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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~