HomeMy WebLinkAbout15-1454 02-10-2015 RESOLUTION NO. 15-1454
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EULESS,
TEXAS, APPROVING A TRINITY RIVER AUTHORITY (TRA)
RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY
OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY
WATER PROJECT) REVENUE BONDS, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING
THERETO.
WHEREAS, it is necessary and advisable that the City approve a resolution
adopted by the Board of Directors of Trinity River Authority of Texas authorizing the
issuance, sale, and delivery of Trinity River Authority of Texas (Tarrant County Water
Project) Revenue Bonds, and approving and authorizing instruments and procedures
relating thereto hereinafter described.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF EULESS, THAT:
SECTION 1.
A "RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT)
REVENUE BONDS, AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO" (the "Bond Resolution") which was adopted by
the Board of Directors of Trinity River Authority of Texas (the "Authority") on June 25,
2014, has been submitted to the City in the form attached hereto, and made a part
hereof for all purposes. Said resolution is hereby approved by the City as to form and
substance, and the bonds (the "Bonds") described therein may be issued by the
Authority in accordance with the terms and provisions set forth therein and herein.
SECTION 2.
The principal amount and maturities of the Bonds, the interest rates for the
Bonds, the purchaser of the Bonds, and other details and provisions for the Bonds, and
the price to be paid for the Bonds, shall be determined by the General Manager of the
Authority in accordance with the procedures and parameters set forth in the Bond
Resolution in the manner determined by the Board of Directors of Authority in
consultation with First Southwest Company, LLC, its Financial Advisor; and all such
matters and procedures are hereby approved by the City.
SECTION 3.
It is acknowledged and agreed by the City that the Bonds authorized pursuant to
said Bond Resolution will be issued in strict conformance and compliance with the water
supply contract dated as of January 21, 1972, executed between the Authority and the
City, and amended as of January 22, 1975, and further amended as of December 5,
1979 (the "Contract"), relating to the project as defined in said Contract and described in
said Bond Resolution, and that the City will be fully bound by the provisions of said
Bond Resolution insofar as they pertain to the City, and the City will be unconditionally
obligated to make the payments with respect to said Bonds as required by the Contract
and said Bond Resolution.
SECTION 4.
In accordance with the Contract, and as a prerequisite to the issuance of the
Bonds, the City finds that a case of emergency exists which requires the City to request
the Authority to issue the Bonds in order to refund outstanding bonds issued by the
Authority with respect to the Tarrant County Water Project resulting in a debt service
savings which will inure to the benefit of the City, and the City hereby formally requests
the Authority to proceed with such refunding.
SECTION 5.
All ordinances and resolutions of the City in conflict or inconsistent with this
Resolution are hereby repealed to the extent of such conflict or inconsistency.
SECTION 6.
ADOPTED AND APPROVED at a regular meeting of the Euless City Council on
February 10, 2015, by a vote of 7 ayes, 0 nays, and 0 abstentions.
APPROVED:
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Line in, Mayor
ATTEST:
Kim S er, TRMC, City Secretary
Resolution No. 15-1454,Page 2 of 37
RESOLUTION NO.R-1411
CERTIFICATE FOR
RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF TRINITY RIVER
AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, AND
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
TRINITY RIVER AUTHORITY OF TEXAS
I,the undersigned,Secretary of the Board of Directors of Trinity River Authority of Texas,being
the official keeper of the minutes and records of said Authority,hereby certify as follows:
1. The Board of Directors of said Authority convened in REGULAR MEETING ON THE 25TH
DAY OF JUNE,2014,at the designated meeting place,and the roll was called of the duly constituted officers
and members of said Board,to-wit:
Kim C.Wyatt,President Martha A.Hernandez
Jess A.Laird,Vice President John W.Jenkins
Howard S.Slobodin,Secretary David B.Leonard
Harold L.Barnard Kevin Maxwell
Henry Borbolla III Dennis"Joe"McCleskey
William W.Collins,Jr. James W.Neale
Christina Melton Crain Manny Rachel
Michael Cronin Amir A.Rupani
Steve Cronin Ana Laura Saucedo
Amanda B.Davis Shirley K.Seale
Valerie E.Ertz Dudley K.Skyrme
Tommy G.Fordyce C.Dwayne Somerville
Ronald J.Goldman J.Carol Spillars
and,at the time of adoption of the resolution hereinafter described,all of said persons were present and
voted, except the following absentees: Harold L. Barnard, Dudley K. Skyime,Amanda B. Davis and
David B.Leonard.Whereupon,a quorum being present,the following was transacted at said Meeting. a
written
RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF TRINITY RIVER
AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, AND
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO
was duly introduced for the consideration of said Board and duly read.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
resolution,prevailed and carried with all members present voting"AYE"except the following:
NAY: None.
ABSTAIN: None.
Resolution No. 15-1454,Page 3 of 37
2. That a true,full,and correct copy of the aforesaid 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 recorded in said Board's minutes of said Meeting that the above and foregoing paragraph is a true,full,
and correct excerpt from said Board'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 Board as indicated therein;and that each of the officers and members of said
Board was duly and sufficiently notified officially and personally,in advance,ofthe 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 Chapter 551,Texas Government Code.
SIGNED AND SEALED the 25th day of June,2014.
Art
Secretary,Board of Directors,
Trinity River Authority of Texas
(AUTHORITY SEAL)
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Resolution No. 15-1454,Page 4 of 37
RESOLUTION NO.R-1411
RESOLUTION AUTHORIZING THE ISSUANCE,SALE,AND DELIVERY OF TRINITY RIVER
AUTHORITY OF TEXAS(TARRANT COUNTY WATER PROJECT)REVENUE BONDS,AND
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING
THERETO
•
THE STATE OF TEXAS
•
TRINITY RIVER AUTHORITY OF TEXAS
WHEREAS,water supply contracts, each dated as of January 21, 1972,and amended as of
January 22, 1975,and as of December 5, 1979(with respect to the City of Euless)and December 11,
1979 (with respect to the City of Bedford), have been duly executed between the Trinity River
Authority of Texas (the "Issuer" or the "Authority") and the Cities of Bedford and Euless, Texas,
respectively, and water supply contracts, each dated as of April 25, 1979, and amended as of
December 5, 1979,and as of April 23,1980,have been duly executed between the Authority and the
Cities of Colleyville,Grapevine,and North Richland Hills,Texas,with all of the above named cities
being hereinafter collectively called and defined as the"Cities",and with all of the above contracts,as
amended,being hereinafter collectively called and defined as the"Contracts";and
WHEREAS,the Contracts are hereby referred to and adopted by reference for all purposes,
with the same effect as if they had been set forth in their entirety in this Resolution;and
WHEREAS,the Contracts relate to the financing of the acquisition and construction of the
Project,as defined therein,being water supply facilities to serve the Cities and others,as described in
the engineering report entitled "Report on Proposed Bedford-Euless Water System to Trinity River
Authority of Texas",dated July 1, 1971,and as such report has been amended and supplemented to
provide expanded service (the "Engineering Report"), including the supplement thereto entitled
"Trinity River Authority of Texas Tarrant County Water Project Master Plan Modification to serve
Bedford,Euless,Colleyville,Grapevine,and North Richland Hills",dated October,1976,prepared by
Knowlton-English-flowers, Inc. (the "Consulting Engineers"), and including all additional
amendments and supplements thereto made thereafter;and
WHEREAS,pursuant to the Contracts and appropriate bond resolutions,the Issuer issued the
following series of bonds:
Trinity River Authority of Texas(Tarrant County Water Project)Improvement and Refunding
Revenue Bonds, Series 2005, dated August 15, 2005, in the original principal amount of
$96,930,000(the"Series 2005 Bonds");
Trinity River Authority of Texas (Tarrant County Water Project) Improvement Revenue
Bonds,Series 2008,dated November 1,2008,in the original principal amount of$50,355,000
(the "Series 2008 Bonds")(collectively, with the Series 2005 Bonds, the "Outstanding
Bonds");and
Trinity River Authority of Texas (Tarrant County Water Project) Improvement Revenue
Bonds, Series 2013, dated October 1, 2013,in the original principal amount of$5,000,000
(the"Series 2013 Bonds")(collectively,with the Series 2005 Bonds and Series 2008 Bonds,
the"Outstanding Bonds");and
Resolution No. 15-1454,Page 5 of 37
WHEREAS,the Outstanding Bonds and any bonds issued on a parity therewith are secured
by a first lien on and pledge of the Net Revenues under the Contracts and certain other revenues;and
WHEREAS,the Issuer has determined to issue the bonds(the"Bonds")hereinafter authorized
to obtain funds to refund certain of the Series 2005 Bonds(the"Refunded Bonds");and
WHEREAS,the Bonds shall be issued and delivered pursuant to Chapter 518, Acts of the
54th Legislature of the State of Texas, Regular Session, 1955, as amended(the "Act" creating the
Authority), Chapters 1207 and 1371, Texas Government Code, as amended, and other applicable
laws.
THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TRINITY
RIVER AUTHORITY OF TEXAS THAT:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE BONDS. The Board of
Directors hereby incorporates the recitals set forth in the preamble hereto as if set forth in full at this
place and further finds and determines that said recitals are true and correct In order to obtain funds
to pay the costs of refunding certain maturities of the outstanding Refunded Bonds, the Board of
Directors hereby authorizes and directs the issuance of revenue bonds of the Issuer,in one or more
series,in the aggregate principal amount of not to exceed$86,660,000.
Section 2.DESIGNATION,DATE,DENOMINATIONS,NUMBERS,MATURITIES AND
SALE OF BONDS. (a) Each Bond issued pursuant to this Resolution shall,subject to paragraph(b)
of this section,be designated: "TRINITY RIVER AUTHORITY OF TEXAS(TARRANT COUNTY
WATER PROJECT)REFUNDING REVENUE BOND,SERIES "
(b) As authorized by Chapters 1207 and 1371, Texas Government Code, as amended, the
General Manager of the Issuer is hereby designated as the "Authorized Officer"of the Issuer,and is
hereby authorized,appointed,and designated as the officer or employee of the Issuer authorized to act
on behalf of the Issuer in the selling and delivering of the Bonds and carrying out the other procedures
specified in this Resolution,including the use of a book-entry-only system with respect to the Bonds
and the execution of an appropriate letter of representations if deemed appropriate,the determining
and fixing of the date of the Bonds,any additional or different designation or title by which the Bonds
shall be known, the price at which the Bonds will be sold, the aggregate principal amount of the
Bonds and the amount of each maturity of principal thereof,the due date of each such maturity(not
exceeding forty years from the date of the Bonds), the rate of interest to be borne by each such
maturity, the interest payment dates and periods,the dates,price and terms upon and at which the
Bonds shall be subject to redemption prior to due date or maturity at the option of the Issuer, any
mandatory sinking fund redemption provisions, procuring municipal bond insurance, including the
execution of any commitment agreements,membership agreements in mutual insurance companies,
and other similar agreements, and approving modifications to this Resolution and executing such
instruments,documents and agreements as may be necessary with respect thereto,if it is determined
that such insurance would be financially desirable and advantageous,and all other matters relating to
the issuance,sale and delivery of the Bonds. The Authorized Officer,acting for and on behalf of the
Issuer, is authorized to arrange for the Bonds to be sold at a private placement, negotiated or
competitive sale,at such price,in the aggregate principal amount not exceeding the maximum amount
set forth in Section 1 hereof,with such maturities of principal,with such interest rates,and with such
optional and mandatory sinking fund redemption provisions,if any,and other matters,as shall be set
forth in a certification by the Authorized Officer. The Bonds shall not be sold at a price less than
95%of the initial aggregate principal amount thereof plus accrued interest thereon from their date to
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Resolution No. 15-1454,Page 6 of 37
their delivery, and no Bond shall bear interest at a rate greater than 10%per annum. It is further
provided,however,that,notwithstanding the foregoing provisions,the Bonds shall not be delivered
unless,prior to their delivery,the Bonds have been rated by a nationally recognized rating agency for
municipal long term obligations, as required by said Chapter 1371, Texas Government Code, as
amended.
