy .....,.. ... a die rec;pa;
(u) Mclbod of "'91•• orpeclc:iD.a; IIJd
(Iii) PJ.e of dclivay.
(2) lf'q cJIInea Cllllt ID iDc:r C 6 II « clecreac iD ibe cast or time tequiled to perfarm
11111 .-rt of die wmk 1lllder tis Widlat, wlldMr ar DOt chuapd by suda order, 1be
n:cipicat sbiU IDIIIre •...,...... IIIUIIIf 'leut ira 1be COidlld price or cleJivay tcbcdulc. ar
bodl, mel moclit1 die ..... ia WJili:Da. The ........ IIRIIt .... 8111 claim far
14••w ..-1bfl dll.-witiD 30 da.P &am die • b caaii~Ct~Dr recciYel dJe
mcipialfs DOti.ficatiGil of...., If die ftiCiJ';ieat decide~ dllt 1be filets justify m:h
~the~ 1D1J ~ IDd act.--.y IUC1t cllim Mucrted at 1111 time Wore fiDII..,_ 1IDJder tis cuidiiCt. --.. COlt ofpmperty Dillie .... Gl' e:rc:ea.
a JeSUit of I cJ.ae is iDcladed ia die CGUIIidG'I dlim fbr lldjDsanent. the ndpicllt has
the riafd to praaibe tt. -a• of di!JIIOiibiift of sucJa JIIOPellY.
NothiDa in this clause shall excuse die contractor fiom proccedina with 1be coatla.1 as
chanaed
(3) No claim by the COiltr8l:tor fbr • cquhable adjUSCDalt sbaJI be allowed if JIJide after
6Dal )II)Giall ..... dais c:aGUICt.
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taminl'ioa of such IUifiCDsioa. delay CJf iD1anJptiDD, but DDt Iller tban the date of fiDil
paymc:at IIDCier die COIICIICt
De..-awd-r h.,,__.,.u.,.
(b) TIU ccwdrw:t may be faaliDatled iD wbole or in .-at fa WJitiDa by tM recipicat IJr kl
COil'ftiJieMe, )XO'ided tblt 1lle COilb&U il an-(1) DDt kwl .._ 1ID (10) olin llw dayi
wriara DGdcl (cleliw.red by catifial 1D1i1, ndaalreceipt nq..-1.) ofillllllt to ami.-.
ad (2) • oppadl8lity b c:aaaultldaD willa 1be ta••i .... ww s-tJ prio.r1D wuW.tian.
(c) If tamirwtjcm tor clef111Jt il cffoctoc:l by die aeciJ*at, m equitlblc .V••Iiltlll ill 1be
price JIIOVided for iD 1bia c:odlulhlll 'be made. Ia (1)., IIDOUIIl sbal1 be ~Bowed 1br
a•dki&llt• ~ po8t Cl1 lltJI!abmed • rices ar odaa WOik.IDd (2) 11r1 ,.,._.due tD 1be
~**" lltdle time ofwmi•iaa may be .Vustecl tD am:r .aJ additiaDal COlli flo the
nsdpiall beclll• oldie cud•• tan defiluJt. If._.., • ..._ a ddiult il ~ b.J the
~. or it fllminadoe C. caavcDiaaco ia efr«eDd IJ,y 1he mcipient, 1he equitlblo acU•......,.IIIIII iDclude a reiiiiMble pufit tar•O. ar 01taar .....t pa&an'IDII. The
eqtdsable a&IJ•II-D.., tonaP•iM aiiiJI··pnwidD i:lr pa,._a 1D diD OCIIIIW .... iw
-·-.ta'ldlncl ... apeiii!J iDcarnd pdcr tD tbe ........... ill ldditiaa 10 ... inaMD llllfdement CGifl Jlllt""Wy iDcuaed by die toldl.a. ...... tD
• _ ... ~~ J.....a b 4!1-• .._ • ~ COIDJDifrrtidw Wllllfll..,. ~~~ .111111 pnar 1o us ...... ....._
(d) Upcm receipC of a ICUI+iwiob acdoa 1llldcr pll&jiapbs (a) or (b)~ de COIIh8:fm
lha1l (J) pmmpd;y cliauiliae .n .......... wade (aaleatbeDOiice directs odlawise), aad
(2) deliver arodlawile mlb I'VIilable10 dae recipicat Ill dill. ....... apecific..._
repons, .,.,.,...IUIDIDiria IDd sada odleriafi:amatiGa IDd IDII'a••• lliiDIJ Mw: bcea
ICCIIIIlUllaccl by 1be CGEIICtar iD pabmi• dlia CODJIU, wlwdaerec.aplded or iD
pmcaL
(e) t.1poD temeiMtioD UDder,...,._ (a) • (b) ~~bene, dae RCipi• may 1lb over 1be
wart ad may awanlllll'dw pllty a CODtlaCt Co compldr dae WOit UDder diU c:wiiiiCt
(f) If, after teanaiDIIioa for failure of tbe coatract« to fulfill coatndUII obliptioas, it is
detamiaed dllt the c:uam.-w -fiiJcd 10 lUJiiD c::oatra:tuaJ obtipdoDI. tbe
tcunipttioo shall be deemed to haw beaa for die caa•~ of dM: JeC:jpieat 1D sucb
CWDt, adjusiJDD of 1be sufJean:cmcm pice !hall he JUde • pmicled iD J'llllfiiPia (c)
of dais cllusc.
No Text
J -" ,-· _.."::.:::... I ·, ,1}~ ::::~~·~· ~ .--... .. " ...• .•... ~ : . •"• .. : llilf1'JI il I t:it 1(!1lt !~l!!l !!I j•l11ll r I s. j II' r 1. .I!, • f f. f. It 8 II a, a, 11 t J ~~ I f ~ all·tal ·a~ lf tlf '!I;~ •_!~~~ I I §a~ I_ tfii~(i ~ 't rj!. J.~llf ~~·~·! ''i "lrr--· '''"I~! I I ·~· ! 'II fflii ;· 11 ;~~ ;Pti I iii~ B i! fllriL. ~~'Jif~ r ~~~1 l~lll l~l!f !~ ~ ll.u i r l J :! 1-' • ti ~~~11 ri=l f·I·•J-· ii'l h·l r a. f. '! t "'lh r r~ ~a.l f.~r ~ tl
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Jteaolatiou Bo. 2004-t05l7
Dec ..... 7~ 2004
It• lfo. 39
I RESOLt.mON
I BE IT RESOLVED BY 1HE CITY COUNCR. OF THE CITY OF LUBBOCK:
THAT rhe Mayor of tbe City of Lubbock BE and is hereby authorized and
, ditectcd to execute for and on behalf of the City of Lubbock, a Letter of Engagement
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betwccn the City of Lubbock and Ray Hutchison of Vinson & EDcins, L.L.P. of Dallas,
Texas appointing Ray Hutchison of Vinson & Elkim, LL.P. as bond ~unael for the City
of Lubboc.k. Said Letter of E'.upgmlcnt is attached hereto and incorporated in this j Resolution as iffoUy set forth herein and shall be included in the minutes of the Council.
Passed by the City Council this 7th day of Decaber 2004 .
AITEST:
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I APPROVED AS TO CONTENT:
I
;iuJA~ iAkll Dumbauld
Chief Financial Officer
.duGAL.MAYOR
I APPRO~ AS TO FORM /AW~~u.s
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'' 1/ ulcil)d'Mia'J& vn.aw.
,, M0•.....-24. 2004
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( November 29, 2004
It is our undentancting that the City's financial advisor will be rcsponst'ble for advising
the City concerning the sale of such debt instruments aDd will assist the City in the preparation of
any traditional official statements and disdos\R documents relating tlado. We win· review
such documen1s if requested by the City Attorney or anef Finanaal Officer of the City,
however, we arc not respoftsible for perfonnin& an iodepeDdeat investigation to cletennine the
ao:uracy, completeness or sufficiency of any such document unless specifically requested to do
so by the City and for compeosation to be determined at the time of such request
In addition to the foregoing services, we will provide such additional services to the City
that do not relate to traditional bond-issuance matUn as it. throush its City Attorney or other
authorized officer, may request ftom time to time by supplement to this letter.
Cootlicts
We recoanize that we shaD be disqualified ftom represmting any other client (i) in any
matter wbicb is substantiaJiy relaad to our ~ of you and (ii) with respect to any
matter where there ia a reasonable probability that confideotial information you fumished to us
could be used to )'OUI' disadvantage. YOU asree that OUI' reprcseating )'OU in this matter will DOt
pzevent or diaqua)ify us fiom rq»esenting clieots advcne to you in other~ subject to )'OlD'
approval in advance to our undertaking of such advc:ne 1 epreseotations.
Cooperation
In order to enable us to reDdez effectively the lepl services cootemplated. the City has
agreed to disclose tully and accurately all relevant facts and to keep us informed of all
developments relating to this matter. We necessarily must rely OD the 1CQ11'1CY and
oompletc:Dess of the facts aod infotmation you and your agents provide to \B.
Our fees fur services to be reodered as bond oounsel with respect to the routine debt
obligations of the City will be charged in accordance with the attached Fee Schedule and will be
payable at 1be time of tbe delivery of the debt
With zespect to mattm that do not relate to a specific bond or debt issuance that the City.
through the City Attorney or other authorized officer, may request us to provide, our fees for
services will be charged ou an hourly basis for time spatt ou the matter based on the Firm's
Level II rates, billable and payable monthly. We will be happy to provide an estimate of such
fees at the time we receive a request to provide such additional services.
Other Charm
In addition to our f~ there will be other clw'ges for items incident to the pa fatmanc::e
of our Jepl services, sud! u photocopying. rncssengen, travel cqxnscs, long-distance
telephone calls. facsimi1e transmissions, postage. overtime for secretaries and other non-legal
staff, specialized computer applications such as computerized legal research. and filing fees. The
39J913..,l.DOC
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November 29, 2004
AGREED TO AND ACCEPTED ON DECEMB~ 2004:
CITY OF LUBBOCK., TEXAS
By:
ATIEST:
NlflRM'D AS m"RHt:
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' RESOLUTION
Reaohatioa 80. 2006-1.052S
Oeb)Hr 26, 2006
It-lro~ S~ 18
BE IT RESOLVED BY THE CITY COUNcn. OF TilE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized aDd
directed to execute for aDd on behalf of the City of Lubbock. a Fir.umcial Advisory
Agreement by and between the City of Lubbock and RBC Dain Rauscher lnc. d/b/a RBC
Capital Martetss and aiJ related documentL Said Financial AdviSOJY Agreement is
attached hereto and iDcorporatcd in this Resolution as if ft1lly set forth herein 8Dd sbalJ be
included iD 1he minutes of the Cotmcil.
Passed by the City Council this 26th day of __ .;;.;Oc=toiMt=r=-----2006.
A TrEST:
APPROVED AS TO FORM;
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ls5uer" s URrestl. To tbe extent appropriate. the plaa wiD address strategies in
addition co the issuance of obligations. such as intEreSt rate derivative
transactions.
(c) Advise Issuer of current conditiODS in the tele\o'&Dt debt marbt, upcoming bond
issues, and adler geocra1 information mel economic dlta which might reasonably
be expected to iDf1uence inJmest rates. biddiDg coaditicms or timing of issuance.
(d) Orpni2e aud coordinate the fimDciDg team. Unless otberwise directed by
lsauer, RBC Capital Mubts will select 1be p&yiDa agent. ecrow agan and
verificatiOil agent. as tbe particular ttansac:tion may requhe, each of whom wiD
be mained and compeusated by Issuer. In a negotjatrd offering, RBC Capital
Markets ahall solicit aDd evaluate underwritm propol&ls upon request aad mab a
rccommendarioa for~ hirins of the underwrita(s).
(e) Work with cotmSe1 on tbe trmJactiaa. including bond counsel whom Issuer
tetains. who will be rec:opizcd mUDicipal boa.d attorneys, whose fees will be
paid by Issuer, and wbo will lftPIU'8 die proc;eertinas, provide lcpJ advice
~ tbc steps neccssuy to be liken to issue lbe Obligations, and issue an
uoqualificd opinion (in a form s1aOdard for cbe particular type of financina)
approving the leplity of the Obligatioas aDd (u applicable) tax cxemptioo oftbe
interest paid thcreoll and other services as oeeded by Issuer. In additioo. boad
couasel will issue an opinion to the effect tbal the disclosure document does aot
c:onl8in an 1IIIII'Ue statement of a material fact or omit to state a mamial faa
necessary in order to make tbe statemems contained tbcrein. in light of the
circumstmces under which they were made, DOt mislading. GeDerally, working
with coUDSCJ will mean COOJdiDaling with tbe attomeys ad .Satiq in the
financial adviJoty aspects of pttpriDg approJWiate legal procecdiDga aad
doeuments, iDcludiag docnrnenll concemina any required eleetioa.
