0491 ORDINANCE NO. 491
TRINITY RIVER AUTHORITY OF TEXAS CITY OF SOUTHLAKE BIG
BEAR CREEK WASTENATER INTERCEPTOR EXTENSION INSTALLMENT
SALE CONTRACT
THE STATE OF TEXAS :
KNOW ALL MEN BY THESE PRESENTS:
TRINITY RIVER AUTHORITY
OF TEXAS :
WHEREAS, Trinity River Authority of Texas (the "Authori-
ty'') is a conservation and reclamation district created and
governed by Chapter 518, Acts of the 54th Legislature of the
State of Texas, Regular Session,
ity Act"), pursuant to Article
1955, as amended (the "Author-
16, Section 59, of the Texas
Constitution; and
WHEREAS, the City of Southlake (hereinafter sometimes
called the "City"), in Tarrant and Denton Counties, Texas, is a
city duly organized and existing pursuant to the Constitution
and laws of the State of Texas and its Home Rule Charter; and
WHEREAS, the Authority is willing and able to acquire, by
purchase and construction, for the benefit of the City, a
separate sanitary sewer collection system to serve only the
City and to connect with and discharge into the main Big Bear
Creek Interceptor System to be owned and operated by the
Authority for the benefit of the City and others (with such
separate sanitary sewer collection system being hereinafter
entitled
called the "Project"); and
WHEREAS, the Project is described in an engineering report
"City of Southlake Big Bear Creek Interceptor
Extension S-6", dated October 30, 1989, by Espey-Huston &
Associates, Consulting Engineers, Dallas, Texas; and
WHEREAS, the city and the Authority are authorized to make
and enter into this Contract under Section 402.014, Local
Government Code (formerly known as Vernon's Ann. Tex. Civ. St.,
Article l109j), and other applicable laws.
IT IS THEREFORE CONTRACTED AND AGREED BETWEEN
THE AUTHORITY AND THE CITY AS FOLLOWS:
Section 1. DEFINITIONS. The terms and expressions used
in this Contract, unless the context shows clearly otherwise,
shall have meanings as follows:
(a) "Board" and "Board of Directors" means the
Board of Directors of the Authority.
(b) "Bonds" means any bonds issued by the Authority
for acquiring, by purchase and construction, the
Project, whether in one or more series or issues, or
any bonds issued to refund same or to refund any
refunding bonds.
(c) "Bond Resolution" means any resolution of the
Board of Directors authorizing the issuance
of Bonds and providing for their security and
payment, as such resolution(s) may be amended
from time to time as therein permitted.
(d) "Engineering Report" means the engineering report
described in the preamble to this Contract together
with any amendments and supplements thereto.
(e) "Project" means the Project as described in the
Engineering Report.
Section 2. OBLIGATION OF AUTHORITY TO ACQUIRE. The
Authority agrees to pay, and will pay, all of the actual costs
of acquiring, by purchase and construction, the Project,
through the issuance of its Bonds to provide the money for such
payment, all in the manner hereinafter described; and the
Authority, by such payment, will thus acquire the Project for
the benefit of the City.
Section 3. AUTHORITY'S BOND RESOLUTION. The proceeds
from the sale of the Bonds will be used for the payment of all
of the Authority's costs and expenses in connection with the
Project and the Bonds, including, without limitation, all
financing, legal, printing, administrative and overhead, and
other expenses and costs incurred in issuing its Bonds and
acquiring the Project, and to fund a debt service reserve and
other funds if required by any Bond Resolution. It is now
estimated that such Bonds will be issued by the Authority in
the amount of approximately $1,400,000 (whether actually more
or less), which amount is now estimated to be sufficient to
cover all the aforesaid costs and expenses and other amounts
required. Each Bond Resolution of the Authority shall specify
the exact principal amount of the Bonds issued, which shall
mature not more than 25 years from the date of such Bonds, and
shall bear interest at a rate or rates not to exceed the
maximum legal rates, and the Bond Resolution shall create and
provide for the maintenance of a revenue fund, an interest and
sinking fund, and a debt service reserve fund, if required, and
other funds, all in the manner and amounts as provided in each
Bond Resolution. The City agrees that if such Bonds are
3
actually issued and delivered to the purchaser thereof, the
Bond Resolution authorizing the Bonds shall for all purposes be
deemed to be in compliance with this Contract in all respects,
and the Bonds issued thereunder will
defined in this Contract.