(c)If the Authorized Officer determines that the Bonds should be sold by private placement,
the Authorized Officer shall select the purchaser which,after due consideration and investigation,is
willing to buy the Bonds on the most advantageous terms to the Issuer as determined by the
Authorized Officer.
(d) If the Authorized Officer determines that the Bonds should be sold by a negotiated sale,
the Authorized Officer shall designate the senior managing underwriter for the Bonds and such
additional investment banking firms as deemed appropriate to assure that the Bonds are sold on the
most advantageous terms to the Issuer. The Authorized Officer,acting for and on behalf of the Issuer,
is authorized to enter into and carry out the terms of a bond purchase contract for the Bonds to be sold
by negotiated sale,with the underwriter(s)thereof at such price,with and subject to such terms as
determined by the Authorized Officer subject to the parameters set forth in this Resolution. Any such
bond purchase contract shall be substantially in a form and substance previously approved by the
Board in connection with the authorization of bonds by the Issuer with such changes as are acceptable
to the Authorized Officer. The Authorized Officer shall cause to be prepared an official statement in
such manner as the Authorized Officer deems appropriate.
(e) If the Authorized Officer determines that the Bonds should be sold at a competitive sale,
the Authorized Officer shall cause to be prepared a notice of sale and official statement in such
manner as the Authorized Officer deems appropriate,to make the notice of sale and official statement
available to those institutions and firms wishing to submit a bid for the Bonds,to receive such bids,
and to award the sale of the Bonds to the bidder submitting the best bid in accordance with the
provisions of the notice of sale.
(1)In establishing the aggregate principal amount of the Bonds,the Authorized Officer shall
establish an amount within the amount authorized in Section 1 hereof, which amount shall be
sufficient to provide,inter alia,for(i)the funding of the Reserve Fund,if any,as hereinafter required
or permitted,as deemed appropriate,(ii)the payment of the costs of issuance of the Bonds(iii)the
refunding of the maturities of the Refunded Bonds in a manner that will achieve a target present value
savings with respect to the Refunded Bonds of at least(A)three percent(3.00%),if the refunding is
treated as being an advance refunding pursuant to the Code or (B) two percent (2.00%), if the
refunding is treated as being a current refunding pursuant to the Code.
(g)It is hereby found and determined that the refunding of the Refunded Bonds meeting the
criteria set forth in paragraph(f)of this section is advisable and necessary in order to restructure the
debt service requirements and procedures of the Issuer,and that the debt service requirements on the
Bonds issued for refunding purposes will be less than those on the Refunded Bonds,resulting in a
reduction in the amount of principal and interest which otherwise would be payable. The Refunded
Bonds are subject to redemption, at the option of the Issuer, and the Authorized Officer is hereby
authorized to cause all of the Refunded Bonds being refunded to be called for redemption on the
respective date or dates consistent with the savings analysis set forth in paragraph(c)of this section,
and the proper notices of such redemption to be given,and in each case at a redemption price of par,
plus accrued interest to the date fixed for redemption. In furtherance of authority granted by Section
1207.007(b), Texas Government Code, the Authorized Officer is further authorized, if deemed
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Resolution No. 15-1454,Page 7 of 37
appropriate or necessary,to enter into and execute on behalf of the Issuer with the escrow agent or
deposit agent named therein,an escrow agreement or deposit agreement,in the form and substance as
shall be approved by the Authorized Officer, which escrow agreement or deposit agreement will
provide for the payment in full of the Refunded Bonds. In addition, the Authorized Officer is
authorized to purchase such securities with proceeds of the Bonds,to execute such subscriptions for
the purchase of the United States Treasury Securities, State and Local Government Series and to
transfer and deposit such cash from available funds, as may be necessary for the escrow fund
described in such escrow or deposit agreement.
Section 3. CHARACTERISTICS OF THE BONDS. Registration.Transfer.Conversion and
Exchange:Authentication. (a) The Issuer shall keep or cause to be kept at the principal corporate
trust office of The Bank of New York Mellon Trust Company,National Association,Dallas,Texas
(the "Paying Agent/Registrar")books or records for the registration of the transfer, conversion and
exchange of the Bonds (the "Registration Books"), and the Issuer hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers,conversions and exchanges under such reasonable regulations as the Issuer
and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such regis-
trations,transfers,conversions and exchanges as herein provided. The Paying Agent/Registrar shall
obtain and record in the Registration Books the address of the registered owner of each Bond to which
payments with respect to the Bonds shall be mailed,as herein provided;but it shall be the duty of
each registered owner to notify the Paying Agent/Registrar in writing of the address to which
payments shall be mailed,and such interest payments shall not be mailed unless such notice has been
given. The Issuer shall have the right to inspect the Registration Books during regular business hours
of the Paying Agent/Registrar,but otherwise the Paying Agent/Registrar shall keep the Registration
Books confidential and,unless otherwise required by law, shall not permit their inspection by any
other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges
for making such registration, transfer, conversion, exchange and delivery of a substitute Bond or
Bonds. Registration of assignments,transfers,conversions and exchanges of Bonds shall be made in
the manner provided and with the effect stated in the FORM OF BOND set forth in this Resolution.
Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
Except as provided in Section 3(c) hereof, an authorized representative of the Paying
Agent/Registrar shall,before the delivery of any such Bond,date and manually sign said Bond,and
no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The
Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for conversion
and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the
governing body of the Issuer or any other body or person so as to accomplish the foregoing
conversion and exchange of any Bond or portion thereof, and the Paying AgentlRegistrar shall
provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed
herein, and said Bonds shall be of type composition printed on paper with lithographed or steel
engraved borders of customary weight and strength. Pursuant to Subchapter D,Chapter 1201,Texas
Government Code, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed
upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the converted and
exchanged Bond shall be valid,incontestable,and enforceable in the same manner and with the same
effect as the Bonds which initially were issued and delivered pursuant to this Resolution,approved by
the Attorney General,and registered by the Comptroller of Public Accounts.
(b) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds,all as
provided in this Resolution. The Paying Agent/Registrar shall keep proper records of all payments
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Resolution No. 15-1454,Page 8 of 37
made by the Issuer and the Paying Agent/Registrar with respect to the Bonds,and of all conversions
and exchanges of Bonds,and all replacements of Bonds,as provided in this Resolution. However,in
the event of a nonpayment of interest on a scheduled payment date,and for thirty(30)days thereafter,
a new record date for such interest payment (a "Special Record Date")will be established by the
Paying Agent/Registrar,if and when funds for the payment of such interest have been received from
the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due
interest(which shall be 15 days after the Special Record Date)shall be sent at least five(5)business
days prior to the Special Record Date by United States mail,first-class postage prepaid,to the address
of each registered owner appearing on the Registration Books at the close of business on the last
business day next preceding the date of mailing of such notice.
(c) ID General. The Bonds (i) shall be issued in fully registered form, without interest
coupons,with the principal of and interest on such Bonds to be payable only to the registered owners
thereof, (ii)may or shall be redeemed prior to their scheduled maturities(notice of which shall be
given to the Paying Agent/Registrar by the Issuer at least 50 days prior to any such redemption date),
(iii)transferred and assigned,(iv)may be converted and exchanged for other Bonds,(v)shall have the
characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and
interest on the Bonds shall be payable,and(viii)shall be administered and the Paying Agent/Registrar
and the Issuer shall have certain duties and responsibilities with respect to the Bonds,all as provided,
and in the manner and to the effect as required or indicated,in the FORM OF BOND set forth in this
Resolution. The Bonds initially issued and delivered pursuant to this Resolution are not required to
be,and shall not be,authenticated by the Paying Agent/Registrar,but on each substitute Bond issued
in conversion of and exchange for any Bond or Bonds issued under this Resolution the Paying
Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFI-
CATE,in the form set forth in the FORM OF BOND.
(d) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of
the Bonds that at all times while the Bonds are outstanding the Issuer will provide a competent and
legally qualified bank,trust company,financial institution,or other agency to act as and perform the
services of Paying Agent/Registrar for the Bonds under this Resolution, and that the Paying
Agent/Registrar will be one entity. The Issuer reserves the right to,and may,at its option,change the
Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar,to
be effective not later than 60 days prior to the next principal or interest payment date after such
notice. In the event that the entity at any time acting as Paying Agent/Registrar(or its successor by
merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer
covenants that promptly it will appoint a competent and legally qualified bank, trust company,
financial institution,or other agency to act as Paying Agent/Registrar under this Resolution. Upon
any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall
transfer and deliver the Registration Books(or a copy thereof),along with all other pertinent books
and records relating to the Bonds,to the new Paying Agent/Registrar designated and appointed by the
Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written
notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds,by
United States mail,first-class postage prepaid, which notice also shall give the address of the new
Paying Agent/Registrar. By accepting the position and performing as such, each Paying
Agent/Registrar shall be deemed to have agreed to the provisions of this Resolution,and a certified
copy of this Resolution shall be delivered to each Paying Agent/Registrar.
(e) Book-Entry Only System. The Bonds issued in exchange for the Bonds initially issued to
the purchaser specified herein shall be initially issued in the form of a separate single fully registered
Bond for each of the maturities thereof. Upon initial issuance,the ownership of each such Bond shall
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Resolution No. 15-1454,Page 9 of 37
be registered in the name of Cede&Co.,as nominee of The Depository Trust Company of New York
("DTC"), and except as provided in subsection (f) hereof, all of the outstanding Bonds shall be
registered in the name of Cede&Co.,as nominee of DTC.
With respect to Bonds registered in the name of Cede&Co.,as nominee of DTC,the Issuer
and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and
dealers,banks,trust companies,clearing corporations and certain other organizations on whose behalf
DTC was created("DTC Participant")to hold securities to facilitate the clearance and settlement of
securities transactions among DTC Participants or to any person on behalf of whom such a DTC
Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence,the
Issuer 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 Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
registered owner of Bonds, as shown on the Registration Books, of any notice with respect to the
Bonds,or(iii)the payment to any DTC Participant or any other person,other than a registered owner
of Bonds,as shown in the Registration Books of any amount with respect to principal of or interest on
the Bonds. Notwithstanding any other provision of this Resolution to the contrary,the Issuer and the
Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of payment of
principal and interest with respect to such Bond,for the purpose of registering transfers with respect
to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all
principal of and interest on the Bonds only to or upon the order of the registered owners,as shown in
the Registration Books as provided in this Resolution,or their respective attorneys duly authorized in
writing,and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's
obligations with respect to payment of principal of and interest on the Bonds to the extent of the sum
or sums so paid. No person other than a registered owner,as shown in the Registration Books,shall
receive a Bond certificate evidencing the obligation of the Issuer to make payments of principal and
interest pursuant to this Resolution. Upon delivery by DTC to the Paying Agent/Registrar of written
notice to the effect that DTC has determined to substitute a new nominee in place of Cede&Co.,and
subject to the provisions in this Resolution with respect to interest checks being mailed to the
registered owner at the close of business on the Record date, the words "Cede & Co." in this
Resolution shall refer to such new nominee of DTC.