(f) Assist in the Issuer's p!epldlioD of abe Preliminary Official Statemcm rros;
and 1he Official Statement ("OSj or equivaJem documeat a 1be patUeular
transaction may require (such as a private placemeut memonndum}.
(g) In CODDeC:tioo. with a co1Dpetitiw sale, RBD Capilal Markets sball:
i. c:oontinate the prepaaltion of the Official Notice of Sale, the Uniform
Bid Form (concainina provisioas m:ogoizcd by the munic:ipal securities
induslry as beiDa C0111istcat with the securities ofl'en!d for sak) and other
such documcotl wbicb Issuer may request or deem appropriate;
ii submit an such documems for ~ appnwa1, and certific:anoo
by ~ ofticials, e:lq)l~. md agmta of tho Issuer. iDcluding
bond auo.meys;
iii. coordiaa!e delivery of these doalments to a list of prospective bidders;
iv. where appropriate, organize investor meetings;
v. coordinate the receipc ofbids;
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4. OfDt:f•' sptemeat, Issuer acknowledges that Issuer is responsible for the
contents of the POS and OS and ue subject to and may be held liable under
federal or state securities Jaws for misleading or incomplete disclosure. To the
ex1a1t permissible by Jaw. and only to such extent. Issuer agrees to indemnify and
hold R.8C Capital Markets harmless against any losse5t claims, damages or
liabilities to which RBC Capital Markets may become subject under federal or
state law or regulation insofar as such losses. cWms, damages or liabilities (or
amiODS in ~ 1bercof) are based solely upon omission or alleged omissioll to
state in the disciMUR document a material fact requited to be stated therein or
necessary to make the statements therein not misleading; and will reimburse RBC
Capital Marlcets tor any reasonable Jegal or other expeases reasonably incurred by
us iD COIUICCtion with investigating or defending my such toss. cJaim, damage,
liability or action.
S. G-%3. In coanection with Rule 0-23 of the Municipal SCIQirities Rulemalcins
Board, 1he Issuer agrees that RBC Capital Mamts. subject to the terms hereof:
may submit a bid (either independently or as a member of syndicate) for any issue
of Obligatious when offen:d for sale at competitive bid I1'Jd prior to submitting
any such bid we shall obtain the Issuer's written consent to bid CD the particular
issue of Obligations.
6.
7.
Fw arul Emeues, In connection with the authorization, issuance, and sale of
Obligations. Issuer agrees that RBC Capital Markets fee wiD be computed u
sbown on the '"Fee Schedule" attachecl be:eto. Such fee will become due and
payable simu11ane0u8ly with tbc delivery of the Obligations to the Pwchaser of all
or a pmt of the ObligatiODS (the .. Purcbasc:r"). Such fee does not include. aod
RBC Capital Markets will be entitled to reimbunement from Issuer for, any
~ "out-of-pocket .. ex:pcuses incurred in connection with the provision of our
services, including reasonable travel expenses or any other expcosca incurred on
your bebalf. These expeoses wiD be due and payable whea presented to tbe Issuer,
which no.rmally wiJJ be simultaneously wntJ. die delivmy of the Obligations to the
Purchaser.
IateQtt ]bte Derly!tiv& If Issuer decides to oonsider the use of interest rate
derivative products as part of the financing plan for Obligations covet'M by this
Agreement, RBC Capita) Marlcets will be pleased to provide assistance upon
request. The nature of our asaimoce will be set forth in an amendment to this
Agreement or in another separate coutract document
8. Qther Imp yd Proylslo.u. RBC Capital Marketll submitted to Issuer, under
Jetter dated September 29, 2006, its n:sponse to Issuer•s Request for Proposal to
Provide FimmciaJ Advisory Services (the "Response"), the Response being
attached hereto as Exhibit "A". All terms, provisions, obligations and
commitments made or contained in the Response shaD be considered part of tbis
Agreement, ud incorpotated by refe1 ence, for aD purposes aDd intems. In the r· j:
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party to designate a different address by notice given in the manner just
described. Notice shall be deemed to be received when delivered if provided
in person or by telephonic facsimile or, if deposited in the United States mail,
as set forth above, three (3) days after depositing sucb notice in the United
States mail, as set forth above.
Forlssuer.
JeffY atea. Chief FinanciaJ Officer
City of Lubbock
P.O. Box 2000
Lubbock, Texas 79457
Facsimile: 806-n5-2051
For RBC Capital Markets:
Mark C. Nicholas, Director
RBC Dain Rauscher Inc.
First City Tower
1001 Fannin, Suite 400
Houston, Texas n002-6708
Facsimile: 71~5 1-3347
c. TfUS AGREEMENT IS TO BE CONSTRUED UNQER TEXAS LAW
WITHOUf REGARD TO CONFLlCf OF LAW RULES 1HAT WOULD
DIRECT APPLICATION OF THE LAWS OF ANY OTIIBR
JURISDICI'ION. THE OBUGA TIONS OF 1HE PARTIES CREATED BY
THIS AGREEMENT ARE PERFORMABLE. AT LEAST IN PART, IN
LUBBOCK COUNTY, TEXAS. VENUE FOR ANY ACI'JON BROUGHT
PURSUANT TO TinS AGREEMENT, OR ACTIVITY CONTEMPLATED
HEREBY, SHALL EXCLUSIVELY BE IN LUBBOCK:COUNTY, TEXAS.
d. This Agreemcmt, including the auacbmonts and !lc:hedules hereto aud
agreements or docurnads inoorponted herein by reference, represent the
entite and sole agreement between the Issuer and RBC Capital Markets with
rapcct to the subject matter hereof and supersedes my and dJ prior
negotiations, understandings, representations or other agreements, whether
written or oral. This Agreement may not be modified or amended except in
writing and duJy executed by each party hereto.
e. Nodriag comamed herein shall be construed to imply a joint venture, joint
enterprise, partnership or principal -agent relationship betWeen RBC Capital
Marlcets and the Issuer.
FA A...,._ (ConDnecf}
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Dated this 2.6t.ll day
CAPITALMA
Dated this 26th day of October, 2006.
CITY OF LUBBOCK
ATTEST:
APPROVED AS TO FORM;
F .A~ (ComiiUted}
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,,... .. PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement ("Agreement") is entered into this __ _
day of -------J 2008, by and between the City of Lubbock (the .. City'' or
ltOwner"), a Texas home rule municipal corporation, and Parldilll, Smith & Cooper, Inc.
(the '"Engineer"), a Texas corporation.
WITNESSETII
WHEREAS, Engineer has substantial skill and experience in the design of water
transmission and pumping facilities (the "Activities");
WHEREAS, Engineer has demonstrated competence and qualifications to
perform the Services, as defined below, and will perform the Services for a fair and
reasonable price;
WHEREAS, the City desires to contract with Engineer to perform services related
to the Activities and Engineer desires to provide the services related to same.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the City and Engineer agree as follows:
ARTICLE I
Services
1.01 Engineer shall conduct all activities and within such time .frames, as set forth on
Exhibit "A'', "Scope of Services", and Exhibit "B", "Payments to Engineer",
attached hereto (the "Services"). The City may authorize in writing Additional
Services (herein so called and as defined in Article VIII, below), not to exceed the
total sum of Fifty Thousand Dollars and No/100 ($50,000.00). The City Council
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interest will accrue on each unpaid amount at the rate in effect on September 1 of
the fiscal year in which the payment becomes overdue, the rate in effect on
September 1 being equal to the sum of (i) one ( 1 % ); and (ii) the prime rate as
published in the Wall Street J oumal on the first day of July of the preceding fiscal
year that does not fall on a Saturday or Sunday, or the maximum amount allowed
by law, if less, from the date said payment is overdue until paid according to the
provisions of the Agreement. Interest shall not be charged on any disputed
invoice item finally resolved in City's favor. Payment of interest shall not excuse
or cure any default or delay in payment of amounts due.
2.03 This Agreement shall expire on December 31, 2012. Additionally, the City may
terminate this Agreement by providing written notice to Engineer at least thirty
(30) days prior to the effective date of termination as provided in such notice: In
the event this Agreement is so tenninated. the City shall pay Engineer only for
services actually performed by Engineer up to and including the date the Engineer
is deemed to have received the City's notice of termination.
2.04 Except for City's payment obligation, neither City nor Engineer shall be
considered in default of this Agreement for delays in performance caused by
circumstances beyond the reasonable control of the non-performing party (herein
called a "force majeure event") for the period of such delay, so long as the
affected party exercises due diligence to relieve or remove such force majeure
event. For purposes of this Agreement, such circumstances include, but are not
limited to; unusually severe weather conditions; floods; earthquakes; fire;
epidemics; war, riots, and other civil disturbances; strike5y lockouts, wort
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any purpose, employees or agents of the City within the meaning or the
application of any federal, state or local law or regulation, including without
limitation, laws, rules or regulations regarding or related to unemployment
insurance, old age benefits, workers compensation, labor, personal injury or taxes
of any kind.
AR.TICLEN
Events ofDefault/Remedies
a. City's Defaults/Engineer's Remedies. In the event the City shall default in the
performance of any term or provision of this Agreement for any reason other than
failure by Engineer to perform hereunder, Engineer may, if said default shall be
continuing after five (5) days notice of such default is deemed received by the
City, exercise any right or remedy available to it by law, contract, equity or
otherwise.
b. Engineer's Defaults/City's Remedies. In the event Engineer shall default in the
performance of any term or provision of this Agreement for any reason other than
failure by the City to perform hereunder, the City may, if said default shall be
continuing after five (5) days notice of such default is deemed received by
Engineer, exercise any right or remedy available to it by law, contract, equity or
otherwise, including without limitation, specific perfomance and/or the right to
tenninate this Agreement without additional notice. The remedies set forth herein
are cumulative and not exclusive, and may be exercised concurrently.
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waiver of subrogation under those policies. Engineer shall provide a Certificate
of Insurance to the City as evidence of coverage. The Certificate shall provide 30
days notice of cancellation. A copy of the additional insured endorsement and
waiver of subrogation attached to the policy will be included in the Certificate.
Engineer shall elect to obtain worker's compensation coverage pursuant to
Section 406.002 of the Texas Labor Code. Further, Engineer shall maintain said
coverage throughout the teun of this Agreement and shall comply with all
provisions of Title S of the Texas Labor Code to ensure that the Engineer
maintains said coverage. The Engineer may maintain Occupational Accident and
Disability Insurance in lieu of Worker's Compensation. In either event, the policy
must be endorsed to include a waiver of subrogation in favor of the City of
Lubbock.
If at any time during the life of the Agreement or any extension hereof,
Engineer fails to maintain the required insurance in full force and effect, Engineer
shall be in breach hereof and all work under the Agreement shall be discontinued
immediately.
b. Indemnification. Having considered the potential liabilities that may exist
during the performance of the Services, the benefits of the Project, and the
Engineer's fee for the Services, and in consideration of the promises contained in
this Agreement, Engineer agrees to provide the indemnities set forth herein.
Engineer shall indemnify and hold City and City's elected officials,
officers, agents, employees and independent contractors harmless, to the fullest
extent permitted by law, from and against any and all claims, demands, damages,
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(i) provided in person or by telephonic facsimile; or (ii) deposited in the United
States mail by certified letter, return receipt requested, addressed to the recipient
at recipient's address shown below, subject to the right of either party to designate
a different address by notice given in the manner just described. Notice sball be
deemed to be received when delivered if provided in person or by telephonic
facsimile or, if deposited in the United States mail, as set forth above, three (3)
days after depositing such notice in the United States mail, as set forth above.
For City:
Tom Adams, Deputy City Manager
P.O. Box 2000
Lubbock, Texas 79457
Facsimile: (806) 775-2051
w/copyto:
Aubrey Spear, P.E.
P.O. Box 2000
Lubbock, Texas 79457
Facsimile: (806) 775-3344
For Engineer:
JohnS. Kelley, P.E.