Section 4. CONSULTING ENGINEERS.
constitute Bonds as
The Authority shall
select Consulting Engineers for the Project and the Project
will be acquired, by purchase and construction, in accordance
with plans and specifications prepared under the supervision of
the Consulting Engineers. It is further agreed that the
Consulting Engineers may be changed, but only with the agree-
ment of both the Authority and the City.
Section 5. ACQUISITION CONTRACTS. The Authority will
enter into such contracts as are necessary to provide for
acquiring, by purchase and construction, the entire Project,
and said contracts shall be executed as required by the laws
applicable to the Authority. The Authority shall cause the
amounts due under such contracts to be paid from the proceeds
from the sale of its Bonds. The Authority shall deposit the
proceeds from the sale of its Bonds into a special Project
Construction Fund. Said Project Construction Fund shall be
used for paying the Authority's costs and expenses incidental
to the Bonds and the Project in accordance with Section 3
hereof, and to pay the costs of acquiring, by purchase and
construction, the Project. Pending use as required by this
Contract, the amounts in the Project Construction Fund may be
invested in accordance with law, provided that all investment
earnings therefrom (excepting any which may be required to be
rebated to the Federal government to prevent the Bonds from
becoming "arbitrage bonds" under the IRS Code of 1986) shall be
deposited in and become a part of the Project Construction
Fund. If, after final completion of the Project, any surplus
remains on hand in the Project Construction Fund, such surplus
shall be used (1) to retire principal of any Bonds purchased by
the Texas Water Development Board, to the extent possible in
multiples of $5,000, with any excess to be deposited into the
interest and sinking Fund for the Bonds, or (2) if no Bonds
have been purchased by the Texas Water Development Board, then
for deposit into said interest and sinking Fund or for any
other lawful purpose.
Section 6. PAYMENTS BY CITY. (a) The Authority will
provide and make available to and for the benefit of the City
and its inhabitants, the works or improvements of the Project
paid for and acquired by the Authority pursuant to this Con-
tract. It is agreed that the City always shall have the
exclusive use of the Project. In consideration of the Authori-
ty's acquiring and making available to and for the benefit of
the City and its inhabitants, the works or improvements of the
Project, the City agrees to make the payments hereinafter
specified. As further consideration, it is agreed that the
5
City will have the sole
maintaining the Project,
maintain the Project; and
responsibility for operating and
and that the city will operate and
the City agrees to indemnify and to
save and hold harmless the Authority from any and all claims,
damages, losses, costs, and expenses, including reasonable
attorneys fees, arising at any time from the acquisition,
existence, ownership, operation and/or maintenance of the
Project. It is further agreed that the City's obligation to
make any and all payments under this Section will terminate
when all of the Authority's Bonds have been paid in full and
are no longer outstanding. It is hereby provided that in
further consideration of the payments made by the City under
this Section, the City shall become the owner of the Project
upon completion of the acquisition of the entire Project; and
the payments made by the City under this Section shall consti-
tute th~ necessary periodic or installment sale payments
required to purchase the Project.
(b) After completion of the acquisition, by purchase and
construction of the entire Project, and when the entire Project
is ready to be placed in service, the City shall inspect the
same and if it is found by the City to have been acquired, by
purchase and construction, as required by this Contract, the
City, acting by and through the Mayor of the City, shall notify
the Authority in writing that it has accepted the Project.
Upon such acceptance, all of the Authority's right,title, and
6
interest of every nature whatsoever in and to the Project
automatically shall vest irrevocably in the City without the
necessity of the execution of any conveyance by the Authority,
and such transaction shall result in the automatic sale and
delivery of the Project by the Authority to the city, and the
vesting of title to the Project in the City in consideration
for the agreement of the city to perform its obligations and
make the payments and indemnities required under this Contract.