(f) Successor Securities Depository: Transfers Outside Book-Entry Only System. In the
event that the Issuer determines that DTC is incapable of discharging its responsibilities described
herein and in the representation letter of the Issuer to DTC or that it is in the best interest of the
beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Issuer shall (i)
appoint a successor securities depository,qualified to act as such under Section 17A 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 Bonds to such successor securities
depository or(ii)notify DTC and DTC Participants of the availability through DTC of Bonds and
transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC
accounts. In such event,the Bonds shall no longer be restricted to being registered in the Registration
Books 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 registered owners
transferring or exchanging Bonds shall designate, in accordance with the provisions of this
Resolution.
(g) Payments to Cede&Co. Notwithstanding any other provision of this Resolution to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
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Resolution No. 15-1454,Page 10 of 37
payments with respect to principal of and interest on such Bond and all notices with respect to such
Bond shall be made and given,respectively,in the manner provided in the representation letter of the
Issuer to DTC.
(h) Notice of Redemption. (i)In addition to the notice of redemption set forth in the FORM
OF BOND, the Paying Agent/Registrar shall give notice of redemption of the Bonds by first class
mail,postage prepaid at least thirty(30)days prior to a redemption date to each registered securities
depository and to any national information service that disseminates redemption notices. In addition,
in the event of a redemption caused by an advance refunding of the Bonds,the Paying Agent/Registrar
shall send a second notice of redemption to the persons specified in the immediately preceding
sentence at least thirty(30)days but not more than ninety(90)days prior to the actual redemption
date. Any notice sent to the registered securities depositories or such national information services
shall be sent so that they are received at least two(2)days prior to the general mailing or publication
date of such notice. The Paying Agent/Registrar shall also send a notice of prepayment or redemption
to the Registered Owner of any Bond who has not sent the Bonds in for redemption sixty(60)days
after the redemption date.
(ii) Each notice of redemption given by the Paying Agent/Registrar,whether required in the
FORM OF BOND or in this Section, shall contain a description of the Bonds to be redeemed
including the complete name of the Bonds,the Series,the date of issue,the interest rate,the maturity
date, the CUSIP number, the certificate numbers, the amounts called of each certificate, the
publications and mailing date for the notice,the date of redemption,the redemption price,the name of
the Paying Agent/Registrar and the address at which the Bonds may be redeemed,including a contact
person and telephone number.
(iii) All redemption payments made by the Paying Agent/Registrar to the Registered Owners
shall include a CUSIP number relating to each amount paid to such Registered Owner.
Section 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bonds
initially issued and delivered pursuant to this Resolution, shall be, respectively, substantially as
follows,with such appropriate variations,omissions,or insertions as are permitted or required by this
Resolution.
7
Resolution No. 15-1454,Page 11 of 37
FORM OF BOND
NO.R- PRINCIPAL
AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT)
REFUNDING REVENUE BONDS
SERIES
INTEREST RATE DATE OF BONDS MATURITY DATE CUSP NO,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the TRINITY RIVER AUTHORITY OF
TEXAS (the"Issuer"),being a governmental agency,and body corporate and politic of the State of
Texas, hereby promises to pay to the Registered Owner set forth above, or registered assigns
(hereinafter called the"registered owner")the principal amount set forth above,and to pay interest
thereon from the Date of Bonds as set forth above,on _and semiannually thereafter on each
1 and 1 to the maturity date specified above,or the date of redemption prior to
maturity, at the interest rate per annum specified above; except that if this Bond is required to be
authenticated and the date of its authentication is later than the first Record Date(hereinafter defined),
such principal amount shall bear interest from the interest payment date next preceding the date of
authentication,unless such date of authentication is after any Record Date but on or before the next
following interest payment date, in which case such principal amount shall bear interest from such
next following interest payment date;provided,however,that if on the date of authentication hereof
the interest on the Bond or Bonds,if any,for which this Bond is being exchanged or converted from is
due but has not been paid,then this Bond shall bear interest from the date to which such interest has
been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America,without exchange or collection charges. The principal of this Bond shall be
paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or upon
the date fixed for its redemption prior to maturity,at the principal corporate trust office of The Bank
of New York Mellon Trust Company, National Association, Dallas, Texas, which is the "Paying
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof on each interest payment date by check or draft,dated
as of such interest payment date,drawn by the Paying Agent/Registrar on,and payable solely from,
funds of the Issuer required by the Resolution authorizing the issuance of this Bond (the "Bond
Resolution") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
provided;and such check or draft shall be sent by the Paying Agent/Registrar by United States mail,
8
Resolution No. 15-1454,Page 12 of 37
first-class postage prepaid,on each such interest payment date,to the registered owner hereof,at its
address as it appeared on the fifteenth calendar day of the month next preceding each such date(the
"Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter
described. In addition, interest may be paid by such other method, acceptable to the Paying
Agent/Registrar,requested by,and at the risk and expense of,the registered owner. In the event of a
non-payment of interest on a scheduled payment date,and for 30 days thereafter,a new record date
for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due interest
(which shall be 15 days after the Special Record Date)shall be sent at least five business days prior to
the Special Record Date by United States mail, first-class postage prepaid, to the address of each
owner of a Bond appearing on the Registration Books at the close of business on the last business day
next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior to
maturity as provided herein shall be paid to the registered owner upon presentation and surrender of
this Bond for redemption and payment at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the registered owner of this Bond that on or before each
principal payment date,interest payment date,and accrued interest payment date for this Bond it will
make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the
Bond Resolution,the amounts required to provide for the payment,in immediately available finds,of
all principal of and interest on the Bonds,when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the city where the principal
corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive
order to close,then the date for such payment shall be the next succeeding day which is not such a
Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS BOND is one of a Series of Bonds dated ,authorized in accordance
with the Constitution and laws of the State of Texas in the principal amount of$
IN ORDER TO OBTAIN FUNDS TO PAY THE COSTS OF REFUNDING CERTAIN
MATURITIES OF THE SERIES 2005 BONDS OF THE ISSUER.
ON ,or on any date thereafter,the Bonds of this Series maybe redeemed
prior to their scheduled maturities,at the option of the Issuer,with funds derived from any available
and lawful source,as a whole,or in part,and,if in part,the particular Bonds to be redeemed shall be
selected and designated by the Issuer,at the redemption price of the principal amount,plus accrued
interest to the date fixed for redemption.
The Bonds maturing in the year_are subject to mandatory redemption prior to maturity in
part,at random,by lot or other customary method selected by the Paying Agent/Registrar,at par plus
accrued interest to the redemption date,in amounts sufficient to redeem said Bonds on 1
in the years and principal amounts shown on the following schedule:
Maturity
Principal
Amount($)
9
Resolution No. 15-1454,Page 13 of 37
The principal amount of said Bonds required to be redeemed pursuant to the operation of such
mandatory redemption provision shall be reduced,at the option of the Issuer,by the principal amount
of said Bonds of the respective maturity which,at least 50 days prior to the mandatory redemption
date(1)shall have been acquired by the Issuer at a price not exceeding the principal amount of such
Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the Paying
Agent/Registrar at the request of the Issuer at a price not exceeding the principal amount of such
Bonds plus accrued interest to the date of purchase,or(3)shall have been redeemed pursuant to the
optional redemption provisions and not theretofore credited against a mandatory redemption
requirement.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by
United States mail,first-class postage prepaid,to the registered owner of each Bond to be redeemed at
its address as it appeared on the registration books of the Paying Agent/Registrar at the close of
business on the business day next preceding the date of mailing such notice and to major securities
depositories,national bond rating agencies and bond information services;provided,however,that the
failure of the registered owner to receive such notice, or any defect therein or in the sending or
mailing thereof,shall not affect the validity or effectiveness of the proceedings for the redemption of
any Bond. By the date fixed for any such redemption,due provision shall be made with the Paying
Agent/Registrar for the payment of the required redemption price for the Bonds or portions thereof
which are to be so redeemed. If such written notice of redemption is sent and if due provision for
such payment is made, all as provided above, the Bonds or portions thereof which are to be so
redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities,and
they shall not bear interest after the date fixed for redemption,and they shall not be regarded as being
outstanding except for the right of the registered owner to receive the redemption price from the
Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Bond shall be
redeemed a substitute Bond or Bonds having the same maturity date,bearing interest at the same rate,
in any denomination or denominations in any integral multiple of$5,000,at the written request of the
registered owner,and in aggregate amount equal to the unredeemed portion thereof,will be issued to
the registered owner upon the surrender thereof for cancellation,at the expense of the Issuer,all as
provided in the Bond Resolution.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds,without interest
coupons,in the denomination of any integral multiple of$5,000. As provided in the Bond Resolution,
this Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the
assignee or assignees hereof, be assigned, transferred, converted into and exchanged for a like
aggregate principal amount of fully registered Bonds, without interest coupons, payable to the
appropriate registered owner, assignee or assignees, as the case may be, having the same
denomination or denominations in any integral multiple of$5,000 as requested in writing by the
appropriate registered owner,assignee or assignees,as the case may be,upon surrender of this Bond
to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set
forth in the Bond Resolution. Among other requirements for such assignment and transfer,this Bond
must be presented and surrendered to the Paying Agent/Registrar,together with proper instruments of
assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing assignment of this Bond or any portion or portions hereof in any integral multiple of
10
Resolution No. 15-1454,Page 14 of 37
$5,000 to the assignee or assignees in whose name or names this Bond or any such portion or portions
hereof is or are to be registered. The form of Assignment printed or endorsed on this Bond may be
executed by the registered owner to evidence the assignment hereof,but such method is not exclusive,
and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to
evidence the assignment of this Bond or any portion or portions hereof from time to time by the
registered owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges
for assigning,transferring,converting and exchanging any Bond or portion thereof will be paid by the
Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect
thereto shall be paid by the one requesting such assignment,transfer,conversion or exchange,as a
condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be
required to make any such transfer,conversion or exchange(i)during the period commencing with
the close of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date,or,(ii)with respect to any Bond or any portion thereof
called for redemption prior to maturity,within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer,resigns
or otherwise ceases to act as such,the Issuer has covenanted in the Bond Resolution that it promptly
will appoint a competent and legally qualified substitute therefor,and cause written notice thereof to
be mailed to the registered owners of the Bonds.