4222 85th Street
Lubbock, Texas 79423
Facsimile: (806) 473-3500
THIS AGREE:MENT IS TO BE CONSTRUED UNDER TEXAS LAW
WITHOUT REGARD TO CONFLICT OF LAW RULES THAT WOULD
DIRECT APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
THE OBLIGATIONS OF THE PARTIES CREATED BY TillS AGREEMENT
ARE PERFORMABLE, AT LEAST IN PART, IN LUBBOCK COUNTY,
TEXAS. VENUE FOR ANY ACTION BROUGHT PURSUANT TO TinS
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pwpose intended, will be at City's sole risk and without liability or legal exposure
to Engineer or to Engineer's consultants. Rights to intellectual property
developed, utilizecL or modified in the performance of the Services shall remain
the property of Engineer.
Any files delivered in electronic media may not work on systems and software
different than those with which they were originally produced. Engineer makes
no warranty as to the compatibility of these files with any other system or
software. Because of the potential degradation of electronic medium over time, in
the event of a conflict between the sealed original drawings I hard copies and the
electronic files, the sealed drawings I hard copies will govern.
7.08 A waiver by either City or Engineer of a breach of this Agreement must be in
writing to be effective. In the event either party shall execute and deliver such
waiver, such waiver shall not affect the waiving party's rights with respect to any
other or subsequent breach.
7.09 Except as otherwise provided herein, neither City nor Engineer may assign or
subcontract any part of the Services under this Agreement, in whole or in part,
without the written consent of such assignment by the non-assigning party. City
and Engineer each bind itself or himself, their legal representatives and permitted
assigns in respect to all provisions of this Agreement
7.10 Nothing in this Agreement shall be construed to provide any rights or benefits
whatsoever to any party other than City and Engineer.
7.11 Engineer represents and warrants to City that it bas taken all actions necessary to
authorize the party executing this Agreement to bind, in all respects, Engineer to
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/-7.16 The authority to authorize Additional Services, as defined and limited herein, and
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to act as Owner representative, as contemplated h~ including but not limited
to, Exhibit "A", "Designated Representatives", and Exhibit "A", Part IT, Paragraph
2, is hereby delegated by the City Council of the City to the Director of Water
Utilities, or his designee.
ARTICLEVTII
Definitions
8.01 Wherever used in this Agreement, including exhibits hereto, the below described
tenns shall have the meaning prescribed herein.
1. Addenda--Written or graphic instruments issued prior to the opening of Bids
which clarify, correct, or change the Bidding Documents.
2. Additional Services-Any services not included within Exhibit A as Basic
Services, but determined to be necessary and mutually agreed upon and to be
performed for or furnished to City by Engineer.
3. Agreement--This Agreement between City and Engineer, including the
Exhibits attached hereto.
4. Asbestos-Any material that contains more than one percent of asbestos and is
friable or is releasing asbestos fibers into the air above current action levels
established by the United States Occupational Safety and Health Administration.
5. Basic Services--The services to be perfonned for or furnished to City by
Engineer in accordance with Exhibit A of this Agreement.
6. Bid-The offer or proposal of the bidder submitted on the prescribed form
setting forth the prices for the Work to be performed.
7. Bidding Documents--The advertisement or invitation to Bid, instructions to
bidders, the Bid form and attachments, the Bid bond, if any, the proposed
Contract Docmnents, and all Addenda, if any.
8. Change Order--A document recommended by Engineer, which is signed by
Contractor and City to authorize an addition, deletion or revision in the Work, or
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16. Documents--Data, reports, Drawings, Specifications, Record Drawings, and
other deliverables, whether in printed or electronic media forma~ provided or
furnished in appropriate phases by Engineer to City pursuant to this Agreement.
17. Drawings-That part of the Contract Documents prepared or approved by
Engineer which graphically shows the scope, extent, and character of the Work to
be performed by Contractor. Shop Drawings are not Drawings as so defined.
18. Engineer 's Consultants-Individuals or entities having a contract with
Engineer to furnish services with respect to the Services as Engineer's
independent professional associates, consultants, subcontractors, or vendors. The
term Engineer, as used in and for all purposes of this Agreement, includes
Engineers Consultants.
19. General Conditions-That part of the Contract Documents which sets forth
terms, conditions, and procedures that govern the Work to be performed or
furnished by Contractor with respect to the Services.
20. Hazardous Environmental Condition-The presence at the Site of Asbestos,
PCB's, Petroleum, Hazardous Waste, or Radioactive Materials in such quantities
or circumstances that may present a substantial danger to persons or property
exposed thereto in connection with the Work.
21. Peer Reviewer-Licensed engineer under separate contract with the Owner
designated to review draft and final engineering and construction documents,
correspondence and discussions dming the design and construction process. Peer
reviewer will provide expert opinion and suggestions for improvement regarding
the process that they participate in.
22. Reimbursable Expenses-The expenses incurred dim:tly by Engineer in
connection with the performing of Additional Services for the Services for which
City shall pay Engineer as indicated in Exhibit B, to include but not limited to fax,
reproduction, travel, telephone, meals and lodging, CAD charges, field supplies,
models, renderings, photos, and postage.
23. Resident Project Representative-The authorized representative of Engineer,
if any, assigned to assist Engineer at the Site during the ConstiUction Phase. The
Resident Project Representative will be Engineer's agent or employee and under
Engineer's supervision. As used herein, the term Resident Project Representative
includes any assistants of Resident Project Representative agreed to by City. The
duties and responsibilities of the Resident Project Representative are as set forth
in Exhibit C.
24. Samples-Physical examples of materials, equipment, or workmanship that are
representative of some portion of the Work and which establish the standards by
which such portion of the Work will be judged.
CITY OF LUBBOCK
TOM MARTIN, MAYOR
) ATTEST:
Rebecca Garza, City Secretary
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• The OWNER shall designate a person to act as OWNER's representative during the
Project.
BASIC SERVICES: The Basic Services include project administration, preliminary
investigations and reports, preparation of detailed design, as set forth herein, and construction
documents and construction bid and award services. Construction phase services, resident
representation services during construction. operations and maintenance manuals, start-up
services, commissioning, and personnel training will be incorporated in subsequent amendments
if desired by OWNER. ENGINEER shall render the following professional services in
connection with the development of the Project:
1. GENERAL SCOPE OF SERVICES TASKS: ENGINEER will provide the following as
part of the preliminary and final design phase of the Project:
a. Attend a kick-off meeting to clarify OWNER'S requirements for the Project, review
pertinent data, review project staffing and organization, and present the initial work
plan and schedule for matters not described in "Time for Completion", below.
b. Provide a Project Procedures Manual. The manual will be for use by the OWNER,
Peer Reviewer, and Engineer. An initial draft will be presented at the kick-off
meeting. The manual will include the following:
• Project description and scope of work
• Project organization
• Project contracts and lines of communication
• Code and other legal requirements
• Special client requirements
• Filing system
• Work plan and schedule
• Project Quality Assurance and Quality Control PJan
• Project budget
• Project schedule
• Specification and drafting standards
c. Provide administration and management of the Project. Review ongoing activities.
Monitor schedule and budget. Review progress with OWNER on a regular basis.
Discuss issues with the OWNER as they are noted. Attend monthly coordination
meetings with the OWNER. Prepare and distribute minutes of the meetings.
Attend periodic meetings and make presentations to the Lubbock Water Advisory
Committee for the Project.
d. Assist the OWNER with the public information program. including the preparation
of exhibits and associated descriptive material. A total of four meetings in
Lubbock are in<:luded.
e. Provide monthly update reports which include the fol1owing:
•Status of the work
•Major tasks to be completed in the next month
•Discussion of major issues
~Scope changes to project scope or Engineer's scope
•Project budget update (if major changes since the last update)
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b. Attend a meeting to present the draft preliminary design report. Attend another
meeting to receive comments from the OWNER. Make modifications to the report
to address the OWNER's comments, and submit 10 copies of the final draft of the
preliminary design report.
FINAL DESIGN PHASE: Upon approval of the final draft of the preliminary design
report, ENGINEER will provide the following as part of the final design phase:
a. Obtain and review OWNER-furnished front end documents, general conditions,
and special conditions for the construction contracts. Meet with OWNER to
resolve review comments, and revise OWNER's standard documents accordingly.
b. Prepare plans, specifications, contract documents, designs, and layouts of
improvements to be constructed.
c. Advise OWNER of need for and recommend scope of additional subsur&.ce
investigations, special analysis, and the mention of special consul1an1s.
(Geotechnical engineering, Soil Modeling, Surge Modeling, Corrosion
Engineering, Subsurface Utility Engineering. and Environmental Services will be
furnished as Basic Services pursuant to Exhibit A-Basic Services, Paragraphs S,
6, 7, 8, and 9, below). The cost of any Additional Services shall be paid by
OWNER and are not included in the seiVices performed by ENGINEER unless
they are included pursuant to Exhibit A-Basic Services.
d. Prepare applications for all routine permits applicable to the Project, as
contempJated by this Exhibit "A", including but not limited to road and railroad
crossing permi1s, building code permitting (if any), TCEQ septic disposal
permitting (if any). ENGINEER will provide supporting documents to the
Construction Contractor(s) for their application of NPDES Permitting. Ally
permitting effort required because of new regulations that become effective after
the signing of this contract will be considered Additional Services.
e. Submit plans, specifications, and contract documents to the applicable fc:deral and
state agency(s) for approval, where required. Submittals will include, but not be
limited to, to the Texas Commission on Environmental Quality (TCEQ), Texas
Water Development Board (TWDBJ, and Texas Department of Licensing and
ReguJation (IDLR).
f. Furnish necessary information to utility companies whose facilities may be affected
or services may be required for the Project. Provide site civil design of the pmnp
station sites to support the electric utilities site requirements, including site grading,
roads, and fencing. The pump station power connection to the electric utility will
be on the secondary side of the utility transformer.
g. Levell Review: Furnish OWNER ten (10) copies of preliminary (300/o) drawings
marked "Preliminary" for approva1 by OWNER. ENGINEER wiiJ meet with the
OWNER. to present the preliminary drawings. After OWNER'S review,
ENGINEER will meet with OWNER to receive comments. Level 1 review
documents will include dimensional layout drawings of the facilities and typical,
based on standard industry practices and according to the degree of care, skill and
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f. Assist OWNER in the preparation of documents for execution of the construction
contracts. ENGINEER will conform the contract documents, make six original
copies for execution. ENGINEER will also make twenty confonned copies of the
plans and specifications for use by the Contractor and OWNER. The twenty copies
will include ten full size copies and ten half size copies. ENGINEER will also
provide twenty color copies of the pipeline map boob for use by the Contractor
and OWNER.
g. The Bid and Award phase will be considered complete upon execution of the
construction contracts and distribution of the confonned copies of the plans and
specifications.
CORROSION ENGINEERING: Retain and monitor, through a subcontract, the efforts
of a corrosion engineering firm, as approved by OWNER, to provide the following
services:
• Prepare soil resistivity surveys at 1500' intervals
• Conduct laboratory analyses of 60 soil samples. The geoteclmical engineer will
collect 50 samples. and the corrosion engineer wiii collect an additional tO samples
at hot spots.
• Provide a visual inspection of the route to look for foreign pipeline crossings, stray
de current sources, power lines, changes in soil conditions, drainages, and
connections to existing facilities.
• Prepare a report indicating soil resistivity analysis and recommendations for
cathodic protection for up to three alternate pipe materials and up to three alternate
cathodic protection system designs, such as galvanic anodes, galvanic nbbon
anodes, and impressed cum:nt.
• Provide 1'1:Conn:nendations for pipe material coating alternatives
• Design cathodic protection systems for up to three alternate pipe materials
• Furnish plans and specifications for cathodic protection and corrosion monitoring
systems
• Evaluation of AC interference and mitigation is not inclu~ and will be an
additional service if required.
6. SURGE PROTEcnON ENGINEERING: Retain and monitor, through a subcontract,
the efforts of a surge protection engineering firm, as approved by OWNER, to provide
the following services:
• Prepare a computer model of the recommended pipeline alignment and initial and
future pump station facilities from the LAHPS to the tenninai reservoir, including
the PBPS and SBPS with suction storage tanks. The model wilJ simulate up to
fifteen transient events including:
o Full power failure at each pump station (3 cases)
o Loss of one pump at each pump station (3 cases)
o Full power fiulure with alternate air valve selections at each pump station
(3 cases)
o Full power failure while pumping from the PBPS to the terminal
reservoir ( 1 case)
o Loss of one pump whi1e pumping from the PBPS to the terminal
reservoir (1 case)
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• Submit Draft Preliminary Design Report/Pump Stations, Post Booster Pump and Storage
Tank -October 1, 2008
• Submit Draft Preliminary Design Report/Pipeline-November 15, 2008
• Begin Advertise for Bids Pipeline Section 1 -May 1, 2009
• Begin Advertise for Bids Pipeline Section 2-December 1, 2009
• Begin Advertise for Bids Pipeline Section 3 -May 1, 2010
• Begin Advertise for Bids Pump Stations -March 1, 20 I 0
The above schedule is based upon OWNER review of the preliminary design report within two
weeks of submittal, and review of Level 1, 2, and 3 within three weeks of submittal.