If requested in writing by the City, acting by and through the
Mayor of the City, the Authority will execute and deliver to
the City an appropriate instrument acknowledging that such
sale, delivery, and vesting of title has occurred, but such
instrument shall not be necessary to effect the automatic sale,
delivery, and vesting of title, which shall occur as described
above. The sale and delivery of the Project and vesting of
title in the City upon the aforesaid conditions are deemed
appropriate and necessary by the Authority, and are made in
conformity with Section 402.014, Local Government Code. Until
the acceptance of the Project by the City, all right, title,
and interest in and to the Project shall be in the Authority.
After such acceptance and the resulting sale, delivery, and
vesting of title in the City, the Authority shall have no
right, title, or interest in, or responsibility with respect
to, the Project. The payments required to be made by the City
under this Agreement shall be made in all events, regardless of
7
whether title to the Project or any part thereof is in the
Authority or in the city. The City shall carry insurance on
the Project in the same manner and to the same extent, if any,
that it carries insurance on other similar works or improve-
ments.
(c)
Ail payments to be made by the City under this
Section shall be payable from and secured by pledges of surplus
revenues of the City's combined Waterworks and Sewer System and
city ad valorem taxes, all as authorized by Section 402.014,
Local Government Code, and in the manner hereinafter provided.
It is further understood and agreed that the Authority's only
source of funds to pay the principal of and interest on the
Bonds is from the payments to be made by the city to the
Authority under this Contract.
(d) The city agrees to make the following payments to the
Authority while any of the Authority's Bonds or interest
thereon are outstanding and unpaid:
1. Such amounts, payable monthly on or before the 20th
day of each month, in approximately equal monthly
installments for each applicable period, as are
necessary to pay the principal and/or interest
coming due on the Authority's Bonds on the next
succeeding interest payment date, plus the fees and
charges of the Paying Agent for paying or redeeming
the Bonds and/or interest thereon coming due on such
date, and the fees of the Registrar for transferring
and registering the Bonds;
2. Such amounts, payable upon receipt of a statement
therefor, as are necessary to pay, or reimburse the
Authority for, the costs and expenses, including
8
administrative and overhead costs and expenses,
reasonably and necessarily incurred by the Authority
and directly attributable and chargeable to the Bonds
and the Project; and
3. Such amounts as are necessary to make all payments
or deposits required to be made into any special or
reserve fund, or other account, established and/or
maintained by the provisions of any Bond Resolution.
(e) If, in addition to the amount initially issued, the
Authority finds it necessary to issue Bonds for the purpose of
completing the Project to the extent contemplated by this
Contract, all of the amounts to be paid to or retained by the
Authority under all Sections of this Contract shall be in-
creased, and such increased amounts shall at all times be
sufficient to pay the principal of and interest on all such
Bonds and all other requirements in connection therewith. It
is understood and agreed that the only source of funds for the
Authority to acquire and
issuance and sale of its
pursuant to this Contract.
complete the Project is from the
Bonds (including additional bonds)
(f) Payments, including indemnities, required to be made
by the City under this Contract shall be made from the surplus
revenues of the City's combined Waterworks and Sewer System
remaining after paying all operation and maintenance expenses
lawfully payable from said Systems, respectively, and after
paying all debt service, reserve, and other requirements in
connection with the City's bonds and other obligations, now or
hereafter outstanding, which are payable from the revenues of
the city's Waterworks and Sewer System; and said surplus
revenues are hereby pledged to making such payments required
under this Contract. It is specifically provided, however,
that if said surplus revenues should not be available or
sufficient at any time for making such payments, or any neces-
sary part thereof, required under this Contract, then, to the
extent required, all or any required part of such payments
shall be made from the
valorem taxes, all as
make provision in each
city's General Fund and the City's ad
hereinafter provided. The City shall
annual City Budget for the payment of
all amounts required to be paid by the City under this Con-
tract. In preparing the budget the City may take into consid-
eration the estimated surplus revenues of the City's Waterworks
and Sewer System to be remaining after paying all expenses of
operation and maintenance lawfully payable therefrom, respec-
tively, and after paying all debt service, reserve, and other
requirements in connection with the City's bonds and other
obligations, now or hereafter outstanding, which are payable
from the revenues of the City's Waterworks and Sewer System;
and the City shall, to the extent it deems it necessary or
advisable, fix, charge, and collect rates for sewer services
and/or water services of said System in such amounts as will
produce surplus revenues as aforesaid to provide for making all
or any part of the payments, including indemnities, required to
be made by the city under this Contract. However, to the
10
extent that such surplus revenues are not available at any time
to make such payments, then the City's ad valorem taxes in the
City's General Fund shall be used to make such payments, and
the proceeds of an annual ad valorem tax are hereby pledged for
such payments to the extent so required, in accordance with
Section 402.014, Local Government Code. During the current
year, and during each year hereafter, the City Council of the
city shall compute and ascertain a rate and amount of ad
valorem tax which will be sufficient to raise and produce the
money necessary to make all or any necessary part of such
payments, including indemnities, required to be made by the
City under this Contract, but only to the extent that the
aforesaid revenues are insufficient for such purpose, and in
every year said tax shall be sufficient to create a sinking
fund of at least 2% as required by Article 11, Section 5 of the
Texas Constitution. Said rate and amount of ad valorem tax are
hereby pledged to such payments, to the extent so required, and
shall be assessed, levied, and collected against all taxable
property in the City for each such year, but only when and to
the extent required above. Reference is hereby made to the
Ordinance passed by the city Council of the City which author-
izes the execution of this Contract and also levies the tax,
and orders the levying of the tax, as required by this Section.