IT IS HEREBY certified,recited, and covenanted that this Bond has been duly and validly
authorized,issued,sold,and delivered;that all acts,conditions,and things required or proper to be
performed,exist,and be done precedent to or in the authorization,issuance,and delivery of this Bond
have been performed,existed,and been done in accordance with law;that this Bond and other parity
bonds,are special obligations of the Issuer payable from and secured by a first lien on and pledge of
(1)the Issuer's Net Revenues from its water supply contracts,each dated as of January 21,1972,and
amended as of January 22,1975,and as of December 5,1979(with respect to the City of Euless)and
December 11, 1979 (with respect to the City of Bedford), with the Cities of Bedford and Euless,
Texas,and its water supply contracts each dated as of April 25,1979,and amended as of December 5,
1979,and as of April 23, 1980,with the Cities of Colleyville,Grapevine,and North Richland Hills,
Texas,all relating to the Issuer's Tarrant County Water Project described in said contracts,all as more
fully described in said contracts and in the Bond Resolution,to each of which reference is hereby
made for all purposes,and(2)the Net Revenues the Issuer may receive from other parties,if any,with
whom the Issuer may contract in the future for supplying treated water from the Issuer's Tarrant
County Water Project.
THE ISSUER has reserved the right, subject to the restrictions stated or referred to in the
Bond Resolution,to issue additional parity revenue bonds which also may be made payable from and
secured by a first lien on and pledge of the aforesaid Net Revenues.
THE ISSUER also has reserved the right to amend the Bond Resolution with the approval of
the owners of two-thirds in principal amount of all outstanding bonds secured by and payable from a
first lien on and pledge of the aforesaid Net Revenues, subject to the restrictions stated in the Bond
Resolution.
THE REGISTERED OWNER hereof shall never have the right to demand payment of this
Bond or the interest hereon from taxes or from any source whatsoever other than specified in the
Bond Resolution.
11
Resolution No. 15-1454,Page 15 of 37
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Resolution, agrees to be bound by such
terms and provisions, acknowledges that the Bond Resolution is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer,and agrees that the
terms and provisions of this Bond and the Bond Resolution constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF,the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the President of the Board of Directors of the Issuer and countersigned with the
manual or facsimile signature of the Secretary of the Board of Directors of the Issuer,and has caused
the official seal of the Issuer to be duly impressed,or placed in facsimile,on this Bond.
Secretary,Board of Directors President,Board of Directors
Trinity River Authority of Texas Trinity River Authority of Texas
(SEAL)
FORM OF
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an
executed Registration Certificate of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Resolution described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of,or in exchange for,a bond,bonds,or a portion of a bond or bonds of a Series which
originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated THE BANK OF NEW YORK MELLON TRUST COMPANY,
NATIONAL ASSOCIATION
Paying Agent/Registrar
By
Authorized Representative
12
Resolution No. 15-1454,Page 16 of 37
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name and address,
including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
,attorney,to register the transfer of the within Bond on the books kept for
registration thereof,with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE:Signatures)must be NOTICE:The signature above
guaranteed by an eligible must correspond with the
guarantor institution parti- name of the registered owner
cipating in a securities as it appears upon the front
transfer association recog- of this Bond in every par-
nized signature guarantee ticular,without alteration
program. or enlargement or any change
whatsoever.
FORM OF REGISTRATION CERTIFICATE OF
THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined,certified as to validity,and approved by the
Attorney General of the State of Texas,and that this Bond has been registered by the Comptroller of
Public Accounts of the State of Texas.
13
Resolution No. 15-1454,Page 17 of 37
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 5. DEFINITIONS. In each place throughout this Resolution wherein the following
terms,or any of them,are used,the same,unless the text shall indicate another or different meaning or
intent,shall be construed and are intended to have meanings as follows:
(a) "Act"and"Authority Act"mean Chapter 518,Acts of the Fifty-Fourth Legislature of
the State of Texas,Regular Session, 1955,as amended.
(b) "Additional Bonds" means the additional parity revenue bonds as defined and
permitted in Sections 36 and 37 of this Resolution.
(c) "Authority"and"Issuer"mean Trinity River Authority of Texas and any other public
body or agency at any time succeeding to the property and principal rights,power and obligations of
said Authority.
(d) "Board of Authority"and"Board"mean the Board of Directors of the Authority.
(e) "Bonds" means collectively the Bonds as described and defined herein, and all
substitute bonds exchanged therefor,as well as all other substitute and replacement bonds,issued as
provided in this Resolution.
(f) "Certified Public Accountant"means any certified public accountant,licensed public
accountant or firm of such public accountants of suitable experience and qualifications not regularly
in the employ of the Authority,selected by the Authority.
(g) "Cities" means the Cities of Bedford, Euless, Colleyville, Grapevine, and North
Richland Hills,Texas.
(h) "Code"means the United States Internal Revenue Code and any regulations or rulings
promulgated by the U.S.Department of the Treasury pursuant thereto.
(i) "Contracts" means the contracts between the Authority and the Cities as described
and defined in the preamble to this Resolution.
(j) "Credit Facility"shall mean a policy of municipal bond insurance,a surety bond or a
letter or line of credit,or any other agreement,commitment or contract authorized by the Authority as
a Credit Facility issued by a Credit Facility Provider in support of any Parity Bonds.
(k) "Credit Facility Provider"shall mean(i)with respect to any Credit Facility consisting
of a policy of municipal bond insurance or a surety bond,an issuer of policies of insurance insuring
the timely payment of debt service on governmental obligations such as the Parity Bonds,provided
that a Rating Agency having an outstanding rating on the Parity Bonds would rate the Parity Bonds
14
Resolution No. 15-1454,Page 18 of 37
fully insured by a standard policy issued by the issuer in its highest generic rating category for such
obligations;and(ii)with respect to any other Credit Facility,any financial institution,provided that a
Rating Agency having an outstanding rating on the Parity Bonds would rate the Parity Bonds in its
two highest generic rating categories for such obligations if the Credit Facility proposed to be issued
by such financial institution secured the timely payment of the entire principal amount of the series of
Parity Bonds and the interest thereon.
(1) "Depository"means the bank or banks which the Authority selects(whether one or
more),in accordance with law,as its depository.
(m) "Eligible Investments" shall mean those investments in which the Authority is
authorized by law,including,but not limited to,the Public Funds Investment Act of 1987(Chapter
2256,Texas Government Code),as amended,to purchase,sell and invest its funds and funds under its
control;and provided further that Eligible Investments shall specifically include,with respect to the
investment of proceeds of any Parity Bonds,guaranteed investment contracts fully collateralized by
Government Obligations.
(n) "Engineering Report" means the Report dated July 1, 1971, and the supplements
thereto with respect to the Authority's Tarrant County Water Project,all as described and defined in
the preamble to this Resolution,as such Engineering Report may be further amended or supplemented
prior to the execution of construction contracts and changed by change orders entered after
construction contracts have been executed, or as such report may be amended or supplemented to
provide expanded service in the future.
(o) "Fiscal Year"means the twelve month period beginning December 1 of each year,or
such other twelve month period as may in the future be designated as the Fiscal Year of Authority.
(p) "Government Obligations" shall mean 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.
(q) "Independent Consulting Engineer" means the Engineer or engineering firm or
corporation at the time employed by the Authority under the provisions of Section 31 of this Reso-
lution.
(r) "Outstanding Bonds"shall have the meaning set forth in the preamble.
(s) "Parity Bonds" means collectively the Outstanding Bonds, the Bonds and bonds
hereafter issued on a parity therewith.
(t) "Paying Agents"means collectively the banks where the principal of and interest on
the Parity Bonds are payable.
(u) "Rating Agency"shall mean any nationally recognized securities rating agency which
has assigned a rating to the Parity Bonds.
(v) "Required Amount" shall mean the amount so designated in Section 10 of this
Resolution.
(w) "Reserve Fund"shall mean the Fund so designated in Section 10 of this Resolution.
15
Resolution No. 15-1454,Page 19 of 37
(x) "Reserve Fund Obligations" shall mean cash, Eligible Investments, any Credit
Facility,or any combination of the foregoing.
(y) "Resolution"means this Resolution authorizing the Bonds.
(z) "Series 2005 Bonds"shall have the meaning set forth in the preamble.
(aa) "Series 2005 Bond Resolution"shall mean the resolution of the Board authorizing the
issuance of the Series 2005 Bonds.
(bb) "System" and "Authority's System" mean all of Authority's facilities constructed
pursuant to the Engineering Report,as supplemented or amended.
Section 6. BONDS AND SECURITY THEREFOR. The Parity Bonds are and shall be
secured by and payable from a first lien on and pledge of the Net Revenues,as hereinafter defined,
and the funds and accounts hereinafter confirmed or created in this Resolution;and the Net Revenues
are further pledged to the establishment and maintenance of said funds and accounts as hereinafter
provided. The Parity Bonds are and will be secured by and payable only from the Net Revenues,and
are not secured by or payable from a mortgage or deed of trust on any properties, whether real,
personal,or mixed,constituting the System.
Section 7. REVENUE FUND. All revenues of the System received by the Authority,
including the net proceeds to the Authority of the Contracts with the Cities shall be collected and paid
over promptly upon collection to the Depository and the Authority hereby covenants and agrees so to
do. Such revenues shall be held by the Depository in a special fund known as the "Trinity River
Authority of Texas (Tarrant County Water Project) Revenue Bonds Revenue Fund" (hereinafter
called the"Revenue Fund"),and shall be disbursed or applied for the purpose of paying Operation
and Maintenance Expenses of the System,and for the making of transfers hereinafter required and in
the order listed.
Section 8. (a) OPERATION AND MAINTENANCE EXPENSES. The term"Operation and
Maintenance Expenses"shall mean all costs of operation and maintenance of the Authority's System
including,but not limited to,repairs and replacements for which no special fund is created in any
bond resolution, the cost of utilities, supervision, engineering, accounting, auditing, legal services,
and any other supplies,services, administrative costs and equipment necessary for proper operation
and maintenance of the Authority's System, and payments made by Authority in satisfaction of
judgments resulting from claims not covered by Authority's insurance or not paid by one of the Cities
arising in connection with the operation and maintenance of the System. The term also includes the
fees of the bank or banks where the Parity Bonds are payable. Deo'eciation shall not be considered
an item of Operation and Maintenance Expense.
(b) Except for other transfers herein required, the moneys in the Revenue Fund shall be
subject to withdrawal by the Authority for the payment of Operation and Maintenance Expenses only
upon checks and vouchers,stating the purpose of the payment(which shall be in accordance with the
current Annual Budget of the Authority)signed by the President of the Authority and countersigned
by its Treasurer,or signed and countersigned by such officers or employees of the Authority as may
from time to time be designated by resolution of the Board of Authority. At the end of each Authority
Fiscal Year any surplus funds remaining in the Revenue Fund shall be transferred to the Interest and
Sinking Fund.
16
Resolution No. 15-1454,Page 20 of 37
Section 9. INTEREST AND SINKING FUND. (a) For the sole purpose of paying the
principal of and interest on the Parity Bonds,and any Additional Bonds,as the same come due,there
has been created and established, and there shall be maintained at a Depository, a separate fund
entitled the"Trinity River Authority of Texas(Tarrant County Water Project)Revenue Bonds Interest
and Sinking Fund"(hereinafter called the"Interest and Sinking Fund").
(b) The Issuer shall,immediately after the delivery of the Bonds,deposit into the Interest and
Sinking Fund,from the proceeds of sale of the Bonds,all accrued interest received upon sale of the
Bonds,plus an amount sufficient to pay the interest coming due on the Bonds during construction,as
required and determined by the Authorized Officer,if any. Said deposit shall be held and applied
solely to pay interest on the Bonds as it becomes due and payable.