If ENGINEER's services are delayed through force majeure, the terms and provisions of Section
2.04, above, s.ball apply.
DESIGNATED REPRESENTATIVES: ENGINEER and OWNER designate the following
representatives. ENGINEER and OWNER may designate a different representative by providing
notice to the other party as prescribed in this Agreement
Owuer's Deslpated Represeatative -Aubrey Spear, P.E., City of Lubbock, Water
Administration, P.O. Box 2000, Lubbock, TX 79457; phone 806-775-2585; fax 806-775-
3344; e-mail ASpear@mail.ci.lubbock.tx.us
ENGINEER's Designated Representative-John Kelley, Parkhill, Smith and Cooper, 4222 85111
Street, Lubbock Texas 79423; phone 806-423-2200; fax 806-473-3500; e-mail jkclley@team-
psc.com
Freese and Nichols Project Meager: Rusty Gibson-overall P.M .• Nick Lester. assistant P.M.
-Pipelines, and Kelly Wood, assistant P.M. -Pump Stations, 4055 International Plaza, Suite 200.
Fort Worth, Texas 76109-4895; Phone: 817·735·7300, Fax: 817-735-7491; email: Rusty:
rlg@fteese.com, Nick: ncl@freesc.com and Kelly: kww@frcese.com
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Contractor(s) are complying with any law, rule, regulation, ordinance, Code or order
applicable to their furnishing and perfonning the work.
Review the preliminary design report and provide comments as OWNER deems
appropriate. Upon final approval of the preliminary design report, provide written
authorization to ENGINEER to proceed with the final design phase. Review the Level 1,
2, and 3 plans and specifications and provide comments to ENGINEER.
OWNER and ENGINEER may agree, if so elected by OWNER and ENGINEER, to a
contract amendment to establish the construction phase services to be provided by
ENGINEER prior to bid and award.
Attend the pre·bid conference, bid opening, preconstruction conferences, construction
progress and other job related meetings and substantial completion inspections and final
payment inspcc:tions.
11. Give prompt written notice to ENGINEER whenever OWNER observes or otherwise
becomes aware of any development that affects the scope or timing of ENGINEER's
scrvic~ cr any defect or nonconfonnance of the work of any Contractor.
12. Furnish, or direct ENGINEER to provide, Additional Services as stipulated in Exhibit A.
Part 3 of this AGREEMENT or other services, as deemed to be required by OWNER.
13. The OWNER reserves the right to direct substantial revision of the Plans and
Specifications after approval by the OWNER as OWNER may deem necessary, but in
such event the OWNER shall pay ENGINEER just and equitable compensation for
services rendered in making such revisions and such shall be considered Additional
Services here1mder. OWNER shall not be obligated to pay ENGINEER for said revisions
should they be necessary as a result of the design and/or Contract Documents being in
any manner defective or deficient.
14. Bear all costs incident to compliance with the requirements of OWNER'S
responsibilities.
15. Provide the following services, unless provided specifically otherwise in this Agreement:
1. Provide casement acquisition services.
2. Pay all permit fees and mitigation costs.
3. Provide land title research and title policy.
4. Provide advertisement for bids in local publications as required.
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12. Providing services made necessary because of unforeseen, concealed. or differing site
conditions or due to the presence of hazardous substances in any form.
13. Providing value engineering studies or reviews of cost savings proposed by others.
14. Providing any services after the bid and award of construction contracts.
15. Providing Arc Flash studies for electrical equipment. Such studies will be provided by
the Contractor.
16. Other items or activities defined as "Additional Services" in this Agreement
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b. The Lump Sum includes compensation for ENGINEER.'s services and services
of ENGINEER's Consultants, if any. Appropriate amounts have been
incoipOrated in the Lump Sum to account for labor, overhead, profit, and direct
expenses.
c. The portion of the Lump Sum amount billed for ENGINEER's services will be
based upon ENGINEER's estimate of the proportion of the total services actually
completed during the billing period to the Lump Sum.
d. The Lump Sum is conditioned on authorization to proceed issued by July l, 2008
and receipt of bids by June 1, 2010. Should the Contract Time to complete the
Work be extended beyond this period through no fault of the ENGINEER, the
total compensation to ENGINEER shall be negotiated by OWNER and
ENGINEER and appropriately adjusted by amendment to this Agreement. No
Additional Services will be rendered until such amendment has been approved by
the City.
OWNER shall pay ENGINEER for services set forth in Exhibit A-Scope of
Services, Basic Services, Paragraphs 8 and 9 as follows:
a. For Basic Services Item 8 -Geotechnical Engineering Services. The basis of
cost times a factor of 1.10, with a Not-to-Exceed amount of$265,100.
b. For Basic Services Item 9-Subsurface Utility Engineering Services. The basis
of cost times a factor of 1.10, with a Not-to-Exceed amo\Dlt of$39,600.
For Authorized Additional Services
a. OWNER shall pay ENGINEER for authorized Additional Services as follows:
1) For labor on an homly rate basis per the attached schedules, as applicable
for personnel of the respective firm.
2) Sub-consultant will be billed on the basis of cost times a factor of 1.0.
3) For reimbursable expenses. on the basis of cost times a factor of 1.10.
4) If mutually agreeable to OWNER and ENGINEER, a negotiated lump smn
fee will be used.
b. The homly rate schedule will be adjusted each January 1st to reflect cost of living
adjustments, limited to a maximwn increase of S% per annum.
Subconsultant
Freese & Nichols, Inc:.
Hourly Rate Schedule
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PRINICIPAL 205.88 404.38
GROUP MANAGER 167.74 263.55
ENGINEER VIII 239.21 275.51
ENGINEER VII 187.33 242.43
) ENGINEER VI 164.55 234.68
ENGINEERV 147.3 171.79
ENGINEER IV 118.13 157.65
ENGINEER Ill 110.93 136.84
ENGINEER II 103.05 135.26
ENGINEER I 91.24 109.13
ELECTRICAL ENGINEER VI 164.19 212.48
ELECTRICAL ENGINEER V 146.55 189.65
ELECTRICAL ENGINEER IV 128.9 166.82
ELECTRICAL ENGINEER Ill 96.61 125.03
ELECTRICAL ENGINEER II 95.69 123.83
ELECTRICAL ENGINEER I 90.16 116.68
MECHANICAL ENGINEER VI 158.61 205.26
MECHANICAL ENGINEER V 141.33 182.9
/ MECHANICAL ENGINEER IV 124.06 160.55
MECHANICAL ENGINEER Ill 100.53 130.1
DISCIPLINE LEADER I 132.89 171.97
PROGRAM MANAGER II 161.51 209.01
PROGRAM ADMINISTRATOR 140.47 181.79
CONSTRUCTION CONTRACT ADMIN Ill 121.88 184.35
CONSTRUCTION CONTRACT ADMIN U 87.49 178.13
CONSTRUCTION CONTRACT ADMIN I 82.2 120.83
DOCUMENT CONTROL CLERK 67.19 86.96
SR DESIGNER 138.78 179.6
) DESIGNER II 141.19 150.15
DESIGNER I 98.53 127.5
CADD DESIGNER 134.51 145.39
ENGINEERING TECHNOLOGIST I 68.95 89.22
TECHNICIAN IV 94.88 120.86
TECHNICIAN Ill 79.8 106.5
TECHNICIAN II 69.08 85.31
TECHNICIAN I 40.13 70.8
GIS COORDINATOR 105.16 136.08
GIS ANAlYST IV 91.04 117.81
GIS ANALYST Ill 81.12 104.98
GIS ANALYST II 69.19 95.36
GIS ANALYST I 53.23 68.89
30 VISUALIZATION COORDINATOR 128.30 166.03
Q·ICITYA~tse-w_..OIIt?ot.~
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Schedule of Charges:
The ranges and Individual salaries will be adjusted annuaJiy. Rate ac:tuaUy charged will be specific to the
personnel activity lnvorv.d In the project.
RATES FOR INHOUSE SERVICES
Computer and CAD
PC CAD Stations
Prtnt Shop
Color Copies and Printing
$10.00 per hr
Black and White Copies and Printing
Binding
T .. ang Apparatus
Density Meter
Gas Detection
ontER REIMBURSABLE EXPENSES
$700.00 per month
$20.00 pertest
calcomp Plotter
Bond
Other
Color
$0.50 per single side copy
$1 .00 per double side copy
$0.10 per single side copy
$0.20 per double side copy
$5.75 per book
$2.50 per plot
$5.00 per plot
$5.75 per plot
Other authorized reimbursable mcpensea are reimbursed at actual ccet times a multiplier of 1.10. They Include outside printing and
reproduction upen~e, cammunk:atlon 8lCpenSe, travel, lransporlatlcn and subslatllnce away fn:Jm FOft Warth, and other mlsceiMeous
expenses dlredly related to the wont, Including costs rJ laboratgry analysis, tllsts, and other wartc required to be dane by Independent
person other 1han staff members.
Richard/ProfesslanaJSeMcesAgreement PSCWatet 061708
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City of Lubbock, Teus
Teus Water Developmeat Board WIF Appliaiton
Legal Information
Juoe 20, 2008
7. Specific Legal A•tbority:
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 S (commonly c:alled the home rule
amendment) and by home rule charter adopted by election of'Dec::ember 27, 1917. Article
n, Section 10 of the City Charter provides that the City bas the power to, among other
things, own or construct, within or without the city limits, water systems. Additionally,
Section 402.017 of the Loal1 Government Code provides similar authority. Please note
that Section 402.017 w.ill be retumben:d to Section 552.017 of the Local Government
Code, effective April I, 2009.
Lubbock City Charter provisions related to the ownership, acquisition, and control of
public utilities fullow:
Sec. 10. Owaenhip or public utilities. .
Said City shall have the power to buy, own cr 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 p~ 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, firm or corporation
now or hereafter conducting such business, for the purpose of operatiug such
public utility or utilities and for the purpose of distributing such service within or
without the City, or any portion thereof.
Sec. 11. Fuads for acquisitioa ofuy public utility, security for saJDe, 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.
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A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD
APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE
FROM THE WATER INFRASTRUCTURE FUND mROUGH THE PROPOSED
PURCHASE OF $19,945,000 CITY OF LUBBOCK COMBINATION TAX AND
WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
PROPOSED SERIES 2010
(09·69)
WHEREAS, the City of Lubbock, Lubbock CoWlty, Texas, (the ''Cil)f), has filed an
application for financial assistance in the amount of$19,945,000 ftom the Water Inftastructure
FWld {"WJF') in accordance with §§1S.973 and 15.974, Water Code, to finance the
implementation of water supply projects through the &tate and regional water planning process;
and
WHEREAS, the City seeks financial assistance ftom the Texas Water Development
Board (the •6Board") through the Board•s proposed purchase of $19,945,000 City of Amarillo
Combination Tax and Waterworks System Surptus Revenue Certificates of Obligation. Series
2010, (the "Obligations.,). as is more specifically set forth in the application and in
recommendations ofth~ Boar~rs Project Finance and Construction Assistance staff, to which
documents express reference is made; and
WHEREAS, i~ ~ccordance with_§ 15.975, Water Code, lpe Board hereby finds:
I.
2.
3.
that the revenue and/or taxes pledged by the City wiJJ be sufficient to meet the
all of the obligations assumed by the City;
that the project will meet water needs in a manner consistent with the state and
regional water plan for region 0, as required by§ 16.0530). Water Code;
that the project is a recommended water management strateay in a Board~
approved regional water plan adopted pursuant to §16.053. Water Code, and/or
in the State Water Plan adopted in accordance w~th §16.051, Wa~erCode;
4. that the City has adopted a water conservation program for the more efficient
use of water that wiU meet reasonably anticipated local needs and conditions
and that incorporates practices, techniques or technology prescribed by the
Texas Water Code and the Board's rules;
S. that the application and fmancial assistance requested meet the requirements of
ClJapter 15. Subchapter Q and Chapter 17, Subchapter E, Water Code, and the
Board's rules set forth in 31 Tex. Admin. Code (TA q Chapter 363, Subchapteel
A and L; and
G. that the current water audit requimi by §16.0121, Water Code, bas been
completed by lhe City and filed with the Board.
