HomeMy WebLinkAboutOrdinance No. 86-16 (
ORDINANCE NO. 86-16
AN ORDINANCE by the City Council of the City of
FRIENDSWOOD
(the "City" ) authorizing the execution and delivery of
a Lease Purchase Aqreement ; levying a continuing
direct annual ad valorem tax, within the limitations
prescribed by law, for the payment of lease payments
thereunder; pledging certain funds , revenues and taxes
to the payment of the lease obligations ; approving the
assignment of such Lease Purchase Agreement and the
issuance of Certificates of Participation or other
evidence of ownership therein through a trust
established by the lessor or otherwise; and resolving
other matters incident and related thereto .
WHEREAS, the City Council of the City (the "City
Council" ) has determined that it is necessary to provide for
the use, acquisition and purchase of c�rtain personal property
on behalf of the City; and
WHEREAS, in order to facilitate the acquisition of
such property by a corporation, as lessor (the "Lessor" ) and to
lease such property, with an option to purchase such property
during and at the end of the lease term for each item of
property, at a cost that is advantageous to the City, the City
Council has determined that it is desirable to enter into a
Lease Purchase Agreement to provide for the financing and
refinancing of such property and approve the assignment of such
Lease Purchase Agreement and the issu3nce of Certificates of
Participation or other evidence of ownership therein (the
"Certificates") through a trust established by the lessor or
otherwise as further described below; now, therefore, "
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY:
SECTION l : Findinqs : It is hereby found and
determined that :
(a) all of the property to be aequired under the
Lease is personal property, and during the term of the Lease is
to remain personal property;
(b) the Lease, including its form as a lease purchase
obligation, and the terms and conditions thereof are deemed to
be appropriate by this City Council;
(c) the contractual obligation of the Lease and the
Certificates should be made payable . from revenues , funds , and
taxes available to the City for its public purposes , as
permitted by Section 4 (a) of the Public Property Finance Act ,
Article 2368a . 2 , V.A.T.C. S. (the "Act" ) .
SECTION 2 : Execution and Delivery of Lease .
(a) The duly authorized officers of the City listed
in paragraph (b) hereof are hereby authorized to execute and -
deliver the Lease Purchase Agreement substantially in the form
attached hereto as Exhibit "A" , to be dated as of August 1 ,
1986 , in order to facilitate the use, acquisition, and purchase
of the equipment described in Exhibit "B" hereto, and certain
other property to be specified during the term of the Lease,
all as authorized pursuant to the Act .
(b) The officers authorized to perform the duties
described in paragraph (a) hereof are:
Name Title
( i)
( ii)
SECTION 3 : Consent to Assignment ; Creation of Trust ;
Issuance of Certificates . The City Council hereby consents to
the assignment by the Lessor of its rights under the Lease to a
trustee (the "Trustee" ) under terms of a trust agreement (the
"Trust Agreement" ) and the creation of a trust and the issuance
of the Certificates in the aggregate principal amount necessary
to provide for the purchase the equipment described in
Exhibit "B" hereto and to provide for a reasonable reserve fund
and costs of issuance. Proceeds of the Certificates shall be
deposited in the acquisition fund (the "Acquisition Fund" )
created pursuant to such Trust Agreement and invested for and
on behalf of the City by the Trustee until applied to purchase
Equipment pursuant to the Lease.
SECTION 4 : Limited Obligations . Notwithstanding any
other provision of this Ordinance, Lease Payments under the
Lease and payments on the Certificates shall be special ,
limited obligations of the City, payable solely from ( i) moneys
deposited from proceeds of the Certificates in the Acquisition
Fund established and maintained by the Trustee, and earnings
thereon, if any, and ( ii) the obligation of the City to make
other Lease Payments under the Lease, which obligations shall
be incurred only after and to the extent that moneys have been
disbursed from the Acquisition Fund to purchase Equipment, as
defined in the Lease .
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SECTION 5 : Levy of Taxes . To provide for the payment
of the Lease Payments under and as defined in the Lease, there
is hereby levied, out of the tax legally available for the
lease/purchase, and there shall be annually assessed and
collected in due time, form, and manner , a tax on all taxable
property within the boundaries of the City, within the
limitations prescribed by law, and such tax shall be and is
hereby levied on each one hundred dollars ' valuation of taxable
property within the boundaries of the City at a rate from year
to year as will be ample and sufficient to provide funds each
year to pay the Lease Payments as the same become due during
the term of the Lease, full allowance being made for
delinquencies and costs of collection.
Separate accounts and tax records relating to the
receipt and disbursement of taxes levied, assessed and
collected for and on account of the Lease shall be kept and
maintained by the City at all times during the term of the
Lease, and the taxes collected for the payment of the Lease
Payments shall be deposited to the credit of a "Special 1986
Lease Account" maintained on the records of the City, and
deposited in a special fund maintained at an official
depository of the City' s funds ; and such tax hereby levied, and
to be assessed and collected annually, is hereby pledged to the
payment of the Lease Payments .
Proper officers of the City are hereby authorized and
directed to cause to be transferred to the Trustee or paying
agent for the Certificates appointed by the Lessor , from funds
on deposit in the Special 1986 Lease Account , amounts
sufficient to fully pay and discharge promptly the Lease
Payments as the same become due and payable; such transfers of
funds to be made in such manner as will cause collected funds
to be deposited with the Trustee on or before each Lease
Payment Date for the Certificates , as provided in the Lease .
