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Home My WebLink About2000-154ORDINANCE NO 20004' Wj/ ORDINANCE WITH RESPECT TO PROPOSED AMENDMENTS TO BOND ORDINANCES, AND APPROVING SAME, AND PROVIDING AN EFFECTIVE DATE THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON WHEREAS, the Ordinance Authorizing the issuance of City ofDenton, Texas Utility System Revenue Refunding Bonds, Series 1983 (the "1983 Ordinance") was adopted by the City of Denton (the "City") on March 10, 1983, and WHEREAS, pursuant to the 1983 Ordinance and other subsequent ordinances (the "Other Bond Ordmances", and collectively with the 1983 Ordinance, the "Bond Ordinances"), the City has heretofore issued the following revenue bonds that are currently outstanding City of Denton Utility System Revenue Bonds, Series 1992, dated March 1, 1992, City of Denton Utility System Revenue Bonds, Series 1993, dated March 1, 1993, City of Denton Utility System Revenue Refunding Bonds, Series 1993-A, dated June 1, 1993, City of Denton Utility System Revenue Refunding Bonds, Taxable Series 1993-B, dated June 1, 1993, City of Denton Utility System Revenue Bonds, Series 1996, dated May 1, 1996, City of Denton Utility System Revenue Refunding Bonds, Series 1996-A, dated May 1, 1996, City of Denton Utility System Revenue Bonds, Series 1998, dated March 15, 1998, City of Denton Utility System Revenue Refunding Bonds, Series 1998A, dated July 15, 1998, City of Denton Utility System Revenue Refunding Bonds, Series 1998B, dated August 1, 1998, and WHEREAS, the Bond Ordinances contain certain covenants for the benefit of the bondholders, including a covenant that restricts the ability of the City to sell or dispose of any significant portion ofthe City's combined water, wastewater and electric system (the "System") and a covenant that restricts the ability of the City to permit competition with the System, and WHEREAS, the current status of the electric industry in general, and electric deregulation in particular, including the passage of Senate Bill 7, makes it necessary for the City to have more flexibility with respect to the System and to propose amendments to such covenants in order to remain competitive, and WHEREAS, the City hereby fords that it is necessary, pursuant to Section 27 of the 1983 Ordinance and the corresponding sections of the Other Bond Ordinances, to authorize giving of a notice of such proposed amendments, NOW, THEREFORE THE CITY COUNCIL OF DENTON HEREBY ORDAINS Section 1 NOTICE OF PROPOSED AMENDMENTS The City hereby authorizes and directs that notice of such proposed amendments be given to each bondholder by the Paying Agent/Registrar by first class trail sent to their addresses as shown in the registration books kept by the Paying Agent/Registrar, including the bondholders of any Bonds issued after the effective date of this Ordinance follows Section 2 FORM OF NOTICE The form of such notice of the proposed amendments shall be as CITY OF DENTON, TEXAS UTILITY SYSTEM REVENUE BONDS Series 1992, dated March 1, 1992 Taxable Series 1993-11, dated June 1, 1993 Series 1998, dated March 15, 1998 Series 1993, dated March 1, 1993 Series 1996, dated May 1, 1996 Series 1998A, dated July 15, 1998 Series 1993-A, dated June 1, 1993 Series 1996-A, dated May 1, 1996 Series 1998B, dated August 1, 1998 NOTICE OF PROPOSED AMENDMENTS NOTICE IS HEREBY GIVEN that the City of Denton, Texas proposes to amend its Ordinance Authorizing the issuance of City of Denton, Texas Utility System Revenue Refunding Bonds, Series 1983 (the "1983 Ordinance") adopted by the City of March 10, 1983 and each of the ordinances (the "Other Bond Ordinances") that relate to the captioned Bonds in the following manner 1 Section 26(g) of the 1983 Ordinance headed "Sale or Disposal of Property" and the corresponding section of each of the Other Bond Ordinances are hereby amended and restated to read as follows (g) Sale Lease or Disposal of Prone rtv No part of the System shall be sold, leased, mortgaged, demolished, removed or otherwise disposed of, except as follows (1) To the extent permitted by law, the City may sell, lease, mortgage, demolish, remove or otherwise dispose of at any time and from time to tune any property or facilities constituting part of the System only if (A) the City Council shall determine, as evidenced by a resolution to that effect, such property or facilities are not useful in the operation of the System, or (B) the proceeds of such sale are $250,000 or less, or the City Council shall determine, as evidenced by a resolution to that effect, the fair market value of the property or facilities exchanged is $250,000 or less, or (C) if such proceeds or fair market value exceeds $250,000 the City Council shall determine, as evidenced by a resolution to that effect, that the sale or exchange of such property or facilities will not impair the ability of the City to comply during the current or any future fiscal year with the covenant of the City set forth in Section 27(1) of this Ordinance The proceeds of any such sale or exchange not used to acquire other property necessary or desirable for the sale or efficient operation of the System shall forthwith, at the option of the City, (i) be used to redeem or purchase Panty Bonds or Additional Bonds, (u) otherwise be used to provide for the payment of Panty Bonds or Additional Bonds or (in) be used for any other lawful purpose (2) To the extent permitted by law, the City may lease or make contracts or grant licenses for the operation of, or make arrangements for the use of, or grant easements or other rights with respect to, any part of the System, provided that any such lease, contract, license, arrangement, easement or right (A) does not impede the operation of the System by the City and (B) does not in any manner unpair or adversely affect the rights or security of the owners of the Panty Bonds or Additional Bonds under this Ordinance, and provided, further, that if the depreciated cost of the property to be covered by any such lease, contract, license, arrangement, easement or other right is in excess of $500,000, the City Council shall determine, as evidenced by a resolution to that effect, that the action of the City with respect thereto does not result in a breach of the conditions under this clause (2) Any payments received by the City under or in connection with any such lease, contract, license, arrangement, easement or right in respect of the System or any part thereof shall constitute Gross Revenues 2 Section 260) ofthe 1983 Ordinance headed "Records" and the corresponding section of the Other Bond Ordmarices are hereby amended and restated as follows 0) Records The City shall keep proper books of record and account in which full, true, proper, and correct entries will be made of all dealings, activities, and transactions relating to the System, the Pledged Revenues, and the Funds created pursuant to this Ordinance, and all books, documents, and vouchers relatmg thereto shall at all reasonable times be made available for inspection upon request of any Bondholder, provided, that all books, documents, and vouchers relatmgto the City's electric system shall be made available for mspection only to the extent required by law, including, without limitation, the provisions of Section 552 131 of the Texas Government Code To the extent consistent with the provisions of this Ordinance, the City shall keep its books and records in a manner conforming to standard accounting practices as usually would be followed by private corporations owning and operating a sumlar System, with appropriate recognition being given to essential differences between municipal and corporate accounting practices 3 Section 26(m) of the 1983 Ordinance headed "No Competition" and the corresponding section of the Other Bond Ordinances are hereby deleted in their entirety A copy of the proposed amendment is on file at the principal offices of the Paying Agents for inspection by all bondholders Section 3 EFFECTIVE DATE This Ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the 25th day of Apnl, 2000 ATTEST Jack M her ayor r J roofer `D alters, City Secretary APPROVED AS TO LEGAL FORM Herbert L Prouty, City Attorney 1