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NOW THEREFORE, based on thC$e considerations and findings, lhe Texas Water
Development Board resolves as follows:
A commitment is made by the Board to the City of Lubbock for financial assistance in
the amount of$19,945,000 from tbe Water Infrastructure Fwtd, to be evidenced by the
Board's proposed purchase of S19,94S,OOO City of Lubbock Combination Tax and
Waterworks System Surplus Revenue Certificates ot Obligation, Series 2010. This
co~mitment will expire on May 31, 2010.
Such <:cmmitment is conditioned as follows:
1. this commitment is contingent on a fUture sate of bonds by the Boaid or on the
availability of funds on band;
2. this commitment is contingent upon the issuance of a written appiovjng opinion
of the Attorney Genecal ofthe·State of Texas stating that aU of the requirements
of the laws under which said obligations were issued have been complied with;
that said obligations were issued in conformity with the Constitution and laW$.
of the State of Texas; and that said obligations are valid and binding obligations
of the issuer;
3.
4.
this commitment is contingent upon the City"s compliance with all applicable
requirements contained in the rules. regulations and policies of the Board;
the City•s bond counsel opi~ion 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 City
when rendering this opinion;
S. the City's bond counsel opinion must im;lude an opinion that the obligations are
not .. private activity bonds." Bond counsel may rely on covenants and
representations of the issuer when rendering this opinion;
6. the ordinance/resolution authorizing the issuance or thC$e obligations,
(hereinafter referred to as the "Authorizi11g Documellr), must include .a
provision prohibiting the City from using the proceeds of this loan in a manner
that would cause the obligations to become .. private activity bonds";
7. the Authorizing Document must include that the issuer will comply with the
provisions of Section 148 of the Internal Revenue Code of 1986 (relating to
arbitrage);
8.
9.
the Authorizing Document must include a provision requiring the City to make
any req~ired rebate co the United States of arbitrage earnings;
the Authorizing Document must include a provision prohibiting the City from
taking any action that would cause the interest on the obligations to be
includable as gr:oss income for federal income tax purposes; ' ·
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10. the Authorizing Document must 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 1 0 years from the deted date of the
cbligations, at a redemption price of par, together with accrued interest to the
date fixed for redemption;
11. the Authorizing Document must provide that the City wm not cause or pmnit
the obligations to be treated as ''federally guaranteed•• obligations within the
meaning of §149(b) of the Internal Revenue Code;
..., 12 • the bond transcript must include a No Arbitrage Certificate or similar Federal
Tax Certificate setting forth the City•s reasonable cxpectntions regarding the
use, expenditure and investment of the proceeds of the obligations;
13. the bond transcript must include evidence that the infonnation repQrting
requirements of§ 149(e) of the Internal Revenue Code of 1986 will be satisfied.
This requirement is cwrently &atisfied by filing IRS Fonn 8038 with the Internal
Revenue Service. A completed copy of IRS Form 803 8 mwt be provided to the
Executive Administrator of the Board prior to the release of fUnds;
14. the City. or an obligated person for whom financial or operating data is
presented to the . Board in the· application for financial assistance either
individually or in combination with other issuers of the Citfs obliptions or
'-obligated persons, wUI. at a minimum, covenant to comply with requirements
for conlinwng disclosure on an ongoing basis substantially in the manner
required by S~ritics and Exchmge Commission ("SEC') rule lScl-12 and
detennioed as if the Board were a Participating Underwriter within the meaning
of such rule, such continuing disclosure undertaking being for the benefit of the
Board and the benef;cial 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;
15. the Authorizing Docwnent must contain a provision that the City will at all
times levy a tax and/or to maintain and collect sufficient ntes and charges to
produce net syitem revenues in an amount necessary to meet the debt service
requirements of all outstanding bends and to maintain the funds established and
required by this ordinance;
) 16. prior to closing, the City must submit documentation evidencing the adoption
and implementation of sufficient system rates and charges or, if applicable, the
levy of an interest and sinking tax rate sufficient for the repayment of system
debt service requirements;
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17. the Authorizing Document must include a provision requiring the City to use
any swpJus proceeds from the obligations remaining after completion of the j
water supply project. to redeem, in inverse annual order, the obligations owned J by the Board~
18. if a bond insurance policy is utilized:
(a) thirty (30) days befo"' clo.1ing, the City sbalJ submit a draft of the policy
to the Board's Executive Administrator for a determination on whether
the policy provides appropriate security in ae«>rdance with Board
policies;
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(b) prior to closing, the City shall provide the executed underlying
documents of the policy (-e.g; commitment letter, specimen policy) in a
Conn and substance that is satisfactory to the Board's Executive
Administrator; and
(c) prior to closing. the Attorney General of the State of Texas must have
considered the use of said policy as a part of its approval of the proposed
bond issue.
19. prior to closing, and if not previously provided with the application, the City
shall submit an executed engineering contract for desisn and construction, an J executed financial advisor eon tract, and an executed bond counsel eontraet in a
form and substance that are satisfactory t~ the Board's Bx"utive Administrator;
20. loan proceeds shatJ not be U5ed by the City. when samplin& testing. removing or
disposing of contaminated soils and/or media at the project site. Tbe
Authorizing Document 5hall include an environmental indei1Ulifieation
provision wherein the City agrees to indenmify, hold harmless and protect d)e
Board .from any and ·all claims, causes of action or damages to the person or
property of third parties arising from the sampling. analysis, transport, storage,
treatment and disposition of any contaminated sewage sludge, contaminated
sediments and/or contaminated media that may be generated by the City, its
contractors, consultants. agents, officials and employees as a result of activities
relating to the project to the extent pennitted by law; and
21. should one or more of the provisions in this resolution be held to be null, void,
voidable or~ for any reason whatsoever, of no force and effect, such provision(s)
shall be construed as severable from the remainder of this resolution and shall
) not affect the validity of all other provisions of this resolution which s~l
remain in full force and effect.
22. the Executive Administrator or the Board may require that the City execute a J separate financing agreemenl in ronn and substance acceptable to the Executive
Administrator;
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23. that prior to the release or constru~tion funds for that portion of a project that
proposes surface water development, the Executive Administrator_ must have a
wricten finding that the City has the right to use water that the project financed
by the Board will provido.;
PROVIDED, however, the Authorizing Document is subject to the following special
conditions:
24. that this the loan is approved for funding under the Boant•s pre-design fundjng
option, as specified in ll TAC §363.1206 of the Board's rules, and initial and
fUture releases of funds are subject to all of the Board's rules relating to such
funding option;
2.S. the Authorizing Document must contain a provision tlult requires as follows:
a. if system revenues are actually on deposit in the Interest and Sinking
Fund ia advance of the time when ad valorem taxes are scheduled to be
levied for any year, then the amount of taxes which otherwise would
have been required to be . levied and collected may be reduced to the
extent and by the amount of revenues then on deposh in the Interest and
Sinking Fund; or
b. if surplus revenues are bas¢ upon budgeted amounts:
i. the Authorizing Doc:ument must include a requirement tha_t the
City transfer and deposit in the Interest and Sinking Fund each
month. an amounl or not. Jess than l/121h ofthe annual debt service·
on the obligations until the amount on deposit in J}le Interest and
Sinking Fund equals the amount required for. BllDUal debt service
on the obligations; further. that the ordinance; authorizing the
issuance of the obligations must include a requirement that the Cily
shaU not transfer any funds from the City's pledged system
revenues to any fund other than. the Interest 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;
ii. the Authorizing Document must include a requirement lhat for each
yeu that the obligations are outstandlng; and prior to tbe time taxes
are to be levied for such year, the City shall establish, adopt, and
maintain an annual budget that provides Cor either the monthly
deposit or sufficient szrplu.s pledged revenues and/or tax revenues,
the monthly deposil ofany other legally available fUnds on hand at
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
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iii. the Authorizing Document must include a requirement that the City
ai nlt times maintain and collect sufficient r.ttcs and charges in
conjunction with any other Icg.1lly uvnilablc funds so that aOcr
p;tymcnt of the costs of opcrnling uml maintaining the system. it
produces rc\'cnucs in nn amount not less than 1.10 times debt
service requirements or nil outst:mding bonds of the City and other
obligations of the City which arc secured in whole or in part by the
pledged revenues, for which the City is budgeting the rcpa)'lllCilt of
such obligations. or the City shall provide documentation which
evidences the ~~~''Y nnd collection of an :~d valorem tux nuc
dcdicutcd to the Interest and Sinking Fund, in conjunction with any
other lcgnlly avnilab!c funds, sufficient for the repayment of debt
service requirements;
26. prior to the release of construction funds for that portion or a project that
proposes ground water or surface w:uer dcVdopmcnt, the Boord's Executive
A<.lministrator must either {a) issue a written finding that the Cil)' has the righl
to appropriate and usc the water required by the project being financed by the
Bo:1rd; or (b) a written dctennin:stion th:lt a reasonable c:<pcctution exists that
such a finding will be mt~dc before t~ny release of funds for construction;
APPROVED. and ordered of record this. tltc 21 '1 day of tvh1y, 2009.
ATTEST:
Ex~-cutivt: Administrntor
TEXAS WATER DEVELOPMENT BOARD
~1~~'1-\
( ~s E. Hcrrhig~ Chainuan
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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 infonnation:
L This certificate relates to the City of Lubbock, Texas, Tax and Waterworks
System Surplus Revenue Certificates of Obligation, Series 2010 (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 $702,820,000.
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 tax year 2009, being its latest approved official
assessment rolls is $12,002,616,280, 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 Tem
Lee Ann Dumbauld, City Manager
Andy Burcham, Chief Financial Officer
Rebecca Garza, City Secretary
Linda DeLeon, Member of Council
Floyd Price, Member of Council
Todd R. Klein, Member of Council
Paul R. Beane, Member of Council
John W. Leonard, III, Member of Council
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 the
issuance of the Certificates, and so far as we know and believe, no such litigation is threatened.
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.
136564v.2 LUB200171016
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9. There has not been filed or presented to the City Secretary or the City Council any
petition protesting, challenging or otheiWise questioning the issuance of the Certificates.
10. The Ordinance was duly adopted by the City Council on December 16,2009.
11. A true and correct statement of the revenues and expenses of the Waterworks
System for fiscal years 2004, 2005, 2006, 2007 and 2008, together with a true and correct
statement of current rates and charges for the services of the System, is attached hereto as
Exhibit B.
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 (iii) the obligations set forth in Exhibit C hereto, none of the Cityts 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 Certificate 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 o~ 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 Certificate 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]
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EXECUTED AND DELIVERED this r:fkf.u&..ry /.r; ;)tJI.?l
MANUAL SIGNATURE
STATE OF TEXAS §
§
COUNTY OF LUBBOCK §
OFFICIAL TITLES
Mayor, City of Lubbock, Texas
) Before me, the wtdersigned 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.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS f(p -+}! :Pikde¥j d!JO<(
Notary Public,
In and for the State of Texas
[SEAL)
Signature Page for General Certificate
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MANUAL SIGNATURE
~t'ihLvv::
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 Andy Burcham,
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.
-fA.~ GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS&-@~ 2tJ(fl
Notary Public,
In and for the State of Texas
[SEAL]
Signature Page for General Certificate
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EXECUTED AND DELIVERED this ~" uA-N"'' / S: .';)O/ t!>
MANUAL SIGNATURE
STATE OF TEXAS §
§
COUNTY OF LUBBOCK §
OFFICIAL TITLES
City Secretary, City of Luboock, 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.
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GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS /7 Jt«'f of JJeamit.<, 3.00 9
[SEALJ
LINDA a HART Notary Public. State of :rexas
My commission Exp1res
June 30, 20l 1
Notary Public,
In and for the State of Texas
Signature Page for General Certificate
Exhibit A
(Attached.)