The amount of taxes to be provided annually for the
payment of the Lease Payments with respect to the Base Rent (as
defined in the Lease) including the principal component and
interest component thereof ( "Debt Service Requirements" ) shall
be determined and accomplished in the following manner :
(a) Prior to the date this City Council establishes
the annual tax rate and passes an ordinance levying ad valorem
taxes each year, the City Council shall determine:
( 1) The amount on deposit under the Trust
Agreement to pay principal and interest components of '
the Certificates after (a) deducting therefrom the
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total amount of Debt Service Requirements to become
due as Base Rent prior to the date annual ad valorem
ta�es levied by the City become delinquent (the
"Collection Date" ) and (b) adding thereto the amount
of the other revenue and funds appropriated and
allocated to pay such Debt Service Requirements prior
to the Collection Date for the ad valorem taxes to be
levied.
(2) The amount of other revenue and funds
appropriated and to be set aside for the payment of
the Debt Service Requirements between the Collection
Date for the taxes then to be levied and the
Collection Date for the taxes to be levied during the
next succeeding calendar year .
(3) The amount of Debt Service Requirements to
become due and payable between the Collection Date for
the taxes then to be levied and the Collection Date
. for the taxes to be levied during the next succeeding
calendar year .
(b) The amount of taxes to be levied annually each
year to pay the Debt Service Requirements shall be the amount
established in paragraph (3) above less the sum total of the
amounts established in paragraphs ( 1) and (2 ) , after taking
into consideration delinquencies and costs of collecting such
annual taxes . With respect to the amount due as Additional Rent
(as defined in the Lease) , the amount budgeted for such
purposes shall be the amount anticipated to become due during
the Fiscal Year following , plus any amount of Lease Payments
remaining unpaid from the previous year .
The City covenants that , in accordance with the
provisions of the Property Tax Code, Section 26 . 04 (g) , any
amounts budgeted to pay the Lease Payments which are due more
than one year from the date of the Lease will be set aside in
the tax levy for the payment of such Lease Payments .
SECTION 6 : Pledqe . The City hereby covenants and
agrees that all the funds and revenues which are legally
available for the purpose, with the exception of those in
excess of the amounts required to be deposited to the Special
1986 Lease Account, are hereby irrevocably pledged to the
payment of the Lease Payments , and the pledge of such funds and
revenues herein made for the payment of the Lease Payments
shall constitute a lien on such funds and revenues in
accordance with the terms and provisions hereof and be valid
and binding without any physical delivery thereof or further
act by the City.
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SECTION 7 : Lease and Purchase of Equipment . On the
date hereof , the City reasonably expects to proceed with due
diligence to lease/purchase the Equipment described on exhibit
"B" hereto within three years of the date hereof and to
lease/purchase other equipment to be identified during the term
of the Lease. However, it is expressly understood that the
City shall not be required to apply for the disbursement of
moneys from the Acquisition Fund for the lease and purchase of
Equipment unless and until :
( i) the interest rate component of the Base Rent
shall have been determined and shall be acceptable to the City;
( ii) the City shall have received approval of the
Credit Provider, as defined in the Lease;
( iii) the amount of Costs of Issuance to be included
in the Equipment Costs (as defined in the Lease) shall be
acceptable to the City;
( iv) the need for the Equipment by the City exists
at the time of such disbursement;
(v) the Equipment is available at a reasonable cost
and, if applicable, acceptable bids for the sale and purchase
of the Equipment are received; and
(vi) the City Council approves the purchase of the
Equipment and the execution and delivery of documents required
in connection with the lease and purchase thereof .
SECTION S : Delivery of Certificates . The duly
authorized officers of the City are hereby authorized to
e�ecute and deliver the Lease and other instruments and
certificates as may be reason�bly required in connection with
the sale and purchase of the Certificates and to consent to
such changes in the terms of the Lease as may be reasonably
necessary in connection with such delivery; execution and
delivery of the Lease with any such changes by officers of the
City shall constitute evidence of the approval by the City
Council thereof .
SECTION 9 : Open Meetinq . It is hereby found and
determined that advance notice of the time, place and purpose
of the meeting was given to each member of the City Council ;
and that said meeting, and deliberation of the aforesaid public
business, was open to the public, and written notice of said
meeting, including the subjec't of the entitled ordinance, was
posted and given in advance thereof in compliance with the
provisions of Article 6252-17, Section 3A, V.A.T.C. S .
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' � . SECTION 10 : Effective Date . This Ordinance sha11 be
, � in • force and efrect from and after its passage on the date �
shown below.
PASSED AND APPROVED on first reading this 18th day
of August , 1986 .
PASSED AND APPROVED on second reading this 8th day
of September , 1986 .
PASSED AND ADOPTED, this Sept. 22 , , 1986 .
CITY OF: Friendswood
B Y: ����_
Mayor �
AT T:
. �
City Secretary
(Seal)
To Be Attached: Exhibit "A" - Lease Purchase Agreement
Exhibit "B" - Description of Equipment ot be
financed (from Demand Survey)
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