2000-154 ORDINANCE NO 2000'/~'l'~
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 Authonzmgthe tssuance of C~ty of Denton, Texas Uuhty System Revenue
Refunchng Bonds, Series 1983 (the ~'1983 Ordinance") was adopted by the City of Denton (the "C~ty") on
March 10, 1983, and
WHEREAS, pursuant to the 1983 Ordinance and other subsequent ordinances (the "Other Bond
Ordinances", and collecUvely w~th the 1983 Ordinance, the "Bond Ordinances"), the C~ty has heretofore ~ssued
the followm$ revenue bonds that are currently outstanding
C~ty of Denton Utahty System Revenue Bonds, Series 1992, dated March l, 1992,
C~ty of Denton Utahty System Revenue Bonds, Series 1993, dated March l, 1993,
C~ty of Denton Utthty System Revenue Refunding Bonds, Series 1993-A, dated Jane l, 1993,
C~ty of Denton Utahty System Revenue Refunding Bonds, Taxable Series 1993-B, dated June l, 1993,
Ctty of Denton Utility System Revenue Bonds, Series 1996, dated May 1, 1996,
C~ty of Denton Utthty System Revenue Refunding Bonds, Series 1996-A, dated May l, 1996,
C~ty of Denton Utahty System Revenue Bonds, Series 1998, dated March 15, 1995,
C~ty of Denten Uuhty System Revenue Refunding Bonds, Series 1998A, dated July 15, 1998,
Ctty of Denton Utthty System Revenue Refunding Bonds, Series 1998B, dated August l, 1998, and
WHEREAS, the Bond Ordinances contmn certain covenants for the benefit of the bondholders,
including a covenant that restricts the ability of the C~ty to sell or chspose of any s~gmficant port~on of the C~ty's
combined water, wastewater and electric system (the "System") and a covenant that restricts the ab~hty of the
C~ty to penmt compet~taon wath the System, and
WHEREAS, the current status of the electric industry m general, and electric deregulation m
particular, including the passage of Senate Bill 7, makes ~t necessary for the C~ty to have more flex~bthty voth
respect to the System and to propose amendments to such covenants m order to remain competitive, and
WHEREAS, the C~ty hereby finds that ~t is necessary, pursuant to Section 27 of the 1983 Ordinance
and the corresponding sections of the Other Bond Ordinances, to authorize g~wng ora nct~ce of such proposed
amendments, NOW, THEREFORE
THE CITY COUNCIL OF DENTON HEREBY ORDAINS
Sectmon 1 NOTICE OF PROPOSED AMENDMENTS The City hereby authonzes and chrects that
notice of such proposed amendments be given to each bondholder by the Paying Agent/Registrar by first class
mml sent to their addresses as shown m the raglstration books kept by the Paymg Agent/Registrar, meludmg
the bondholders of any Bonds ~ssued after the effeeUve date of flus Ordinance
Section 2 FORM OF NOTICE The form of such notice of the proposed amendments shall be as
follows
CITY OF DENTON, TEXAS
UTILITY SYSTEM REVENUE BONDS
Series 1992, dated March 1, 1992 Taxable Series 1993-B, dated June 1, 1993 Series 1998, dated March t 5, 1998
Series 1993, dated March 1, 1993 Series 1996, dated May 1, 1996 Senes 1998A, dated July 15, 1998
Series 1993-A, dated June 1, 1993Senes 1996-A, dated May l, 1996 Series 1998B, dasd August l, 1998
NOTICE OF PROPOSED AMENDMENTS
NOTICE IS HEREBY GIVEN that the City of Denton, Texas proposes to amend ns Ordinance
Authorizing the issuance of City of Denton, Texas Utahty System Revenue Refunding Bonds, Series 1983 (the
"1983 Ordinance") adopted by the C~ty of March 10, 1983 and each of the ordinances (the "Other Bond
Ordinances") that relate to the captioned Bonds m the following manner
1 SecUon 26(g) of the 1983 Ordinance headed "Sale or D~sposal of Property"
and the correspondmg section of each of the Other Bond Ordinances are hereby amended and
restated to read as follows
(g) Sale, Lease or Disposal of Prooertv No part of the System
shall be sold, leased, mortgaged, demohshed, removed or otherwase d~sposed
of, except as follows
(1) To the extent penmtted by law, the C~ty may sell,
lease, mortgage, demolish, remove or othen~qse chspose of at any