(g) Recognizing the fact that the City urgently requires
the Project; and further recognizing that the Authority will
11
use the payments received from the City hereunder to pay,
secure, and finance the issuance of the Bonds,
agreed that if and when any Bonds are delivered,
be obligated to make the payments, including
it is hereby
the City shall
indemnities,
required by this Contract, regardless of whether or not the
Project is acquired, or whether or not the Authority actually
provides all or any part of the Project, or whether or not the
City actually receives or uses all or any part of the Project,
and the holders of the Bonds shall be entitled to rely on the
foregoing agreement and representation, regardless of any other
agreement between the Authority and the City.
Section 7. ACQUISITION. The Authority agrees to proceed
promptly with the acquisition, by purchase and construction, of
the Project. The Authority hereby covenants that it will make
a diligent effort to complete such acquisition as soon as
practicable. The City and the Authority do not anticipate any
delays in completing the acquisition of the Project, but the
City and the Authority shall not be liable to each other for
any damages caused by any delays in completion of the Project.
The obligation on the
Project shall be con-
Section 8. CONDITIONS PRECEDENT.
part of the Authority to acquire the
ditioned upon the following:
(a)
(b)
sale of Bonds in an amount sufficient to
assure the acquisition of the Project; and
the Authority's ability, or the ability of
the contractors, to obtain all interests in real
property, material, labor, and equipment necessary
for the acquisition of the Project.
12
Section 9. CITY'S PROPERTY. By these presents, City
authorizes use by the Authority of any and all real property,
streets, alleys, public ways and places, and easements of City
for acquisition and construction of the Project. It is further
specifically understood and agreed that the City shall acquire
and/or make available to the Authority all lands, easements,
rights-of-way, and other interests in real property, free and
clear of all encumbrances which would adversely affect the
Project, which are necessary for the acquisition and construc-
tion of the Project by the Authority.
Section 10. FORCE MAJEURE. If, by reason of Force
Majeure, any party hereto shall be rendered unable wholly or in
part to carry out its obligations under this agreement then
such party shall give notice and full particulars of such Force
Majeure in writing to the other party within a reasonable time
after occurrence of the event or cause relied upon, and the
obligation of the party giving such notice, so far as it is
affected by such Force Majeure, shall be suspended during the
continuance of the inability then claimed, except as herein-
after provided, but for no longer period, and any such party
shall endeavor to remove or overcome such inability with all
reasonable dispatch. The term Force Majeure as employed
herein, shall mean acts of God, strikes, lockouts, or other
industrial disturbances, acts of public enemy, orders of any
13
kind of the Government of the United States or the State of
Texas or any civil or military authority, insurrections, riots,
epidemics, landslides, lightning, earthquake, fires, hurri-
canes, storms, floods, washouts, droughts, arrests, restraint
of government and people, civil disturbances, explosions,
breakage or accidents to machinery, pipelines, or canals, or
other causes not reasonably within the control of the party
claiming such inability. It is understood and agreed that the
settlement of strikes and lockouts shall be entirely within the
discretion of the party having the difficulty, and that the
above requirement that any Force Majeure shall be remedied with
all reasonable dispatch shall'not require the settlement of
strikes and lockouts by acceding to the demands of the opposing
party or parties when such settlement is unfavorable to it in
the judgment of the party having the difficulty. It is specif-
ically excepted and provided, however, that in no event shall
any Force Majeure relieve the City of its obligation to make
payments to the Authority as required under Section 6 of this
Contract.
