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07/05/1994-CC-Agenda Packet-Regular
CITY CGUNCIL AGENDA S DULY 5, 1994 2Q 1 BGLIVAR STREET, CITY HALL CITY CUUNCIL CHAMBERS 7: Q6 P.M. 1. Call to Order, Invocation, and Pledge to the Flag 2. CONSENT AGENDA a). Approve Minutes b). Disbursements AGENDA 3. Citizen's Input PASSD��.�� __ ._ 4. Consider and Possible Action Awarding Library Bid 5. Presentation -Chamber of Commerce �. Consider and Possible Action Regarding Annual Sanger Sellebratian ,�� �� � c� �� 7. Consider and Possible Action Regarding Ordinance #�-��ale of � ✓� Ccrtificatcs of Obligatian....Strics 1J94 8. Consider and Possible Action Regarding Capital Improvements Projects -Streets 9. Consider and Possible Action Regarding Street Name -Change - Austin StreetJDuck Creek Raad la. Consider and Passible Action Regarding Limb Collection Policy 11. Executive Session Pursuant to Article 6252-17, Vernon's Civil Statutes, 2{g), Personnel - Appointments 12. Consider and Passible Action Regarding Executive Session Pursuant to V.A.T.S. Article 6252-17, 2(g), Personnel - Appointments 13. Consider and Passible Action Regarding Baard/Commission Appointments 14. City Administration Report �- � f Rosalie Chavez, City ecretary 15. Any Other Such Matters 7/1/94 3:00 p.m. 16. Adjournment Date & T��e Posted a®`®'mil ®®F ,'�`�®®'®®® ®® • x �a®® a�g � MINUTES: MEMBERS PRESENT: MEMBERS ABSENT: OTHERS PRESENT. City Council Meeting June 20, 1994 Mayor Nel Armstrong, Councilman Joe Bell, Councilman Jack Richardson, and Councilman Tommy Kincaid Councilman Jerry Jenkins and Councilwoman Margie Braxton City Administrator John Hamilton, City Secretary Rosalie Chavez, Public Works Superintendent Chuck Tucker, Police Chief Benny Erwin, Craig Waggoner, John Mears - Hunter Associates, Jim Mantos - Motorola, and Liza Hardy - Sanger Courier 1. Mayor Armstrong called the meeting to order. Councilman Bell gave the invocation, which was followed by the pledge to the flag. 2. CONSENT AGENDA a). Approve Minutes b). Disbursements Motion was made by Councilman Richardson to approve the Consent Agenda. Seconded by Councilman Bell. Motion carried. 3. Citizen's Input -None 4. Consider and Passible Action Regarding Capital Improvements Projects -Streets Jahn Mears, Hunter Associates, City's Consulting Engineers, addressed the City Council concerning the bidding of the praposed street improvements. John Mears stated he recommended all the street projects be bidded together and to wait until the first of the year to begin. Mayor Armstrong disagreed due to the possibility of bad weather during the first of the year. She asked if they could give a twelve month completion date. John Mears advised if they did, Council needed to set a schedule so the contractor can adhere to the schedule. CC MINUTES 6/20/94, PAGE 2 Discussion continued regarding the time line an the street projects. Council did agree to start with Willow Street in September, then move to Austin, then loth and Keaton last, if bids come in right. Council also agreed to have another workshop to possibly consider another street if the proposed bids come as projected. No action taken to allow Council to hold another workshop before any further decisions are made. 5. Consider and Possible Action Regarding Public Safety Radio System Chief Benny Erwin addressed this item concerning his request for a new 800 "Radio System" for his department. Benny stated the County would accommodate this request. He also stated that Weldon Lucas, Sheriff at Denton County, has no intention of asking Commissioner's Court at this time to allow their department to charge for dispatch services. Discussion followed. Council tabled this item and to be on the next City Council Meeting in order to further study the proposed Safety Radio System. This will also allow the Public Safety Radio System Committee to meet and report back to City Council. 6. Consider and Possible Action Regarding Request to Re -Advertise Bids - Utility Vehicle -Fire Department Craig Waggoner addressed this item. He stated that the law bidder for the new suburban for the Fire Department, James Wood Motors, was not able to deliver the vehicle. Craig stated that Mr. Hamilton had checked with the City Attorney who advised that a new bid cycle was necessary. Craig also advised that by the time this bid goes out, the 94's will no longer be available and 95's might be more expensive. Discussion. Motion was made by Councilman Kincaid that the Fire Department be allowed to readvertise Utility Vehicle Bids on the new suburban. Seconded by Councilman Richardson. Motion carried. CC MINUTES 6/ 20/ 94, PAGE 3 7. Consider and Possible Action Regarding Resolution - Appointment to Denco 9-1-1 Board Councilman Kincaid made the motion to adopt Resolution #R7-94 supporting Don Franklin, Director of Police/EMS, of the City of Trophy Club, to Denco 9-1-1. Seconded by Councilman Richardson. Motion carried. 8. Consider and Possible Action Regarding Animal Control -Proposed Adoption Fee Discussion. Councilman Bell made the motion to support the fee of $5.00 for animal adoption from the animal shelter. Seconded by Councilman Richardson. Motion carried. 9. Consider and Possible Action Regarding Board/Commission Appointments Mayor Armstrong stated that in the midst of trying to get the Library constructed that Council needs to keep the continuity of the Board going at this point in time. Mayor Armstrong appointed the following with Council consensus: Parks Board Place 1 Sam Burrus Reappointed Parks Board Pace 3 &Place 6 Vacancies Parks Board Carroll Caddell will be replacing James Huse (Local Pastor serving on the Parks Board) Mayor Armstrong does have two prospects and will appoint them at the next meeting. Beautification Place 6 Teresa Calvert Reappointed Beautification Place 5 David Gray Reappointed Beautification Place 7 Galinda Powell Appointed Beautification Place 3 Eddie Branham Recently Appointed Beautification Place 2 Doug Payne Recently Appointed (1994-1996) UU MINUTES 6/ 20/ 94, PAGE 4 Library Board Mayor Armstrong stated that Helen BULAII O, Nancy Smith, both have served six (6) year terms; however, they are willing to serve again. She stated she would like these two members reappointed; however, our ordinance states that members can only serve six (6) year terms and she feels that this Board needs to be kept together with the same members due to the extenuating circumstances. P & Z Place 4 Russell Madden Appointed P & Z Place 2 Glenn Shaw Reappointed P & Z Place 6 Mike Rosenberg Reappointed P & Z Place 5 Glenn Ervin Appointed Parks Board - The new representative for the Wednesday Study Club, 1994/96, is Mrs. W. H. (Quida) Anderson. Motion was made by Councilman Kincaid that on the Library Board that the six (6) year term be waived for Helen Bounds and Nancy Smith to maintain the continuity on the Board during the midst of library construction. Seconded by Councilman Richardson. Motion carried. 10. Consider and Possible Action Regarding Limb Pick -Up Mayor Armstrong again stated that each year this has become a costly service for the City both in resources and time. Mayor Armstrong stated possibly an ordinance could be passed where limbs be cut a certain length and bundled before the City picks them uPO Craig Waggoner also stated that the chipper parts are also costly and the equipment is getting old. Discussion. Staff instructed to bring an ordinance regarding limb pick-up. 11. City Administration Report a). Lone Star Gas has begun extending natural gas service to customers along Railroad Avenue and Jones Street. CC MINUTES C/ 20/ 94, PAGE 5 Railroad Avenue has been completed already. b), City of Sanger is on a Fax Network and does receive Ozone Alert Notices. Whenever there is an Ozone Alert, some sort of signs will be put out in the lobby and the driveAhru informing people of an Ozone Alert that is mandated by Washington. City Administrator mentioned there is a video available at the Library that can be checked out regarding Ozone Alert precautions. c}, The 1995 proposed budget for the Denton Central Appraisal District is available for review. 12. Any Other Such Matters a). Councilman Kincaid stated Mrs. Alyne Wells is complaining regarding her ditch on Wood Street. Apparently, the contractors stacked up some concrete in that ditch. Chuck Tucker stated that It it Councilman Kincaid advised Ms. Wells is not happy about that ditch since she can't maintain it, Councilman Bell stated that possibly one of her grandsons could help Mrs. Wells in keeping the ditch, mowed, etc.. b). Councilman Richardson asked regarding the letter sent from the Texas Historical Commission. Vickie Elieson, Librarian, did notify the Texas Historical Commission at the time we applied for the Library Grant, The Historical Commission did state buildings might be historical; however, if the City did not receive any State or Federal monies then the City can do whatever is necessary. c). Councilman Richardson asked status of street lights. CC MINUTES 6/ 20/ 94, PAGE 6 Staff advised that it was less than expected and the steel poles seem to be the most expensive item to be purchased. d). Councilman Kincaid asked regarding the cat ordinance. Staff advised the City does not have a cat ordinance. 13. Meeting adjourned. CITY OF SANGER AP OPEN ITEM LIST COMPANY 100 7/01/94 PAGE 1 08:30 VENDOR INV NO INV DTE PO NUM DUE DTE PORCH AMT DISC. AMT 175 A-1 RENTAL P.O. BOX 7878 5 GAL, COOLERS-S 15408201 6/08/94 14533 7/06/94 104.97 .00 424.0500 52.49 412.0600 52.48 TOTAL 104. 97 .00 1501 ARM COMMUNICATIONS REPAIR RADIOS -PO 3705 456, 0300 RADIO/BATTERY-ST 3860 442.0600 442.0500 442.0700 TOTAL P.O. BOX 50324 116 MAPLE ST 6/02/94 14575 7/06/94 99.00 99.00 6/20/94 14651 7/06/94 552.00 356.00 52.00 144.00 651.00 1530 CUMMINS SUPPLY FEEDTHRU INSERT- 26454280 6/08/94 470.0800 393.94 TOTAL 1O ,. 4710200 5191 .0)".4. rrlltH TAL T 17700 GRLL'5 INC. MEDIC BAG/LIGHT- 5876911 421.2000 419.1100 TOTAL 393.94 14594 7/06/94 53.91 14596 7/06/94 11.20 65.11 607 WEST fi2ND 5T. P.O. BDX 8007 fi/23/94 14447 7/0fi/94 127.00 127.00 127.00 2470 PALUMBO DRIVE P.O. BOX 55268 6/24/94 14565 7l06/94 110.98 59.99 50.99 110.98 24632 JESWOOD tlIL COMPANY P.tl. BOX 2026 FUEL PURCHASE -MA 14653 6/21/94 14653 7/06/94 1,644.10 .00 414.0500 320.02 414.1100 55.44 414.0300 670.72 414.2600 73.79 414.0800 314.52 414.0600 78.57 414.0700 41.19 414.1700 89.85 TOTAL 11644.10 .00 26000 KRIZ DAVIS CO. P.O. BOX 2500 PEDESTALS -ELECT. 327394 6/16/94 14569 7/06/94 368.00 .00 470.0800 368.00 TOTAL 368.00 .00 ����� CITY OF SANGER VENDOR INV NO 419.0300 419.0500 419.0600 419.0700 419.0800 419.1100 419.1200 419.2000 419.2200 419.2600 456.0900 TOTAL 33725 PERRICO TRAILER AND MFG. AP OPEN ITEM LIST COMPANY 100 7/01/94 PAGE 2 08:30 INV DTE PO NUM DUE DTE PURCH AMT DISC. AMT 4.39 4.39 4.39 4.39 4.39 4.39 4.39 4.39 4.39 4.39 4.43 r r�, P. 35300 RITE -WELD SUPPLY ING. P.O. BOX 1597 OXYGEN -FIRE DEPT 1009876 6/23/94 14446 7/06/94 31.68 .00 421.1100 31.68 TOTAL 31.68 .00 35350 ROADRUNNER TRAFFIC SUPPLY P.O.BOX 122837 PVMNT MARKERS/PO 12524 5/17/94 14468 7/06/94 256.50 .00 423.1100 256.50 TOTAL 256.50 .00 38752 SARGENT-SOWELL, INC. LOCKBOX 911494 CAN LINERS-C.CEN 3397730 5/06/94 14365 7/06/94 141.90 .00 461.2100 141.90 TOTAL 141.90 .00 42925 STATE FIREMAN & MARSHALL P.O. BOX 13326 DUES -FIRE DEPT 14445 6/23/94 14445 7/06/94 115.00 .00 439.1100 115.00 TOTAL 115.00 .00 13701 TECHLINE, INC. P.O. BOX 9249 CABLE -ELECT DEPT 28085 4/22/94 14145 7/06/94 460.00 .00 470.0800 460.00 HPS HEADS -ELECT. 28929 5/24/94 14567 7/06/94 325.80 .00 470.0800 325.80 ARMS -ELECT. DEPT 29214 6/02/94 13646 7/06/94 1,043.30 .00 470.0800 1104130 TOTAL 11829010 .00 13718 TAM AUTO PARTS 117 N. MORRIS PATCHES -ALL DEPT 14640 6/21/94 14640 7/06/94 10.99 .00 419.0300 2.19 419.0500 2.19 419.0600 2019 419.0700 2.19 419.0800 2.23 TOTAL 10.99 .00 11" 49654 U.S. ARMOR CORP. VEST—WALLER/POLI 022476 418.0300 TOTAL 50200 VIKING OFFICE PRODUCTS COPY PAPER 828956 442.1400 442.1500 TOTAL 084930 �CY • 7/06/94 239w74r l; 239.74 6/20/94 14647 7/06/94 49.80 24.90 24.90 49.80 50265 W.W. GRAINGER, ING. DEPT 192-824850119 GATE OPENER—SEWE 341204 6/16/94 14639 7/06/94 421.0700 360.48 TOTAL METER lMETER CAN— 207675 6/15/94 470.0800 141.00 TOTAL BHUUA - .) 421x0500 4212000 r TOTAL LIBRARY 2 POLICE 3 STREETS 5 WATER 6 WASTEWATER 7 ELECTRIC 8 PARKS 9 FIRE 11 VEHICLE MAINT—GF 12 MAYOR & COUNCIL—GF 14 MAYOR & COUNCIL—EF 15 PUBLIC WORKS—EF 17 VEHICLE MAINT—EF 20 COMM. CENTER —BF 21 WASTE—WTR LOLL—EF 22 FNTIVIAL CODTTROL—GF 26 �M 1 1 "1 •r r,. I ri 1 ' 1 14643 7/06/94 2,446WfolropruAA .81 L'iL'iSfiiC� TC}. FROM. DATE. SUBJECT. ■ Ps OBOX 578 A,NGER, TEXAS 76266 Honorable Mayer Members of the City Council John Hamilton, City Administrator July 1, 1994 bids on Library The bid opening is scheduled for 2 p.m., Tuesday, July 5th with the results forwarded to you for consideration. project Architect herald Stone will present the bids for your consideration. JH.es T C): FROM: DATE: SUBJECT: p Pm w BOX 578 LNG- O R TEXAS 76266 I�onorale Mayor Mem+ers of the City Ct���cil John Hamilton, City Administrator � duly 1, 1994 Presentation - Chamber of ComMerc Chamber President Debbie Spindle will be present to discuss the Annual Sanger Sellebration. J�:es MEMORANDUM #2531 TO: Pa Oa BOX `k NGER,TEXAS • 6• Honorable Mayor &Members of the City Council Jahn Hamilton, City Administr July 1, 1994 SUBJECT: Ordinance #08-94 -Sale of Certificates of Obligation, $1,900,000 and Gather Legal Documents Related to Ordinance #08-94, including General Certificate, Signature Identification and No -Litigation Certificates, Treasurer Receipt, Closing Certificate, No -Arbitrage Certificate, Initial Certificate of Obligation, Instruction letters to the Attorney General, Comptroller and Bank where the Certificates of Obligation are to be delivered and Paying Agent/Registrar Agreement These are the documents from Bond Counsel, Peter Tart, related to the Sale of the $1,900,000 Certificates of Obligation. JH:es LAW OFFICES MkeCALL, PARKHURST & MUMON L,L,P, 3100 ONE AMERICAN CENTER AUSTIN, TEXAS 78701.3248 TELEPHONE' 512 47B•3805 FACBIM ILE: 512 472.O B71 Mr. Dan Al Southwes ecurities Inc. 4I naissanc4 Tower D as, Texas 75270 Dear Dan: 717 NORTH HARWOOO NINTH FLOOR DALLAS, TEXAS 75201.6587 TCLlPHONE� 214 220.2800 FACSIMILE: 214 754.9250 June 29, 1994 $1,900,000 City of Sanger, Texas Certificates of Obligation, Series 1994 I225 ONE RIVERWALK PLACE SAN ANTONIO, TEXAS 78205 3503 TELCPHON E: 210 225.2 BOO FACSIMILl: 210 2Z5.2984 Enclosed herewith are the following documents for execution by the Mayor and City Secretary of the City of Sanger: 1. Ordinance authorizing the issuance of the captioned Certificates of Obligation. 2. General Certificate, 3. Signature Identification and No -Litigation Certificate. 4. Treasurer's Receipt. 5. Closing Certificate. 6. No -Arbitrage Certificate. 7. g. 8. Initial Certificate of Obligation. 9. S t -pages-fare.su� i aCertif=tes�of•Obligation. 10. "Wions. 11. Instruction letters to the Attorney General, Comptroller and the Bank where the Certificates of Obligation are to be delivered. 12. Paying Agent/Registrar Agreement. Please execute all the above enclosures as indicated and return all copies to our office with the exception of one copy of the ordinance which should be retained for the City's files. Peter M. Tart wk enclosures / cc* John Hamilton CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER We, the undersigned officers of said City, hereby certify as follows: 1. The City Council of said City convened in REGULAR MEETING ON THE STH DAY OF JULY, 1994, at the City Hall, and the roll was called of the duly constituted officers and members of said City Council, to -wit: Nel Armstrong, Mayor Jerry Jenkins, Mayor Pro Tem Jack Richardson Tommy Kincaid Russell Madden Margie Braxton Rosalie Chavez, City Secretary and all of said persons were present, except the following absentees: thus constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF CERTIFICATES OF OBLIGATION, SERIES 1994 was duly introduced for the consideration of said City Council and read in full. It was then duly moved and seconded that said Ordinance be passed; and, after due discussion, said motion carrying with it the passage of said Ordinance, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye". NOES: None. hr 2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificates that said Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of said Ordinances that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, 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. 3. That the Mayor of said City has approved and hereby approves the aforesaid Ordinance; that the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Ordinance for all purposes. SIGNED AND SEALED the Sth day of July, 1994. City Secretary SEAL Mayor ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF SANGER, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1994, IN THE PRINCIPAL AMOUNT OF $1,9007000 THE STATE OF TEXAS § COUNTY OF DENTON § CITY OF SANGER § WHEREAS, the City Council deems, it advisable to issue Certificates of Obligation in the amount of $1,900,000 for paying all or a portion of the City's contractual obligations for the purpose of constructing public works in the City, to -wit: constructing and reconstructing streets throughout the City, and constructing a new library at 5th and Bolivar Streets, and for paying legal, fiscal, architectural and engineering fees in connection with such projects; and WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be issued and delivered for cash pursuant to Article 2368a.1, V.A.T.C.S., now known as Subchapter C of Chapter 271 of the Local Government Code; and WHEREAS, the City Council has heretofore, on the 6th day of June, 1994, adopted a Resolution authorizing and directing the City Secretary to give notice of intention to issue Certificates of Obligation; and WHEREAS, said notice has been duly published in the Sanger Courier, which is a newspaper of general circulation in said City, in its issues of June 16, 1994 and June 23, 1994; and WHEREAS, the City received no petition from the qualified electors of the City protesting the issuance of such Certificates of Obligation. WHEREAS, the meeting was open to the public and public notice of the time, place and purpose of said meeting was given pursuant to ChapterTexas Government Code. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BANGER: Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES OF OBLIGATION. The certificate of obligation or certificates of obligation of the Issuer of Sanger (the "Issuer") are hereby authorized to be issued and delivered in the aggregate principal amount of $1,900,000 for paying all or a portion of the Issuer's contractual obligations for the purpose of constructing public works in the Issuer, to -wit: constructing and reconstructing streets throughout the Issuer, and constructing a new library at 5th and Bolivar Streets, and for paying legal, fiscal, architectural and engineering fees in connection with such projects. 1 Section 2. DESIGNATION OF THE CERTIFICATES OF OBLIGATION. Each certificate of obligation issued pursuant to this Ordinance shall be designated: "Issuer OF SANGER, TEXAS CERTIFICATE OF OBLIGATION, SERIES 1994", and initially there shall be issued, sold, and delivered hereunder a single fully registered certificate of obligation, without interest coupons, payable in installments of principal (the "Initial Certifi- cate of Obligation"), but the Initial Certificate of Obligation may be assigned and transferred and/or converted into and exchanged for a like aggregate principal amount of fully registered certificates of obligation, without interest coupons, having serial maturities, and in the denomination or denominations of $5,000 or any integral multiple of $5,000, all in the manner hereinafter provided. The term "Certificates of Obligation" as used in this Ordinance shall mean and include collectively the Initial Certificate of Obligation and all substitute certificates of obligation exchanged therefor, as well as all other substitute certifi- cates of obligation and replacement certificates of obligation issued pursuant hereto, and the term "Certificate of Obligation" shall mean any of the Certificates of Obligation. Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE OF OBLIGATION. (a) The Initial Certificate of Obligation is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered Certificate of Obligation, without interest coupons, dated July 1, 1994, in the denomination and aggregate principal amount of $1,900,000, numbered R-1, payable in annual installments of principal to the initial registered owner thereof, to -wit: , or to the registered assignee or assignees of said Certificate of Obligation or any portion or portions thereof (in each case, the "registered owner"), with the annual installments of principal of the Initial Certificate of Obligation to be payable on the dates, respectively, and in the prin- cipal amounts, respectively, stated in the FORM OF INITIAL CERTIFICATE OF OBLIGATION set forth in this Ordinance. (b) The Initial Certificate of Obligation (i) may be prepaid or redeemed prior to the respective scheduled due dates of installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted and exchanged for other Certificates of Obligation, (iv) shall have the characteristics, and (v) shall be signed and sealed, and the principal of and interest on the Initial Certificate of Obligation shall be payable, all as provided, and in the manner required or indicated, in the FORM OF INITIAL CERTIFICATE OF OBLIGATION set forth in this Ordinance. Section 4. INTEREST. The unpaid principal balance of the Initial Certificate of Obligation shall bear interest from the date of the Initial Certificate of Obligation, and will be calculated on the basis of a 360-day year of twelve 30-day months to the respective scheduled due dates, or to the respective dates of prepayment or redemption, of the installments of principal of the Initial Certificate of Obligation, and said interest shall be payable, all in the manner provided and at the rates and on the dates stated in the FORM OF INITIAL CERTIFICATE OF OBLIGATION set forth in this Ordinance. 