(c)It shall be the duty of the Authority to transfer from Net Revenues in the Revenue Fund to
the credit of the Interest and Sinking Fund the amounts and at times as follows:
(1) such amounts,in equal monthly installments,made on or before the 15th day of
each month hereafter,as will be sufficient,together with any other amounts on deposit therein
and available for such purpose,to pay the interest scheduled to come due on all Parity Bonds
and any Additional Bonds on the next interest payment date;and
(2) such amounts,in equal monthly installments,made on or before the 15th day of
each month hereafter,as will be sufficient,together with any other amounts on deposit therein
and available for such purpose,to pay the principal of all Parity Bonds and any Additional
Bonds coming due and maturing or required to be redeemed on the next interest payment
date.
(d) The Authority shall make such arrangements as are necessary to insure that sufficient
funds from the Interest and Sinking Fund are available at each Paying Agent to pay the principal of
and interest on all Parity Bonds and Additional Bonds when due.
Section 10. RESERVE FUND. (a)There is hereby confirmed and there shall be maintained
on the books of the Authority a special Fund entitled the "Trinity River Authority of Texas Tarrant
County Water Project New Reserve Fund" (the "Reserve Fund"), within which there may be
established separate accounts to be held for the benefit of specific issues of Parity Bonds and not for
the benefit of all Parity Bonds. There shall be deposited into the Reserve Fund any Reserve Fund
Obligations so designated by the Authority. Reserve Fund Obligations in the Reserve Fund shall be
deposited and maintained in a Depository. Reserve Fund Obligations in the Reserve Fund shall be
used solely for the purpose of retiring the last of any Parity Bonds for which the Reserve Fund,or an
account within the Reserve Fund,is held as they become due or paying principal of and interest on
any such Parity Bonds when and to the extent the amounts in the Interest and Sinking Fund are
insufficient for such purpose. Any specific Reserve Fund account shall be maintained in an amount
equal to the average annual principal and interest requirements of the specific Parity Bonds to which
it relates(the "Required Amount"). The Authority may,at its option,withdraw and transfer to the
Revenue Fund, all surplus in the Reserve Fund over the Required Amount. The foregoing
notwithstanding,with respect to the issuance of the Bonds,the Authorized Officer may direct the
transfer of any surplus in the Reserve Fund to be deposited into the Construction and Acquisition
Fund.
(b) The Authority may replace or substitute a Credit Facility for cash or Eligible Investments
on deposit in the Reserve Fund or in substitution for or replacement of any existing Credit Facility.
17
Resolution No. 15-1454,Page 21 of 37
Upon such replacement or substitution,cash or Eligible Investments on deposit in the Reserve Fund
which, taken together with the face amount of any existing Credit Facilities, are in excess of the
Required Amount may be withdrawn by the Authority,at its option,and transferred to the Revenue
Fund; provided that the face amount of any Credit Facility may be reduced at the option of the
Authority in lieu of such transfer.
(c) If the Authority is required to make a withdrawal from the Reserve Fund for any of the
purposes described in subsection (a), the Authority shall promptly notify any applicable Credit
Facility Provider of the necessity for a withdrawal from the Reserve Fund for any such purposes,and
shall make such withdrawal first from available moneys or Eligible Investments then on deposit in the
Reserve Fund,and next from a drawing under any Credit Facility to the extent of such deficiency.
(d) In the event of a deficiency in the Reserve Fund, or in the event that on the date of
termination or expiration of any Credit Facility there is not on deposit in the Reserve Fund sufficient
Reserve Fund Obligations,all in an aggregate amount at least equal to the Required Amount,then the
Authority shall satisfy the Required Amount by depositing Reserve Fund Obligations into the Reserve
Fund in monthly installments of not less than 1/60 of the Required Amount made on or before the
15th day of each month following such termination or expiration.
(e) In the event of the redemption or defeasance of any Parity Bonds, any Reserve Fund
Obligations on deposit in the Reserve Fund in excess of the Required Amount may be withdrawn and
transferred,at the option of the Authority,to the Revenue Fund,as a result of(i)the redemption of
any Parity Bonds or(ii)funds for the payment of any Parity Bonds having been deposited irrevocably
with the paying agent or place of payment therefor in the manner described in any resolution
authorizing the issuance of Parity Bonds,the result of such deposit being that such Parity Bonds no
longer are deemed to be Outstanding under the terms of any such resolution.
(f) In the event there is a draw upon the Credit Facility,the Authority shall reimburse the
Credit Facility Provider for such draw,in accordance with the terms of any agreement pursuant to
which the Credit Facility is issued, from Net Revenues, however, such reimbursement from Net
Revenues shall be subordinate and junior in right of payment to the payment of principal of and
premium,if any,and interest on the Parity Bonds.
(g) Upon the issuance of Additional Bonds the monies in the Reserve Fund shall, to the
extent necessary,be increased to the newly-established Required Amount.
Section 11. CONSTRUCTION AND ACQUISITION FUND. There has been created and
there shall be established and maintained at the Depository a separate fund to be entitled the"Trinity
River Authority of Texas (Tarrant County Water Project) Revenue Bonds Construction and
Acquisition Fund" (hereinafter called the "Construction and Acquisition Fund"). The net proceeds
(after paying costs of issuance and making other required deposits)from the sale of all"Improvement
Bonds"in the future shall be deposited in the Construction and Acquisition Fund and such Fund shall
be subject to and charged with a lien in favor of the holders of all such"Improvement Bonds"until the
money in said Fund has been paid out as herein provided. Interest earnings derived from investment
of the Construction and Acquisition Fund shall become part thereof for all purposes; provided,
however,that any such earnings required to be rebated to the United States shall not be considered as
interest earnings for the purposes of this Resolution. The Depository shall be required to secure the
Construction and Acquisition Fund in its possession by pledging obligations of or obligations uncon-
ditionally guaranteed by the United States; such obligations at all times shall be at least equal in
market value to the amount in the Construction and Acquisition Fund in its possession.
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Resolution No. 15-1454,Page 22 of 37
Section 12. DISBURSEMENTS FROM CONSTRUCTION AND ACQUISITION FUND.
(a) Money in the Construction and Acquisition Fund shall be subject to disbursement by the
Authority for payment of Project Costs to be incurred in the acquisition and construction of any
project for which"Improvement Bonds" are issued. Such disbursements shall be made only upon
checks stating the purpose of the payment signed and countersigned by such officers of the Authority
as may from time to time be designated by the Authority by resolution, and duly certified to the
Depository. Disbursements for payments to construction contractors and disbursements for
construction material, supplies, and equipment shall be approved by a registered professional
engineer.
(b) "Project Costs" as used herein includes all acquisition costs and construction costs as
those terms are generally understood in standard accounting practice as applied to projects of this
nature,and without limiting the generality of the foregoing, it shall include purchase of equipment,
property,rights in property,capitalized interest,costs of land,easements,and rights of way,including
damages to land and property,engineering,financing,financial consultants,administrative,auditing,
and legal expenses incurred in connection with the performance of the Contracts. The costs for
engineering, financial consultants, administrative, and legal expense paid from bond proceeds
incurred by the Authority shall be reasonable and at usual and customary rates. Damages to land and
property,whenever accruing,adjusted under Article I,Section 17 of the Constitution of Texas shall
constitute a part of Project Costs. After completion of any Project improvements, any residue
remaining in the Construction and Acquisition Fund shall be deposited in the Interest and Sinking
Fund.
Section 13. TRUST FUNDS. The Interest and Sinking Fund and the Reserve Fund shall
constitute trust funds and shall be held in trust by a Depository for the benefit of the holders of the
Parity Bonds and Additional Bonds permitted hereunder.
Section 14. SECURITY OF FUNDS. The Authority shall cause the Depository to secure and
keep secured,in the manner required by law,all funds on deposit with it,and will cause each paying
agent to secure all funds deposited with it or them as other trust funds are secured. The Authority
covenants and agrees that no money will be allowed to be or remain deposited with the Depository
unless secured as above provided.
Section 15. PLEDGE. The Contracts provide for the payment by the Cities to the Authority
(a)an amount equal to all Operation and Maintenance Expenses,(b)the amount necessary to pay all
the principal of and the interest coming due on "Bonds" (as defined in the Contracts) on each
principal and/or interest payment date, (c) during each Fiscal Year, the proportionate part of any
special or reserve funds required to be established and/or maintained by the provisions of any"Bond
Resolutions",and(d)an amount in addition thereto sufficient to restore any deficiency in any of such
funds or accounts required to be accumulated and maintained by the provisions of any "Bond
Resolutions". The term"Net Revenues"as used in this Resolution shall mean and be defined as all of
the gross revenues or payments received by the Authority(i)from the Cities under the Contracts and
(ii)from the parties,if any,with whom the Authority may contract in the future for supplying treated
water from the System,after deducting therefrom the amounts paid to the Authority for the purpose of
paying Operation and Maintenance Expenses,with the result that the Net Revenues shall consist of
the amounts necessary to pay all principal and/or interest coming due on the Parity Bonds on each
principal and/or interest payment date,and any amounts payable under(c)and(d)above. The Parity
Bonds and the interest thereon are and shall be payable from and secured by a first lien on and pledge
of said Net Revenues, and said Net Revenues are hereby pledged for such purpose and to the
establishment and maintenance of the Interest and Sinking Fund and the Reserve Fund.
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Resolution No. 15-1454,Page 23 of 37
Section 16. INVESTMENT OF FUNDS. The money in all Funds maintained hereunder shall
be invested and reinvested in Eligible Securities which mature in not more than fifteen(15)years
from the date of their purchase. The foregoing notwithstanding,the Reserve Fund and Construction
and Acquisition Fund may be invested as described in Sections 10 and 11,respectively. All income
and profits from the investment of all funds hereunder shall be deposited in the Interest and Sinking
Fund not later than the January 15 or July 15 next following the receipt thereof.
Section 17. PREPARATION OF BUDGET. Not less than forty (40) days before the
commencement of each Fiscal Year while any of the Parity Bonds are outstanding and unpaid,the
Authority will prepare and file with the Cities the annual budget(herein called"Annual Budget")of
Operation and Maintenance Expenses for the ensuing Fiscal Year,and,except as otherwise provided,
the total expenditures in any division thereof will not exceed the total expenditures in the
corresponding division in the Annual Budget. The Authority covenants that the current Operation and
Maintenance Expenses incurred in any Fiscal Year will not exceed the reasonable and necessary
amount of such expenses, and that it will not expend any amount or incur any obligation for
maintenance, repair, and operation in excess of the amounts provided for current Operation and
Maintenance Expenses in the Annual Budget; provided,however, that if at any time the Board of
Authority shall determine that the amount of the appropriation for any item in the Annual Budget is in
excess of the amount which will be required for such term,the Board of Authority may reduce such
appropriation and make appropriation for any item or items not covered by the Annual Budget or
increase the appropriation for any other item or items by an amount not exceeding the amount of such
reduction; and provided further,that the Board of Authority may at any time adopt an amended or
supplemental budget for the remainder of the then current Fiscal Year in case of an emergency caused
by some extraordinary occurrence which shall be clearly defined in such resolution. Any such
supplemental budget shall be filed immediately with the Cities.