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136564v.2 LUB2oonl016
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FYE Ountandlns Debt (ll T~ Certffleates Total
30-SeJ! PrtneJe•• Interest Tollll Prlnclel Interest Total DebtServl«
2010 $ 35,065,000 $ 3),079,484 $ 68,144,484 $ $ 202,521 $ 202,521 s 68,.347,004
2011 37,685,000 29,730,082 67,415,082 740,000 342,289 1,082,289 68,497,371
2012 37,ns.ooo 28,043,456 65,818,456 760,000 342,289 1,102,289 66,920,745 1 2013 39,110,000 26,300,764 65,410,764 785,000 342,289 1,127,289 66,538,053
2014 39,655,000 24,483,740 64,138,740 810,000 341,584 I,ISI,S84 65,290,324
lOIS 38,250,000 22,718,933 60,968,933 835,000 339,026 1,174,026 62,142,958
2016 37,920.000 21,013,271 58,933,271 860,000 334,403 1,194,403 60,127,674
2017 38,675,000 19,247,880 57,922,880 885,000 327,8SS 1,212,8SS 59,135,735
2018 39,875,000 17,418,847 57,293,847 910,()00 319,234 1,229,234 S8,S23,081
) 2019 38,465,000 IS,S2S,007 53,990,007 940,000 307,945 1,247,945 55,237.951
2020 35,660,000 13,756,409 49,416,409 970,000 293,533 1,263,S33 50,679,941
2021 34,845,000 12 ,()48,504 46,893,504 995,000 275,883 1,270,883 48,164,387
2022 33,005,000 10,381,944 43,386,944 1,025,000 25S,27S 1,280,275 44,667,219
2023 32,955,000 8,760,791 41,715,791 1,060,000 232,270 1,292.270 43,008,061
2024 31,990,000 7,156,072 39,146,072 1,090,000 207,373 1,297,373 40,443,445
2025 31,880,000 5,601,906 37,481,906 1,125,000 180,317 1,305,317 38,787,223
) 2026 28,995,000 4,098,297 33,093,297 1,160,000 151,789 1,311,789 34,405,086
2027 23,910,000 2,791,323 26,701,323 1,195.000 121,336 1,316,336 28,017,658
2028 19,240,000 1,743,542 20,983,542 1,230,000 88,802 1,318,802 22,302,344
2029 9,300,000 1,062,768 10,362,768 1,265,000 54,632 1,319,632 11,682,399
2030 5,735,000 712,173 6,447,173 1,305,000 18,414 1,323,414 7,770,586
20.31 6,000,000 445,949 6,445,949 6,445,949
2032 2,195,000 260,438 2,455,438 2,455,438
) 2033 2,290,000 159,525 2,449,525 2,449,525
2034 2.400,000 54,000 2,454,000 2,454,000
s 682,875,000 $ •3061S9S,I02 $ 989,470,102 s 19,945,000 $ S.079,054 s 25,024,054 $ 1,014,494,157
Average Annual Debt Service Requirements All General Obligation Debt (2010-2034}: s 40,579,766
Maximum Annual Debt Service Requirements All Gener.~l Obligalion Debt (2011): $ 68,497,371
<ll Dots 1101 in<:lude leasclpurchasc obligalion$.
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Exhibit B
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B-1
136564v.2 LUB200nl016
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Moadlly Water Rata
On September 26, 2001 the Lubbock City Council adopted a foW' year ir,.~ total inCRaSe il1 water rates. On September 26, 2002. the Lubbock City
Council added a fifth yew rate inc:m~SC of 3%. On September 13, 2006, the Lubbock City Couaeil adopted a rougllly II% increase in W1dCr rates,
effective October I, 2006. On Fcbrury 28, 2008, the Lubboc:k City Council adopted a rouahly 16% inm'cuc in water rata, effective M~n:h I,
2008.
On March 9, 2009, the Lubbock City Council adopted water rate increases, etTective April I, 2009, that are designed 1o cover wat.er expenses for
2008..()9 and 2009-10 fiscal yellS and that fully fund the debt service for a number of major water supply projects.
Effective
Base Rate(ll 04/01/09
3/4" metet 18.00
I w meter (single family residential) 30.05
I " meter (ocher than residential) 30.05
Flow Rate Char&e E 11000 Gallons Block I Block 2 Block3
Single Family R.csidaltia.l 2.67 4.29 .5.93
Single Family R.esidentiallzription Dla 4.29 .5.93
Multi-Family R.esicleutial, Commercial and Public 2.67 4.29 5.93
NOD-Residential lnipti011 nla 4.29 .5.93
Schools 2.67 nla nla
WhoiCll&le 3.47 .5 . .58 7.71
111Tbe 8uc ~ ia forwaterleJ\Iice; Due Rm:a.w.-nan: for al/4" Wlltcfmc:taaacla l"mcler forraidc:utW &lid COII:IIIWCill~ mp. a-Jt~taJipply 10 IIIICtlei'Stalljliq ftOIII
I.S"ID 10".
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Waterworks System Coadnsed Staleraat ofOperatloas
Fiscal Year Ended Seotelnbcr 301
2008 2007 2006 2005 2004
REVENUE
Operating Revenues $ 42,527,445 35,454,426 37,330,953 33,306.786 31,907,893
Non-Operating Revenues 2,1231853 11746,843 11678.056 8831824 5391413
Gross Revenuu 44,651.298 37,201,269 39,009,009 34,190,610 32,447,306
EXPENSE
Operating Expense Ill 23z543,862 18,781,580 20,720,395 17,6191668 20,550,379
Net Revenues $ 21,107,436 18,419,689 18¢88.614 16,5701942 .11,896,927
Nwnber of Wa=r MeteD 78,156 77,388 77,147 75,876 72.500
111 ()pc:nliiJI CXJ1C11M> iDcluda CIOIIIIniCdoll ~ COlla eod openllioa and ~ c:J.racs paid to c.a.dia River Mualcipal W.ar:r Alllbarity llld GCiuda
~oaadcapital~
Note: The City has no outs11mding or authorized Waterworks System Revenue Bonds, however, there is Sl62,511,542 of general obligation debt
outstanding which was issued for wat=' system purposes on which annuaJ debt service is provided from revenues of the System.
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Exhibit C
Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2009, dated
March 1, 2009, issued in the original principal amount of$58,705,000
Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, dated
June 15, 2008, issued in the original principal amount of$22,615,000
Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008, dated
April15, 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 amoWlt 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 Swplus 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
Apri115, 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 amountof$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 I,
1999, issued in the original principal amoWlt 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
C-1
136564v.2 LUB200/71016
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Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1998,
dated October 1, 1998, issued in the original principal amoWlt 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
)
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RECEIPT AND CERTIFICATE OF DELIVERY
OF PAYING/AGENT REGISTRAR
The undersigned, authorized representative of The Bank of New York Mellon Trust
Company, N.A., as Paying Agent/Registrar, hereby makes the following acknowledgments and
certifications in connection with the issuance and delivery of $19,945,000 principal amount of
City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of
Obligation, Series 2010 (the "Certificates"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in the Ordinance authorizing the issuance
thereof adopted by the City Council of the City of Lubbock, Texas (the "Issuer"). The
undersigned hereby:
1. Acknowledges receipt of$19,945,000 from the Texas Water Development Board
(the "Purchaser").
2. Acknowledges and certifies the application of amounts described in paragraph 1
hereof as required by and in accordance with the Closing Instructions attached hereto as
Exlubit A prepared by RBC Capital Markets, the Issuer's Financial Advisor.
3. Certifies that the Initial Certificate for the Certificates, registered by the
Comptroller of Public Accounts of the State of Texas and representing the aggregate principal
amount of the Certificates, was delivered to or upon order of the Purchaser and was duly
canceled this date upon delivery of the definitive Certificates to the Purchaser through The
Depository Trust Company.
DATED: January 15,2010.
LUB200n 1015
Dallas 155008U.DOC
Dallas 1550081 v.2
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
as Paying Agent/Registrar
VJat~ By:
Title: SenlorAuod*
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LUB200ni01S
Dallas 1550081_ . .2.DOC
Dallas t55008lv.2
Exhibit A
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Bonds Dated:
Settlement Date:
Closing:
RBC Capital Markets•
DELIVERY, SEITLEMEN'I' & CLOSING PROCEDURES
for
City of Lubbock, Texas (the "City")
$19,945,000
Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2010
January 1, 2010
Friday, January 15, 2010
The dosing on the aoove-refw:nced certificate~ (the "Certificates") will be held on Friday, January 15, 2010, at 10:00 A.M. (the
"Closing") via teleconference by Vin~on & Elkins Lt.P., Attn: Jennifer Taffe (214) 220-7941.
Those parties expected ro participate include:
~ ]J&Je/Bgle CompiQf fho.a.c. Email
Mr. Andy Burcham Chief l'iru~ncial Officer City of Lubbock (806) 775·2149 aburcham@mylubbock.us
!VIs. Chelsea Pigg Senior 11inancial Analyst City of Lubbock (806) 775-2985 cpigg@mylublwck.us
Mr. Mart Boles Financial Advisor RBC Capital Markers (214) 989-1672 rMtt.boles@rbccm.com
Mr. Derek Hone~ Financial Advisor RBC Capitll Markets (214) 989-1671 derek.honea@rbccm.com
Mr. Ben Mun~;,'uia Purchaser Texas Water Development Board (512) 46:>-1618 ben.munguia@twdb.state.tx.us
Mr. Albert Murillo Purchaser Texas Water Development Board (512) 305-871 3 albert.muriUo@twdb.state.tx.us
Ms. Jennifer Taffe Bond Counsel Vinson & Elkins t.L.P. (214) 220-7941 jtaffe@velaw.com
Ms. P~t Blue Paying Agent The B~nk of Nt:W York Mellon (214) 468-6511 patticia.blue@bnymellon.com
SOUBCES AND USES OF FUNDS
Sgurs;ss gfFundti Series 2010
Principal Amount of the Bonds ....................................................... S 19,945,000.00
'I'otal Sources $ 19,945,000.00
useo Q( fllod§
Deposit to Escrow Fund ............................................................... S 19,945,000.00
Total Uses $ 19,945,000.00
JtECEIPT OF fUNDS
On Friday, January 15,2010, the Texas Water Development Board ('1\VDB") will wire tnnsfer to The Bank of New York Mellon, ABA #021000018, GLA
211-1)65, TAS #437877, Ref: City of Lubbock Series 2010, Arm: Pat Blue (214) 468·651 1, the amount listed below. 1WDB will call or e-mail the Pa}~ng
Agent and Bond Counsel with a Federal Wire Reference Number and time of such wire as soon as possible on Friday, January 15, 2010.
'I'otal Wire Amount irom TWDB:
DJSBUBSEMENT OF FUNDS
On Friday,J~nuary 15,2010, The Bank of New York Mellon will wire transfer $!9,945,000.00 as a de(»Sit to the Escrow Fund to Srate Street Bank and Trust
Company, Boston, MA, ABA #011000028, BNF = Arm: TexPool A/C#67573Tl4, RFB = Location lD #77963, 081 :::: 449, Account #1552100035,
Participant Name: Ciry of Lubbock, TX.
Total Deposit to Escrow Fund: $ 19,94s1ooo.oo
POST CI.OSING WIRES
Ci!J of LNbboflt., Texas
Pt~gt 2
1. On Friday, January 15,2010, upon successful closing, the City will wire transfer $22,217.63 to U.S. Bank, Minneapolis, MN, ABA
#091000022, Account Name: RBC Capital Markets Corp., A/C #160230097208, FN00017276, Attn. Bob Behrens (312) 559-1644 for
the following purpose.
RBC Capital Markets' Fee & Reimbursable Expenses: $ 22,217.63
2. On Friday, January 15, 2010, upon successful closing, the City will wire transfer $25,195.00 to JPMorgan Chase Bank, N.A., ABA
#021000021, Account Name: Vinson & Elkins J.J.P. Domestic Account, Account #001-01687987, Ref: Invoice #25325743, Billing
Attorney: Ben Brooks, for the following purpose.
Vinson & Elkins L.L.P. Fee and Reimbursable Expenses: $ 25,195.00
3. On Friday, January 15, 2010, upon successful closing, the City wiU wire transfer $542.47 to The Bank of New York Mellon, ABA
#021 000018, GJ .A 211-065, T AS #437877, Ref: City of I .ubbock Series 2010, Attn: Pat Blue (214) 468-6511, for the payment of fees
listed below.
Prorated Annual Paying Agent Fee: $ 542.47
Total Wires from City: $ 47,955.10
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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 1Oth Street> Room 448
Austin> Texas 78701-2407
Attention: Economic Analysis Center
December 16, 2009
Re: City of Lubbock, Texas Tax and Waterworks System Surplus Revenue Certificates of
Obligation> Series 2010
To the Attorney General:
The executed Initial 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
same at your office.