2 W Section 5. FORM OF INITIAL CERTIFICATE OF OBLIGATION. The form of the Initial Certificate of Obligation, including the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the Initial Certificate of Obligation, shall be substantially as follows: NO. R-1 FORM OF INITIAL CERTIFICATE OF OBLIGATION UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER, TEXAS CERTIFICATE OF OBLIGATION SERIES 1994 $1,900,000 CITY OF BANGER, in Denton County (the "Issuer"), being a political subdivision A the State of Texas, hereby promises to pay to or to the registered assignee or assignees of this Certificate of Obligation or any portion or portions hereof (in each case, the "registered owner") the aggregate principal amount of ONE MILLION NINE HUNDRED THOUSAND DOLLARS in annual installments of principal due and payable on September 1 in each of the years, and in the respective principal amounts, as set forth in the following schedule. YEAR AMOUNT YEAR AMOUNT 1996 $ 85,000 2003 $135,000 1997 90,000 2004 145,000 1998 100,000 2005 150,000 1999 105,000 2006 165,000 2000 110,000 2007 175,000 2001 120,000 2008 190,000 2002 125,000 2009 200,000 and to pay interest, from the date of this Initial Certificate of Obligation, on the balance of each such installment of principal, respectively, from time to time remaining unpaid, at the rates as follows: maturity 1996, % maturity 2003, % maturity 1997, % maturity 2004, % maturity 1998, % maturity 2005, % maturity 1999, % maturity 2006, % maturity 2000, % maturity 2007, % maturity 2001, % maturity 2008, % maturity 2002, % maturity 2009, % with said interest being payable on March 1, 1995, and semiannually on each September 1 and March 1 thereafter while this Certificate of Obligation or any portion hereof is outstand- ing and unpaid. THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate of Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The installments of principal and the interest on this Certificate of Obligation are payable to the registered owner hereof through the services of Texas Commerce Bank National Association, Dallas, Texas, which is the "Paying Agent/Reg- istrar" for this Certificate of Obligation. Payment of all principal of and interest on this Certificate of Obligation shall be made by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by check or draft, dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Certificate of Obligation (the "Certificate of Obligation Ordinance") 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, first-class postage prepaid, on each such principal and/or interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on the 15th 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, or by such other method acceptable to Paying Agent/Registrar requested by, and at the risk and expense of, the registered owner. The Issuer covenants with the registered owner of this Certificate of Obligation that on or before each principal and/or interest payment date for this Certificate of Obligation it will make available to the Paying Agent/ Registrar, from the "Interest and Sinking Fund" created by the Certificate of Obligation Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on this Certificate of Obligation, when due. IF THE DATE for the payment of the principal of or interest on this Certificate of Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institu- tions in the city where 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. 4 THIS CERTIFICATE OF OBLIGATION has been authorized in accordance with the Constitution and laws of the State of Texas, in the principal amount of $1,900,000 for paying all or a portion of the Issuer's contractual obligations for the purpose of constructing public works in the Issuer, to -wit: constructing and reconstructing streets throughout the Issuer, and constructing a new library at 5th and Bolivar Streets, and for paying legal, fiscal, architectural and engineering fees in connection with such projects. ON SEPTEMBER 1, 2004, or any date thereafter, the unpaid installments of principal of this Certificate of Obligation may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the Issuer shall select and designate the maturity, or maturities, and the amount that is to be redeemed, and if less than a whole ma- turity is to be called, the Issuer shall direct the Paying Agent/Registrar to call by lot (provided that a portion of this Certificate of Obligation may be redeemed only in an integral multiple of $5,000), at the redemption price of the principal amount, plus accrued interest to the date fixed for prepayment or redemption. AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written notice of such prepayment or redemption shall be mailed by the Paying Agent/Reg- istrar to the registered owner hereof. By the date fixed for any such prepayment or redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepayment or redemption price for this Certificate of Obligation or the portion hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice of prepayment or redemption is given, and if due provision for such payment is made, all as provided above, this Certificate of Obligation, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the prepayment or redemption price plus accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of principal of this Certificate of Obligation or any portion hereof. THIS CERTIFICATE OF OBLIGATION, to the extent of the unpaid or unredeemed principal balance hereof, or any unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for this Certificate of Obligation, upon the terms and conditions set forth in the Certificate of Obligation Ordinance. Among other requirements for such transfer, this Certificate of Obligation must be presented and surren- dered to the Paying Agent/Registrar for cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Reg- 5 istrar, evidencing assignment by the initial registered owner of this Certificate of Obligation, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names this Certificate of Obligation or any such portion or portions hereof is or are to be transferred and registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Certificate of Obligation or any such portion or portions hereof by the initial registered owner hereof. Anew certificate of obligation or certificates of obligation payable to such assignee or assignees (which then will be the new registered owner or owners of such new certificate of obligation or certificates of obligation) or to the initial registered owner as to any portion of this Certificate of Obligation which is not being assigned and transferred by the initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate of Obligation or any portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof for the conversion and exchange of this Certificate of Obligation or any portion hereof. The registered owner of this Certificate of Obligation shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate of Obligation to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. AS PROVIDED above and in the Certificate of Obligation Ordinance, this Certificate of Obligation, to the extent of the unpaid or unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate principal amount of fully registered certificates of obligation, without interest coupons, payable to the assignee or assignees duly designated in writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this Certificate of Obligation which is not being assigned and transferred by the initial registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute certificate of obligation issued in exchange for any portion of this Certificate of Obligation shall have a single stated principal maturity date), upon surrender of this Certificate of Obligation to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Certificate of Obligation Ordinance. If this Certificate of Obligation or any portion hereof is assigned and transferred or converted each certificate of obligation issued in exchange for any portion hereof shall have a single stated principal maturity date corresponding to the due date of the installment of principal of this Certificate of Obligation or portion hereof for which the substitute certificate of obligation is being ex- changed, and shall bear interest at the rate applicable to and borne by such installment of principal or portion thereof. Such certificates of obligation, respectively, shall be subject to redemption prior to maturity on the same dates and for the same prices as the corresponding installment of principal of this Certificate of Obligation or portion hereof for which they are being exchanged. No such certificate of obligation shall be payable in install- ments, but shall have only one stated principal maturity date. AS PROVIDED IN THE CERTIFICATE OF OBLIGATION ORDINANCE, THIS CERTIFICATE OF OBLIGATION IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED 6 OR CONVERTED ONCE ONLY, and to one or more assignees, but the certificates of obligation issued and delivered in exchange for this Certificate of Obligation or any portion hereof may be assigned, transferred and converted, subsequently, as provided in the Certificate of Obligation Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging this Certificate of Obligation or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment, conversion, or exchange (1) 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 Certificate of Obligation or portion thereof called for prepayment or redemption prior to maturity, within 45 days prior to its prepayment or redemption date. IN THE EVENT any Paying Agent/Registrar for this Certificate of Obligation is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate of Obligation Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owner of this Certificate of Obligation. IT IS HEREBY certified, recited, and covenanted that this Certificate of Obligation 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 Certificate of Obligation have been performed, existed, and been done in accordance with law; that this Certificate of Obligation is a general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate of Obligation, as such interest and principal come due, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for such payment, within the limit prescribed by law, and that this Certificate of Obligation is additionally secured by and payable from limited surplus revenues of the Issuer's Utility System, being the Waterworks, Sewer and Electric System, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the Issuer's revenue bonds or other obligations (now or hereafter outstanding), which are payable from all or any part of the Net Revenues of the Issuer's Utility System. BY BECOMING the registered owner of this Certificate of Obligation, the registered owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of Obligation Ordinance is duly recorded and available for inspection in the official minutes and records of the governi ffing body of the Issuer, and agrees that the terms and provisions of this Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between the registered owner hereof and the Issuer. 7 �,s IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed with the manual signature of the Mayor of the Issuer, countersigned with the manual signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed on this Certificate of Obligation to be dated July 1, 1994. City Secretary Mayor CITY SEAL FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS. COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO. I hereby certify that this Certificate of Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certifi- cate of Obligation has been registered by the Comptroller of Public Accounts of the State A Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES OF OBLIGATION. Registration and Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of Texas Commerce Bank National Association, Dallas, Texas (the "Paying Agent/Registrar") books or records of the registration and transfer of the Certificates of Obligation (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 transfers and registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribes and the Paying Agent/Registrar shall make such transfers and registrations as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each Certificate of Obligation to which payments with respect to the Certificates of Obligation 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 8 r. 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. Registration of each Certificate of Obligation may be transferred in the Regi- stration Books only upon presentation and surrender of such Certificate of Obligation to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/ Registrar, (1) evidencing the assignment of the Certificate of Obligation, or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such assignee or assignees to have the Certificate of Obligation or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Certificate of Obligation or any portion thereof, a new substi- tute Certificate of Obligation or Certificates of Obligation shall be issued in conversion and exchange therefor in the manner herein provided. The Initial Certificate of Obligation, to the extent of the unpaid or unredeemed principal balance thereof, may be assigned and transferred by the initial registered owner thereof once only, and to one or more assignees designated in writing by the initial registered owner thereof. All Certificates of Obligation issued and delivered in conversion of and exchange for the Initial Certificate of Obligation shall be in any denomination or denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate of Obligation shall have a single stated principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION set forth in this Ordinance, and shall have the characteristics, and may be assigned, transferred, and converted as hereinafter provided. If the Initial Certificate of Obligation or any portion thereof is assigned and transferred or converted the Initial Certificate of Obligation must be surrendered to the Paying Agent/Registrar for cancellation, and each Certificate of Obligation issued in exchange for any portion of the Initial Certificate of Obligation shall have a single stated principal maturity date, and shall not be payable in installments; and each such Certificate of Obligation shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Certificate of Obligation is being exchanged, and each such Certificate of Obligation shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged. If only a portion of the Initial Certificate of Obligation is assigned and transferred, there shall be delivered to and registered in the name of the initial registered owner substitute Certificates of Obligation in exchange for the unassigned balance of the Initial Certificate of Obligation in the same manner as if the initial registered owner were the assignee thereof. If any Certificate of Obligation or portion thereof other than the Initial Certificate of Obligation is assigned and transferred or converted each Certificate of Obligation issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate of Obligation for which it is exchanged. A form of assignment shall be printed or endorsed on each Certificate of Obligation, excepting the Initial Certificate of Obligation, which shall be executed by the registered owner or its duly authorized attorney or representative to evidence an assignment thereof. Upon surrender of any Certificates of Obligation or any portion or portions thereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such 9 transfer in the Registration Books, and shall deliver a new fully registered substitute Certificate of Obligation or Certificates of Obligation, having the characteristics herein described, payable to such assignee or assignees (which then will be the registered owner or owners of such new Certificate of Obligation or Certificates of Obligation), or to the previous registered owner in case only a portion of a Certificate of Obligation is being assigned and transferred, all in conversion of and exchange for said assigned Certificate of Obligation or Certificates of Obligation or any portion or portions thereof, in the same form and manner, and with the same effect, as provided in Section 6(d), below, for the conversion and exchange of Certificates of Obligation by any registered owner of a Certificate of Obligation. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer and delivery of a substitute Certificate of Obligation or Certificates of Obligation, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration of any Certificate of Obligation or any portion thereof (1) 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 Certificate of Obligation or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. (b) Ownership of Certificates of Obli a� tion. The entity in whose name any Certificate of Obligation shall be registered in the Registration Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Certificate of Obligation shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any such Certificate of Obligation shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Certificate of Obligation to the extent of the sum or sums so paid. (c) Payment of Certificates of Obligation 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 Certificates of Obligation, and to act as its agent to convert and exchange or replace Certificates of Obligation, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the Certificates of Obligation, and of all conversions and exchanges of Certificates of Obligation, and all replacements of Certificates of Obligation, as provided in this Ordinance. 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 fifteen (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 Bondholder appearing on the Security Register at the close of business on the 15th day next preceding the date of mailing of such notice. (d) Conversion and Exchange or Replacement; Authentication. Each Certificate of Obligation issued and delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance or principal amount thereof, may, upon surrender of such Certificate of Obligation at the principal corporate trust office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as appropriate, be converted into and exchanged for fully registered certificates of obligation, without interest coupons, in the form prescribed in the FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION set forth in this Ordinance, in the denomination of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate of Obligation shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or principal amount of any Certificate of Obligation or Certificates of Obligation so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be. If the Initial Certificate of Obligation is assigned and transferred or converted each substitute Certificate of Obligation issued in exchange for any portion of the Initial Certificate of Obligation shall have a single stated principal maturity date, and shall not be payable in installments; and each such Certificate of Obligation shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Certificate of Obligation is being exchanged; and each such Certificate of Obligation shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged. If a portion of any Certificate of Obligation (other than the Initial Certificate of Obligation) shall be redeemed prior to its scheduled maturity as provided herein, a substitute Certificate of Obligation or Certificates of Obligation having the same maturity date, bearing interest at the same rate, in the denomination or denominations of any integral multiple of $5,000 at the request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for cancellation. If any Certificate of Obligation or portion thereof (other than the Initial Certificate of Obligation) is assigned and transferred or converted, each Certificate of Obligation issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate of Obligation for which it is being exchanged. Each substitute Certificate of Obligation shall bear a letter and/or number to distinguish it from each other Certificate of Obligation. The Paying Agent/Registrar shall convert and exchange or replace Certificates of Obligation as provided herein, and each fully registered certificate of obligation delivered in conversion of and exchange for or replacement of any Certificate of Obligation or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Certificates of Obligation for all purposes of this 11 Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that any Certificate of Obligation authenticated in conversion of and exchange for or replacement of another Certificate of Obligation on or prior to the first scheduled Record Date for the Initial Certificate of Obligation shall bear interest from the date of the Initial Certificate of Obligation, but each substitute Certificate of Obligation so authenticated after such first scheduled Record Date shall bear interest from the interest payment date next preceding the date on which such substitute Certificate of Obligation was so authenticated, unless such Certificate of Obligation is authenticated after any Record Date but on or before the next following interest payment date, in which case it shall bear interest from such next following interest payment date; provided, however, that if at the time of delivery of any substitute Certificate of Obligation the interest on the Certificate of Obligation for which it is being exchanged is due but has not been paid, then such Certificate of Obligation shall bear interest from the date to which such interest has been paid in full. THE INITIAL CERTIFICATE OF OBLIGATION issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Certificate of Obligation issued in conversion of and exchange for or replacement of any Certificate of Obligation or Certificates of Obligation issued under this Ordinance there shall be printed a certificate, in the form substantially as follows. "PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate of Obligation has been issued under the provisions of the Certificate of Obligation Ordinance described on the face of this Certificate of Obligation; and that this Certificate of Obligation has been issued in conversion of and exchange for or replacement of a certificate of obligation, certificates of obligation, or a portion of a certificate of obligation or certificates of obligation of an issue 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 Paying Agent/Registrar Authorized Representative" An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Certificate of Obligation, date and manually sign the above Certificate, and no such Certificate of Obligation shall be deemed to be issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Certificates of Obligation surrendered for conversion and exchange or replacement. 