Loading...
HomeMy WebLinkAboutResolution - 3251 - Agreement - Brazos River Authority - Tax Exemption - 11/16/1989Resolution # 3251 November 16, 1989 Item #13 AGREEMENT BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF LUBBOCK, TEXAS REGARDING TAX EXEMPTION WHEREAS, the Brazos River Authority (the "Authority") has authorized and issued its Special Facilities (Lake Alan Henry) Revenue Bonds, Series 1989 (the "Bonds") for the purpose of constructing a reservoir (the "Project") on the south fork of the double mountained fork of the Brazos River to provide a long-term, firm supply of surface water to the City of Lubbock, Texas ("Lubbock"); WHEREAS, the Authority and Lubbock have entered into a contract dated May 11, 1989, which provides, among other things, for the Authority to construct the Project and operate and maintain it on the land acquired by Lubbock and pursuant to easements granted to the Authority; WHEREAS, the Authority has agreed to sell to Lubbock and Lubbock has agreed to buy from the Authority and to pay as provided in the contract, whether such water is actually used or not, the entire amount of the water which can be supplied from the Project; and WHEREAS, the payments received by the Authority with respect to such sale will be used for the payment of debt service on the Bonds; THE AUTHORITY AND LUBBOCK DO HEREBY AGREE AS FOLLOWS: 1. Lubbock agrees to refrain from any action which would adversely affect, or to take such action to ensure, the treatment of the Bonds as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. 2. In furtherance thereof, Lubbock agrees as follows: (a) to take any action to assure that no portion of the proceeds of the Bonds received by Lubbock or no more than five percent of the output received by Lubbock from the Project are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 5 percent of the output is so used, that amounts, whether or not received by Lubbock, with respect to such private business use, do not, under the terms of the Resolution adopted by the Authority or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 5 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code; (b) to refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (c) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (d) to refrain from using any portion of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with -- (1) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less until such proceeds are needed for the purpose for which the bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.103-13(b)(12) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the -extent such amounts do not exceed 10 percent of the proceeds of the Bonds; (e) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); (f) to take such action as necessary to assist the Authority in paying to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code and (g) to maintain such records as will enable Lubbock to fulfill its responsibilities under this section and section 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Bonds. r 3. It is the understanding of the Authority and Lubbock that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or ruling are hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Bonds, Lubbock will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally -recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, Lubbock agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally -recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. Dated: Dated: November 16, 1989 BRAZOS RIVER AUTHORITY 2_e,� Wel - -•- CITY OF LUBBOCK, TEXAS � f C - /,,;/- <-7,L * e. B.C. McMinn, Mayor • pViD AS W CONlTiNf: �,pprawo rata farms M!!4� fir► CERTIFICATE FOR RESOLUTION AUTHORIZING THE MAYOR OF THE CITY OF LUBBOCK TO EXECUTE AN AGREEMENT WITH BRAZOS RIVER AUTHORITY REGARDING TAX EXEMPTION THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK We, the undersigned officers of the City of Lubbock, Texas, hereby certify as follows: 1. The City Council of said City convened in RP9ular MEETING ON THE 16th DAY OF NOVEMBER, 1989, at the City Hall, and the roll was called of the duly constituted officers and members of said City Council, to -wit: B. C. "Peck" McMinn, Mayor Joan Baker Bill Maloy Gary D. Phillips Ranette Boyd, City Secretary George Carpenter T. J. Patterson Maggie Trejo and all of said persons were present, except the absentees: None constituting a quorum. Whereupon, among following was transacted at said Meeting: following thus ness, the a written RESOLUTION AUTHORIZING THE MAYOR OF THE CITY OF LUBBOCK TO EXECUTE AN AGREEMENT WITH BRAZOS RIVER AUTHORITY REGARDING TAX EXEMPTION was duly introduced for the consideration of said City Council for adoption. It was then duly moved and seconded that said Resolution be adopted; and, after due discussion, said motion, carrying with it the adoption of said Resolu- tion, prevailed and carried by the following vote: 7 voted "For" 0 voted "Against" 0 abstained, all as shown in the official Minutes of the City Council for the Meeting held on the aforesaid date. 2. That a true, full, and correct copy of the afore- said Resolution adopted at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Resolution has been duly record- ed in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full, and correct excerpt from said City Council's minutes of said Meeting pertaining to the adoption of said Resolution; that the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers and members of said City, Council as indicated therein; and that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the aforesaid Meeting, and that said Resolution would be introduced and considered for adoption at said Meeting; and that said Meeting was open to the public, and public notice of the time, place, and purpose of said Meeting was given, all as required by Vernon's Ann. Civ. St. Article 6252-17. 3. That the City Council of said City has approved, and hereby approves, the aforesaid Resolution; that the Mayor and the,City Secretary of said City have duly signed said Resolution; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Resolution for all purposes. SIGNED AND SEALED City ( SEAL) 16th day of November, 1989. Mayor Resolution #3251 �. November 16, 1989 Item #13 RESOLUTION AUTHORIZING THE MAYOR OF THE CITY OF LUBBOCK TO EXECUTE AN AGREEMENT WITH BRAZOS RIVER AUTHORITY REGARDING TAX EXEMPTION WHEREAS, the Brazos River Authority (the "Authority") has authorized the issuance of its Special Facilities (Lake Alan Henry) Revenue Bonds, Series 1989 (the "Bonds") for the purpose of constructing a reservoir (the "Project") on the south fork of the double mountained fork of the Brazos River to provide a long-term, firm supply of surface water to the City of Lubbock, Texas ("Lubbock"); and WHEREAS, the Authority and Lubbock have entered into a contract dated May 11, 1989, which provides, among other things, for the Authority to construct the Project and operate and maintain it on the land acquired by Lubbock and pursuant to easements granted to the Authority; and WHEREAS, the Authority has agreed to sell to Lubbock and Lubbock has agreed to buy from the Authority and to pay as provided in the contract, whether such water is actually used or not, the entire amount of the water which can be supplied from the Project; and WHEREAS, the payments received by the Authority with respect to such sale will be used for the payment of debt service on the Bonds; and WHEREAS, it is appropriate that Lubbock and the Author- ity enter into an agreement whereby Lubbock agrees to refrain from any action which would adversely affect, or to take such action to ensure, the treatment of the Bonds as obligations described in section 103 of the Internal Revenue Code of 1986, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation; BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: 1. The Mayor is authorized to enter into an agreement with the Authority, and the City Secretary is authorized to affix the seal of the City thereto and attest such agree- ment, being substantially in the form attached hereto as Exhibit A and made a part hereof. 2. The Mayor and other officers and employees of the City are hereby authorized to take such further action as shall be appropriate or necessary to carry out the intent and purposes of said agreement.