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HomeMy WebLinkAboutResolution - 1387 - Special Escrow Fund Agreement - TCBNA - Electric System Refunding Revenue Bonds - 05/12/1983RESOLUTION 1387 - 5/12/83 S A RESOLUTION by the City Council of the City of Lubbock, Texas, approving and authorizing the execution of a "Special Escrow Fund Agreement" by and between the City and Texas Commerce Bank, National Association, Lubbock, Texas, in relation to the refunding of certain outstanding revenue bonds of the City; and resolving other matters incident and related thereto. WHEREAS, on this date the City Council of the City of Lubbock, Texas passed and adopted on first reading an ordinance authorizing the issuance of "City of Lubbock, Texas, Electric Light and Power System Refunding Revenue Bonds, Series 1983" (the "Bonds") in the aggregate principal amount $10,770,000 for the purpose of refunding certain outstanding revenue bonds of the City payable from and secured by a lien on and pledge of the net revenues of the City's Electric Light and Power System (the "Refunded Bonds"); and WHEREAS, in accordance with the provisions of Article 717k, V.A.T.C.S., the City is to deposit with the Texas Commerce Bank, National Association, Lubbock, Texas (the paying agent for the Refunded'Bonds) from the proceeds of sale of the Bonds an amount sufficient to provide funds necessary to fully pay the principal of and interest on the Refunded Bonds as the same becomes due and payable; and WHEREAS, to provide for the safekeeping, investment, administration and disposition of the funds to be deposited with said Bank and to insure the availability of moneys in amounts sufficient to provide for the scheduled payment of the principal of and interest on the Refunded Bonds, a "Special Escrow Fund Agreement" by and between the City and Texas Commerce Bank, National Association, Lubbock, Texas, has been prepared and submitted to the City Council for approval and execution, such "Special Escrow Fund Agreement" being attached hereto as Exhibit A and incorporated herein by reference as a part of this resolution for all purposes; and WHEREAS, the City Council hereby finds and determines that said "Special Escrow Fund Agreement" should be approved and execution of the same for and on behalf of the City authorized; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: r SECTION 1: That the "Special Escrow Fund Agreement" (the 'Agreement") by and between the City and Texas Commerce Bank, National Association, Lubbock, Texas, attached hereto as Exhibit A and incorporated herein by reference as a part of this resolution for all purposes, is hereby approved as to form and substance, and the Mayor and City Secretary of the City of Lubbock, Texas, are hereby authorized and directed.to execute such Agreement for and on behalf of the City and as the act and deed of this Council. SECTION 2: That, in connection with the purchase and delivery of the "Federal Securities" referenced in the Agreement and to be acquired and deposited to the credit of the "Special 1983 City of Lubbock Refunding Bond Escrow Fund", the Texas Commerce Bank, National Association, Lubbock, Texas, as agent for the City, and the Assistant City Manager for Financial Services (either or both) are hereby authorized and directed to execute the appropriate subscription forms and make the necessary arrangements for the purchase and acquisition, on the date of delivery and payment for Bonds from the Federal Reserve Bank, Dallas, Texas, of the "Federal Securities" in the principal amount of $10,497,600, bearing interest at such rate or rates and maturing in such amounts and at such time as shall -be necessary to fully pay the principal of and interest on the Refunded Bonds; all as contemplated and provided in Article 717k, V.A.T.C.S., the ordinance authorizing the issuance of the Bonds and the Agreement. PASSED AND APPROVED,- this the -12th day of May, 1983. Mayory City of L ck, Texas AT`T'EST P'0 7rh City S retary, of Lubbock, Texas (City Seal) EXHIBIT R SPECIAL ESCROW FUND AGREEMENT THE STATE OF TEXAS § COUNTY OF LUBBOCK § THIS SPECIAL ESCROW FUND AGREEMENT (the "Agreement"), dated and effective as of June 15, 1983, made by and between the CITY OF LUBBOCK, TEXAS, a duly incorporated municipal corporation of the State of Texas in the County of Lubbock (the "City"), and the TEXAS COMMERCE BANK, NATIONAL ASSOCIATION, Lubbock, Texas (the "Bank"), a national banking association organized and existing under the laws of the United States of America, W I T N E S S E T H: WHEREAS, the City has heretofore issued, and there is currently outstanding the following described issue or series of revenue bonds (hereinafter called the "Outstanding Bonds"), payable solely from and secured by a lien on and pledge of the net revenues of the City's Electric Light and Power System, to wit: CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER SYSTEM REVENUE BONDS, SERIES 198111, dated August 15, 1981 and now outstanding in the aggregate principal