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 or replacement of any Certificate of Obligation or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute 11 Certificates of Obligation in the manner prescribed herein, and said Certificates of Obligation shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the duty of conversion and exchange or replacement of Certificates of Obligation as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authen- tication Certificate, the converted and exchanged or replaced Certificate of Obligation shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Certificate of Obligation which originally was issued pursuant to this Ordinance, ap- proved by the Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate of Obligation or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required to make any such conversion and exchange or replacement of Certificates of Obligation or any portion thereof (1) 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 Certificate of Obligation or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. (e) In General. All Certificates of Obligation issued in conversion and exchange or replacement of any other Certificate of Obligation or portion thereof, (1) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Certificates of Obligation to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and exchanged for other Certificates of Obligation, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Certificates of Obligation shall be payable, all as provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION set forth in this Ordinance. (f) Payment of Fees and Charces. The Issuer hereby covenants with the registered owners of the Certificates of Obligation that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Certificates of Obligation, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer of registration of Certificates of Obligation, and with respect to the conversion and exchange of Certificates of Obligation solely to the extent above provided in this Ordinance. (g) Substitute Paying At The Issuer covenants with the registered owners of the Certificates of Obligation that at all times while the Certificates of Obligation are outstanding the Issuer will provide a competent and legally qualified bank, trust 13 company, financial institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Certificates of Obligation under this Ordinance, 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 Ordinance. 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 Certificates of Obligation, 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 Certificates of Obligation, 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 Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. (h) Book -Entry Only System. The Certificates of Obligation issued in exchange for the Certificates of Obligation initially issued to the purchaser specified herein shall be initially issued in the form of a separate single fully registered Certificate of Obligation for each of the maturities thereof. Upon initial issuance, the ownership of each such Certificate of Obligation shall be registered in the name of Cede & Co., as nominee of Depository Trust Company of New York ("DTC), and except as provided in subsection (f) hereof, all of the outstanding Certificates of Obligation shall be registered in the name of Cede & Co., as nominee of DTC. With respect to Certificates of Obligation 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 DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest on the Certificates of Obligation. 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 Certificates of Obligation, (ii) the delivery to any DTC Participant or any other person, other than a Certificate of Obligation holder, as shown on the Registration Books, of any notice with respect to the Certificates of Obligation, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Certificate of Obligation holder, as shown in the Registration Books of any amount with respect to principal of, premium, if any, or interest on, as the case may be, the Certificates of Obligation. Notwithstanding any other provision of thi Ns Ordinance to the contrary, the Issuer and the 14 Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate of Obligation is registered in the Registration Books as the absolute owner of such Certificate of Obligation for the purpose of payment of principal, premium, if any, and interest, as the case may be, with respect to such Certificate of Obligation, for the purpose of giving notices of redemption and other matters with respect to such Certificate of Obligation, for the purpose of registering transfers with respect to such Certificate of Obligation, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Certificates of Obligation only to or upon .the order of the respective owners, as shown in the Registration Books as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of, premium, if any, and interest on, or as the case may be, the Certificates of Obligation to the extent of the sum or sums so paid. No person other than an owner, as shown in the Registration Books, shall receive a Certificate of Obligation certificate evidencing the obligation of the Issuer to make payments of principal, premium, if any, and interest, as the case may be, pursuant to this Ordinance. 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 Ordinance with respect to interest checks being mailed to the registered owner at the close of business on the Record Date, the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (i) Successor Securities Depository; Transfers Outside Book -Entry Onl,�, sue. In the event that the Issuer or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the representation letter of the Issuer to DTC and that it is in the best interest of the beneficial owners of the Certificates of Obligation that they be able to obtain certificated Certificates of Obligation, the Issuer or the Paying Agent/Registrar shall (1) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Certificates of Obligation to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Certificates of Obligation and transfer one or more separate Certificates of Obligation to DTC Participants having Certificates of Obligation credited to their DTC accounts. In such event, the Certificates of Obligation 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 Certificate of Obligation holders transferring or exchanging Certificates of Obligation shall designate, in accordance with the provisions of this Ordinance. (j) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Certificate of Obligation is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on, or as the case may be, such Certificate of Obligation and all notices with respect 1 5 to such Certificate of Obligation shall be made and given, respectively, in the manner provided in the representation letter of the Issuer to DTC. Section 7. FORM OF SUBSTITUTE CERTIFICATES OF OBLIGATION. The form of all Certificates of Obligation issued in conversion and exchange or replacement of any other Certificate of Obligation or portion thereof, including the form of Paying Agent/Registrar's Certificate to be printed on each of such Certificates of Obligation, and the Form of Assignment to be printed on each of the Certificates of Obligation, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION NO. PRINCIPAL AMOUNT UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER, TEXAS CERTIFICATE OF OBLIGATION SERIES 1994 DATE OF INTEREST RATE MATURITY DATE ORIGINAL ISSUE CUSIP NO, July 1, 1994 ON THE MATURITY DATE specified above, the CITY OF SANCrER (the "Issuer") in Denton County, being a political subdivision of the State of Texas, hereby promises to pay to or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon from July 1, 1994 to the maturity date specified above, or the date of redemption prior to maturity, at the interest rate per annum specified above with interest being payable on March 1, 1995, and semiannually on each September 1 and March 1 thereafter; except that if the date of authentication of this Certificate of Obligation is later than February 15, 1995, 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 (hereinafter defined) but on or before the next following in terest nterest payment date, in which case such principal amount shall bear interest from such next following interest payment date. THE PRINCIPAL OF AND INTEREST ON this Certificate of Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Certificate of Obligation shall be paid to the registered owner hereof upon presentation and surrender of this Certificate of Obligation at maturity or upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of Texas Commerce Bank National Association, Dallas, Texas, which is the "Paying Agent/Registrar" for this Certificate of Obligation. The payment of interest on this Certificate of Obligation shall be made by the Paying Agent/Registrar to the registered owner hereof on the 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 Ordinance authorizing the issuance of the Certificates of Obliga- tion (the "Certificate of Obligation Ordinance") 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, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on the 15th day of the month next preceding such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described, or by such other method acceptable to the Paying Agent/Registrar requested by, and at the risk and expense of, the registered owner. Any accrued interest due upon the re- demption of this Certificate of Obligation prior to maturity as provided herein shall be paid to the registered owner at the principal corporate trust office of the Paying Agent/Registrar upon presentation and surrender of this Certificate of Obligation for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar. The Issuer covenants with the registered owner of this Certificate of Obligation that on or before each principal payment date, interest payment date, and accrued interest payment date for this Certificate of Obligation, it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by th-e Certificate of Obligation Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Certificates of Obligation, when due. IF THE DATE for the payment of the principal of or interest on this Certificate of Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where 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 CERTIFICATE OF OBLIGATION is one of an issue of Certificates of Obliga- tion initially dated July 1, 1994, authorized in accordance with the Constitution and laws of the State of Texas in the original principal amount of $1,900,000 for paying all or a portion of the Issuer's contractual obligations for the purpose of constructing public works in the Issuer, to -wit: constructing and reconstructing streets throughout the Issuer, and constructing 17 a new library at 5th and Bolivar Streets, and for paying legal, fiscal, architectural and engineering fees in connection with such projects. ON SEPTEMBER 1, 2004, or any date thereafter, the Certificates of Obligation of this Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the maturity or maturities of Certificates of Obligation and the amounts thereof, to be redeemed shall be selected and designated by the Issuer, and the Issuer shall direct the Paying Agent/Registrar to call by lot Certificates of Obligation, or portions thereof within such maturities and in such principal amounts, for redemption (provided that a portion of this Certificate of Obligation may be redeemed only in an integral multiple of $5,000), at the prepayment or redemption price of the principal amount thereof, plus accrued interest to the date fixed for prepayment or redemption. AT LEAST 30 days prior to the date fixed for any redemption of Certificates of Obligation or portions thereof prior to maturity a written notice of such redemption shall be published once in a financial publication, journal, or reporter of general circulation among securities dealers in the City of New York, New York (including, but not limited to, The Bond Buyer and The Wall Street Journal), or in the State of Texas (including, but not limited to, The Texas Bond Reporter). Such notice also shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, not less than 30 days prior to the date fixed for any such redemption, to the registered owner of each Certificate of Obligation to be redeemed at its address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure to send, mail or 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 Certificate of Obligation, and it is hereby specifically provided that the publication of such notice as required above shall be the only notice actually required in connection with or as a prerequisite to the redemption of any Certificates of Obligation or portions thereof. 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 Certificates of Obligation or portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written notice of redemption is published and if due provision for such payment is made, all as provided above, the Certificates of Obligation 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 plus accrued interest from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Certificate of Obligation shall be redeemed a substitute Certificate of Obligation or Certificates of Obligation 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 principal 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 Certificate of Obligation Ordinance, THIS CERTIFICATE OF OBLIGATION OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be trans- ferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates of Obligation, upon the terms and conditions set forth in the Certificate of Obligation Ordinance. Among other requirements for such assignment and transfer, this Certificate of Obligation 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 assign- ment of this Certificate of Obligation or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate of Obligation or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Certificate of Obligation shall be executed by the registered owner or its duly authorized attorney or representative to evidence the assignment hereof. Anew Certificate of Obligation or Certificates of Obligation payable to such assignee or assignees (which then will be the new registered owner or owners of such new Certificate of Obligation or Certificates of Obligation), or to the previous registered owner in the case of the assignment and transfer of only a portion of this Certificate of Obligation, may be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate of Obligation, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of other Certificates of Obligation. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration of this Certificate of Obligation or any portion hereof (1) 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 Certificate of Obligation or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. The registered owner of this Certificate of Obligation shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate of Obligation to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. ALL CERTIFICATES OF OBLIGATION OF THIS SERIES are issuable solely as fully registered certificates of obligation, without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate of Obligation Ordinance, this Certificate of Obligation, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or assignees hereof, be converted into and exchanged for a like aggregate principal amount of fully registered Certificates of Obligation, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in any 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 Certificate of Obligation to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Certificate of Obligation Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate of Obligation or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition prece- dent to the exercise of such privilege of conversion and exchange. The Paying Agent/Regis- trar shall not be required to make any such conversion and 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 Certificate of Obligation or 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 Certificates of Obligation is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate of Obligation Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owners of the Certificates of Obligation. IT IS HEREBY certified, recited, and covenanted that this Certificate of Obligation 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 Certificate of Obligation have been performed, existed, and been done in accordance with law; that this Certificate of Obligation is a general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate of Obligation, as such interest and principal come due, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for such payment, within the limit prescribed by law, and that this Certificate of Obligation is additionally secured by and payable from limited surplus revenues of the Issuer's Utility System, being the Waterworks, Sewer and Electric System, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the Issuer's revenue bonds or other obligations (now or hereafter outstanding), which are payable from all or any part of the Net Revenues of the Issuer's Utility System. BY BECOMING the registered owner of this Certificate of Obligation, the registered owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of Obligation Ordinance 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 2Q and provisions of this Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate of Obligation. City Secretary CITY SEAL Mayor FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Certificate of Obligation 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 Certificate of Obligation has been issued under the provisions of the Certificate of Obligation Ordinance described on the face of this Certificate of Obligation; and that this Certificate of Obligation has been issued in conversion of and exchange for or replacement of a certificate of obligation, certificates of obligation, or a portion of a certificate of obligation or certificates of obligation of an issue 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 Texas Commerce Bank National Association Paying Agent/Registrar By Authorized Representative 21 FORM OF ASSIGNMENT: ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Certificate of Obligation, or duly authorized representative or attorney thereof, hereby assigns this Certificate of Obligation to (Assignee's Social Security or Taxpayer Identification Number and hereby irrevocably constitutes and appoints (print or type Assignee's name anI address, including zip code) attorney to transfer the registration of this Certificate of Obligation on the Paying Agent/Registrar's Registration Books with full power of substitution in the premises. Dated Signature Guaranteed; NOTICE: This signature must be guaranteed by a member of the New York Stock Exchange or a commercial bank or trust company. Registered Owner NOTICE: This signature must correspond with the name of the Registered Owner appearing on the face of this Certificate of Obligation in every particular without alteration or enlargement or any change whatsoever. Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the benefit of the Certificates of Obligation, and the Interest and Sinking Fund shall be established and maintained by the Issuer at an official depository bank of the Issuer. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and principal of the Certificates of Obligation. All ad valorem taxes levied and collected for and on account of the Certificates of Obligation shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates of Obligation or interest thereon are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Certificates of Obligation as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of its Certificates of Obligation as such principal matures (but never less than 2% of the original principal amount of the Certificates of Obligation as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of the Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, 22 against all taxable property in the Issuer for each year while any of the Certificates of Obligation or interest thereon are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Certificates of Obligation, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Section 9. REVENUES. That said Certificates %J Obligation, together with other obligations of the Issuer, are additionally secured by and shall be payable from and secured by the collection of the revenues of the Issuer's Utility System, being the Waterworks, Sewer and Electric System, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the Issuer's revenue bonds or other obligations (now or hereafter outstanding), which are payable from all or any part of the revenues of the Issuer's Utility System, being the Waterworks, Sewer and Electric System, with such amount not exceeding $1,000, constituting "Surplus Revenues". The Issuer shall deposit such Surplus Revenues to the credit of the Interest and Sinking Fund created pursuant to Section 8; to the extent necessary to pay the principal and interest on the Certificates of Obligation. Notwithstanding the requirements of Section 8, if Surplus Revenues are actually on deposit or budgeted for deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes which otherwise would have been required to be levied pursuant to Section 8 may be reduced to the extent and by the amount of the Surplus Revenues then on deposit in the Interest and Sinking Fund or budgeted for deposit therein. Section 10. TRANSFER. That the Mayor and the City Secretary are hereby ordered to do any and all things necessary to accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to pay such items of principal and interest. Section 11. DEFEASANCE OF CERTIFICATES OF OBLIGATION. (a) Any Certificate of Obligation and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Certificate of Obligation") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section 11, when payment A the principal of such Certificate of Obligation, plus interest thereon to the due date (whether such due date be by reason of maturity, upon redemption, or otherwise) either (1) shall have been made or caused to be made in accordance with the terms thereof (including the giving of any required notice of redemption, or (n) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without re- investment, 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 Certificates of Obligation shall have become due and payable. 23 At such time as a Certificate of Obligation shall be deemed to be a Defeased Certificate of Obligation hereunder, as aforesaid, such Certificate of Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and revenues pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Certificates of Obligation 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. (c) The term "Government Obligations" as used in this Section, 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, which may be United States Treasury obligations such as its State and Local Government Series, which may be in book -entry form. (d) Until all Defeased Certificates of Obligation shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certificates of Obligation 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 Ordinance. Section •12. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES OF OBLIGATION. (a) Replacement Certificates of Obligation. In the event any outstanding Certificate of Obligation is damaged, mutilated, lost, stolen, or des- troyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new certificate of obligation of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate of Obligation, in replacement for such Certificate of Obligation in the manner hereinafter provided. (b) Application for Replacement Certificates of Obli a� tion. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Certificates of Obligation shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate of Obligation, the registered owner applying for a replacement certificate of obligation 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 Certificate of Obligation, 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 Certificate of Obligation, as the case may be. In every case of damage or mutilation of a Certificate of Obligation, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate of Obligation so damaged or muti- lated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Certificate of Obligation 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 Certificate of Obligation, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Certificate of Obligation) instead of issuing a replacement Certificate of Obligation, provided security or indemnity is furnished as above provided in this Section. (d) Charge for Issuing Replacement Certificates of Obligation. Prior to the issuance A any replacement certificate of obligation, the Paying Agent/Registrar shall charge the registered owner of such Certificate of Obligation with all legal, printing, and other expenses in connection therewith. Every replacement certificate of obligation issued pursuant to the provisions of this Section by virtue of the fact that any Certificate of Obligation is lost, stolen, or destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Certificate of Obligation shall be found at any time, or be enforce. able by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Certificates of Obligation duly issued under this Ordinance. (e) Authority for Issuing Replacement Certificates of Obli„a�. In accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section 12 of this Ordinance shall constitute authority for the issuance of any such replacement certificate of obligation 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 certificates of obligation is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates of Obligation in the form and manner and with the effect, as provided in Section 6(d) of this Ordinance for Certificates of Obligation issued in conversion and exchange for other Certificates of Obligation. Section 13. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES OF OBLIGATION; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED. The Mayor of the Issuer is hereby authorized to have control of the Initial Certificate of Obligation issued hereunder and all necessary records and proceedings pertaining to the Initial Certificate of Obligation pending its delivery and its investigation, examination, and approval by the Attorney General A the State of Texas, and its registration by the Comptroller of Public Accounts of the State A Texas. Upon registration of the Initial Certificate of Obligation said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate on the Initial Certificate of Obligation, and the seal of said Comptroller shall be impressed, or placed in facsimile, on 9 5 the Initial Certificate of Obligation. The approving legal opinion of the Issuer's Certificate of Obligation Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Initial Certificate of Obligation or on any Certificates of Obligation issued and delivered in conversion of and exchange or replacement of any Certificate of Obligation, but neither shall have any legal effect, and shall be solely for the convenience and informa- tion of the registered owners of the Certificates of Obligation. In addition, if bond insurance is obtained, the Certificates of Obligation may bear an appropriate legend as provided by the insurer. Section 14. COVENANTS REGARDING TAX EXEMPTION. The Issuer covenants to refrain from taking any action which would adversely affect, and to take any required action to ensure, the treatment of the Certificates of Obligation as obligations described in Section 103 of the Internal Revenue Code of 1986, as amended (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 Certificates of Obligation 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 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 Ordinance, or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Certificates of Obligation, 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 Certificates of Obligation 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(b)(3) 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 Certificates of Obligation (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 Certificates of Obligation being treated as "private activity bonds" within the meaning of Section 141(b) A the Code; (e) to refrain from taking any action that would result in the Certificates of Obligation being "federally guaranteed" within the meaning of Section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Certificates of Obligation, 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 Certificates of Obligation, other than investment property acquired with -- (1) proceeds of the Certificates %J Obligation invested for a reasonable temporary period of 3 years or less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed for the purpose for which the bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of Section 1.148-1(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 Certificates of Obligation, (g) to otherwise restrict the use of the proceeds of the Certificates of Obligation or amounts treated as proceeds of the Certificates of Obligation, as may be necessary, so that the Certificates of Obligation do not otherwise contravene the requirements of Section 148 A 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 Certificates of Obligation) 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 Certificates of Obligation 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 (i) to maintain such records as will enable the Issuer to fulfill its responsibilities under this Section and Section 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Certificates of Obligation. 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 Certificates of Obligation, 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 -rec- ognized bond counsel, will not adversely affect the exemption from federal income taxation A interest on the Certificates of Obligation under Section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements 11 which are applicable to the Certificates of Obligation, 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 Certificates of Obligation under Section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor of the Issuer 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 with the purpose for the issuance of the Certificates of Obligation. In order to facilitate compliance with the above covenants (h) and (i), 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 ncluding without limitation the bondholders. The Rebate Fund is established for the additional purpose of compliance with Section 148 of the Code. Section 15. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The Issuer hereby designates the Certificates of Obligation as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code. In furtherance of such designation, the Issuer represents, covenants and warrants the following: (a) that during the calendar year in which the Certificates of Obligation are issued, the Issuer (including any subordinate entities) has not designated nor will designate obligations, which when aggregated with the Certificates of Obligation, will result in more than $10,000,000 of "qualified tax-exempt obligations" being issued; and (b) that the Issuer reasonably anticipates that the amount of tax-exempt obligations issued, during the calendar year in which the Certificates of Obligation are issued, by the Issuer (or any subordinate entities) will not exceed $10,000,000. Section 16. SALE OF INITIAL CERTIFICATE OF Certificate of Obligation is hereby sold and shall be delivered to OBLIGATION. The Initial for cash for the par value thereof and accrued interest thereon to date of delivery, plus a premium of $ It is hereby officially found, determined, and declared that the Initial Certificate of Obligation has been sold at public sale to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to a Official Notice of Sale and Official Statement dated June 22, 1994 prepared and distributed in connection with the sale of the Initial Certificate of Obligation. Said Official Notice of Sale and Official Statement, and any addenda, supplement, or amendment thereto have been and are hereby approved by the governing body of the Issuer, and their use in the offer and sale of the Certificates of Obligation is hereby approved. It is further officially found, determined, and declared that the statements and representations contained in said Official Notice of Sale and Official Statement are true and correct in all material respects, to the best knowledge and belief of the governing body of the Issuer. Section 17. INTEREST EARNINGS ON CERTIFICATES OF OBLIGATION PROCEEDS. The earnings derived from the investment of proceeds from the sale of the Certificates of Obligation shall be used along with other Certificate of Obligation proceeds as described in Section 1 hereof; provided that after completion of such project, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that interest earnings on the Certificates of Obligation proceeds which are required to be rebated to the United States of America pursuant to Section 14 hereof in order to prevent the Certificates of Obligation from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purpose of this Section. Section 18. PUBLIC NOTICE. It is public notice of the time, place and purpose Chapter 551, Texas Government Code. hereby officially found and determined that of said meeting was given, all as required by Section 19. SEVERABILITY. The provisions of this Ordinance are severable; and in case any one or more of the provisions of this Ordinance or the application thereof to any person or circumstance should be held to be invalid, unconstitutional, or ineffective as to any person or circumstance, the remainder of this Ordinance nevertheless shall be valid, and the application of any such invalid provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby. GENERAL CERTIFICATE THE STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER Vol the undersigned officers of said City, hereby certify as follows: 1. That this cercate is executed for and on behalf of said City with reference to the issuance of the proposed CITY OF SANGER, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1994, dated July 1, 1994, in the principal amount of $1,900,000 ("Certificates of Obligation"). 2. That said City was incorporated, and is now operating and existing under the general laws of the State of Texas, with an Aldermanic form of governments and that the provisions of Title 28, Revised Civil Statutes of Texas, 1925, as amended, relating to cities and towns, including particularly Chapters 1 through 10 thereof, are applicable to, and have been lawfully accepted or adopted by said City. 3. That no litigation of any nature has ever been filed pertaining to, affecting, questioning, or contesting: (a) the ordinance which authorized said City's proposed Certificates of Obligation described in paragraph 1 of this certificate, (b) the issuance, execution, delivery, payment, security or validity of said proposed Certificates of Obligation, (c) the authority of the City Council and the officers of said City to issue, execute and deliver said Certificates of Obligation; (d) the validity of the corporate existence of said City, or (e) the current tax rolls of said City; and that no litigation is pending pertaining to, affecting, questioning, or contesting the current boundaries of said City. 4. That no petition protesting the issuance of the Certificates of Obligation and requesting a referendum election has been received. 5. That attached to this certificate and marked Exhibit A is a true, full and correct schedule and statement of the aforesaid proposed Certificates of Obligation and of all presently outstanding tax indebtedness of said City. 6. That the currently effective ad valorem tax appraisal roll of said City (the "Tax Roll") is the Tax Roll prepared and approved during the calendar year 1993, being the most recently approved Tax Roll of said City; that the taxable property in said City has been ap- praised, assessed, and valued as required and provided by the Texas Constitution and Property Tax Code (collectively, "Texas law"); that the Tax Roll for said year has been submitted to the City Council of said City as required by Texas law, and has been approved and recorded by said City Council; and according to the Tax Roll for said year the net aggregate taxable value of taxable property in said City (after deducting the amount of all applicable exemptions required or authorized under Texas law), upon which the annual ad valorem tax of said City has been or will be imposed and levied, is $69,862,557. 7. That the City's current water and sewer and electric rates are reflected in ordinances adopted by the City on September 20, 1993, copies of which are attached hereto. 8. That none of the revenues or income of said City's Utility System have been pledged or encumbered to the payment of any debt or obligation of said City or said System, except in connection with the aforesaid proposed Bonds and the following outstanding revenue bonds and certificates of obligation. Utility System Revenue Bonds, Series 1976, now outstanding in the aggregate principal amount of $110,0004, Utility System Refunding &Improvement Revenue Bonds, Series 1991, now outstanding in the aggregate principal amount of $2,200,000. Combination Tax and Utility System Junior Lien Revenue Certificates of Obligation, Series 1993, now outstanding in the aggregate principal amount of $295,000. 9. That said City is not in default in connection with any of the covenants, conditions, or obligations contained in the ordinances that authorized the issuance of the outstanding bonds and certificates of obligation listed above, and that each of the Funds, including the Interest and Sinking Fund and Reserve Fund created in said ordinances and maintained for the benefit of said outstanding bonds and certificates of obligation, contains the amount now required to be on deposit therein. 10. That the following is a true, full and correct schedule of the income and expenses A the Utility System for the past •three years, to -wit: Income Expenses Net Revenues 1993 $2,850,662 2,103,507 $ 7472155 1992 $2,547,874 2,027,481 $ 520,393 SIGNED AND SEALED this the Sth day of July, 1994. City Secretary SEAL Mayor 1991 $2,439,892 1,974,368 $ 465,524 EXHIBIT A Certificates of Obligation, Series 1994, dated July 1, 1994, to be outstanding in the principal amount of $1,900,000, bearing interest and maturing as set forth in the Ordinance authorizing said Certificates of Obligation. Combination Tax and Utility System Junior Lien Revenue Certificates %J Obligation, Series 1993, dated August 1, 1986, now outstanding in the principal amount of $295,000, bearing interest and maturing on August 1 in each of the years as follows: 7.75%: 100M-95* 8.00%8 105M-96* *maturities being called for redemption on August 1, 1994. nv rI udv4 CITY OF SANDER, TEXAS QRUIN'ANCE NO. #012-93 UALLAS OFFIGESg 2 GITI' SECRETARY ORIGINAL COPY AN ORDINANCE OF THZ CITY OF BANGER, DEN I VIN COUNTY, TEXAS, AMENDING CHAPTER 11, ARTICLE 11.800 AND APPENDIX ARTICLE 27.I0l., ARTICLE 27.102 AND ARTICLE 27.103 OF THE CITY OF SANGER CODE OF ORDINAriI"CES, kNI), PROVIDING FOR REPEAL OF ORDINANCES IN CONFICT; PROVIDING A SEVERABILITY CLAUSE: AND, PROVIDING . FOR AN EFFECTIVE DATE, BE IT ORDAINED 13Y THE CITY COUNCIL OF' THE CITY OF BANGER, TEXAa: SECTION I THAT CRAFTER ].1, A32TICLE 1 I.800 A.ND ApPE�TDt� ARTICLE 27.10 Y, ARTICLE. 27.102 AND ARTICLE 27.103 OF THE CITY OF SANGER CODE OF ORDINANCES IS HEREBY AMENDED TO READ AS FOLLOWS: A. RESIDENTIAL ELECTRIC RATE Facilities Charge. Energy Charge: Minimum Bill; $9.40 per month $Q.059`�1B � per KV� $9.OQ per month SMALL COMMERCIAL ELECTRIC RATE F�eilities Energy Charge: Minimum Bill: LAh'CrE COMMERCIAL RATE Energy Charge: �Iinirnum Bill: $11.5� per month $11.50 per month $5Q.50 for first 6 KW �►Q.t? 22i348 per K'�N ' %r all KVV' $5Q.00 per month Sh nvv u i ,,4i r a n 4 4"zG-04 O Y� U[eM ; IiuI I I Ui-+ UALLAS OFF ICE 1# 3 -. , 0 V # . . Ui�,ratNANCE #012-93, ELECTRIC RATES lire .3X 2 D. FUEL ADJUSTMENT The fuel adjustment charge for all K7 SECTION II CITY SECRETA13Y dRIGINAL copy shs11 be $,OI8�. All Ordinances or parts of Ordinances in conflict herewith are, to the extent of such conflict, hereby repealed. SEC7'TCal�i ITT I: is hereby declared to be the intention of the +City Council that the .ctions, paragraphs, sentences, clauses, and phrases of this Ordinance are severable and, if any phrase, clause, sentence, aaregraph, or section of this Ordinance tali be declared uTac,mstitutional by the valid judgment or decree of any court of c int pxtent jurisdiction, such unconstitutionality shall not affect any c�F alie remaining phrases, clauses, sentences, paragraphs, and 4 f:::.tions of this Ordinance, since the same would have been enacted she City Council without the incorporation in this Ordinance of any hitch unconstitutional phrase, clause, sentence, paragraph, or section. SEC'TIC3N I'V This C+rdinance will take effect i�'nznedigtelY froze and after its passage ar�d ttze publication %0 the caption as the law in such cases provides. n .AND APPROVED this 20 day of septx . 1995, by l:ri� y;ty Gdurzcil o f the City of Sanger, Texas, ATTEST: Rosalie Chavc City Secretary APPROVED: Nel Armstrong Msyor n V v o r iro r a n S e 4 4—ZG—U4 olYlUdrM i As UrrIUtc# a C:TTY OF SANGER, TZAAS ORDINANCE NO. #014-93 cmr SECRETARY ORIGINAL. COP' A1V ORDINANCE AMENDING CHAPTER 10, SEC I i4N 4 OF TIME CODE OF ORDINANCES OF THE CITY OF SANGER, DETVTON COUNTY, TEXAS, ENTITLED SEWER SERVICE RATES; ESTABLISHING RATES FOR MULTI -FAMILY DWELLINGS; PROVIDING FOR REPEAL, OF ORDINANCES IN CONFLICT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A PENALTY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. BE iT ORDAINED BY' TIIE CITY COUNCIL OF THE CITY OF SANGER, DENTON COUNTY, TEXAS, SECTION I Chapter 10, Section 4 of the Sanger Code of Ordinances is hereby amended to read as follows; Section 4. , Sewer Service Rates (l) Residential � Class A Class A customers shall include all residential type users including but not limited to, single-fam ily residences, apartment units, trailer court units, duplexes, or any other service primarily intended for domestic or residential use. The City may include similar low volume users such as churches and small business offices or stores in Class A. .gill customers of wastewater will be charged a minimum of $14 per monthly cycle and $.95 per thousand gallons of metered water in excess Class A municipal facilities oi f the first one thousand (1,000) gallons, but in no case to xceed �2500 month c;ommercial � Class B ,,:'lass B customers shah include commercial users such as Gaut not limited to, restaurants, cafes, car washes, schools, iospitals, nursing homes, offices, hotels, motels, laundrier►, grocery stores, department stores and other commercial lusiness operations gs may be identified as not a Class A type user, R,B Glass B customers of municipal wastewater facilities �:raall be charged a minimum of $1G.04 per munt�ly cycle n� I R I I IrU r G. '1 4'ZQ'04 sicsuarm LA UHLS UFNUE14 5 ORnINANk; JA(: E 2 #014-98 SEWER SER'V, RKrES and $.95 per thousand gallons of metered water of the first one thousand (1,000) gallons, but in exceed $125 per month. in excess no case to SECRErA NAC Co y �. , Mult€-family 1,3wellings The amount due for multi -family dwellings shall be the Class A rate multiplied by the number of occupied dwelling units, Section II E�13 wyrctit7.ances or parts of Ordizxarzces in conflict herewith are, tc t� .r :6,:T-tent of such conflict, hereby repealed. Section III It . . ;lQLlaxed to b+e the intention of the City Cauncii that the. s1 c ` c;I.AS, paragraphs. sentences, clauses and phrases of this arlce are severable and, if any phrase, clause, sentence, a: ~c;, ; apii or section of this Ordinance shall be declared nl. �: �stitutional by the valid judgment or decree of any count: L mpetent jurisdiction, such unconstitutionality shall not affect of the remaining phrases, clauses, sentences, paragraphs, and :...:riS of this Ordinance, Mince the name would have been enacted :,...City Council without the incorporation in this Ordinance of r.uch unconstitutional phrase, clause, sentence, paragraph or Section IV V'VY�c. •:><�:ver in the Ordinance an acx is g><'Qhiliited or is rzzade or de�,lr�xr;d, to be unlawful or an offense or a mi�sderaeanor or �. F nvv 91011 r a n 4-Y0"V4 i 1 z; u4rM UG1 1 1 UJU4 UALLAS OFFICE Ili 6 ORDINAN #014m00093 PAGE 3 SEWER SERV, RATES CITY SECRETARY ORIGINAL Copy Aoicriever in suc Ordinance, the doing of an act is required or �Aie failure to do any act is declared to be unlawful, the violation r YI any such provision shall be punishable by a fine not to exceed ant. Thousand ($1,000.00) Dollars; provided that no penalty shall )e _;treater or less than the penalty provided for the same or irn;I.ar offcnsc under the laws of the State. Each day any v_4:-iadon of this Ordinance shall continue shall constitute a beF.yarate offense. Section V T��ic Ordinance will take effect September Z01 19934 P� �::�I�;D AND APPROVED this 20 day of _ September �ggg by the Ci;ouncil of the City of Sanger, Denton County, Texas, Nel Armstrong Mayor, City of Sanger ATTEST': /J t Ros. i.te (.navez City Secretary i w � u�� ���� a n 4-c o-5w � i c u�►riri ��ll I taa^ L'H..LH� Urr llit � ti � C�'X t7�' SEiNG�.R, "ZFXAS t •J 1 1 � ! • �T C?k;I)I�XA�GE .E3I�7� Ck-IAR 1tI, SFG'k'IOI�d GOIC!3� L��` ORi?1i3�TCES OF' 'I'I-3fEr Ck?"Y C?R' 5�1,NC►1�2, 2]l CO��b'[1'. 'i'P:XAS, i'O Pk�,�3e�Ti?E FOB' A SGiiEY3UL�* OAF' i3"3'1Li'i:"� R.�i�,'ES; k'RO�I1�Cx FOR TOTE R�FEAL OF' �J��'�ANCL� kRl' C{�it€FLiCT: kzFFiO�i}iPiCc A S�4*�it�t3� s�:L.4.L7SF; �rRO*�It►iC A, PEN�.LZ'Y GLAUS�; AI1TkJ kx'.[�O' �"�3�ti A� EF'k�'�iCTd'� IJ,ATE. BE IT :�R�Ak�ll�i� i•'�f TIC C�k'Y COt3NG�E. Off' 'i'FiE C�'I'Y' (7F S�'.C1'IC�� k 'k'1�E SC��:;��lL� i'�F' FEES �R C'C?�Si7IYfi}�i�`t E}F �1�iE� �'k'kI �:��I���RC. A.i1TY} ,'�k±SA7E�i'k`IA,L �GUSTOA+IERS SHA �kt;3,s;t� �iirLirnttm Iaer �.#k sergcd for (kI=q�3 gai3axt>� :'�i,.�;3� r�r thxsu�arsd �aI?on� ��;.i.'C3 oa ,-r f#'la�ii ,ga�azx�i `�.�'� �1�3' thOuB�z1d #��oI3B «'� �7Mx ��30116dt1t� Ilt?Y,ki eifrctiv� �ep�era.:��r ?A, 1��. SEC�'iCbN kl +s ��: f+4 •r: , E• � ! • t �{ f • -. �, �i �:x�.ix�n�es �r �Ls a# 4h�.�•J�es �r� eo�n�,ict herea� ex�,.�� ins �� evt�f�.