Section 18. ACCOUNTING AND REPORTING. The Authority covenants that proper books
of record and account will be kept in which true,full,and correct entries will be made of all income,
expense,and transactions of and in relation to the System,and each and every part thereof. Within
three months after each full Fiscal Year, a statement certified as correct by a Certified Public
Accountant showing the Gross Revenues and the Operation and Maintenance Expenses for such
Fiscal Year,shall be furnished to the Cities,and to the original purchasers of the Bonds. Each such
audit will be available during regular office hours at the administration offices of the Authority for
inspection by any holder of any of the Bonds.
Section 19. PUBLIC INSPECTION. The Authority further covenants and agrees that the
System,and each and every part thereof,and all books,records,accounts,documents,and vouchers
relating to the construction,operation,maintenance,repair,improvement,and extension thereof,will
at all times be open to inspection by the Cities.
Section 20. PAYMENT OF PARITY BONDS AND INTEREST THEREON. The Authority
covenants and agrees that,out of the pledged Net Revenues,it will duly and punctually pay,or cause
to be paid,the principal of every Parity Bond and the interest thereon,on the date and at the place and
in the manner specified in the Parity Bonds,and that it will faithfully do and perform and at all times
fully observe any and all covenants,undertakings,and provisions contained herein or in any Parity
Bond.
Section 21. LEGAL ABILITY. The Authority represents that it is a conservation and
reclamation district,a political subdivision of the State of Texas,and a governmental agency and body
politic and corporate, duly created,organized, and existing under the Constitution and laws of the
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Resolution No. 15-1454,Page 24 of 37
State of Texas and has proper authority from all other public bodies and authorities,if any,having
jurisdiction thereof to construct, acquire, operate, maintain, improve, extend,better,repair,renew,
and replace the System as herein described,and to levy and collect rates,tolls,rents,fees,and other
charges,and to pledge its revenues in the manner and form as herein done or intended, and that all
corporate action on its part to that end has been duly and validly taken. The Authority covenants and
agrees that it will at all times maintain its corporate existence and maintain a lawful Board of
Directors, and at all times function and act in the best interest of the System and the owners and
holders of the Parity Bonds.
Section 22. CONSTRUCTION AND OPERATION. The Authority further covenants that it
will forthwith proceed to acquire and construct the improvements, betterments, extensions, and
replacements to the System for which the Bonds are being issued as soon as practicable in accordance
with plans and specifications which have been prepared by the Independent Consulting Engineer,and
thereafter each and every part of the System will be continuously operated by the Authority in an
efficient and economical manner and will be kept in thorough repair and maintained in a high state of
operating efficiency and in such manner that the interest of the Cities, the people of the State of
Texas,the bondholders or owners,and the Authority will be promoted.
Section 23. OPERATION OF THE SYSTEM. The Authority shall use its best efforts to see
that the System is properly and efficiently operated.
Section 24. CONTRACTORS. Authority shall require each person,firm,or corporation with
whom (or which) it may contract for construction in connection with the System to furnish a
performance bond in the full amount of any contract and a payment bond as required by law,and to
carry such workmen's compensation or employers'liability insurance as may be required by law and
such public liability,property damage,and builders'risk insurance,if any,as may be appropriate and
necessary. The Authority further covenants and agrees that the proceeds of any such performance
bond will forthwith,upon receipt of such proceeds,be applied toward the completion of the contract
in connection with which such performance bond shall have been furnished.
Section 25. COVENANT TO MAINTAIN SUFFICIENT INCOME. To the end that
Authority income will be sufficient to pay the Parity Bonds and the interest thereon when due,the
Authority will keep in effect and enforce the Contracts,and will cause the System to be operated and
maintained at an annual cost that will be within its income other than the income required to pay the
Parity Bonds and the interest thereon and the fees of each paying agent and Paying Agent/Registrar.
The Authority will not voluntarily consent to any amendment to the Contracts which would reduce the
amounts payable thereunder or extend the time of the payment of such amounts or which would in any
manner impair or adversely affect the rights of the holders or owners of the Parity Bonds from time to
time. If any of the Cities fails to make payments as required by the Contracts and if it shall appear
that enforcement of the Contracts has become ineffective or will be ineffective to the extent that a
default in payment of principal of or interest on the Parity Bonds occurs or is threatened, the
Authority will take all necessary action to preserve and protect the rights of the holders or owners of
the Parity Bonds and to assure payment of the principal thereof and the interest thereon.
Section 26. NO OTHER LIENS. The Authority further covenants that there is not now
outstanding,except as regards any Parity Bonds,and that the Authority will not at any time while the
Parity Bonds are outstanding,create or allow to accrue or to exist any lien upon the System,or any
rights owned,or the revenues pledged herein to the payment of the principal of and interest on the
Parity Bonds,at any time derived from the operation thereof,or any of its Funds,except as authorized
by Sections 36 and 37 of this Resolution in connection with Additional Bonds and other bonds;that
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Resolution No. 15-1454,Page 25 of 37
the security of the Parity Bonds will not be impaired in any way as a result of any action or any non-
action on the part of the Authority,its Board of Directors,or officers, or any thereof, and that the
Authority has,and will,subject to the provisions hereof,continuously preserve good and indefeasible
title to the System and each and every part thereof.
Section 27. KEEP FRANCHISES AND PERMITS IN EFFECT. The Authority further
covenants that no franchises,permits,privileges,or easements will be allowed to lapse or be forfeited
so long as the same shall be necessary for the proper operation of the System.
Section 28. GOVERNMENTAL REQUIREMENTS; LIENS; CLAIMS. The Authority
covenants that it will duly observe and comply with all valid requirements of any governmental
authority relative to the System or any part thereof,and that it will pay or cause to be discharged,or
will make adequate provision to satisfy and discharge, all lawful claims and demands for labor,
materials,supplies,or other objects which if unpaid,might by law become a lien upon such System or
any part thereof or the revenue therefrom;provided,however,that nothing in this Section contained
shall require the Authority to pay or cause to be discharged,or make provision for,any such lien or
charge, so long as the validity thereof shall be contested in good faith and by appropriate legal
proceedings.
Section 29. FURTHER ASSURANCE. The Authority covenants that it will take such further
action as may be required to carry out the purposes of this Resolution and to assure its validity.
Section 30. SALE AND LEASE OF PROPERTY. (a) The Authority covenants that so long
as any of the Parity Bonds or interest payable thereon shall be outstanding, and except as in this
Section otherwise permitted,it will not sell,lease,or otherwise dispose of or encumber any part of the
System except as provided herein.
(b) The Authority may from time to time dispose of any rights, machinery, fixtures,
apparatus, tolls, instruments, or other movable property and any materials used in connection
therewith,if the Authority shall determine that such are no longer needed or are no longer useful in
connection with the operation and maintenance of the System. The Authority may from time to time
sell such real estate that is not needed or serves no useful purposes in connection with the
maintenance and operation of the System. The proceeds of any sale of real or personal property
acquired from the proceeds of the Parity Bonds shall be deposited in the Revenue Fund.
(c) The Authority may lease any of its lands for any purpose,if such lease or the use of such
lands will not be detrimental to the operation and maintenance of the System. It may also lease any of
its real property for oil,gas,and mineral purposes. No lease shall be made which will result in any
damage to or substantial diminution of the value of other property of the Authority. The rental to be
charged under all such leases shall be not less than the fair and reasonable rental in relation to the
character and value of the property leased. All rentals,revenues,receipts,and royalties derived by the
Authority from any and all leases so made,shall be deposited in the Revenue Fund.
(d) It is covenanted and agreed by Authority that no such property of any nature shall be sold
or leased by Authority unless,prior to any action taken by Authority concerning such sale or leasing,
Authority shall procure the advice and recommendation in writing of a registered professional
engineer concerning such proposed sale or leasing.
Section 31. INDEPENDENT ENGINEER. (a) The Authority covenants that,until the Parity
Bonds and the interest thereon shall have been paid or provision for such payment shall have been
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Resolution No. 15-1454,Page 26 of 37
made,it will, for the purpose of performing and carrying out the duties imposed on the Independent
Consulting Engineer by this Resolution, employ an independent engineer or engineering firm or
corporation having a favorable repute for skill and experience in such work
(b) The Authority covenants that it will at all appropriate times cause the Independent
Consulting Engineer to submit and give all necessary or desirable advice and recommendations
concerning renewals,replacements,extensions,betterments,and improvements for the System,to the
end that the System shall be operated and maintained in the most efficient and satisfactory manner.
Further,Authority shall cause the Independent Consulting Engineer to make in writing a full survey,
review,and report on the physical condition of the System once every three years.
(c) Authority further covenants that it will cause the Independent Consulting Engineer to
make an annual report to it which shall set forth such Engineer's recommendations and advice as to
(1)the proper maintenance,repair,and operation of the System,including their findings as to whether
or not the properties of the System have been maintained in good repair and sound operating
condition; (2) the extensions, improvements, renewals, and replacements which should be made
during the ensuing Fiscal Year;(3)the amounts and types of insurance which should be carried by the
Authority on the properties;and(4)any revisions or changes of rates,fees,and charges.
(d) The expense incurred under this Section 31 shall constitute Operation and Maintenance
Expenses.
Section 32. PARITY BONDS AND INTEREST NOT PAYABLE FROM TAXES. The
holders and owners of the Parity Bonds and the interest payable thereon shall never have the right to
demand payment thereof out of funds raised or to be raised by taxation,or from any source other than
the Net Revenues as defined and described herein.
Section 33. INSURANCE COVERAGE. The Authority covenants that it will at all times
keep insured such of the System's plants, structures, buildings, stations, machinery, equipment,
apparatus,pipelines,and equipment as are usually insured by corporations operating like properties,
with a responsible insurance company or companies, against risks, accidents, or casualties against
which and to the extent insurance is usually carried by corporations operating like properties,and will
also at all times maintain workmen's compensation insurance and insurance against public liability
and property damages, in a reasonable amount with responsible insurance companies; provided,
however,that at any time while any contractor engaged in construction work shall be fully responsible
therefor,the Authority shall not be required to carry such insurance. All such policies shall be open
to the inspection of the bondholders and their representatives at all reasonable times.
Section 34. INSURANCE PROCEEDS. In the event of any loss of or damage to the System
the Authority covenants that it will reconstruct or repair the destroyed or damaged portion of the
property and will apply the proceeds of the insurance policies covering such loss or damage solely for
that purpose. The Authority covenants that it will begin such work of reconstruction or repair
promptly after such loss or damage shall occur and will continue and properly complete the same as
expeditiously as possible and will pay or cause to be paid all costs and expenses in connection
therewith so that the same shall be so completed and the property be free and clear of all mechanics'
and other liens and claims. The Authority agrees that it will procure the advice and recommendation
in writing of a registered professional engineer concerning such reconstruction before it is undertaken.
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Resolution No. 15-1454,Page 27 of 37
Section 35. UNUSED INSURANCE PROCEEDS. Any insurance proceeds remaining after
the completion of and payment for any such reconstruction or repair shall be deposited in the Revenue
Fund.
Section 36. ADDITIONAL BONDS. As used in this resolution, the following additional
definitions shall apply:
(a) "Completion Bonds"means any bonds issued to complete construction of the System to
enable the Authority to provide water supply services to the Cities and to others, as the System is
described in the Engineering Report defined in the Contracts.