Section 11. REGULATORY BODIES. This Contract and the
Project shall be subject to all valid rules, regulations, and
laws applicable thereto passed or promulgated by the United
States of America, the State of Texas, or any governmental body
or agency having lawful jurisdiction or any authorized repre-
sentative or agency of any of them.
14
Section 12. TEP~4 OF CONTRACT. That the term of this
Contract shall be for the period during which the Authority's
Bonds or any interest thereon are outstanding and unpaid.
IN WITNESS WHEREOF, the Authority, acting under authority
of its Board of Directors, and the City, acting under authority
of its City Council, have caused this Contract to be duly
executed in several counterparts, each of which shall
constitute an original,
1989, which is the date
A?TEST: /
e~etary, Board of
(AUTHORITY SEAL)
ATTEST:
(CITY SEAL)
all as of the 5th day of December,
of this Contract.
By Gen~~n~e~ '
Directors
15
Fort Worth Star-Telegram
400 W.SEVENTH STREET•FORT WORTH,TEXAS 76102
THE STATE OF TEXAS
unty of Tarrant
Before me , a Notary Public in and for said County and State , tr .s day
personally appearedo�-1 -0 ,P__ V-ev'c---_ Billing Specialist for tf• Fort Worth
Star-Telegram , published by the Star-Telegram Inc • at Fort Wortr in Tarrant
County , Texas ; and who , after being duly sworn , did depose and Ely that the
following clipping of an advertisement was published in the abo' named
paper on the following dates :
DATE DESCRIPTION AD SIZE TOTAL
1NCHRINE RATE AMOUNT
NOV 26 6427359 november 26 CL • 358 1X33 L 33 • 6C 19 . 80
ORDINANCE NO.491
ORDINANCE AUTHOR-
IZING AND DIRECTING
THE EXECUTION OF
THE TRINITY RIVER
AUTHOR ITYOFTEXAS-
CITY OF SOUTHLAKE
BIG BEAR CREEK
WASTEWATER INTER-
CEPTOR EXTENSION
INSTALLMENT SALE
CONTRACT PLEDGING
AND APPROPRIATING
WATERWORKS AND
SEWER SYSTEM REVE-
NUED PLEDGING •
ANDSCEVYING A CITY
AD VALOREM TAX IN 7c
CONNECTION THERE-
WITH
. L
PASSEDANDAPPROVEDIN S G N E 9
SECOND READING THIS
yTHE211st DAY OFNOVEM.DRN TO BEFORE ME , TriIS THE 27 D4" 0 h� 1(1 .-_......_...___.
Gary Flckes
`
--
Gary PUBLIC /7
Ma or of South lake �� /`'
ATTEST _.- . __.....
Sandra L.LeGrand o,..►c"c w, .- v--'vdoo
City Approved
Drov das ,a�Pdp TARRANT C )UNTY , TEXAS
E.AlenTayloor Jr.m %°i �'''B`'b SUE A. RUSSELL-
CltvAttorney P4..` .e4OMMISSlO.V EXPIRES l..
%.• i�.4r OCTOBER 27, 1993 01 AFFIDA4 =TS • 00
6-LAX)
TEAR ALONG THIS PERFORATION AND RETURN THE LOWER PORTION WITH YOUR PAYMENT ---,A
ortWorth S REMIT TO: Olo. P.O. BOX 970734 • FORT WORTH, TEXAS 76197
6427359 ACCOUNT C I T 5 7 AMOUNT 19 • 8 0
NUMBER bUE
PAGE OF I
CITY OF SOUTHLAKE ORIGINAL
667 N CARROLL PLEASE PAY 19 • 80
SOUTHLAKE TX 76092 0 THIS AMOUNT
ATTN : SANDRA LEGRAND
PLEASE WRITE IN AMOUNT ENCLOSED