��ck, rc�e�le�. sEc�� zar N y -� .. M• *. OF T:-FE 'I��AS: E M' �E� xo the I�. �s :i+�l�red tc� he tlae i�tetition oa 4�ce CIt� CAuzze� tha � the sr;�'��xa�, p�,�r�ha, seez�t�acEs, ekau�c,� sn,d �ahrssee ofs Orr::f�.�dace aa-e �evcsble z�. c�hovttr3 may vi' the game kle �dcelaz�edf I2Llii ;:,x vc�itk ibg a�� Cdai�#"� of C�mpet+� jwrlsxi?rt�on„ �uCkljs�ctaiQxi s33�i1; ;xv � �f�fsct the reaaaitzi�lg �ha-aece, c?.au>��, se>r�tezx��s, �-:;�s'a�;r.�Dsaa<, rrX' t��etians ©f thia Ord�e�. , SEC'I'It]�1� I� �+'�.s:.t�•� ��s �:v�'z5' �vitkx ��+- scc�iQn �r gr�nvi�iox� of kizi� CJ�'�ric� tix�t� f e� �„ s�:�ibited or iu� decIar�ed tD �e U�wfu3. A� a raisde�e�z�az�, ax w�;����x�e•Yer do this Ornce, tki� a�azxa�tiseior,, tad' ac. a� xec;�:=:si ��r tizc c�rrai,�ioxx tk-ier+eraa�' I� �axhsibtYad, yraoiat�an n3 sueh. �.�� �0'd :OCR' �N U= ,-. �,;�Z .:cfy �'.. nv+ uiwi r a n li ti 1 I I li J'' u�ut.As UrrlGtcii 8 `0 •f ORDXI'iANCE �01�-93 PACE � ATTEST: 1 � be tkt,� r i SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE THE STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER We, the undersigned officers of said City, hereby certify as follows: (a) That this certificate is executed and delivered with reference to CITY OF SANGER, TEXAS CERTIFICATE OF OBLIGATION, SERIES 1994, dated July 1, 1994, in the principal amount of $1,900,000, being a single fully registered Certificate of Obligation payable in installments to the registered owner thereof (the "Initial Certificate of Obligation") and the Certificates of Obligation (the "Definitive Certificates of Obligation") initially made available by the Issuer for completion and exchange for the Initial Certificate of Obligation. (b) That each of us manually signed the Initial Certificate of Obligation. (c) That each of us signed the Definitive Certificates of Obligation by manually signing or causing facsimiles of our manual signatures to be printed or lithographed on each of the Definitive Certificates of Obligation, and, if applicable, we hereby adopt said facsimile signatures as our own, respectively, and declare that, if applicable, said facsimile signatures constitute our signatures the same as if we had manually signed each of the Definitive Certificates of Obligation. (d) That the Initial Certificate of Obligation is, and the Definitive Certificates of Obligation are, substantially in the form, and each of them has been duly executed and signed in the manner, prescribed in the order authorizing the issuance thereof. (e) That at the time we so executed and signed the Initial Certificate of Obligation aIL d the Definitive Certificates of Obligation (collectively the "Certificates of Obligation") we were, and at the time of executing this certificate we are, the duly chosen, qualified, and acting officers indicated therein, and authorized to execute and sign the same. (f) That no litigation of any nature has been filed or is now pending to restrain or enjoin the issuance or delivery of any of the Certificates of Obligation, or which would affect the provision made for their payment or security, or in any manner questioning the proceedings or authority concerning the issuance of the Certificates of Obligation, and that so far as we know and believe no such litigation is threatened. (g) That neither the corporate existence nor boundaries of the Issuer is being contested, that no litigation has been filed or is now pending which would affect the authority of the officers of the Issuer to issue, execute, sign, and deliver any of the Certificates of Obligation, and that no authority or proceedings for the issuance of any of the Certificates of Obligation have been repealed, revoked, or rescinded. (h) That we have caused the official seal of the Issuer to be impressed, or printed, or lithographed on each of the Certificates of Obligation; and said seal on each of the Certificates of Obligation has been duly adopted as, and is hereby declared to be, the official seal of the Issuer. EXECUTED and delivered this MANUAL SIGNATURES Execute either I or II below: I. The signatures of the officers subscribed above are hereby certified to be true and genuine. Bank Authorized Officer OFFICIAL TITLES Mayor City Secretary (BANK SEAL) or (initials of Authorized Officer if all has no seal on premises ) II. Before me, on this day personally appeared the foregoing individuals, known to me to be the persons whose names are subscribed to the foregoing instrument. Given under my hand and seal of office this Notary Public Notary Seal TREASURER'S RECEIPT THE STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER The undersigned hereby certifies as follows: (a) That this certificate is executed and delivered with reference to CITY OF SANGER, TEXAS CERTIFICATE OF OBLIGATION, SERIES 1994, dated July 1, 1994, in the principal amount of $1,900,000, being a single fully registered Certificate of Obligation payable in installments to the registered owner thereof. (b) That the undersigned is the duly chosen, qualified, and acting Treasurer of the Issuer of said Certificate of Obligation. (c) That said Certificate of Obligation has been duly delivered to the purchaser thereof, namely: (d) That said Certificate of Obligation has been paid for in full by said purchaser concurrently with the delivery of this certificate, and the Issuer of said Certificate of Obligation has received, and hereby acknowledges receipt of, the agreed purchase price for said Certificate of Obligation and accrued interest to the date of delivery. EXECUTED and delivered Treasurer CLOSING CERTIFICATE THE STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER We, the undersigned officers of said City, hereby certify as follows: 1. That this certificate is executed for and on behalf of said City with reference to the issuance of the proposed CITY OF SANGER, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1994, dated July 1, 1994, in the principal amount of $1,900,000. 2. That, to our best knowledge and belief: (a) the description and statements of or pertaining to the City contained in its Official Statement, and any addenda, supplement or amendment thereto, for its $1,900,000 Certificates of Obligation, Series 1994, on the date of such Official Statement, on the date A sale of said certificates of obligation and the acceptance of the best bid therefor, and on the date of them delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the Im statements therein, in the light of the circumstances under which they were made, not misleading; and (c) insofar as the description and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and that the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since September 30, 1993, the last audited financial statements of the City. SIGNED AND SEALED this City Secretary Mayor r NO -ARBITRAGE CERTIFICATE I. In General. 1. I. The undersigned is the Mayor of the City of Sanger, Texas (the "Issuer"). 1.2. This Certificate is executed for the purpose of establishing the reasonable expectations of the Issuer as to future events regarding the Issuer's Certificates of Obligation, Series 1994 (the "Certificates of Obligation"). The Certificates of Obligation are being issued pursuant to an ordinance of the Issuer (the "Ordinance") adopted on the date of sale of the Certificates of Obligation. The Ordinance is incorporated herein by reference. 1.3. To the best of the undersigned's knowledge, information and belief, the expectations contained in this Certificate are reasonable. 1.4. The undersigned is an ofI•icer of the Issuer delegated with the responsibility of issuing and delivering the Certificates of Obligation. 2. The Purpose of the Certificates of Obli ag tion. 2.1, The Certificates of Obligation are being issued pursuant to the Ordinance (a) to provide for the payment of costs of issuing the Certificates of Obligation, and (b) to pay all or a portion of the contractual obligations for the purpose of constructing public works in the Issuer, to -wit: constructing and reconstructing streets throughout the Issuer, and constructing a new library at 5th and Bolivar Streets (the "Project"). 2.2. All earnings, such as interest and dividends, received from the investment of the proceeds of the Certificates of Obligation during the period of acquisition and construction of the Project and not used to pay interest on the Certificates of Obligation, will be used to pay the costs of the Project, unless required to be rebated and paid to the United States in accordance with section 148(f) of the Internal Revenue Code of 1986, as amended (the "Code"). 2.3. The proceeds of the Certificates of Obligation, together with any investment earnings thereon, are expected not to exceed the amount necessary for the governmental purpose of the Certificates of Obligation. 3. Temporal Period and Hed eg Bond. 3.1. The Issuer will incur, within six months after the date of issue of the Certificates of Obligation, a binding obligation to commence the Project, either by entering into contracts for the construction of the Project or by entering into contracts for architectural or engineering services for such Project, or contracts for the development, purchase of construction materials, or purchase of equipment, for the Project, with the amount to be paid under such contracts to be in excess of five percent of the proceeds which are estimated to be used for the cost of the Project. 3.2. After entering into said binding obligations, work on such Project will proceed promptly, with due diligence to completion. ,4 3.3. All original proceeds derived from the sale of the Certificates of Obligation to be applied to the Project and all investment earnings thereon (other than any amounts required to be rebated to the United States pursuant to section 148(f) of the Code) will be expended for the Project no later than a date which is three years after the date of issue of the Certificates of Obligation. 3.4. The Issuer will not invest the proceeds in any guaranteed investment contract or other nonpurpose investment with a substantially guaranteed yield for a period equal to or greater than four years. 4. Interest and Sinking Fund. 4.1. A sepazate and special Interest and Sinking Fund has been created and established solely to pay the principal of and interest on the Certificates of Obligation, with a portion of the Interest and Sinking Fund constituting a bona fide debt service fund for the Certificates of Obligation, and money deposited into the Interest and Sinking Fund for the Certificates of Obligation will not be invested at a yield higher than the yield on the Certificates of Obligation, except during the thirteen month period beginning on the date of each such deposit of money, and the amounts received from the investment of money in the Interest and Sinking Fund will not be invested at a yield higher than the yield on the Certificates of Obligation, except during the one year period beginning on the date of receipt of such amounts; provided, however, and except that, if any money so deposited, and any amounts received from the investment thereof, are accumulated in the Interest and Sinking Fund and remain on hand in the Interest and Sinking Fund after thirteen months from the date of deposit of any such money or one year after the receipt of any such amounts from the investment thereof, such money and amounts, to the extent of an aggregate not exceeding the lesser of 5 percent of the proceeds of the Certificates of Obligation or $10%000 will not be subject to investment yield restrictions, and shall constitute a separate portion of the Interest and Sinking Fund. 4.2. It is expected that a portion of the Interest and Sinking Fund will be used primarily to achieve a proper matching of revenues collected for the Certificates of Obligation and debt service on the Certificates of Obligation within each bond year, and it is expected that such portion of the Interest and Sinking Fund will be depleted once a year on a first -in • first -out basis, except for a possible cazryover amount which will not exceed the greater of one year's earnings on such fund or 1/12 of annual debt service payable from such fund, but any money and amounts which may be accumulated in the Interest and Sinking Fund, to constitute a debt service reserve fund for the Certificates of Obligation as described in Section 4.1, above, shall constitute a separate portion of the Interest and Sinking Fund, and will not be depleted annually, and will not be subject to yield restrictions; provided that in no event will such debt service reserve fund portion of the Interest and Sinking Fund ever exceed the lesser of 5 percent of the proceeds of the Certificates of Obligation or $100,000. 5, Invested Sinking Fund Proceeds, Replacement Proceeds, S.I. The Issuer has, in addition to the moneys received from the sale of the Certificates of Obligation, certain other moneys that are invested in various funds which are pledged for various purposes. These other funds are not available to accomplish the purposes described in Section 2 of this Certificate. 5.2. There are no funds or accounts other than the Interest and Sinking Fund which the Issuer reasonably expects to be available to pay the principal of or interest on the Certificates of Obligation. 6. Other Obligations. There are no other obligations of the Issuer which (a) are sold at substantially the same time as the Certificates of Obligation (i.e., within 15 days of the date of sale of the Certificates of Obligation), (b) are sold pursuant to a common plan of financing with the Certificates of Obligation, and (c) will be id out of the same source or have substantially the same claim to be pai pad out of substantially the same source of funds as the Certificates of Obligation. 7. Rebate to United States. The Issuer has covenanted in the Ordinance that it will comply with the requirements of the Code, including section 148(f) of the Code, relating to the required rebate to the United States. Specifically, the Issuer will take steps to ensure that all earnings on gross proceeds of the Certificates of Obligation in excess of the yield on the Certificates of Obligation required to be rebated to the United States will be timely paid to the United States. The Issuer acknowledges receipt of the memorandum attached hereto as Exhibit "A" which discusses regulations promulgated pursuant to section 148(f) of the Code. This memorandum does not constitute an opinion of Bond Counsel as to the proper federal tax or accounting treatment of any specific transaction. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] t DATED: CITY OF SANGER, TEXAS sy: Mayor Exhibit "A" 3100 ONE AMERICAN CENTER AUSTIN, TEXAS 7B701.3234 TELEPHONE: 512 47B•3 BOS TELEGOPY� SI2 472-0871 LAW OFFICES MCCALL, PARKHURST & HORTON L.L.P. 7I7 NORTH HARWOOD NINTH FLOOR DALLAS, TEXAS 7520165B7 T[LCPMONC: 214 220.2800 TELEOCPY: 2W 953-0736 January 1, 1994 1225 ONE RIVERWALK PLACE SAN ANTONIO, TEXAS 7B205 3503 TEL[PMON E: 210 22S•2800 TELCCOPV; 210 225.2H64 The Tax Reform Act of 1986 amended the provisions of the Internal Revenue Code by providing a newly -enacted section 148(f) of the Internal Revenue Code of 1986 (the "Code"), relating to arbitrage rebate. This arbitrage rebate requirement generally provides that in order for interest on any issue of obligations to be excluded from gross income (i.e., tax-exempt) the issuer must rebate to the United States the sum of, (1) the excess of the amount earned on all "nonpurpose investments" acquired with "gross proceeds" of the issue over the amount which would have been earned if such investments had been invested at a yield equal to the yield on the issue, and (2) the earnings on such excess earnings. These rules are substantially similar to the rules which, prior to the Tax Reform Act of 1986, applied to industrial development bonds and mortgage revenue bonds. Section 148(f) of the Code has been amended by several subsequent tax acts, most notably, the Revenue Reconciliation Acts of 1989 and 1990. These amendments primarily provided a special exception to rebate for certain construction issues, as discussed under the heading "Exceptions to Rebate." On June 18, 1993, the U.S. Treasury Department promulgated regulations relating to the computation of arbitrage rebate and the rebate exceptions. These regulations, which replace the previously -published regulations promulgated on May 15, 1989, and on May 18, 1992, are effective for bonds issued after June 30, 1993, These newly -promulgated regulations also replace the arbitrage regulations, other than those relating to rebate, which were published in 1978, This memorandum was prepared by McCall, Parkhurst & Horton L.L.P. and provides a general discussion of the arbitrage rebate regulations. This memorandum does not otherwise discuss the general arbitrage regulations, other than as they may incidentally relate to rebate. This memorandum also does not attempt to provide an exhaustive discussion of the arbitrage rebate regulations and should not be considered advice with respect to the arbitrage rebate requirements as applied to any individual or governmental unit or any Copyright 1993 by Harold T. Flanagan, McCall, Parkhurst &Horton L.L.P. All rights rese�gd.� ; ° �� J 4 specific transaction. McCall, Parkhurst & Horton L.L.P. remains available to provide legal advice to issuers with respect to the provisions of these tax regulations but recommends that issuers seek competent financial and accounting assistance in calculating the amount of such issuer's rebate liability under section 148(f) of the Code and in making elections to apply the rebate exceptions. In this memorandum the word "bond" is defined to include any bond, note, certificate, financing lease or other obligation of an issuer. Effective Dates The regulations promulgated on June 18, 1993, generally apply to bonds delivered after June 30, 1993, but, as discussed below, also permit an issuer to elect to apply the newly -promulgated rules to bonds issued prior to that date. The temporary regulations adopted by the U.S. Treasury Department in 1989 and 1992 incorporated the same effective dates which generally apply for purposes of section 148(f) of the Code. The statutory provisions of section 148(f) of the Code, other than the exception for construction issues, apply to all bonds issued after August 15, 19860 (for private activity bonds) and August 31, 1986, (for governmental public purpose bonds). As such, the previous versions of the rebate regulations generally applied to bonds issued between August 1986 and June 30, 1993 (or, with an election, to bonds issued prior to August 15, 1993). The statutory exception to rebate applicable to construction issues generally applies to such issues if delivered after December 19, 1989. The newly -promulgated regulations provide numerous transitional rules for bonds sold prior to July 1, 1993. Moreover, since, under prior law, rules were previously published with respect to industrial development bonds and mortgage revenue bonds, the transitional rules contained in these newly -promulgated regulations permit an issuer to elect to apply certain of these rules for computing rebate on pre- 1986 bonds. The regulations provide for numerous elections which would permit an issuer to apply the newly -promulgated rules (other than 18-month spending exception) to bonds which were issued prior to July 1, 1993 and remain outstanding on June 30, 1993. Due to the complexity of the regulation, it is impossible to discuss in this memorandum all circumstances for which specific elections are provided. If an issuer would prefer, in certain circumstances, to use the newly -promulgated regulations in lieu of the computational method stated under prior law (e.g., due to prior redemption) or the previously -published regulations, please contact McCall, Parkhurst & Horton L.L.P. for advice as to the availability of such options. Future Value Computation Method The regulations employ an actuarial method for computing the rebate amount based on the future value of the investment receipts (i.e., earnings) and payments. The rebate method employs a two-step computation to determine the amount of the rebate payment. First, the issuer determines the bond yield. Second, the issuer McCall, Parkhurst & Horton L.L.P. -Page 2 � ` ' "' � determines the arbitrage rebate amount. The regulations require that the computations be made at the end of each five-year period and upon final maturity of the issue (the "computation dates"). THE FINAL MATURITY DATE WILL ACCELERATE IN CIRCUMSTANCES IN WHICH THE BONDS ARE OPTIONALLY REDEEMED PRIOR TO MATURITY. AS SUCH, IF BONDS ARE REFUNDED OR OTHERWISE REDEEMED, THE REBATE MAY BE DUE EARLIER THAN INITIALLY PROJECTED. In order to accommodate accurate record -keeping and to assure that sufficient amounts will be available for the payment of arbitrage rebate liability, however, we recommend that the computations be performed at least annually. Under the future value method, the amount of rebate is determined by compounding the aggregate earnings on all the investments from the date of receipt by the issuer to the computation date. Similarly, a payment for an investment is future valued from the date that the payment is made to the computation date. The receipts and payments are future valued at a discount rate equal to the yield on the bonds. The rebatable arbitrage, as of any computation date, is equal to the excess of the (1) future value of all receipts (i.e., earnings) from investments, over (2) the future value of all payments. The following example is provided in the regulations to illustrate how arbitrage rebate is computed under the future value method for a fixed -yield bond: "On January 1, 1994, City A issues a fixed yield issue and invests all the sale proceeds of the issue ($49 million). There are no other gross proceeds. The issue has a yield of 7.0000 percent per year compounded semiannually (computed on a 30 day month/360 day year basis). City A receives amounts from the investment and immediately expends them for the governmental purpose of the issue as follows. Date Amount 1994 $3,0009000 4/1/1994 5,000,000 6/1/1994 141000,000 9/1/1994 201000,000 7/1/1995 10,000,000 City A selects a bond year ending on January 1, and thus the first required computation date is January 1, 1999. The rebate amount as of this date is computed by determining the future value of the receipts and the payments for the investment. The compounding interval is each 6•month (or shorter) period and the 30 day month/360 day year basis is used because these conventions were used to compute yield on the issue. The future value of these amounts, plus the computation credit, as of January 1, 19991 is: MENNEN McCall, Parkhurst &Horton•Page 1/1/1994 2/1/1994 4/1/1994 6/1/1994 9/1/1994 1/1/1995 7/1/1995 1/1/1996 ($49,000,000) 3,000,000 5,000,000 14,0009000 209000,000 (10000) 10,0000000 (10000) Rebate amount (1/Ol/1999) General Method for Computinq_Yield on Bonds ($69,119,339) 4,207,602 6,932,715 19,190,277 26/9479162 (11317) 12,722,793 (1,229) S878.664" In general, the term "yield," with respect to a bond, means the discount rate that when used in computing the present value of all unconditionally due payments of principal and interest and all of the payments for a qualified guarantee produces an amount equal to the present value of the issue price of the bond. For this purpose, the term "issue price" has the same meaning as provided in sections 1273 and 1274 of the Code. That is, if bonds are publicly offered (i.e., sold by the issuer to a bond house, broker or similar person acting in the capacity of underwriter or wholesaler), the issue price of each bond is determined on the basis of the initial offering price to the public (not to the aforementioned intermediaries) at which price a substantial amount of such bond was sold to the public (not to the aforementioned intermediaries). The "issue price" is separately determined for each bond (i.e., maturity) which comprises an issue. The regulations also provide varying periods for computing yield on the bonds depending on the method by which the interest payment is determined. Thus, for example, yield on an issue of bonds sold with variable interest rates (i.e., interest rates which are reset periodically based on changes in market) is computed separately for each annual period ending on the first anniversary of the delivery date that the issue is outstanding. In effect, yield on a variable yield issue is determined on each computation date by "looking back" at the interest payments for such period. The regulations, however, permit an issuer of a variable -yield issue to elect to compute the yield for annual periods ending on any date in order to permit a matching of such yield to the expenditure of the proceeds. Any such election must be made in writing, is irrevocable, and must be made no later than the earlier of (1) the fifth anniversary date, or (2) the final maturity date. Yield on a fixed interest rate issue (i.e., an issue of bonds the interest rate on which is determined as of the date of the issue) is computed over the entire term of the issue. Issuers of fixed -yield issues generally use the yield computed as of the date of issue for all rebate computations. Such yield on fixed -yield issues generally is recomputed only if (1) the issue is sold at a substantial premium, may be retired within five years of the date of delivery, and such date is earlier than its scheduled maturity McCall, Parkhurst &Horton L.L.P. -Page 4 ( I �.) date, or (2) the issue is a stepped -coupon bond. In such cases, the regulations require the issuer to recompute the yield on such issues by taking into account the early retirement value of the bonds. Similarly, recomputation occurs in circumstances in which the issuer or bondholder modify or waive certain terms of, or rights with respect to, the issue or in sophisticated hedging transactions. IN SUCH CIRCUMSTANCES ISSUERS ARE ADVISED TO CONSULT McCALL PARKHURST & HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS. For purposes of determining the principal or redemption payments on a bond, different rules are used for fixed-rate and variable -rate bonds. The payment is computed separately on each maturity of bonds rather than on the issue as a whole. In certain circumstances, the yield on the bond is determined by assuming that prin- cipal on the bond is paid as scheduled and that the bond is retired on the final maturity date for the stated retirement price. For bonds subject to early redemption or stepped -coupon bonds, described above, or for bonds subject to mandatory early redemption, the yield is computed assuming the bonds are paid on the early redemption date for an amount equal to their value. Section 148 of the Code provides that premiums paid to guarantee the payment of debt service on bonds are taken into account in computing the yield on the bond. Payments for guarantees are taken into account by treating such premiums as the payment of interest on the bonds. This treatment, in effect, raises the yield on the bond, thereby permitting the issuer to recover such fee with excess earnings. The guarantee must be an unconditional obligation of the guarantor enforceable by the bondholder for the payment of principal or interest on the bond or the tender price of a tender bond. The guarantee may be in the form of an insurance policy, surety bond, irrevocable letter or line of credit, or standby purchase agreement. Importantly, the guarantor must be legally entitled to full reimbursement for any payment made on the guarantee either immediately or upon commercially reasonable repayment terms. The guarantor may not be a co -obligor of the bonds or a user of more than 10 percent of the proceeds of the bonds. Payments for the guarantee may not exceed a reasonable charge for the transfer of credit risk. This reasonable charge requirement is not satisfied unless it is reasonably expected that the guarantee will result in a net present value savings on the bond (i.e., the premium does not exceed the present value of the interest savings resulting by virtue of the guarantee). If the guarantee is entered into after June 14, 1989, then any fees charged for the nonguarantee services must be separately stated or the guarantee fee is not recoverable. The regulations also treat certain "hedging" transactions in a manner similar to qualified guarantees. "Hedges" are contracts, e.g., interest rate swaps, futures contracts or options, which are intended to reduce the risk of interest rate fluctuations. Hedges and other financial derivatives are sophisticated and ever -evolving financial McCall, Parkhurst Ho on L.L.P. -Page 5 products with which a memorandum, .such as this, can not readily deal.INSU „, CH THESE TRANSACTIONS. Earnincts on Nonpurpose Investments The arbitrage rebate provisions apply only to the receipts from the investment of "gross proceeds" in "nonpurpose investments." For this purpose, nonpurpose investments are stock, bonds or other obligations acquired with the gross proceeds of the bonds for the period prior to the use of the gross proceeds for its ultimate purpose. For example, investments deposited to construction funds, reserve funds (including surplus taxes or revenues deposited to sinking funds) or other similar funds are nonpurpose investments. Such investments include only those which are acquired with "gross proceeds." For this purpose, "gross proceeds" include original proceeds received from the sale of the bonds, investment earnings from the investment of such original proceeds, amounts pledged to the payment of debt service on the bonds or amounts actually used to pay debt service on the bonds. The regulations do not provide sufficient amount of guidance to include an exhaustive list of "gross proceeds" for this purpose; however, it can be assumed that "gross proceeds" represent all amounts received from the sale of bonds, amounts earned as a result of such sale or amounts (including taxes and revenues) which are used to pay, or secure the payment of, debt service for the bonds. The total amount of "gross proceeds' allocated to a bond generally can not exceed the outstanding principal amount of the bonds. The regulations provide generally that an investment is allocated to an issue for the period (1) that begins on the date gross proceeds are used to acquire the investment, and (2) that ends on the date such investment ceases to be allocated to the issue. In general, proceeds are allocated to a bond issue until expended for the ultimate purpose for which the bond was issued or for which such proceeds are received (e.g., construction of a bond -financed facility or payment of debt service on the bonds). Deposit of gross proceeds to the general fund of the issuer (or other fund in which they are commingled with revenues or taxes) does not alleviate the obligation to compute rebate in most cases. As such, proceeds commingled with the general revenues of the issuer are not "freed -up" from the rebate obligation. An exception to this commingling limitation for bonds, other than private activity bonds, permits "investment earnings" (but not sale proceeds or other types of gross proceeds) to be considered spent when deposited to a commingled fund if those amounts are reasonably expected to be spent within six months. Other than for these amounts, issuers may consider segregating investments in order to more easily compute the amount of such arbitrage earnings by not having to allocate investments. Special rules are too complex to refundings, however, Jo not require are provided for purposes of discuss in this that amounts memorandum. advance refundings. These rules Essentially, the rules relating to deposited to the escrow fund to McCall, Parkhurst &Horton L.L.P. -Page 6 J defease the prior obligations of the issuer be subject to arbitrage rebate to the extent that the investments deposited to the escrow fund do not have a yield in excess of the yield on the bonds. Any loss resulting from the investment of proceeds in an escrow fund below the yield on the bonds, however, may be recovered by combining those investments with investments deposited to other funds, e.g., reserve or construction funds. The arbitrage regulations also provide that the investment %J bond proceeds in tax-exempt obligations does not result in arbitrage. The provisions of the Technical and Miscellaneous Revenue Act of 1988, however, amended that rule by providing that investment, of bond proceeds in "private activity bonds" (i.e., bonds subject to the alternative minimum tax under section 57(a) (5) of the Code) are treated as investments in taxable obligations. As such, earnings from these tax-exempt invest- ments are subject to rebate. Similarly, the investment of gross proceeds in certain tax-exempt mutual funds are treated as a direct investment in the tax-exempt obligations deposited in such fund. While issuers may invest in such funds for purposes of avoiding arbitrage rebate, they should be aware that if "private activity bonds" are included in the fund then a portion of the earnings will be subject to arbitrage rebate. Issuers should be prudent in assuring that the funds do not contain private activity bonds. The arbitrage regulations provide a number of instances in which earnings will be imputed to the nonpurpose investments. Receipts generally will be imputed to investments that do not bear interest at an arm's-length (i.e., market) interest rate. As such, the regulations adopt a "market price" rule. In effect, this rule prohibits an issuer from investing bond proceeds in investments at a price which is higher than the market price of comparable obligations, in order to reduce the yield. Special rules are included for determining the market price for investment contracts, certificates of deposit and certain U.S. Treasury obligations. For example, to establish the fair market value of investment contracts a bidding process between three qualified bidders must be used. The fair market value of certificates of deposit which bear a fixed interest rate and are subject to an early withdrawal penalty is its purchase price if that price is not less than the yield on comparable U.S. Treasury obligations and is the highest yield available from the institution. In any event, a basic "common sense" rule - of -thumb that can be used to determine whether a fair market value has been paid is to ask whether the general funds of the issuer would be invested at the same yield. An exception to this market price rule is available for United States Treasury Obligations - State or Local Government Series in which case the purchase price is always the market price. Reimbursement and Workin4 Capital The final regulations provide new rules for, purposes of determining whether gross proceeds are used for working capital and, if so, at what times those proceeds are considered spent. In general, working capital financings are subject to many of McCall, Parkhurst &Horton L.L.P. -Page 7 41 the same rules that have existed since the mid-1970s. For example, the regulations generally continue the 13-month temporary period. By adopting a "proceeds -spent - last" rule, the regulations also generally require that an issuer actually incur a deficit (i.e., expenditures must exceed receipts) for the computation period (which generally corresponds to the issuer's fiscal year). Also, the regulations continue to permit an operating reserve, but unlike prior regulations the amount of such reserve may not exceed five percent of the issuer's actual working capital expenditures for the prior fiscal year. Another change made by the regulations is that the issuer may not finance the operating reserve with proceeds of a tax-exempt obligation. Importantly, the regulations also adopt rules for determining whether proceeds used to reimburse an issuer for costs paid prior to the date of issue of the obligation, in fact, are considered spent at the time of reimbursement. These rules apply to an issuer who uses general revenues for the payment of all or a portion of the costs of a project then uses the proceeds of the bonds to reimburse those general revenues. Failure to comply with these rules would result in the proceeds continuing to be subject to federal income tax restrictions, including rebate. To quality for reimbursement, a cost must be described in an expression (e.g., resolution, legislative authorization) evidencing the issuer's intent to reimburse which is made no later than 60 days after the payment of the cost. Reimbursement must occur no later than 18 months after the later of (1) the date the cost is paid or (2) the date the project is placed in service. Except for projects requiring an extended construction period or small issuers, in no event can a cost be reimbursed more than three years after the cost is paid. Reimbursement generally is not permitted for working capital; only capital costs, grants and loans may be reimbursed. Moreover, certain anti -abuse rules apply to prevent issuers from avoiding the limitations on refundings. IN CASES INVOLVING WORKING CAPITAL OR REIMBURSEMENT, ISSUERS ARE ADVISED TO CONTACT McCALL, PARKHURST & HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION. Rebate Payments Rebate payments generally are due 60 days after each installment computation date. The interim computation dates occur each fifth anniversary of the issue date. The final computation date is on the latest of (1) the date 60 days after the date the issue of bonds is no longer outstanding, (2) the date eight months after the date of issue for certain short-term obligations (i.e., obligations retired within three (ears), or (3) the date the issuer no longer reasonably expects any spending exception, discussed below, to apply to the issue. On such payment dates, other than the final payment date, an issuer is required to pay 90 percent of the rebatable arbitrage to the United States. On the final payment date, an issuer is required to pay 100 percent of the remaining rebate liability. McCall, Parkhurst &Horton L.L.P. -Page 8 Failure to timely pay rebate does not necessarily result in the loss of tax - exemption. Late payments, however, are subject to the payment of interest, and unless waived, a penalty of 50 percent (or, in the case of private activity bonds, other than qualified 501(c)(3) bonds, 100 percent) of the rebate amount which is due. IN SUCH CIRCUMSTANCES, ISSUERS ARE ADVISED TO CONSULT McCALL, PARKHURST & HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS. Rebate' payments are refundable. The issuer, however, must establish to the satisfaction of the Commissioner of the Internal Revenue Service that the issuer paid an amount in excess of the rebate and that the recovery of the overpayment on that date would not result in additional rebatable arbitrage. An overpayment of less than $5,000 may not be recovered before the final computation date. Alternative Penalty Amount In certain cases, an issuer of a bond the proceeds of which are to be used for construction may elect to pay a penalty, in lieu of rebate. The penalty may be elected in circumstances in which the issuer expects to satisfy the two-year spending exception which is more fully described under the heading "Exceptions to Rebate." The penalty is payable, if at all, within 60 days after the end of each six-month period. This is more often than rebate. The election of the alternative penalty amount would subject an issuer, which fails the two-year spend -out requirements, to the payment of a penalty equal to one and one-half of the excess of the amount of proceeds which was required to be spent during that period over the amount which was actually spent during the period. The penalty has characteristics which distinguish it from arbitrage rebate. First, the penalty would be payable without regard to whether any arbitrage profit is actually earned. Second, the penalty continues to accrue until either (1) the appropriate amount is expended or (2) the issuer elects to terminate the penalty. To be able to terminate the penalty, the issuer must meet specific requirements and, in some instances, must pay an additional penalty equal to three percent of the unexpended proceeds. Exceptions to Rebate The Code and regulations provide certain exceptions to the requirement that the excess investment earnings be rebated to the United States. a. Small Issuers. The first exception provides that if an issuer (together with all subordinate issuers) during a calendar year does not issue tax-exempt obligations in an aggregate face amount exceeding $5 million, then the obligations are not subject to rebate. Only issuers with general taxing powers may take 6 advantage of this exception. For this purpose, "private activity bonds" neither are afforded the benefit of this exception nor are taken into account for purposes of determining the amount of McCall, Parkhurst &Horton L.L.P. -Page 9 �� 6' bonds issued. Subordinate issuers are those issuers which derive their authority to issue bonds from the same issuer, e.g., a city and a health facilities development corporation, or which are controlled by the same issuer, e.g., a state and the board of a public university. b. Spendi"W Exceptions. Six -Month Exception. The second exception to the rebate requirement is available to all tax-exempt bonds, all of the gross proceeds of which are expended during six months. The six month rule is available to bonds issued after the effective date of the Tax Reform Act of 1986. See the discussion of effective dates on page two. For this purpose, proceeds used for the redemption of bonds (other than proceeds of a refunding bond deposited to an escrow fund to discharge refunded bonds) can not be taken into account as expended. As such, bonds with excess gross proceeds generally can not satisfy the second exception unless the amount does not exceed the lesser of five percent or $100,000 and such de minimis amount must be expended within one year. Certain gross proceeds are not subject to the spend -out requirement, including amounts deposited to a bona fide debt service fund, to a reserve fund and amounts which become gross proceeds received from purpose investments. These amounts themselves, however, may be subject to rebate even though the originally expended proceeds were not. The Code provides a special rule for tax and revenue anticipation notes (i.e., obligations issued to pay operating expenses in anticipation of the receipt of taxes and other revenues). Such notes are referred to as TRANs. To determine the timely expenditure of the proceeds of a TRAN, the computation of the "cumulative cash flow deficit" is important. If the "cumulative cash flow deficit" (i.e., the point at which the operating expenditures of the issuer on a cumulative basis exceed the revenues of the issuer during the fiscal year) occurs within the first six months of the date of issue and must be equal to at least 90 percent of the proceeds of the TRAN, then the notes are deemed to satisfy the exception. This special rule requires, however, that the deficit actually occur, not that the issuer merely have an expectation that the deficit will occur. In lieu of the statutory exception for TRANs, the regulations also provide a second exception. Under this exception, 100 percent of the proceeds must be spent within six months, but before note proceeds can be considered spent, all other available amounts of the issuer must be spent first ("proceeds -spent -last" rule). In determining whether all available amounts are spent, a reasonable working capital reserve equal to five percent of the prior year's expenditures may be set aside and treated as unavailable. 