(b) "Improvement Bonds" means bonds issued for improvements, betterments, extensions,
and replacements of the System.
(c) "Special Project Bonds" means any bonds issued to finance construction and/or
acquisition of facilities which will not constitute a part of the System and which will not be paid out
of revenues from the Contracts.
(d) "Refunding Bonds"means any bonds issued for the purpose of refunding all or a part of
the Prior Lien Bonds,Parity Bonds or Additional Bonds.
(e) "Additional Bonds" means and includes Completion Bonds, Improvement Bonds, and
Refunding Bonds.
Section 37. COMPLETION BONDS AND IMPROVEMENT BONDS. The Authority
reserves the right to issue Completion Bonds and Improvement Bonds payable from and secured by a
pledge of the Net Revenues,on a parity of lien with the Parity Bonds,or junior to the Parity Bonds,or
a portion of them may be such first lien bonds and a portion may such junior lien bonds. The
Completion Bonds and Improvement Bonds may be issued in one or more series or installments,and
from time to time as authorized by the Board of Authority,provided,however,that no installment or
series of Completion Bonds or Improvement Bonds, if it is on a parity with the lien of the Parity
Bonds,shall be issued unless:
(a) A certificate is executed by the President and Secretary of the Board of Authority
to the effect that no default exists in connection with any of the covenants or requirements of
the resolutions authorizing the issuance of all then outstanding bonds which are secured by
and payable from the Net Revenues;
(b) A certificate is executed by the President and the Secretary of the Board of
Authority to the effect that the Interest and Sinking Fund and the Reserve Fund contain the
amounts then required to be on deposit therein;
(c) The then proposed Completion Bonds or Improvement Bonds are made to mature
on August 1 and/or February 1 of each of the years in which they are scheduled to mature.
Section 38. SPECIAL PROJECT BONDS. Special Project Bonds payable from and secured
by revenues may be issued by the Authority for the purpose of providing additional facilities to enable
the Authority to render service to other users, provided that such Special Project Bonds are not
payable from or secured by a pledge of Net Revenues. Special Project Bonds may be additionally
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Resolution No. 15-1454,Page 28 of 37
secured by a mortgage or deed of trust lien upon only the physical properties of the project purchased
or constructed with the proceeds of such bonds.
Section 39. INCREASE IN RESERVE FUND. If Completion Bonds or Improvement Bonds
are issued as Parity Bonds,the amount required to be deposited and maintained in the Reserve Fund
shall, if necessary to maintain the Required Amount in the Reserve Fund,be increased so that the
aggregate amount to be accumulated in the Reserve Fund shall be no less than the Required Amount
for all then outstanding Parity Bonds and for the installment or series of parity Completion Bonds or
Improvement Bonds then proposed to be issued. Such average annual requirements shall be calcu-
lated as of the date of any such Additional Bonds. Provided,as of the date of any such Additional
Bonds, it shall be sufficient if the aggregate amount in the Reserve Fund is equal to the average
annual requirement on the Parity Bonds and Additional Bonds outstanding and to be outstanding,and
if the amount exceeds such average annual requirement, any surplus in the Reserve Fund may be
transferred to the Revenue Fund,unless otherwise required by any bond resolution.
Section 40. TAX BONDS. No provisions in this Resolution shall in any way affect the
statutory right of the Authority to issue bonds supported wholly by ad valorem taxes.
Section 41. REFUNDING BONDS. The Authority reserves the right to issue Refunding
Bonds to refund any outstanding bonds secured by a pledge of the Net Revenues from the Contracts
and any amendments thereof.
Section 42. DEFAULT PROVISIONS AND REMEDIES. In the event of a default or a
threatened default in the payment of principal of or interest on the Parity Bonds, any court of
competent jurisdiction may, upon petition of holders or owners of twenty-five per cent of the
outstanding Parity Bonds,appoint a receiver with authority to collect and receive all income from the
System, employ, and discharge agents,employees, and consultants of the Authority,take charge of
pledged funds on hand and manage the proprietary affairs of the Authority without consent or
hindrance by the Board of Authority. Such receiver may also be authorized to make contracts for
providing water treatment services or renew such contracts with the approval of the court appointing
him. The Court may vest the receiver with such other powers and duties as the court may find
necessary for the protection of the holders or owners of the Parity Bonds.
Section 43. OTHER REMEDIES;REMEDIES NOT WAIVED. No remedy herein specified
is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy available to the holders or
owners of the said Parity Bonds,or now or hereafter existing at law or in equity,or by statute. No
delay or omission to exercise any right or power shall impair any such right or power or shall be con-
strued to be a waiver of any such default or acquiescence therein,and every such right and power may
be exercised from time to time and so often as may be deemed expedient.
Section 44. AMENDMENTS OF RESOLUTION BY AUTHORITY. Without any prior
action by or notice to the holders or owners of the Parity Bonds,Authority may,from time to time,
and at any time,amend this Resolution:
(a) to add to the covenants and undertakings of the Authority contained in this
Resolution such additional covenants and undertakings as may be authorized or permitted by
law;and
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Resolution No. 15-1454,Page 29 of 37
(b) to cure any ambiguous, defective,or inconsistent provisions of this Resolution
and to accomplish any other purposes not inconsistent with the provisions of this Resolution
and which shall not impair the security afforded hereby.
Section 45. AMENDMENTS BY CONSENT. The holders and owners of Parity Bonds and
Additional Bonds aggregating in principal amount two-thirds of the aggregate principal amount of the
Parity Bonds and Additional Bonds at the time outstanding(but not including in any case any Panty
Bonds or Additional Bonds which may then be held or owned by or for the account of the Authority)
shall have the right from time to time to approve an amendment of this Resolution which may be
deemed necessary or desirable by the Authority;provided,however,that no amendment,without the
consent of the holders and owners of all of the outstanding Parity Bonds and Additional Bonds,shall:
(a) Make any change in the maturity of the Parity Bonds or Additional Bonds;
(b) Reduce the rate of interest borne by any of the Parity Bonds or Additional Bonds;
(c) Reduce the amount of the principal payable on the Parity Bonds or Additional Bonds;
(d) Modify the terms of payment of principal of or interest on the Parity Bonds or Additional
Bonds,or any of them,or impose any conditions with respect to such payment;
(e) Affect the rights of the holders or owners of less than all of the Parity Bonds and
Additional Bonds then outstanding;or
(f) Change the minimum percentage of the principal amount of Parity Bonds and Additional
Bonds necessary for consent to such amendment.
Section 46. NOTICE REQUIRED. If at any time the Authority shall desire to amend this
Resolution under Section 45, the Authority shall cause notice of the proposed amendment to be
published in a financial newspaper or journal published in the City of New York,New York,once
during each calendar week for at least four successive calendar weeks. Such notice shall briefly set
forth the nature of the proposed amendment and shall state that a copy thereof is on file with each
paying agent for the Parity Bonds and Additional Bonds and with the Secretary of the Board of
Authority for inspection by all holders or owners of Parity Bonds and Additional Bonds. Such
publication is not required,however,if notice in writing is given to each holder and owner of Parity
Bonds and Additional Bonds.
Section 47. ADOPTION OF AMENDMENT. Whenever at any time not less than thirty(30)
days and within one year from the date of the first publication of said notice or other service of
written notice the Authority shall receive an instrument or instruments executed by the holders and
owners of at least two-thirds in aggregate principal amount of Parity Bonds and Additional Bonds
then outstanding,which instrument or instruments shall refer to the proposed amendment described in
said notice and which specifically consent to and approve such amendment in substantially the form
of the copy thereof on file with the paying agents and Authority, the Authority may adopt the
amendatory resolution in substantially the same form.
Section 48. EFFECTIVE UPON ADOPTION. Upon the adoption of any amendatory
resolution pursuant to the provisions hereof,this Resolution shall be deemed to be amended in accor-
dance with such amendatory resolution,and the respective rights,duties,and obligations under this
Resolution of the Authority and all the holders or owners of outstanding Parity Bonds and Additional
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Resolution No. 15-1454,Page 30 of 37
Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all respects to
such amendments.
Section 49. REVOCATION OF CONSENT. Any consent given by the holder or owner of a
Parity Bond or Additional Bond pursuant to the provisions hereof shall be irrevocable for a period of
six months from the date of the first publication of the notice provided for herein, and shall be
conclusive and binding upon all future holders and owners of the same Parity Bond or Additional
Bond during such period. Such consent may be revoked at any time after six months from the date of
the first publication of such notice by the holder or owner who gave such consent,or by a successor in
title,by filing notice thereof with the paying agent and the Authority,but such revocation shall not be
effective if the holders or owners of two-thirds aggregate principal amount of the Parity Bonds and
Additional Bonds outstanding as herein defined have,prior to the attempted revocation,consented to
and approved the amendment.
Section 50. PROOF OF OWNERSHIP. The fact of the holding of Parity Bonds and
Additional Bonds by any Bondholder and the amount and numbers of such Parity Bonds and
Additional Bonds, and the date of his holding same may be proved by the affidavit of the person
claiming to be such holder or owner,or by a certificate executed by any trust company,bank,banker,
or any other depository, wherever situated showing that on the date therein mentioned such person
had on deposit with such trust company, bank, banker, or other depository, the Parity Bonds or
Additional Bonds described in such certificate. The Authority may conclusively assume that such
ownership continues until written notice to the contrary is served upon the Authority. All matters
relating to the ownership of fully registered Parity Bonds and Additional Bonds shall be ascertained
from the registration books therefor kept by the registrar.
Section 51. DEFEASANCE OF BONDS. (a) .Any Bond and the interest thereon shall be
deemed to be paid,retired,and no longer outstanding(a"Defeased Bond")within the meaning of this
Resolution, except to the extent provided in subsection (d) of this Section, when payment of the
principal of such Bond,plus interest thereon to the due date(whether such due date be by reason of
maturity or otherwise)either(i)shall have been made or caused to be made in accordance with the
terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably
depositing with or making available to the Paying Agent/Registrar in accordance with an escrow
agreement or other instrument(the"Future Escrow Agreement")for such payment(1)lawful money
of the United States of America sufficient to make such payment or(2)Defeasance Securities that
mature as to principal and interest in such amounts and at such times as will insure the availability,
without reinvestment, of sufficient money to provide for such payment, and when proper
arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its
services until all Defeased Bonds shall have become due and payable. At such time as a Bond shall
be deemed to be a Defeased Bond hereunder,as aforesaid,such Bond and the interest thereon shall no
longer be secured by,payable from,or entitled to the benefits of,the Net Revenues as provided in this
Resolution,and such principal and interest shall be payable solely from such money or Defeasance
Securities. Notwithstanding any other provision of this Resolution to the contrary, it is hereby
provided that any determination not to redeem Defeased Bonds that is made in conjunction with the
payment arrangements specified in subsection 51(axi)or(ii)shall not be irrevocable,provided that
(1) in the proceedings providing for such payment arrangements,the Issuer expressly reserves the
right to call the Defeased Bonds for redemption;(2)gives notice of the reservation of that right to the
owners of the Defeased Bonds immediately following the making of the payment arrangements;and
(3)directs that notice of the reservation be included in any redemption notices that it authorizes.