tune and from time to tune any property or facd~ties constituting
part of the System only if(A) the C~ty Council shall determine, as
evidenced by a resolutaon to that effect, such property or facilities
are not useful m the operataon of the System, or (B) the proceeds of
such sale are $250,000 or less, or the C~ty Council shall determine,
as evadenced by a resnlutmn to that effect, the fair market value of
the property or facflat~es 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,
2
that the sale or exchange of such property or faclhtles will not
unpmr the ablhty of the C~ty to comply during the current or any
future fiscal year vnth the covenant of the City set forth m Section
27(1) of flus Ordinance The proceeds of any such sale or exchange
not used to acqmre other property necessary or desirable for the sale
or efficient operation of the System shall forthwith, at the optton of
the City, 0) be used to redeem or purchase Panty Bonds or
Adaht~onal Bonds, (u) otherwise be used to provtds for the payment
of Panty Bonds or Adchtlonal Bonds or (m) be used for any other
lawful purpose
(2) To the extent pemutted by law, the C~ty may lease
or make contracts or grant hcenses for the operation of, or make
arrangements for the use of, or grant easements or other rights w~th
r~spect to, any part of the System, provided that any such lease,
contract, hcense, arrangement, easement or right (A) does not
unpede the operation of the System by the City and (B) does not m
any manner m~pmr or adversely affect the rights or secunty of the
owners of the Panty Bonds or Additional Bonds under flus
Ordinance, and proxadsd, further, that if the depreciated cost of the
property to be covered by any such lease, contract, hcense,
arrangement, casement or other nsht is m excess of $500,000, the
City Cotmml shall deterrmne, as evidenced by a resolution to that
effect, that the a,mon of the C~ty w~th respect thereto does not result
m a breach of the conditions under flus clause (2) Any payments
reeexved by the C~ty under or m connection w~th any such lease,
contract, hcenee, arrangement, easement or right m respect of the
System or any part thereof shall constitute Gross Revenues
2 Section 260) of the 1983 Ordinance headed "Records" and the corresponding
section of the Other Bond Ordinances are hereby amended and restated as follows
(j) R~cords The C~ty shall keep proper books of record and
account m wluch full, true, proper, and correct entries wall be made of all
dealings, acavmes, and transactions relating to the System, the Pledged
Revenues, and the Funds created pursuant to flus Ordinance, and all books,
documents, and vouchers relating thereto shall at all reasonable tunes be
made avmlable for mspectmn upon request of any Bondholder, provided, that
all books, documents, and vouchers relatmgXo the City's electric system shall
bo made avadable for mspcctaon only to the extent reqmred by law,
including, w~thout lamtatton, the proxastons of Section 552 131 of the Texas
Government Code To the extent consistent w~th the provlsxons of flus
Ordinance, the City shall keep ~ts books and records m a manner confomung
to standard accounting practices as usually would be followed by private
corporataons owning and operating a smular System, w~th appropriate
recogmt~on being g~ven to essential d~fferences between mmuc~pal and
corporate accountm$ practices
3
3 Section 26(m) of the 1983 Ordinance headed "No Competition" and the
corresponding section of the Other Bond Ordinances are hereby deleted tn their entirety
A copy of the proposed amendment ,s on file at the pnnc~pal offices of the Paying Agents for
respect,on by all bondholders
Section3 EFFECTIVE DATE TlusOrdmanceshallbecomeeffecuvetmmechatelyupon~tspassage
and approval
4
PASSED AND APPROVED tl~s tho 25th day of April, 2000
Jack M~,~ayo r
ATTEST
nm~r ~g'~lt~rs, ~2~ty Secretary
APPROVED AS TO LEGAL FORM
Herbert L Prouty, C~ty Attom~