LUB200171012
US l96066v.1
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Please also deliver to Vinson & Elkins L.L.P., Dallas, Texas, four copies of each of the
following:
1. Attorney General's approving opinion; and
2. Comptroller's signature certificate.
Very truly yours,
CITY OF LUBBOCK, TEXAS
By: PE:~
Tom artm, Mayor
-2-
US 196066v.l
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REGISTERED
No. I
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOC~ TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$740,000
INTEREST RATE: MATURITY DATE: BOND DATE~~USIP NUMBER:
0.000% February 15, 2011 January I, ~ ~~ 549188 DZO
received, hereby promises to pay to CED~
or registered assigns, on the Maturity £\ ove, the sum of
SEVEN ~~THOUSAND DOLLARS
and to pay interest on such p ount from the later of the Closing Date specified above
or the most recent interest pa 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,
2010.
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 Mellon 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/Registt:ar 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.
US 226384v.l
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REGISTERED
No.2
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
INTEREST RATE:
or registered assigns, on the Maturity Date
REGISTERED
$760,000
SEVEN HUNDI DOLLARS
and to pay interest on such pni! t the later of the Closing Date specified above
or the most recent interest pa to which interest has been paid or provided for until
payment of such principal amount een paid or provided for, at the per annum rate of interest
specified above, computed on the SIS 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,
2010.
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 Mellon 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.
US 226384v.l
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REGISTERED
No.3
INTEREST RATE:
0.000%
The City of Lubbock (the "City"), in
received, hereby promises to pay to
or registered assigns, on the M
SEVEN HTY-FIVE THOUSAND DOLLARS
REGISTERED
$785,000
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 30-day months, such interest
to be paid semiannually on February 15 and August 15 of each year, commencing August 15,
2010.
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!fransfer
Office"), of The Bank of New York Mellon 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.
US 226384v.l
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REGISTERED REGISTERED
No.4 $810,000
United States of America
State of Texas
County of Lubbock
CTIY OF LUBBOCK, TEXAS
TAXANDWATERWORKSSYSTEM
SURPLUS REVENUE CERTIFICATES OF O~ION
SERIES 2010 ~
INTEREST RATE: MATURITY DATE: ~ E· CUSIP NUMBER:
0.174% February 15,2014 , 549188 ECO
The City of Lubbock (the "City"), · ~~ Lubbock, State of Texas, for value
received, hereby promises to pay to ,.~~
RED TEN 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,
2010.
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 Mellon 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.
US 226384v.l
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REGISTERED
No.5
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLI<tTION
REGISTERED
$835,000
SERIES2010 ~
INTEREST RATE: MATURITY DATE: i.~ ~ CUSIP NUMBER:
0.444% February 15,2015 549188 ED8
State of Texas, for value
THIRTY -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,
20 10.
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 Mellon 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!R.egistrar 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.
US 226384v.l
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REGISTERED
No.6
INTEREST RATE:
0.644%
REGISTERED
$860,000
The City of Lubbock (the "City"), in State of Texas, for value
received, hereby promises to pay to
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,
2010.
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 Mellon Trust Company, National Association, or, with
respect to a successor Paying Agent/Registrar, at the Designated Paymentlfransfer 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.
US 226384v.l
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REGISTERED
No.7
INTEREST RATE:
0.854%
MATURITY DATE:
February 15,2017
The City of Lubbock (the ''City''), in the
received, hereby promises to pay to
EIGHTH~ HTY-FIVE THOUSAND DOLLARS
REGISTERED
$885,000
and to pay interest on such pri~ 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,
2010.
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 Mellon 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.
US 226384v.l
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REGISTERED
No.8
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
INTEREST RATE:
1.064%
MATURITY DATE:
February 15, 2018
REGISTERED
$910,000
The City of Lubbock (the "City"), in the of Texas, for value
received, hereby promises to pay to
D TEN 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,
2010.
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!fransfer
Office"), of The Bank of New York Mellon Trust Company, National Associatio~ 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.
US 226384v.l
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REGISTERED
No.9
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$940,000
INTEREST RATE: MATURITY DATE: BOND DAT CUSIP NUMBER:
1.372% February 15, 2019 January 549188 EH9
received, hereby promises to pay to ~
or registered assigns, on theM ~above, the swn of
N~ D ORTY THOUSAND DOLLARS
and to pay interest on suc;~pal 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 semiarmually on February 15 and August 15 of each year, commencing August 15,
2010.
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 Mellon 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.
US 226384v.l
\
)
REGISTERED
No.lO
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAXANDWATERWORKSSYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$970,000
INTERESTRATE: MATURITYDATE: BONDDATE: ...... '"~IPNUMBER:
1.642% February 15,2020 January 1, 2~·-~~49188 EJ5
The City of Lubbock (the "City"), in the Coun~~ e of Texas, for value
received, hereby promises to pay to \."' ~
c co11l'
or registered assigns, on the Maturi ve, the sum of
NINE
and to pay interest on such prin 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 30-day months, such interest
to be paid semiannually on February 15 and August 15 of each year, commencing August 15,
2010.
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 Mellon 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.
US 226384v.l
}
)
REGISTERED
No. II
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
REGISTERED
$995,000
SERIES 20IO ~
INTEREST RATE: MATURITY DATE: BONDDA~G ~ NUMBER:
1.947% February 15,2021 January I ~ 549188 EK2
received, hereby promises to pay to
or registered assigns, on theM ~above, the swn of
TY -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,
2010.
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 Mellon Trust Company, National Association, or, with
respect to a successor Paying Agent/Registrar, at the Designated Paymentlfransfer 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.
US 226384v. 1
)
REGISTERED
No.12
INTEREST RATE:
2.131%
MATURITY DATE:
February 15, 2022
ONE MILLI -FIVE THOUSAND DOLLARS
REGISTERED
$1,025,000
or registered assigns, on the M~· e
and to pay interest on such princip 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 3 0-day months, such interest
to be paid semiannually on February 15 and August 15 of each year, commencing August 15,
2010.
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 Mellon 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.
US 226384v.l
REGISTERED
No.13
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$1,060,000
INTERESTRATE: MATURITYDATE: BONDDATE: ~SIPNUMBER:
2.280% February 15,2023 January 1 ~ ,~9188 EM8
received, hereby promises to pay to ,.. ~ .
:~
ONE IXTY THOUSAND DOLLARS
and to pay interest on such principal amom1t 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 Wltil
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,
2010.
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!fransfer
Office"), of The Bank of New York Mellon 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.
US 226384v.l
)
REGISTERED
No.14
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$1,090,000
INTEREST RATE: MATURITY DATE: BOND DATE: ~IP NUMBER:
2.351% February 15,2024 January l, 2010 ~~~9188 EN6
~\
received, hereby promises to pay to
CED .
ONE Me..~ E HOUSAND DOLLARS
and to pay interest on such pri~ount 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,
2010.
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 Mellon 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.
US 226384v.I
)
REGISTERED
No. 15
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$1,125,000
INTEREST RATE:
2.532%
MATURITY DATE:
February 15, 2025
BOND DATE:
January 1, 2010
CUSIP NUMBER:
549188 EPI
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 Mellon 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.
US 226384v.l
)
)
REGISTERED
No. 16
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
INTEREST RATE:
2.463%
MATURITY DATE:
February 15, 2026
REGISTERED
$1,160,000
UNDRED SIXTY THOUSAND DOLLARS
and to pay interest on such pnncipal 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,
2010.
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 Mellon 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 oW1ler;
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.
US 226384v.l
'
'
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 2010
REGISTERED
$1,195,000
INTEREST RATE:
2.706%
MATURITY DATE:
February 15, 2027
USIP NUMBER:
549188 ER7
ONE MILLION
and to pay interest on such pn at 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,
2010.
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 Paymentrrransfer
Office"), of The Bank of New York Mellon Trust Company, National Association, or, with
respect to a successor Paying Agent/Registrar, at the Designated Paymentrrransfer 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.
US 226384v.l
)
)
REGISTERED
No.l8
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
INTEREST RATE:
2.661%
MATURITY DATE:
February 15, 2028
REGISTERED
$1,230,000
or registered assigns, on the Maturi'"~ e, the sum of
ONE MILLION~TR THIRTY THOUSAND DOLLARS
and to pay interest on such p~ 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,
2010.
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 Paymentrrransfer
OfficeH), of The Bank of New York Mellon 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.
US 226384v.l
REGISTERED
No.19
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$1,265,000
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER:
2.815% February 15, 2029 January 1, 2~00 549188 ET3
The City of Lubbock (the "City"), in the County o~ · e of Texas, for value
received, hereby promises to pay to ~-·
CEDE
or registered assigns, on the Maturity e, the swn of
ONE MILLION TW TY-FIVE THOUSAND DOLLARS
and to pay interest on sgn ai am unt from the later of the Closing Date specified above
or the most recent inter I· . ' date to which interest bas been paid or provided for until
payment of such principal · t has been paid or provided for, at the per annwn rate of interest
specified above, computed on the basis of a 3 60-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,
2010.
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 Mellon 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.
US 226384v.l
REGISTERED
No.20
United States of America
State ofTexas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2010
REGISTERED
$1,305,000
INTEREST RATE:
2.822%
MATURITY DATE:
February 15, 2030
BOND DATE:
January 1, 2010
CUSIP NUMBER:
549188 EUO
or registered assigns, on the Maturity
THOUSAND DOLLARS
and to pay interest on from the later of the Closing Date specified above
or the most recent · date to which interest has been paid or provided for until
payment of such 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,
2010.
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 Mellon 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.
US 226384v.l
)
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!fransfer 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 $19,945,000 (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~ic improvements
(collectively, the "Project,.), as described in the Ordinance, and to pa tual obligations
for professional services of attorneys, financial advisors and o · o in connection
with the Project and the issuance 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
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
US 226346v.l
)
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 by law;
that, in addition to said taxes, further provisions have been made for of the debt
service requirements of the Certificates to be additionally payable by a lien on
and pledge of the Net Revenues (as defined in the Ordinance) System
(the "System''), such lien and pledge, however, being to the lien on and
pledge of the Net Revenues of the System Lien Obligations (as
defined in the Ordinance) currently the City and (ii) on parity
with the lien on and pledge of the Net securing the payment of the
Previously Issued Obligations (as and any Additional Obligations (as
defined in the Ordinance) Ordinance, the City reserves and retains
the right to issue Prior Lien Certificates are outstanding without limitation
as to principal amount or conditions or restrictions other than as may be
required by law or otherwise, 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.
3
US 226346v.l
)
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.
[SEAL]
4
US 226346v.1
)
)
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.
The Bank of New Y
Company, N
Dated:
5
US 226346v.l
)
)
)
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
US 226346v.l
6
e within Certificate
stitutes and appoints
on the books kept for
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.
Vinson &Elkins
January 15, 2010
$19,945,000
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2010
WE HAVE 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 2010,
dated January 1, 2010, issued in the principal amount of$19,945,000.
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 HAVE 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 CAP A CITY 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.
Vinson & Elkins LLP Attorneys al Law
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BASED ON SUCH EXAMINATION, IT IS OUR OPINION THAT:
(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 ofTexas 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 constitutional, statutory or other limitations. In addition, the
Certificates 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 general 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) Interest on the Certificates is not (A) a specific preference item
subject to the alternative minimum tax on individuals and corporations or (B)
included in a corporation's adjusted current earnings for purposes of the
alternative minimum tax.
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 Internal Revenue Code of 1986, as amended,
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.
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.
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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 insw-ance 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, 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 as to
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.
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ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
January 5, 2010
THIS IS TO CERTIFY that the City of Lubbock, Texas (the "Issuer"), has
submitted to me Citv of Lubbock. Texas. Tax and Waterworks System Sw::plus
Revenue Certificate of Obligation. Series 2010 (the "Certificate") in the principal
amount of $19,945,000 for approval. The Certificate is dated January 1, 2010,
numbered T -1, and was authorized by an Ordinance of the Issuer passed on
December 16, 2009 (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):
(1) 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 ad valorem tax levied, within the
limits prescribed by law, upon all taxable property in the Issuer and is 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, 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 currently outstanding and hereafter issued by the Issuer 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 and any Additional Obligations hereafter
issued.
POST 0FflC£ BOX 12548, AUSTIN. TEXAS78711 -2548 T£L:(512)463·2100 WWW.OAG.STATE.TX.US
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City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificate of Obligation,
Series 2010-$19,945,000
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Therefore, the Certificate is approved.
No. 50053
Book No. 2010·A
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OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS
I, SUSAN COMBS, Comptroller of Public Accounts of the State of Texas,
do hereby certify that the attachment is a true and correct copy of the opinion of
the Attorney General approving the:
City of Lubbock. Texas. Tax and Waterworks System Surplus Revenue
Certificate of Obligation, Series 201 0
numbered T-1_. of the denomination of$ 19,945,000, dated January 1. 2010, 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 5th day of January 2010, under Registration Number 76457.