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(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of
the Issuer also be invested in Defeasance Securities, maturing in the amounts and times as
hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Bonds and interest thereon,with respect to
which such money has been so deposited,shall be turned over to the Issuer,or deposited as directed in
writing by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or Defeasance
Securities are held for the payment of Defeased Bonds may contain provisions permitting the
investment or reinvestment of such moneys in Defeasance Securities or the substitution of other
Defeasance Securities upon the satisfaction of the requirements specified in subsection 51(aXi)or(ii).
All income from such Defeasance Securities received by the Paying Agent/Registrar which is not
required for the payment of the Defeased Bonds, with respect to which such money has been so
deposited,shall be remitted to the Issuer or deposited as directed in writing by the Issuer.
(c)The term"Defeasance Securities"means any securities and obligations now or hereafter
authorized by State law that are eligible to discharge obligations such as the Bonds.
(d) Until all Defeased Bonds shall have become due and payable,the Paying Agent/Registrar
shall perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had
not been defeased,and the Issuer shall make proper arrangements to provide and pay for such services
as required by this Resolution.
(e) In the event that the Issuer elects to defease less than all of the principal amount of
Bonds of a maturity,the Paying Agent/Registrar shall select,or cause to be selected,such amount of
Bonds by such random method as it deems fair and appropriate.
Section 52. DAMAGED,MUTILATED,LOST,STOLEN,OR DESTROYED BONDS. (a)
Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed,the Paying Agent/Registrar shall cause to be printed,executed,and delivered,a new bond
of the same principal amount,maturity,and interest rate,as the damaged,mutilated,lost,stolen,or
destroyed Bond,in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,mutilated,
Iost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss,theft,or destruction of a Bond,the registered owner applying
for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with
respect thereto. Also,in every case of loss,theft,or destruction of a Bond,the registered owner shall
furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss,theft,
or destruction of such Bond,as the case may be. In every case of damage or mutilation of a Bond,the
registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged
or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section,in the
event any such Bond shall have matured,and no default has occurred which is then continuing in the
payment of the principal of,redemption premium, if any, or interest on the Bond, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond)instead of issuing a replacement Bond,provided security or indemnity is furnished as
above provided in this Section.
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(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal,printing,and
other expenses in connection therewith. Every replacement bond issued pursuant to the provisions of
this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a
contractual obligation of the Issuer whether or not the lost,stolen,or destroyed Bond shall be found at
any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Resolution
equally and proportionately with any and all other Bonds duly issued under this Resolution.
(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter B,Chapter
1206,Texas Government Code,this Section shall constitute authority for the issuance of any such
replacement bond without necessity of further action by the governing body of the Issuer or any other
body or person,and the duty of the replacement of such bonds is hereby authorized and imposed upon
the Paying Agent/Registrar,and the Paying Agent/Registrar shall authenticate and deliver such Bonds
in the form and manner and with the effect,as provided in Section 4 for Bonds issued in conversion
and exchange for other Bonds.
Section 53. FEDERAL TAX COVENANTS. (a) General Tax Covenants Reaarding Tax
);xemption of Interest on the Bonds.The Issuer covenants to take any action necessary to assure,or
refrain from any action which would adversely affect, 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. In furtherance thereof,the Issuer covenants as
follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds or the projects financed therewith(less amounts deposited to a reserve fund,if any)are
used for any"private business use,"as defined in section 141(b)(6)of the Code or,if more
than 10 percent of the proceeds or the projects financed therewith are so used,such amounts,
whether or not received by the Issuer,with respect to such private business use,do not,under
the terms of this Resolution or any underlying arrangement,directly or indirectly,secure or
provide for the payment of more than 10 percent of the debt service on the Bonds, in
contravention of section 141(b)(2)of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a)hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a"private business use"which is"related"and not
"disproportionate,"within the meaning of section 141(bx3)of the Code,to the governmental
use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000,or 5 percent of the proceeds of the Bonds(less amounts deposited into a reserve
fund,if any)is directly or indirectly used to finance loans to persons,other than state or local
governmental units,in contravention of section 141(c)of the Code;
(d) 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;
(e) 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;
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Resolution No. 15-1454,Page 33 of 37
(f) to refrain from using any portion of the 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 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 1.148-1(b)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;
(g) 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);
(h) to pay 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
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby
established by the Issuer for the sole benefit of the United States of America,and such fund shall not
be subject to the claim of any other person,including without limitation the bondholders. The Rebate
Fund is established for the additional purpose of compliance with section 148 of the Code.
For purposes of the foregoing(a) and (b), the Issuer understands that the term "proceeds"
includes"disposition proceeds"as defined in the Treasury Regulations and,in the case of refunding
bonds,transferred proceeds(if any)and the proceeds of the refunded bonds expended prior to the date
of issuance of the Bonds. It is the understanding of the Issuer 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 rulings are hereafter
promulgated which modify or expand provisions of the Code,as applicable to the Bonds,the Issuer
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,the Issuer 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. In furtherance of
such intention,the Issuer hereby authorizes and directs the President of the Board of Authority,or the
Authorized Officer,to execute any documents, certificates or reports required by the Code and to
make such elections,on behalf of the Issuer,which may be permitted by the Code as are consistent
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Resolution No. 15-1454,Page 34 of 37
with the purpose for the issuance of the Bonds. This Resolution is intended to satisfy the official
intent requirements set forth in section 1.150-2 of the Treasury Regulations.
(b) Interest Earnings on Bond Proceeds. Interest earnings derived from the investment of
proceeds from the sale of the Bonds shall be used along with other bond proceeds for the purpose for
which the Bonds are issued set forth in Section 1 hereof; provided that after completion of such
purpose,if any of such interest earnings remain on band,such interest earnings shall by deposited in
the Interest and Sinking Fund. It is further provided,however,that any interest earnings on bond
proceeds which are required to be rebated to the United States of America pursuant to Section 53(a)
hereof in order to prevent the Bonds from being arbitrage bonds shall be so rebated and not
considered as interest earnings for the purposes of this Section 53(b).
(c) Disposition of Project. The Issuer covenants that the property constituting the Project
financed with the proceeds of the Refunded Bonds will not be sold or otherwise disposed in a
transaction resulting in the receipt by the Issuer of cash or other compensation, unless the Issuer
obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing,the portion of the
property comprising personal property and disposed in the ordinary course shall not be treated as a
transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer
shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply
will not adversely affect the excludability for federal income tax purposes from gross income of the
interest
Section 54. CUSTODY,APPROVAL,BOND COUNSEL'S OPINION,CUSIP NUMBERS
AND INSURANCE. The President of the Board of Directors and the General Manager of the Issuer
are hereby authorized to have control of the Bonds issued hereunder and all necessary records and
proceedings pertaining to the Bonds pending their delivery and the approval of the Bonds by the
Attorney General of the State of Texas. The Comptroller of Public Accounts is requested to cause the
Bonds to be registered in accordance with law. The approving legal opinion of the Issuer's Bond
Counsel and the assigned CUSIP numbers may,at the option of the Issuer,be printed on the Bonds or
on any Bonds issued and delivered in conversion of and exchange or replacement of any Bond,but
neither shall have any legal effect, and shall be solely for the convenience and information of the
registered owners of the Bonds. If insurance is obtained on any of the Bonds,the Bonds shall bear,as
appropriate and applicable,a legend concerning insurance as provided by the Insurer.
Section 55. FURTHER PROCEDURES.The President,Vice President and Secretary of the
Board of Directors of the Issuer,the General Manager(as the"Authorized Officer"of the Issuer)and
all other officers,employees and agents of the Issuer,and each of them,shall be and they are hereby
expressly authorized,empowered and directed from time to time and at any time to do and perform all
such acts and things and to execute,acknowledge and deliver in the name and under the corporate seal
and on behalf of the Issuer a Letter of Representation with DTC regarding the Book-Entry Only
System, the Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other
instruments,whether or not herein mentioned,as may be necessary or desirable in order to carry out
the terms and provisions of this Resolution,the Letter of Representation,the Bonds,the sale of the
Bonds and the Official Statement Notwithstanding anything to the contrary contained herein,while
the Bonds are subject to DTC's Book-Entry Only System and to the extent permitted by law,the
Letter of Representation is hereby incorporated herein and its provisions shall prevail over any other
provisions of this Resolution in the event of conflict. In case any officer whose signature shall appear
on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall
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Resolution No. 15-1454,Page 35 of 37
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office
until such delivery.
Section 56. CONTINUING DISCLOSURE OF INFORMATION. (a) As used in this
Section,the following terms have the meanings ascribed to such terms below:
"MSRB"means the Municipal Securities Rulemaking Board.
"Rule"means SEC Rule 15c2-12,as amended from time to time.
"SEC"means the United States Securities and Exchange Commission.
(b) Pursuant to a Continuing Disclosure Agreement by and between the Issuer and the Cities,
the Issuer and the Cities have undertaken for the benefit of the beneficial owners of the Bonds,to the
extent set forth therein,to provide continuing disclosure of financial information and operating data
with respect to the Cities in accordance with the Rule as promulgated by the SEC.
(c)The Issuer shall notify the MSRB,in a timely manner not in excess of ten business days
after the occurrence of the event,of any of the following events with respect to the Bonds:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults,if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers,or their failure to perform;
6. Adverse tax opinions,the issuance by the Internal Revenue Service of proposed or
final determinations of taxability,Notices of Proposed Issue(IRS Fong 5701-TEB)or
other material notices or determinations with respect to the tax status of the Bonds,or
other material events affecting the tax status of the Bonds;
7. Modifications to rights of holders of the Bonds,if material;
8. Bond calls,if material,and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds, if
material;
11. Rating changes;
12. Bankruptcy,insolvency,receivership or similar event of the Issuer;
13. The consummation of a merger,consolidation,or acquisition involving the Issuer or
the sale of all or substantially all of the assets of the Issuer,other than in the ordinary
course of business,the entry into a definitive agreement to undertake such an action
or the termination of a definitive agreement relating to any such actions,other than
pursuant to its terms,if material;and
14. Appointment of a successor Paying Agent/Registrar or change in the name of the
Paying Agent/Registrar,if material.
Section 57. SECURITY INTEREST. Chapter 1208, Government Code, applies to the
issuance of the Bonds and the pledge of the Net Revenues granted by the Issuer under Sections 6 and
15 of this Resolution,and is therefore valid,effective,and perfected. If Texas law is amended at any
time while the Bonds are outstanding and unpaid such that the pledge of the Net Revenues granted by
the Issuer under Sections 6 and 15 of this Resolution is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
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Resolution No. 15-1454,Page 36 of 37
Bonds the perfection of the security interest in said pledge,the Issuer agrees to take such measures as
it determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9,Business&Commerce Code and enable a filing to perfect the security interest in said
pledge to occur.
Section 58. EXPIRATION OF AUTHORIZATION. The authority of the General Manager,
as Authorized Officer,to sell the Bonds as described in Section 2 of this Resolution shall expire on
the one-year anniversary date of the adoption of this Resolution by the Board.
Section 59.REPEAL OF CONFLICTING RESOLUTIONS. All resolutions and all parts of
any resolutions which are in conflict or inconsistent with this Resolution are hereby repealed and shall
be of no further force or effect to the extent of such conflict or inconsisten
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