amount of $8,550,000; AND WHEREAS, under the provisions of Article 717k, V.A.T.C.S., as amended, (the "Act") the City is authorized to sell refunding bonds in an amount sufficient to provide for the payment of revenue obligations which are to be refunded, deposit the proceeds of such refunding bonds with the place of payment for the revenue obligations being refunded and enter into an escrow or similar agreement with such place of payment for the safekeeping, investment, reinvestment, administration and disposition of such de- posit, upon such terms and conditions as the parties may agree; provided such deposits may be invested only in direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and which may be in book entry form and which shall mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of such revenue obligations; and EXHIBIT A WHEREAS, the Outstanding Bonds are scheduled to mature or be redeemed, and interest thereon is payable, on the dates and in the manner set forth in Exhibit A attached hereto and incorporated herein by reference as a part of the Agreement for all purposes; and WHEREAS, pursuant to an ordinance (the "Bond Ordinance") duly passed and adopted by the City Council, the City has authorized, issued and sold revenue bonds in the aggregate principal amount of $10,770,000 known as "City of Lubbock, Texas, Electric Light and Power System Refunding Revenue Bonds, Series 1983" (the "Bonds"), to refund, discharge and make final payment of the principal of and interest on the Outstanding Bonds; and WHEREAS, upon the delivery of the Bonds, proceeds of sale of the Bonds in the sum of $10,497,600 are to be used immediately by the Bank to purchase United States Treasury Securities - State and Local Government Series (the "Federal Securities") in the principal amount of $10,497,600 and such Federal Securities together with cash in the amount of $71.55 shall be credited to and deposited into the "Escrow Fund" to be held by the Bank in accordance with this Agreement; and WHEREAS, a list or description of the Federal Securities to be purchased by the Bank and held for the account of the Escrow Fund is attached hereto _as Exhibit B incorporated herein by reference and made a part of this Agreement for all purposes; and WHEREAS, the Federal Securities shall mature and the interest thereon shall be payable at such times to insure the existence of monies, together with other funds lawfully available therefor, sufficient to pay the principal amount of the Outstanding Bonds upon maturity or redemption prior to maturity, and the accrued interest thereon, as the same shall become due in accordance with their terms as set forth in Exhibit A attached hereto; and WHEREAS, the City has completed all arrangements re- quired for the purchase of the Federal Securities listed in Exhibit B and the credit of the same to the Escrow Fund as provided herein; and WHEREAS, the Bank is a banking corporation organized and existing under the laws of the United States of America and possessing trust powers and is fully qualified and empowered to enter into this Agreement; and 2 WHEREAS, pursuant to a resolution adopted on May 12, 1983, the City Council approved and authorized the execution of this Agreement in connection with the issuance of the Bonds and the refunding of the Outstanding Bonds; and NOW, THEREFORE, in consideration of the mutal agree- ments herein contained, and to secure the payment of the principal of and the interest on the Outstanding Bonds as the same shall become due, whether upon maturity or redemp- tion prior to maturity as the case may be, the City and the Bank hereby mutually undertake, promise and agree for them- selves and their respective representatives and successors, as follows: SECTION 1: There is hereby created by the City with the Bank a special segregated and irrevocable trust fund designated "SPECIAL 1983 CITY OF LUBBOCK REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow Fund") for the benefit of the holders of the Outstanding Bonds, and, im- mediately following the delivery of the Bonds, the City. agrees and covenants to cause to be deposited with the Bank the following: $10,497,600.00 for the purchase of the Federal Securities listed in Exhibit B to be held for the account of the Escrow Fund; 71.55 for deposit in the Escrow Fund as a beginning cash balance; and $ 16,000.00 to pay fees and charges of the Bank for the administration of this Agreement and paying agents charges for the Outstanding Bonds as provided in Section 13 hereof. The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys, apply the same as set forth herein, and to hold the cash and Federal Securities deposited and credited to the Escrow Fund for application and disbursement for the purposes and in the manner provided in this Agreement. "SECTION 2: The City hereby represents that the cash and Federal Securities specified in Section l hereof to be deposited to the credit of the Escrow Fund is sufficient to pay the principal of and interest on the Outstanding Bonds as the same shall become due and payable, and such Outstanding Bonds, and the interest thereon, are to mature and be paid at the times and in the amounts set forth and identified in Exhibit A attached hereto. 