Given under my hand and seal of office, at Austin, Texas, the 5th day of
January 2010.
SUSAN COMBS
Comptroller of Public Accounts
of the State of Texas
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OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS
I, Melissa Mora, 0 Bond Clerk [K] 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
5th day of January 2010, 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 201 0,
numbered T-1 dated January 1, 2010, and that in signing the certificate of registration I used the
following signature:
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 76457.
GIVEN under my hand and seal of office at Austin, Texas, this the 5th day of January 2010.
~~
Susan Combs
Comptroller of Public Accounts
of the State of Texas
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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 2010, (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. Resoonsible Officer. I am the duly chosen, qualified and acting officer of the
Issuer 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 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, 1.149(b)-1, 1.149(d)-1, 1.149(g)-l, 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 in
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 Corporation (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. Descriotion 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 purpose of
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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
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 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 2009B (Water Infrastructure Bonds), which were issued by the Board
on May 28, 2009. The Issuer has been informed that the yield on the Board's Water Financial
Assistance Bonds, Series 2009B {Water Infrastructure Bonds) is equal to 3.675089 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 $19,945,000. Such amount represents the Stated Redemption Price
at Maturity.
(b) Expenditure of Sale Proceeds. The Sale Proceeds of the Certificates of Obligation
will be 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
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
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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.
(f) 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 days
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 Reolacement 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.
(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 pwposes of this
certification, an amount is treated as so pledged if it is held under an agreement to maintain the
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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 Rmlacement Proceeds. There are no other replacement proceeds
allocable to the Certificates of Obligation because the Issuer reasonably expects that the term 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 Obligation
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 Maturitv. 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 determined 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 heen 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 2009B (Water Infrastructure Bonds). However, the yield on the
Certificates of Obligation is lower than the yield on the Board's Water Financial Assistance
Bonds, Series 2009B (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
pwposes 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:
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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 COWlsel 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 10 above,
the Certificates of Obligation will be purchased by the Issuer out of proceeds of the Board's
Water Financial Assistance Bonds, Series 2009B (Water Infrastructure Bonds), which were
issued on the date stated in paragraph 6 above. Therefore the proceeds of the Certificates of
Obligation may be invested at an unrestricted yield Wltil 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 2009B (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
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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 2009B (Water Infrastructure Bonds).
12. Debt Service Fund. Pursuant to the Bond Docwnent, the Issuer has confinned the
debt service fund designated the "City of Lubbock, Texas, Tax and Waterworks System Surplus
Revenue Certificates of Obligation, Series 2010, 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 Reauirements.
(a) General. The Issuer has covenanted in the Bond Document that it will take 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 govermnent by
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 arm's-length and had the yield on the issue not been
relevant to either party.
15. Not an Abusive Transaction.
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(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 tenn 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 would
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 term of the Certificates of Obligation will cause either the "private
business tests" or the .. private loan financing test," as such terms are defined in the Regulations,
to bernet.
(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
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 ownershlp, actual or
beneficial use pursuant to a lease, or a management or incentive payment contract, or certain
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US 137723v.l
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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 Ordinazy 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
purposes 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
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
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US 137723v.l
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 cany 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 OF LUBBOCK, TEXAS
By:M,~
Title: ChiefFinancial Officer
Date: January 15, 2010
Attachments:
Exhibit A: Certificate of Financial Advisor
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US l37723v.l
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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 or
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 Financial Advisor computed the Weighted Average Maturity of the
Certificates of Obligation to be 11.572 years, as set forth in paragraph 18 of the Federal Tax
Certificate.
3. To the best of my knowledge the statements set forth in paragraph 15 of the
Federal Tax Certificate are true.
4. 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.
US l37723v.l
RBC CAPITAL MARKETS
By: VJ...~~
Title: MA-N~i -N j {j\J. t ~ r...,.
Date: January 15, 2010
A-1
0
Vinson &Elkins
Sleven H. Gerdee SOordasOvelaw.c;om
Tei713.7S8.4616 Fax 713.615.5503
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
7002 0860 0003 5311 6954
District Director
Internal Revenue Service
Ogden. UT 84201
March 5, 2010
Re: $19,945,000 City of Lubbock, Texas Tax and Waterworks System Surplus
Revenue Certificates of Obligation, Series 2'0 10
Dear Sir:
Enclosed please find an originally executed Form 8038-G (Infonnatlon Return for
Tax-Exempt Governmental ObJigations) for the above-captioned bond issue.
Please acknowledge receipt of the Fotm 8038-0 by stamping and returning the c;opy
of the Form 8038-G attached to the selfwaddressed, postagewpaid envelope that we have
provided.
cc: Meagan Horn
Terri Lambert
Leslie Morgan
VInson ac Elldns LLP Attorneys et law
Austin 6eijlng Oalls$ IJIJba1 Houston london
Moscow New York Shanghai Tokyo W~lngton
Very truly yours,
~AlA~
Steven H. Gerdes
2901 VIII Fortu~~a. Sulllt 100
Austin. T)( 78741$.7568
Toi512.1S42.8400 Fu 512.542..8612 www.velaw.com
Fonn 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev. Nowmber 2000)
~ Under Internal Revenue Code eectlon 149Ce) OMS No. lS45-0720 ~ See separate fnstructlom;.
Oeplltlment <:11M r,_.,
~al Fl._ SIMile Caution: If the issue price Is under $100.000, use Form 6038-GC.
I Pail~:! Reporting Authority If Amend" Return, check here ~ []
1 lt-r'sname 2 mutf'lj'tmJ'IO)tirlctan'tlflc:.ltloo numw
Citv of Lubbock. Texas 75-6000S90
~ ~umber and &lreet (or P.O. boxlf m81lls not dellwntd 10 street address) Room/&1.111& .. Reportnwnber
P.O. Box 2000 3 01
s ~ bNn, Of' poat ~. state. and ZIP coda • 081ieo.!1fl-
Lubbock. Texas 79457 .January 15,2010
7 Name of lUIIe I! CUSIP number
Tax and Waterworks System Surplus Revenue Certificates of Obligation Series 2010 None
9 Ham• and titie of ollicer or legal repnttentative whom the IRS may eall tot more lnronnetlon 10 flit~ IMI'Ibllf Q.l olll!:8f ar,leQal ,._.en181l!Ye
(806) 775-2149 Andy Burcham Chief Financial Officer
l.~rtUJ Type of l~ue (check applicable box(es) and enter the Issue prlc•) See instruction!S and attach schedule
11 0 Education .....................................................•.•.......... 11
12 0 Health and hospital ........•................................•.....•........... 12
13 0 Transportation ......................................•..............•........ 13
14 0 Public safety ........•...................................•......•...•........ 14
16 D Environment {lnauding sewage bonds) ............................................ 15
16 D Housing ........•..............................•......................•..•. 16
17 1iJ Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........................•.•.......• 17 19.945.000 ..
18 D Other. Oescfibe ~ 18
19 If obligations are TANs or RANs, ctleck box~ 0 If obligations are BANs, check box . • . • • • ~ 0 --~ \ , .
20 If obligations are in the form of a lease or installment sale, dleck box . . . . . . . . . . • . . . . . . ~ 0 '' · ~;Y A', •• " -
I Piirt Ill I Description of Obligations. (Complete for the entire issue for which this form is being filed.).
(a) Frn.t m.Wrlty date (b) ln\lft pric;e (c) S1allld redemptiOn (d) Weighted ,., Yield price at maturity 8\efaQemaUity
21 2/.15/2030 $ 19.945 000 $ 19 945 000 11.572 ye.ers 3.6751%
I'P;iiflV,..l Uses of Proceeds of Bo.nd Issue (including underwriters' discount
22 Proceeds used for accrued interest. . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . ........•.......... 22
23 Issue price of entire issue (enter amount from line 21. column (b)) ....•...........•....•..•• 23 19 945 000
24 Proceeds used for bond issuance costs (including underwriters' discount) 24 n · ~-. '
25 Proceeds used for credit enhancement. . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (j ;.,~~
26 Proceeds allocated to reasonably required reserve or replacement fund . . .26 (l ~\\<:~
21 Proceeds used to currently refund prior issues . . . . . . . . . . . . . . . . . . . . . Z7 (0 ~t~
28 Proceeds used to advance refund prior Issues . . . . . . . . . . . . . . . . . . . . . 28 (0 ... ~
29 Total (add lines 24 through 28) ....................................•................ 29 0
30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) •....•.. 30 19.945.000
r~a..tY,I Description of Refunded Bonds (Compfete this part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded. . . . . . . . . . . ~ ______ y!..,;ea~rs
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . . . . . . . • ~ ______ y:..ea_rs
33 Enter the last date on whlch the refunded bonds will be called . . . . . . . . . . . • . . . . . . • . . . . . . • • . ~ --------
34 Enter the date(s) the refunded bonds were issued ~
[Patt VJj Miscellaneous
35 Enter the amount of th~ state volume cap allocated to the issue under section 141(b)(5} .....•... 3S (0)
36a Entei the amount of gross proceeds ln~ed or to be invested in a guaranleEd investment c:ontract (see instruc:tictls) •.•• 36a (0)
b Enter the final maturity date of the guaranteed investment contract ~ .. "'C~
I~"'.
37 Pooled finandngs: a Proceeds of this issue that are to be used !0 make loans to <XI.ler governmental units ....•..•.•. 37a (0)
b If this issue is a loan made from the proceeds of another tax-exempt issue. check box~ (Xland enter the name of the issuer~ Texas Water Development Board and the date of the issue~ May 28, 2009
38 If the issuer has designated the Issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), chGck box . . . . . . . . . . . • ~ 0
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 penalliG$ of perj\lry. 1 dec:lare th41t I hlllle ellamlne<l tM tetllm and a~panying achadules and ttati!~Mn!S, end to the be&t d my ~edg.e end bel'tef,
c11ey ere tru • correct. and plete. Andy Burcham
___.L=.-l.ol:~~~~~-"==:::;_-----.::1.:..:;/1;..:;5.;..;12;;.;;0..;;.1 0.;..._ ~ Chief Financial Officer
Date , Type or prl1\t name and tllle
For Paperwork Reduction Act Notice, see page 2 of the Instructions. ISA Form 8038-G (Rev. l1·2COO)
S'n' FEt»>O".F
... ' ~ • Compteta Items 1, 2, and 3. N80 complete Hem 4 If Restricted DeRvetY It <fasbd. • Print YO\lr name and address on 1he reverse so that we c:an return the card to you. • Attach thfs card to 1he back of the mallptece, or on the front If space permits.. 1. Miele Addree8d to: U1s1n~l uu-a:tC\r lnt.:mal Revenue Scrvi~ Ogden. UT 11420 r J A. SiQnll!llre X } a. Rece1Yed by ( Prlnt1!td Name) D. Is dellwly lldChlla dlftQrent 11om Item 1? If YES, enter del!llery add~aS below: 0 Elcples$ MGII OAgent Yes ONo lJ Cl Ratum Reaalpt for Men:handlse c 2. Article Number (rransler fiO!Il II8Mce 1abe1J 7002 06b0 0003 5311 b954 PS Form 38'11, Februsty 2004 OomestJc Relum Receipt 1~540 o;uon~nJI$01 Jl')j :lSJJ,\OH ·'"S ~oo<: ,ud•J ·ooac lu•o:J Srl ----.. ---~-· ... t ..UZ '$liS 'JIIO t\ltti J.O 'U)p'IO ·--·-.;;;;;;;;;~ ···-··-·--.. -_. .. ~S am~'ll III'WIUI __ ....!!."!.:!.~!!.~ JO)\)(UI(t )~UlS!(I OJJU~ $ _,,..,.....111'10;1. ~ .... belil~ •:i~~ij MH ~~-~ ~~WIII8\l ~ ••:IP'IIJIIIIIO t •lhrl•O'd 3 $ L~ts ·~J.Uw 01 OZ s:l~S ().') :IIWll•:l'd snjdiiiS QQmS ~tllh\ pw X1U. sew .l '1t:l0Ciql11 JO .<t!:> .. (p,;fH.'OJ.:J a:jc,,l,10~ JJUf'J/151/f OtJ •,(fliQ f!l.'j'J :Jij~iJWDQ) ldt303tl l!V~'\1 031.:JIHJ30 ;,:J·A)~s ~"'sod ·s·n .. . ~ " . :'1'" ... · •• ~"\J cc oc ruru cc 01 01 rr oc cc cc oc UJUJ lnU1 l.LIUJ 1:-'-k-' k-'k-l rcr ..D..D U1lrJ .&.& u