18-Month Exception. The regulations also establish a non -statutory exception to arbitrage rebate if all of the gross proceeds (including investment earnings) are expended within 18 months after the date of issue. Under this exception, 15 percent of the gross proceeds must be expended within a six-month McCall, Parkhurst & Horton L.L.P. - Page 10 { 1 �o, 1{ spending period, 60 percent within a 12-month spending period and 100 percent within an 18-month spending period. The rule permits an issuer to rely on its reasonable expectations for computing investment earnings which are included as gross proceeds during the first and second spending period. A reasonable retainage not to exceed five percent of the sale proceeds of the issue is not required to be spent within the 18-month period but must be expended within 30 months. Rules similar to the six-month exception relate to the definition of gross proceeds. Two Year Exception. Bonds issued after December 19, 1989 (i.e., the effective date of the Omnibus Reconciliation Act of 1989), at least 75 percent of the net proceeds of which are to be used for construction, may be exempted from rebate if the gross proceeds are spent within two years. Bonds more than 25 percent of the proceeds of which are used for acquisition or working capital may not take advantage of this exception. The exception applies only to governmental bonds, qualified 501(c) (3) bonds and private activity bonds for governmentally -owned airports and Jocks and wharves. The two-year exception requires that at least 10 percent of the available construction proceeds must be expended within six months after the date of issue, 45 percent within 12 months, 75 percent within 18 months and 100 percent within 24 months. The term "available construction proceeds" generally means sale proceeds of the bonds together with investment earnings less amounts deposited to a qualified reserve fund or used to pay costs of issuance. Under this rule, a reasonable retainage not to exceed five percent need not be spent within 24 months but must be spent within 36 months. The two-year rule also provides for numerous elections which must be made not later than the date of issuance of the bonds. Once made, the elections are irrevocable. Certain elections permit an issuer to bifurcate bond issues, thereby treating only a portion of the issue as a qualified construction bonds and, permit an issuer to disregard earnings from reserve funds for purposes of determining "available construction proceeds." Another election permits an issuer to pay the alternative penalty amount discussed above in lieu of rebate if the issuer ultimately fails to satisfy the two-year rule. Issuers should discuss these elections with their financial advisors prior to issuance of the bonds. Of course, McCall, Parkhurst & Horton L.L.P. remains available to assist you by providing legal interpretations thereof. c. Debt Service Funds. Additionally, an exception to the rebate requirement, whether or not any of the previously discussed exceptions are available, applies for earnings on "bona fide debt service funds." A "bona fide debt service fund" is one in which the amounts are expended within 13 months of the accumulation of such amounts by the issuer. In general, most interest and sinking funds (other than any excess taxes or revenues accumulated therein) satisfy these requirements. For private activity bonds, short term bonds (i.e., have a term of less than five years) or variable rate bonds, the exclusion is available only if the gross earnings in such fund does not exceed $100,000, for the bond year. For other bonds issued after November 11, 1988, no limitation is applied to the gross earnings on such funds for purposes of this McCall, Parkhurst &Horton L.L.P. -Page 11 14 44 exception. Therefore, subject to the foregoing discussion, the issuer is not required to take such amounts into account for purposes of the computation. FOR BONDS ISSUED AFTER THE EFFECTIVE DATE OF THE TAX REFORM ACT OF 1986 WHICH WERE OUTSTANDING AS OF NOVEMBER 11, 1988, OTHER THAN PRIVATE ACTIVITY BONDS, SHORT TERM BONDS OR VARIABLE RATE BONDS, A ONE-TIME ELECTION MAY BE MADE TO EXCLUDE EARNINGS ON "BONA FIDE DEBT SERVICE FUNDS" WITHOUT REGARD TO THE $10090009 LIMITATION. THE ELECTION MUST BE MADE IN WRITING (AND MAINTAINED AS PART OF THE ISSUER'S BOOKS AND RECORDS) NO LATER THAN THE LATER OF MARCH 21, 1990, OR THE FIRST DATE A REBATE PAYMENT IS REQUIRED. Conclusion McCall, Parkhurst &Horton L.L.P. hopes that this memorandum will prove to be useful as a general guide to the arbitrage rebate requirements. Again, this memorandum is not intended as an exhaustive discussion nor as specific advice with respect to any specific transaction. We advise our clients to seek competent financial and accounting assistance. Of course, we remain available to provide legal advice regarding all federal income tax matters, including arbitrage rebate. If you have any questions, please feel free to contact Harold T. Flanagan at (214) 220-2800. McCall, Parkhurst &Horton L.L.P. -Page 12 %0 M Exhibit "B" August 2, 1994 Mr. John Hamilton City Manager City of Sanger, Texas P.O. Box 578 Sanger, Texas 76266=0578 Re: City of Sanger, Texas Certificates of Obligation, Series 1994 Dear Mr. Hamilton: As you know, the City of Sanger, Texas (the "Issuer") issued the captioned certificates of obligation in order to provide for the acquisition and construction of the project. As a result of that issuance, the federal income tax laws impose certain restrictions on the investment of amounts deposited to the interest and sinking fund for the captioned certificates of obligation. The purpose of this letter is to set forth, in somewhat less technical language, those provisions of the tax law which require that obligations acquired with these amounts be invested at a yield which is not higher than the yield on the captioned certificates of obligation. For this purpose, please refer to line 20(f) of the Form 803&G included in the transcript of proceedings for the yield on the captioned certificates of obligation. Generally, the federal tax laws provide that, unless excepted, amounts deposited to the interest and sinking fund which are allocable to the captioned certificates of obligation must be invested in obligations the combined yield on which does not exceed the yield on the certificates of obligation. Importantly, for purposes of administrative convenience, the certificates of obligation, however, have been structured in such a way as to avoid, for the most part, this restriction on investment yield. First, the interest and sinking fund is made up of amounts which are received annually for the payment of current debt service on all the Issuer's outstanding bonds. Any taxes or revenues deposited to the interest and sinking fund which are to be used for the payment of current debt service on the captioned certificates of obligation, or any other outstanding bonds, are not subject to yield restriction. By definition, current debt service refers only to debt service to be paid within one year of the date of receipt of these amounts. For the most part, this would be debt service in the current fiscal year. These amounts deposited to the account for current debt service may be invested without regard to any constraint imposed by the federal income tax laws. ,J 14 Second, a portion of the interest and sinking fund is permitted to be invested without regard to yield restriction as a "minor portion." The "minor portion" exception is available for de nummis amounts of taxes deposited to the interest and sinking fund. The maximum amount that may be invested as part of this account may not exceed the lesser of 5 percent of the principal amount of the certificates of obligation or $100)0006 Accordingly, you should review the current balance in the interest and sinking fund in order to determine if such balance exceeds the aggregate amounts discussed above. Additionally, in the future it is important that you be aware of these restrictions as additional amounts are deposited to the interest and sinking fund. The amounts in this fund which are subject to yield restriction would only be the amounts which are in excess of the sum of (1) the current debt service account and (2) the "minor portion" account. Moreover, to the extent that additional bonds are issued by the Issuer, whether for new money projects or for refunding, these amounts will change in their proportion. Obviously, this letter only presents a fundamental discussion of the yield restriction rules as applied to amounts deposited to the interest and sinking fund. Moreover, this letter does not address the rebate consequences .with respect to the interest and sinking fund and you should review the memorandum attached to the No -Arbitrage Certificate as Exhibit "A" for this purpose. If you have certain concerns with respect to the matters discussed in this letter or wish to ask additional questions with regards to certain limitations imposed, please feel free to contact our firm. Thank you for your consideration and we look forward to our continued relationship. Very truly yours, McCALL, PARKHURST 8c HORTON L.L.P. TA ;e Exhibit "C" CERTIFICATE OF ELECTION PURSUANT TO SECTION 148(f)(4)(C) OF THE INTERNAL REVENUE CODE OF 1986 I, the undersigned, being the duly authorized representative of the City of Sanger, Texas (the "Issuer") hereby state that the Issuer elects the provisions of section 148(f)(4)(C) of the Internal Revenue Code of 1986 (the "Code"), relating to the exception to arbitrage rebate for temporary investments, as more specifically designated below, with respect to the Issuer's Certificates of Obligation, Series 1994 (the "Certificates of Obligation") which are being issued on the date of delivery of the Certificates of Obligation in a face amount equal to $1,900,000. The CUSIP Number for the Certificates of Obligation is stated on the Form 803&G executed as of the date hereof, The Issuer intends to take action to comply with the two-year temporary investments exception to rebate afforded construction bonds under section 148(f)(4)(C) of the Code. Capitalized terms have the same meaning as defined in the No -Arbitrage Certificate. �—� 1. PENALTY ELECTION. In the event that the Issuer should fail to expend the "available construction proceeds" of the Certificates of Obligation in accordance with the provisions of section 148(f)(4)(C) of the Code, the Issuer elects, in lieu of rebate, the penalty provisions of section 148(f)(4)(C)(vii)(I) of the Code, 2. RESERVE FUND ELECTION, The Issuer elects to exclude from "available construction proceeds," within the meaning of section 148(f)(4)(C)(vi) of the Code, of the Certificates of Obligation, earnings on the Reserve Fund in accordance with section 148(f)(4)(C)(vi)(IV) of the Code. 3. MULTIPURPOSE ELECTION. The Issuer elects to treat that portion of the Certificates of Obligation the proceeds of which are to be used for the payment of expenditures for construction, reconstruction or rehabilitation of the Project, as defined in the instrument authorizing the issuance of the Certificates of Obligation, in an amount which is currently expected to be equal to $ , as a separate issue in accordance with the provisions of section 148(f)(4)(C)(v)(II) of the Code. (Note: This election is not necessary unless less than 75 percent of the proceeds of the Certificates of Obligation will be used for construction, reconstruction or renovation.) U 4. ACTUAL FACTS. For purposes of determining compliance with section 148(f)(c) of the Code (other than qualification of the Certificates of Obligation as a qualified construction issue), the Issuer elects to use actual facts rather than reasonable expectations. 5. NO ELECTION. The Issuer understands that the elections which are adopted as evidenced by the check in the box adjacent to the applicable provision are irrevocable. Further, the Issuer understands that qualification of the Certificates of Obligation for eligibility for the exclusion from the rebate requirement set forth in section 148(f) of the Code is based on subsequent events and is unaffected by the Issuer's expectations of such events as of the date of delivery of the Certificates of Obligation. Accordingly, while failure to execute this certificate and to designate the intended election does not preclude qualification, it would preclude the Issuer from the relief afforded by such election. DATED: Mayor of the City of Sanger, Texas P.O. Box 578 Sanger, Texas 76266-0578 Employer I.D. Number: 75-6000661 NO. R-1 $1,9001000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF SANGER, TEXAS CERTIFICATE OF OBLIGATION SERIES 1994 CITY OF BANGER, in Denton County (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to or to the registered assignee or assignees of this Certificate of Obligation or any portion or portions hereof (in each case, the "registered owner") the aggregate principal amount of ONE MILLION NINE HUNDRED THOUSAND DOLLARS in annual installments of principal due and payable on September 1 in each of the years, and in the respective principal amounts, as set forth in the following schedule: YEAR AMOUNT YEAR AMOUNT 199G S 85,000 2003 S 135,000 1997 90,000 2004 145,000 1998 100,000 2005 150,000 1999 105,000 2006 165,000 2000 110,000 2007 175,000 2001 120,000 2008 190,000 2002 125,000 2009 200,000 and to pay interest, from the date of this Initial Certificate of Obligation, on the balance of each such installment of principal, respectively, from time to time remaining unpaid, at the rates as follows: maturity 1996, Q/o maturity 2003, % maturity 1997, % maturity 2004, % maturity 1998, % maturity 2005, % maturity 1999, % maturity 2006, % maturity 2000, % maturity 2007, % maturity 2001, % maturity 2008, % maturity 2002, % maturity 2009, % with said interest bcing payable on March 1, 1995, and semiannually on each September 1 and March 1 thereafter while this Certificate of Obligation or any portion hereof is outstanding and unpaid. THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate of Obligation are payable in lawful money of the United States of America, without exchange or collec- tion charges. The installments of principal and the interest on this Certificate of Obligation are payable to the registered owner hereof through the services of Texas Commerce Bank National Association, Dallas, Texas, which is the "Paying Agent/Registrar" for this Certificate of Obligation, Payment of all principal of and interest on this Certificate of Obligation shall be made by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by check or draft, dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Certificate of Obligation (the "Certificate of Obligation Ordinance") to be on deposit with the Paying Agent/Regis- trar for such purpose as hereinafter provided, and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such principal and/or interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on the 15th 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, or by such other method acceptable to Paying Agent/Registrar requested by, and at the risk and expense of, the registered owner. The Issuer covenants with the registered owner of this Certificate of Obligation that on or before each principal and/or interest payment date for this Certificate of Obligation it will make available to the Paying Agent/ Registrar, from the "Interest and Sinking Fund" created by the Certif- icate of Obligation Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on this Certificate of Obligation, when due. IF THE DATE for the payment of the principal of or interest on this Certificate of Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where 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 CERTIFICATE OF OBLIGATION has been authorized in accordance with the Constitution and laws of the State of Texas, in the principal amount of $1,900,000 for paying all or a portion of the Issuer's contractual obligations for the purpose of constructing public works in the Issuer, to -wit: constructing and reconstructing streets throughout the Issuer, and constructing a new library at 5th and Bolivar Streets, and for paying legal, fiscal, architectural and engineering fees in connection with such projects, ON SEPTEMBER 1, 2004, or any date thereafter, the unpaid installments of principal of this Certificate of Obligation may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the Issuer shall select and designate the maturity, or maturities, and the amount that is to be redeemed, and if less than a whole maturity is to be called, the Issuer shall direct the Paying Agent/Registrar to call by lot (provided that a portion of this Certificate of Obligation may be redeemed only in an integral multiple of $5,000), at the redemption price of the principal amount, plus accrued interest to the date fixed for prepayment or redemption. AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the registered owner hereof. By the date fixed for any such prepayment or redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepayment or redemption price for this Certificate of Obligation or the portion hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption. If such l} , written notice of prepayment or redemption is given, and if due provision for such payment is made, all as provided above, this Certificate of Obligation, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the prepayment or redemption price plus accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of principal of this Certificate of Obligation or any portion hereof. THIS CERTIFICATE OF OBLIGATION, to the extent of the unpaid or unredeemed principal balance hereof, or any unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for this Certificate of Obligation, upon the terms and conditions set forth in the Certificate of Obligation Ordinance. Among other requirements for such transfer, this Certificate of Obligation must be presented and surrendered to the Paying Agent/Registrar for cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Certificate of Obligation, or any portion or portions.hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names this Certificate of Obligation or any such portion or portions hereof is or are to be transferred and registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Regist'rar may be used to evidence the assignment of this Certificate of Obligation or any such portion or portions hereof by the initial registered owner hereof. A new certificate of obliga- tion or certificates of obligation payable to such assignee or assignees (which then will be the new registered owner or owners of such new certificate of obligation or certificates of obligation) or to the initial registered owner as to any portion of this Certificate of Obligation which is not being assigned and transferred by the initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate of Obligation or any portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof for the conversion and exchange of this Certificate of Obligation or any portion hereof. The registered owner of this Certifi. cate of Obligation shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certif- icate of Obligation to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. AS PROVIDED above and in the Certificate of Obligation Ordinance, this Certificate of Obligation, to the extent of the unpaid or unredeemed principal balance hereof, maybe converted into and exchanged for a like aggregate principal amount of fully registered certificates of obligation, without interest coupons, payable to the assignee or assignees duly designated in writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this Certificate of Obligation which is not being assigned and transferred by the initial registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject to the requirement here- inafter stated that each substitute certificate of obligation issued in exchange for any portion of this Certificate of Obligation shall have a single stated principal maturity date), upon surrender of this Certificate of Obligation to the Paying Agcnt/Registrar for cancellation, all in accordance with the form and procedures set forth in the Certificate of Obligation Ordinance. If this Certificate of Obligation or any portion hereof is assigned and transferred or converted each certificate of obligation issued in exchange for any portion hereof shall have a single stated principal maturity date corresponding to the due date of the installment of principal of this Certificate of Obligation or portion hereof for which the substitute certificate of obligation is being exchanged, and shall bear interest at the rate applicable to and borne by such installment of principal or portion thereof. Such certificates of obligation, respectively, shall be subject to redemption prior to maturity on the same dates and for the same prices as the corresponding installment of principal of this Certificate of Obligation or portion hereof for which they are being exchanged. No such certificate of obligation shall be payable in installments, but shall have only one stated principal maturity date. AS PROVIDED IN THE CERTIFICATE OF OBLIGATION ORDINANCE, THIS CERTIFICATE OF OBLIGATION IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees, but the certificates of obligation issued and delivered in exchange for this Certificate of Obligation or any portion hereof may be assigned, transferred and converted, subsequently, as provided in the Certificate of Obligation Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging this Certificate of Obligation or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment, conversion, or exchange (1) 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 Certificate of Obligation or portion thereof called for prepayment or redemption prior to maturity, within 45 days prior to its prepayment or redemption date. IN THE EVENT any Paying Agent/Registrar for this Certificate of Obligation is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate of Obligation Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owner of this Certificate of Obligation. IT IS HEREBY certified, recited, and covenanted that this Certificate of Obligation 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 Certificate of Obligation have been performed, existed, and been done in accordance with law; that this Certificate of Obligation is a general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate of Obligation, as such interest and principal come due, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for such payment, within the limit prescribed by law, and that this Certificate of Obligation is additionally secured by and payable from limited surplus revenues of the Issuer's Utility System, being the Waterworks, Sewer and Electric System, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the Issuer's revenue bonds or other obligations (now or hereafter outstanding), which are payable from all or any part of the Net Revenues of the Issuer's Utility System. BY BECOMING the registered owner of this Certificate of Obligation, the registered owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of Obligation Ordinance 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 Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between the registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed with the manual signature of the Mayor of the Issuer, countersigned with the manual signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed on this Certificate of Obligation to be dated July 1, 1994. City Secretary Mayor CITY SEAL COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO. I hereby certify that this Certificate of Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) The Attorney General of Texas Public Finance Section Austin, Texas 78704 Dear Sir: City of Sanger, Texas Certificates of Obligation Series 1994, $1,900,000 The captioned Certificate of Obligation has been sent to your Office, and it is requested that you examine and approve the Certificate of Obligation in accordance with law. After such approval, please deliver the Certificate of Obligation to the Comptroller of Public Accounts for registration. Enclosed herewith is a signed but undated copy of the SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE for said Certificate of Obligation. You are hereby authorized and directed to date said Certificate concurrently with the date of approval of the Certificate of Obligation. If any litigation or contest should develop pertaining to the Certificate of Obligation or any other matters covered by said Certificate, the undersigned will notify you thereof immediately by telephone and telegraph. With this assurance you can rely on the absence of any such litigation or contest, and on the veracity and currency of said Certificate, at the time you approve the Certificate of Obligation, unless you are notified otherwise as aforesaid. Sincerely yours, City of Sanger Mayor The Comptroller of Public Accounts 111 E. 17th Street Austin, Texas 78701 Dear Sir: City of Sanger, Texas Certificates of Obligation Series 1994, $1,900,000 The approved Certificate of Obligation will be delivered to you by the Attorney General of Texas. You are hereby requested to register the Certificate of Obligation as required by law and by the proceedings authorizing the Certificate