3 SECTION 3: The Bank agrees that all cash and Federal Securities held in the Escrow Fund shall be and is hereby irrevocably pledged to the payment of the principal of and interest on the Outstanding Bonds which will mature and become due on and after the date of this Agreement and such principal of and interest on the Outstanding Bonds shall be paid in the manner provided by the Act, this Agreement and the ordinance authorizing the Outstanding Bonds with funds initially deposited and to be received from maturing principal and interest on the Federal Securities in the Escrow Fund. SECTION 4: If, for any reason, the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A attached hereto, as the same becomes due and payable, the City shall make timely deposits in the Escrow Fund, from lawfully available funds, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be immediately given by the fastest means possible, but the Bank shall in no manner be responsible for the City's failure to make such deposits. SECTION 5: The Bank at all times shall hold said Federal Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for the benefit of the holders of the Outstanding Bonds, wholly segregated from other moneys and securities on deposit with the Bank; shall never commingle said Federal Securities and moneys with other moneys or securities -of the Bank; and shall hold and dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an equal amount, except to the extent such are represented by the Federal Securities shall always be maintained on deposit in the .Escrow Fund by the Bank, as trustee; and a special account evidencing such facts shall at all times be maintained on the books of the Bank. SECTION 6: The Bank shall from time to time collect and receive for the credit of the Escrow Fund the principal of and interest on the Federal Securities as they respectively mature and become due and credit the same to the Escrow Fund. As set forth in Exhibit B, the proceeds received on the maturing principal and interest of the Federal Securities shall be made available to pay the principal of and interest on the Outstanding Bonds in accordance with Exhibit A attached hereto. SECTION 7: Except as provided in Section 8, moneys in the Escrow Fund will be invested only in the Federal Securities 4 listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys deposited in the Escrow Fund unless hereafter specifically authorized by law. The Bank shall maintain the. Escrow Fund until the date upon which said Outstanding Bonds are fully paid as to principal and interest whereupon the Bank shall sell or redeem any Federal Securities remaining in the Escrow Fund and shall remit to the City the proceeds thereof and accrued interest thereon, together with all other monies, if any, then remaining in the Escrow Fund. SECTION 8: shall redeem the thereof, together provided that th eAt the direction of the City, Federal. Securities and reinvest with other monies held in the City delivers to the Bank the the Bank the proceeds Escrow Fund following: (1) an opinion by an independent certified public accountant that after such reinvestment the principal amount of substituted securities (which shall be non - callable direct obligations of the United States of America), together with the interest thereon and other available moneys, will be sufficient to pay, as the same become due in accordance with Exhibit A, the principal of, and interest on, the Outstanding Bonds which have not previously been paid, and (2) an unqualified opinion of nationally recog- nized municipal bond counsel to the effect that (a) such investment will not cause the Bonds or Outstanding Bonds to be "arbitrage bands" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations thereunder in effect on the date of such investment, or otherwise make the interest on the Bonds or the Outstanding Bonds subject to Federal income taxation and (b) such reinvestment complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Outstanding Bonds and the Bonds. SECTION 9: If at any time through redemption or cancella- tion of the Outstanding Bonds there exists or will exist excesses of interest on or maturing principal of the Federal Securities in excess of the amounts necessary hereunder for the Outstanding Bonds, the Bank may transfer such excess amounts to or on the order of the City, provided that the City delivers to the Bank the following: (1) an opinion by an independent certified public accountant that after the transfer of such excess, the principal amount of securities in the Escrow Fund, together with the interest thereon and other available 5 monies, will be sufficient to pay, as the same become due, in accordance with Exhibit A, the principal of, and interest on, the Outstanding Bonds which have not previously been paid, and (2) an unqualified opinion of nationally recog- nized municipal bond counsel to the effect that (a) such transfer will not cause the Bonds or the Outstanding Bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations thereunder in effect on the date of such transfer, -or otherwise make the interest on the Bonds or the Outstanding Bonds subject to Federal income taxation, and (b) such transfer complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Outstanding Bonds or the Bonds. SECTION 10: The Bank shall continuously secure the monies in the Escrow Fund not invested in Federal Securities if any, by a pledge of obligations of the United States of America, in the par or face amount at least equal to the principal amount of said uninvested monies to the extent such money is not insured by the Federal Deposit Insurance Corporation. SECTION 11: The Bank shall not be liable or respon- sible for any loss resulting from any investment made in the Federal Securities. SECTION 12: Should the Bank fail to account for any funds or the Federal Securities received by it for the account of the City, such funds, Federal Securities shall be and remain the property of the Escrow Fund and the City and the holders of the Outstanding Bonds shall be entitled to a preferred claim and shall have a first lien upon such funds, Federal Securities enjoyed by a trust beneficiary. The funds, Federal Securities received by the Bank under this Agreement shall not be considered as a banking deposit by the City and the Bank shall have no right or title with respect thereto. Such funds and Federal Securities shall not be subject to checks or drafts drawn by the City. SECTION 13: The City agrees to pay the Bank for the performance of services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount of $A_ and the Bank hereby agrees said amount is full and complete payment for the administration of this Agreement. 2 The City also agrees to pay the Bank, concurrently with the deposit to the Escrow Fund, the sum of $k,(,25;O0 which amount represents the-- total charges for 'all paying agents and co -paying agents for the Outstanding Bonds, and the Bank hereby acknowledges and agrees that the foregoing sum is and represents the total amount of compensation due said Bank for said services, as well as the co -paying agent's charges of the Citibank, National Association, New York, New York (co -paying agent for the Outstanding Bonds); and the Bank hereby agrees to pay, assume and be fully responsible for the payment of any additional charges that may be incurred by the Bank, and the Citibank,- -National Association, New York, New York representing paying agent's charges incurred in relation to the Outstanding Bonds. SECTION 14: Whenever under the terms of this Agreement the performance date of any provision hereof shall fall on a holiday of the Bank, the performance thereof on the next successive business day of the Bank shall be deemed to be in full compliance. SECTION 15: Time shall be of the essence in the per- formance of obligations from time to time imposed upon the Bank by this Agreement. SECTION 16: In the event of any disagreement or con- troversy hereunder or -if conflicting demands or notices are made upon Bank growing out of or relating to this Agreement or in the event that the Bank --in good faith is in doubt as to what action should be taken hereunder, the City expressly agrees and consents that the Bank shall have the absolute right at its election to do either or both of the following things: (a) withhold and stop all further proceedings in, and performance of, this Agreement and of all instruc- tions received hereunder. (b) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction requir- ing all persons involved to interplead and litigate in such court their several claims and rights among them- selves. In the event the Bank becomes involved in litigation in connection with this Agreement,. the City agrees to indemnify and save the Bank harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank 7 as a result thereof. The obligations of the Bank under this paragraph shall be performable at the office of the Bank in Lubbock, Texas. The Bank may advise with legal counsel in the event of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel. SECTION 17: Promptly after December 31 of each calendar year, commencing with the year 1983, so long as the Escrow Fund is maintained under this Agreement, the Bank shall forward by letter to the City, to the attention of the City Manager, a statement in detail of the Federal Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from the Escrow Fund for the preceding calendar year. SECTION 18: Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: CITY OF LUBBOCK, TEXAS: City of Lubbock, Texas P. 0. Box 2000 Lubbock, Texas 79457 Attention: City Manager TEXAS COMMERCE BANK NATIONAL ASSOCIATION Texas Commerce Bank, N. A. P. O. Box 841 Lubbock, Texas 79408 Attention: Corporate Trust Department The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclu- sive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. 8 SECTION 19: Upon the taking of all the actions as described herein by the Bank, the Bank shall have no further obligations or responsibilities to the City or to any other person or persons in connection with this Agreement. SECTION 20: The Bank shall not be liable for any act done or step taken or omitted by it or any mistake of fact or law or for anything which it may do or refrain from doing, except for its gross negligence or its willful default in the performance of any obligation imposed under it hereunder. The Bank shall not be responsible in any manner whatsoever for the recitals or statements contained in the Outstanding Bonds or the Bonds or any proceedings taken by the City in connection therewith. SECTION 21: The Bank shall have no responsibility to any persons in connection herewith except those specifically provided herein. The City will not commence any action against the Bank at law, in equity or otherwise as a result of any action taken or thing done by the Bank in compliance with this Agreement. SECTION 22: The Bank shall not be responsible or liable to any person in any manner whatever for the suffi- ciency, correctness, genuineness, effectiveness, or validity of the deposits made pursuant to this Agreement, or for the form or execution thereof, or for the identity or authority of any person making or executing such deposits. This Agreement is between the City_' and the Bank only and in connection therewith the Bank is authorized by the City to rely upon the representations of the City with respect to this Agreement and the deposits made pursuant hereto and as to this City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the City and the holders of the Outstanding Bonds. Neither the City nor the Bank shall assign or at- tempt to assign or transfer any interest hereunder or any portion of any such interest. Any such assignment or at- tempted assignment shall be in direct conflict with this Agreement and be without effect. SECTION 23: This Agreement shall inure to the benefit of and be binding upon the Bank and the City and their respective successors. 9 T' r IN WITNESS WHEREOF, the City Council of the City of Lubbock, Texas, has caused these presents to be executed by the Mayor and attested by the City Secretary and its corporate seal to be affixed hereto, and the Texas Commerce Bank, National Association, Lubbock, Texas, has caused these presents to be signed in its corporate name by one of its vice Presidents, sealed with its corporate seal and duly attested by an authorized signer, all as of the date and year above written. ATTEST: City Secretary (City Seal) ATTEST: Authorized Signer (Bank Seal) 10 CITY OF LUBBOCK, TEXAS Mayor TEXAS COMMERCE BANK, NATIONAL ASSOCIATION Lubbock, Texas vice President 4 • riry c OCTngv-TRF.ASIJRFR CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS § COUNTY OF LUBBOCK § CITY OF LUBBOCK § I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. That on the 12th day of May, 1983, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: BILL MC ALISTER MAYOR ALAN HENRY ) MAYOR PRO TEM JOAN BAKER ) M. J. ADERTON ) COUNCILMEMBERS E. JACK BROWN ) and all of said persons were present at said meeting, except the following: Mayor Bi l l McAlister Among other business considered at said meeting, the attached resolution entitled: N0. 1387 "A RESOLUTION by the City Council of the City of Lubbock, Texas, approving and authorizing the execution of a 'Special Escrow Fund Agreement' by and between the City and Texas Commerce Bank, National Association, Lubbock, Texas, in relation to the refunding of certain outstanding revenue bonds of the City; and resolving other matters incident and related thereto." was introduced and submitted to the Council for passage and adoption. After presentation and due consideration of the resolution, a motion was made by Councilwoman Baker that the resolution be finally passed and adopted. The motion was seconded by Councilman Brown and carried by the following vote: absent (McAlister) 4 voted "For" 0 voted "Against" 1 gbv"UW4 all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 2. That the attached resolution is a true and correct copy of the original on'file in the official records of the City; the duly qualified and acting members of the City 1*7 ' Council of said City on the date of the aforesaid meeting are those persons shown above arid, according to the records of my office, advance notice of the time, place and purpose of the meeting was given to each member of the Council; and that said meeting, and the deliberation of the aforesaid public business, was open to the public and.written notice of said meeting, including the subject of the entitled resolution, was posted and given in advance thereof in compliance with the provisions of Article 6252-17, Section 3A, V.A.T.C.S. IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 12th day of May, 1983. (City Seal) City Secr tart', Ci y Lubbock, Texas