of Obligation. As you will see, the Certificate of Obligation is a single instrument payable in installments solely to the registered owner. After the Comptroller's Registration Certificate on the Certificate of Obligation is duly signed and sealed, you are hereby authorized and directed to deliver the Certificate of Obligation to a representative of our Austin office, together with six copies of each of the following: (1) Attorney General's Approving Opinion. (2) Comptroller's Signature Certificate. Your statement for services should be sent to Southwest Securities Inc., 4300 Renaissance Tower, Dallas, Texas 75201. Sincerely yours, City of Sanger Mayor Texas Commerce Bank National Association Dallas, Texas Gentlemen: City of Sanger, Texas Certificates of Obligation Series 1994, $1,900,000 The ISSUER and the PURCHASER of the captioned Certificate of Obligation have designated your bank as the place, and as their agent, for the delivery and payment of the Certificate of Obligation. The Certificate of Obligation, which initially has been issued as a single fully registered Certificate of Obligation payable in installments, will be sent to you in the near future, together with a certified copy of the Ordinance authorizing the issuance of the Certificate of Obligation. Upon your receipt of the final unqualified approving legal opinion of McCall, Parkhurst &Horton, Attorneys at Law, 717 No. Harwood St., Dallas, Texas 75201 as to the validity of the Certificate of Obligation, you are authorized and directed to deliver the Certificate of Obligation to the PURCHASER thereof, to -wit: when you have received payment for the Certificate of Obligation, in immediately available funds, for the purchase price thereof and accrued interest to the date of delivery. You are further authorized and directed to remit all of the aforesaid proceeds received from the delivery and payment of the Certificate of Obligation, immediately upon receipt, and by the fastest means available, to the credit of the ISSUER of the Certificate of Obligation, at its OFFICIAL DEPOSITORY, as follows: Enclosed herewith are two signed but undated copies of each of the TREASURER'S RECEIPT, SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE and CLOSING CERTIFICATE for said Certificate of Obligation. You are hereby authorized and directed to date all copies of each of said documents concurrently with the date of delivery and payment for the Certificate of Obligation. If any litigation or contest should develop or be filed, or if any event should occur, or any knowledge should come to our attention, which would change or affect the veracity of the statements and representations contained in any of said documents, the undersigned will notify you thereof immediately by telephone. With this assurance you can rely on the absence of any such litigation, contest, event, or knowledge, and on the veracity and currency of each of said documents at the time of delivery of and payment for the Certificate of Obligation, unless you are notified otherwise as aforesaid. After all copies of each of said documents have been dated in accordance with the foregoing instructions, please send all of them to McCall, Parkhurst &Horton. Sincerely yours, City of Sanger Mayor BY BECOMING the registered owner of this Certificate of Obligation, the registered owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of Obligation Ordinance 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 Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate of Obligation. City Secretary CITY SEAL Mayor PAYING AGENMILE GISTRAR AGRIJI;MI;NT THIS AGREEMENT entered into as of July 1, 1994 (this "Agreement"), by and between the City of Sanger, Texas (the "Issuer"), and Texas Commerce Bank National Association, Dallas, Texas, a banking association duly organized and existing under the laws of the United States of America (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its Certificates of Obligation, Series 1994 (the "Securities") in the aggregate principal amount of $1,900,000, such Securities to be issued in fully registered form only as to the payment of principal and interest thereon; and WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof on or about August 2, 1994; and WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities. As Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof, all in accordance with this Agreement and the "Ordinance" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Ordinance." The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Schedule A attached hereto for the remainder of the Fiscal Year during which the Agreement is executed and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. This agreement assumes retention by the Paying Agent of the float on univested funds held in accounts by the Paying Agent. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the principal corporate trust office of the Bank as indicated on the signature page hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Fiscal Year" means the fiscal year of the Issuer, ending September 30. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Ordinance" means a written request or ordinance signed in the name of the Issuer by the Mayor of the Issuer, any one or more of said officials, delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated., lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Ordinance). "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of the Ordinance. "Ordinance" means the ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the City Secretary or any other officer of the Issuer and delivered to the Bank. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice -Chairman of the Board of Directors, the Chairman or Vice-chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, 2 or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfer of the Securities. "Stated Maturity" means the date specified in the Ordinance the principal of a Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "Bank," Issuer," and Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paying Agent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the Bank Office, As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and preparing and sending checks by United States Mail, first class postage prepaid, on each payment date, to the Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the address appearing on the Security Register or by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on the dates specified in the Ordinance. ARTICLE FOUR REGISTRAR Section 4.01. Security Register -Transfers and Exchanges. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Registcr") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be 3 reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers, exchanges and replacement of Securities shall be noted in the Security Register, Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re -registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use, and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other political subdivisions or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. The Security Register may be maintained in converted into written form within a reasonable lime. Section 4.04. List of Security Holders. written form or in any other form capable of being The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. 0 Section 4.05. Return of Cancelled Certificates, The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu A which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Mutilated, Destroyed, at or Stolen Securities. The Issuer hereby instructs the Bank, subject to the applicable provisions of the Ordinance, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its discretion, may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06, ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, 5 security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Moneys Held by Bank. The Bank shall deposit any moneys received from the Issuer into a trust account to be held in a fiduciary capacity for the payment of the Securities, with such moneys in the account that exceed the deposit insurance available to the Issuer by the Federal Deposit Insurance Corporation, to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas, and to the extent practicable under the laws of the United States of America, to secure and be pledged as collateral for trust accounts until the principal and interest on such securities have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. Subject to the Unclaimed Property Law of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for three years after the final maturity of the Security has become due and payable will be paid by the Bank to the Issuer if the Issuer so elects, and the Holder of such Security shalt hereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies shall thereupon cease. If the Issuer does not elect, the Bank is directed to report and dispose of the funds in compliance with Title Six of the Texas Property Code, as amended. Section 5.06, Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in 6 connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the all agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5.08. Depository Trust Company Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements," effective August 1, 1987, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. SectionAssignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page of this Agreement. hereof. Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction Section G.OS. Successors and Assigns. All covenants and agreements hcrcitt by the Issuer shall bind its successors and assigns, whether so expressed or not. 7 i 4} Section 6.06, Severability. In case any provision herein shall be invalid,, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire Agreement. This Agreement and the Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between his Agreement and the Ordinance, the Ordinance shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. . This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice has been given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securi- ties, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. !'3 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. Texas Commerce Bank National Association Dallas, Texas By Title Attest: Title (BANK SEAL] CITY OF BANGER, TEXAS Mayor [ISSUER SEAL] Attest: City Secretary 9 SCHEDULE A Paying Agent/Registrar Fee Schedule [To be supplied by the Bank] 10 Tom: FROMM DATE: SUBJECT. R R kNGER, TEXAS 76 *1 Honorable Mayor � John Hamilton, Citywov July 1, 1994 Street Dame -Change Austin Street7Duck Creek Road Councilmember Bell asked for this item to be placed on the agenda in order to eliminate any confusion on the west side of I-35. Austin Street and Duck Creek are the same street. Councilmember Bells suggestion is to change the name of Austin to Duck Creek Road from the west access road to the City limits. Staff recommends approval. JH:es E ., i� i :� r t t 1 t 1 t ❑� tl � � .� �� �� -� ,�� __ �� � .. �.�.� ��1 TO: FROM: DATE: SUBJECT: CITY OF SANGER P. O. BOX 578 SANGER, TEXAS 76266 Honorable Mayer &Members of the Jahn Hamilton, City Administrate' July 1, 1994 Limb Collection Policy ty Council The attached proposal is submitted for your review and comment. JH:es Attachment Minimum Charge. $15.00 Any project that would require more than fifteen (15} minutes to collect would require an estimate by a Public Works Supervisor. The charges would be figured in quarter hour blocks with the charges of $15.00 for the first quarter hour and $7.00 per quarter hour up to one hour. Thereafter, each quarter hour block would be charged at $10.00 per quarter hour. Each resident would be advised that for small amounts of limbs and brush that it should be either bagged or bundled, not to exceed twenty (20) pounds, with bundles no more than thirty-six inches in length, and be placed curbside on regular solid waste collection days. At this time, Texas Waste Management will collect these at no additional charge. MEMORANDUM # 2533 TO: FROM: DATE: S[]SJECT: CITY OF BANGER P. O. SOX 578 BANGER, TEXAB 7�i2�i6 Hanarable Mayar &Members of the City Cauncil Jahn Hamiltan, City Administratar July 1, 1994 Executive Bessian - Persannel This item is being placed an the agenda regarding City Council appointments far City Judge, Health Officer and Fire Chief. JH:es MEMORANDUM #2532 TO: FROM: DATE. SUBJECT. CITY OF SANDER P. O. BOX 578 BANGER, TEXAS 76266 Honorable Mayor &Members of the City Council John Hamilton, City Administrator July 1, 1994� Board/Commission Appointments This agenda item is to finalize BaardjComrnission Appointments. Also, the City Council needs to appoint or reappoint the following: City Judge Fire Chief City Physician Municipal Court Clerk Danny Spindle Bill Murrell Dr. Richard Perry Paula Morales to serve a two (2) year term from 7/94 to 7i96 with the exception of the Court Clerk due to her reappointment every two years is not necessary. JH:es CITY up BANGER P. a. BOX 578 SANGER, TEXAS 76266 TU: Honorable Mayor &Members of the City Council FROM: John Hamilton, City Administrato DATE: July 1, 1994 SUBJECT: Administration Report 1). The Army Corps Qf Engineers has announced that the repairs to Ray Roberts Dam will be completed on or about July 11, 1994. 2). Texas Waste Management has notified the City that a federally mandated increase on Sub -Title D (federal law requirements for solid waste disposal) will be presented to the City as required by contract. When the exact amount is calculated, it will be forwarded for your review. 3). Centel -Sprint is currently reviewing over 49 EAS requests in their Kansas City home office. Mr. Rick Brown of Centel/Sprint will keep the City informed as the review process proceeds. �H:es MEIVIC7RANDUM # 2527 TO: FROMM DATE: SUBJECT. 1 ■ r o Ow BOX 578 kNGER,TEXASql _ • Honorable Mayor &Members of the City Council Jahn Hamilton, City Administrate June 29, 1994 lt Srazos Electric Rate Increase Today, I spoke with Frank Bushnell of Brazos effective with the August'94 billing, the P.U.C. wholesale cost increase for Brazos customers. w h Electric and he advised as approved a 3.75% Staff recommends that this increase be passed on to customers on the September 1, 1994 billing. The 3.75% would be added to the energy charge and not the fuel adjustment which would remain at $.0184. Residential Small Commercial Large Commercial Demand Energy Minimum Bill JH:es Current $.0599161 $.0�i52494 $50.50, 1st 6Kt�V $ 7.99, per KVV $.022848 KWH $50.50 cc: Rosalie Chavez, City Secretary Larry Yeast, Electric Superintendent Proposed $.0621629 $52.39, 1st 6K�7 $ 8.29, per KW $.0237048 KWH $52.39 June 2�, 1994 Cherry's Beauty Shop P. O. Box 863 Sanger, Texas 76266 RE: 309 N. 5th Dear Ms. Horst: Certified #Z780-479-276 As previously discussed, .this letter is your official notification to vacatte your business within thirty (30) days from the receipt of this notice. Thank you for your cooperation. Sincere hn Hamilton Administrator JH:es c c: Mayor Armstrong & City Councilmembers >..�_< 1' • • , �,'� (��1�,���(,� � 1 C�A1ViBER OF CONIlI�RCE P.O. BOX 537 BANGER, TEXAS 76266 Mrs Mary Ann Hausler 257 Post Oak Road Lewisville, TX. 75057 Dear Mrs Hausler: June 23, 1994 We are requesting your permission to repaint the Coca-Cola mural that is located. on the outside brick wall •of 'your building on .3rd.•Street. We are negotiating with the Coca-Cola Co. to furnish the paint, and ;are hoping to get a qualified painter to repaint i.t; we feel this would 'help to enhance the building and improve the appearance of the locale. SQin�cerely, Debbie Spindle cc: City of Sanger President 94�90 ��or�: B���x �Ru�zN, cx��� �- ��'��: 7/1./9� SU�JF'C�': ����D SIG.N,"� �+ � • " n ,, • _ • • .� � • • t � � � � �� �? r � f � \,. a. PAGE 1 Ur 2 James M. Paton JUN 2 3 1994 700 Elm Street Sanger, Texas 76266 CITY OF SANGER City Managers office Attention: Mr. Hamilton City of Sanger, Texas 76266 Dear Mr. Hamilton: As you are aware, I am the owner of two tracts of property situated in the town of Sanger, Denton County, Texas, legally described as BEING all that certain lot, tract, or, parcel of land situated in the Ruben Bebee Survey, Abstract Number 29, in the City of Sanger, Denton County, Texas, being apart of block 5 of J.R. Sullivan West Addition, an addition to the City of Sanger, Denton County, Texas, recorded in Volume 75, Page 480, Deed of Records of Denton County, Texas. As you are. also aware, Sir, to this. belated date, I am still encountering, even during small amounts of recorded precipitation, the same severe flooding problem, at the _ aforementioned property, which has existed for at least the last 25 months. The flooding, caused by the inadequate or non-existent sewer/drainage provided by your office, has caused documented damage to my home/garage/storage shed, as well as making the majority of my property unusable/unimprovable. I have also lost a fair amount of landscaping materials due to the flooding. The damage, and documentation of said damage, continues to increase. The flooding/damage/drainage documentation which I have gathered/purchased to this date can, have, and will substantiate the neglegence on the part of the City of Sanger. I am currently paying $689.79 a year in School, County, and in City Taxes. $160.29 per year of that amount is City Taxes. Unfortunately, your office continues to ignore the water run-off that originates at Interstate Highway 35E and finally floods my property. It is incomprehensible to myself, as well as many other residents, that the city would consider building a new library, when our city drainage problem is so extensive. Therefor, under advice of counsel, I am once again requesting that your office take immediate action in regard to this neglected problem. In addition, I have also been informed by a paid professional that a drainage ditch, a minimum of 3.5 feet deep, along Elm street, between 8th and 7th streets, will be necessary to only decrease the amount of flooding occuring at my property. 4l PAGE 2 OF 2 I do not wish, nor request,�that you again vist me at my residence in regard to this matter. I do, however, request that you direct your subordinates to act accordingly. As a paid city official, it is your duty and responsibility to act immediately in regard to any and all problems within the scope of your office. I would greatly appreciate, and have in the past expected, your timely cooperation in rectifying this situation. S ncerely, James M. Paton ' 700 Elm St. JP/gw/bh cc: G.W./P.0 First State Bank of Denton - Turner young Investment Co. Trinity Universal Insurance D.R.C. �,. , ;;` April 4, 1994 Proposed Street Projects J1 3. Austin Street :4200 ft. X $115 = $253,000 4. North loth Street 2,200 ft. X $115 = $253,000 5. Keaton (Phase II) - Brookglen, North Duck Creek 2,200 ft. X $115 = $253,000 + $30,,,g 000• 6. Holt, Berry, Bolivar Z200 ft. X $115 = $253,000 TOTAL Additional drainage construction project construction totals include 8°�6 engineering costs. $ 3491 $330,480 $493,560 _ $273,240 _ $273,240 _ $305,640 _ $273,240 _ $1,949,400 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS Ann W. Richards GOVERNOR Henry Flores EXECUTIVE DIRECTOR June 24, 1994 The.Honorable Nel Armstrong Mayor City of Sanger P.O. Box 578 Sanger, Texas 76266-0578 Dear Mayor Armstrong: J U N So 1994 j SAhIGERI TEXAS BOARD MEMBERS Paul R. Rodriguez Chalrman Harvey Clemons Jr. Elizabeth Flores Richard C. Hile Joseph Kemp Walter Martinez Judith McDonald Mary Sanger Susan Sharlot Congratulations! The Texas Department of Housing and Community Affairs' HOME Program is pleased to inform.you that your 1993 Owner Occupied Rehabilitation HOME Program application was recommended to the Board of Directors and has been approved for funding. The total amount approved is $153,920, which includes $148,000 for project funds and $5,920 for administrative costs. To enable you to go forward with your program, we have organized Implementation Training to provide program guidance. Training will be available at four different locations; you may choose which session you prefer to attend. Due to the fact that sites have a limited number of spaces available, so registration will be on a "first -come, first - serve" basis. If your first choice is already filled, the HOME staff reserves the right to assign you to attend the training at another location. Please complete the attached pre- registration form and fax it by July 1 to our office at (512) 475-3287. A representative from the HOME Program will contact you in the near future concerning the contract agreement. If you have any questions in the meantime, please feel free to contact me at (512) 475-3109. Again, congratulations on your award. The HOME Program staff looks forward to working with you in providing safe, decent and affordable housing in your community. Thank you. Respectfitlly, David D. Garza HOME Program Manager 811 BARYON SPRINGS ROAD -SUITE 100 '• P. O. BOX 13941 • AUSTIN, TEXAS 78711-3941 • (512) 475-3800 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS Ann W. Richards GOVERNOR Henry Flores EXECUTIVE DIRECTOR June 24, 1994 The Honorable Nel Armstrong Mayor City of Sanger P.O. BOX S78 Sanger, Texas 76266-OS78 Dear Mayor Armstrong: rJ JUN 3 � 1994 ';;�� t, .. {; . �i ��� ,. �ANC�,�R, T�7°s .`� BOARD MEMBERS Paul R. Rodriguez Chairman Harvey Clemons Jr. Elizabeth Flores Richard C. Hile Joseph Kemp Waiter Martinez Judith McDonald Mary Sanger Susan Sharlot Congratulations! The Texas Department of Housing and Community Affairs' HOME Program is pleased to inform you that your 1993 First -Time Homebuyer HOME Program application was recommended to the Board of Directors and has been approved for funding. The total amount approved is $54,080, which includes $52,000 for project funds and $2,080 for administrative costs. To enable you to go forward with your program, we have organized Implementation Training to provide program guidance. Training will be available at four different locations; you may choose which session you prefer to attend. Due to the fact that sites have a limited number of spaces available, so registration will be on a "first -come, first - serve" basis. If your first choice is already filled, the HOME staff reserves the right to assign you to attend the training at another location. Please complete the attached pre- registration form and fax it by July 1 to our office at (S 12) 475-3287. A representative from the HOME Program will contact you in the near future concerning the contract agreement. If you have any questions in the meantime, please feel free to contact me at (S 12) 475-3109. Again, congratulations on your award. The HOME Program staff looks forward to working with you in providing safe, decent and affordable housing in your community. Thank you. Respectfully, ��� David D. Garza HOME Program Manager 811 BARYON SPRINGS ROAD -SUITE 100 • P. O. BOX 13941 • AUSTIN, TEXAS 78711-3941 • (512) 475-3800