R-2017-4734 - 8/24/2017 RESOLUTION NO. R-2017-4734
WHEREAS,the City of Round Rock,Texas(the"City")is a participating and founding member of
the Brushy Creek Regional Utility Authority, Inc. (the "BCRUA"), and
WHEREAS, on August 28, 2017,the BCRUA will consider approval of a Financing Agreement
with the Texas Water Development Board, and
WHEREAS, the City Council wishes to approve and authorize the BCRUA to execute the
Financing Agreement; Now Therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK,TEXAS,
That the Council hereby approves and authorizes the BCRUA to execute the Financing Agreement,
a copy of said Agreement being attached hereto as Exhibit"A" and incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of the date,hour,place and subject
of the meeting at which this Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and the subject matter hereof were
discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551,
Texas Government Code, as amended.
RESOLVED this 24th day of August, 2017.
CRAI ORGAN, ayor
City Round Ro , Texas
ATTEST:
SARA L. WHITE, City Clerk
0112.1704;00384158
EXHIBIT
, '
n
FINANCING AGREEMENT
This FINANCING AGREEMENT (Agreement) is entered into between the TEXAS WATER
DEVELOPMENT BOARD (TWDB),an agency of the State of Texas,and the Brushy Creek
Regional Utility Authority, Inc. (Borrower). The TWDB and the Borrower may be referred
to as the "Parties" in this Agreement.
RECITALS
WHEREAS,the TWDB adopted Resolution No. 17-072 (Attachment A,referred to as
the Resolution) on July 20, 2017, making a commitment to the Borrower for financial
assistance in the amount of$16,995,000 from the State Water Implementation Revenue
Fund for Texas (SWIRFT) administered by the TWDB; and
WHEREAS, through this Agreement, the Borrower intends to sell to the TWDB the
Authority's $4,435,000 Brushy Creek Regional Utility Authority, Inc., City of Round Rock,
Texas Contract Revenue Bonds, Proposed Series 2017 Brushy Creek Regional Water
Treatment and Distribution Project; $4,430,000 Brushy Creek Regional Utility Authority,
Inc., City of Cedar Park, Texas Contract Revenue Bonds, Proposed Series 2017 Brushy Creek
Regional Water Treatment and Distribution Project; and $8,130,000 Brushy Creek Regional
Utility Authority, Inc., City of Leander,Texas Contract Revenue Bonds, Proposed Series
2017 Brushy Creek Regional Water Treatment and Distribution Project for the TWDB's
financial assistance from the SWIRFT,as further described in Attachment B; and
WHEREAS, the SWIRFT is funded, in part,with proceeds of the expected issuance of
TWDB's revenue bonds (SWIRFT Bonds),in an estimated par amount not to exceed
$1,208,235,000, issued under authority of Texas Water Code§§ 15.472 and 15.475,and
Texas Constitution,Article III, Section 49-d-13; and
WHEREAS,the SWIRFT Bonds are additionally secured by money made available
under the terms of a bond enhancement agreement executed under authority of Texas
Water Code§§ 15.434 and 15.435,and Texas Constitution,Article III, Section 49-d-12; and
WHEREAS, the SWIRFT is funded, in part,with money received as repayment of
financial assistance provided from the SWIRFT, under Texas Water Code § 15.472,which is
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used to pay the principal and interest on the SWIRFT Bonds,under Texas Water Code
§ 15.474, and Texas Constitution,Article III, Section 49-d-13(d) and (f); and
WHEREAS,the Resolution provides that funding the commitment is contingent on a
future sale of SWIRFT Bonds designated by the TWDB; and
WHEREAS,the TWDB intends to provide financial assistance from the SWIRFT to
the Borrower with proceeds of SWIRFT Bonds designated by the TWDB; and
WHEREAS,the TWDB and the Borrower desire to enter into this Agreement to set
forth the obligations of the Parties with respect to the TWDB providing financial assistance
to the Borrower consistent with the desire of the TWDB to issue SWIRFT Bonds to provide
money for the SWIRFT.
NOW,THEREFORE, for and in consideration of the promises and the mutual
covenants contained in this Agreement,the TWDB and the Borrower agree as follows:
AGREEMENT
SECTION 1. MUTUAL COMMITMENTS. As further described in the Resolution, the TWDB
committed to the Borrower and the Borrower commits to borrow from the TWDB an
amount not to exceed $16,995,000 from the SWIRFT to be evidenced by the issuance and
delivery of Borrower Bonds to the TWDB consistent with the terms and conditions
described in this Agreement,Attachment A,Attachment B,and Attachment C.
SECTION 2. TRANSACTION SCHEDULE AND PRICING. By execution of this Agreement, the
Borrower acknowledges and represents that it has a current need for financial assistance
from the TWDB and shall take all necessary steps to issue and deliver the Borrower Bonds
to evidence the commitment described in Section 1. The Borrower further acknowledges
and understands that the TWDB is entering into this Agreement for the sole purpose of
issuing SWIRFT Bonds to fund the TWDB commitment described in the Resolution and in
this Agreement.
With respect to the Borrower Bonds and the SWIRFT Bonds, the Parties agree to
structure such public securities in a manner that will allow for substantially similar terms,
redemption provisions, and related matters to allow the TWDB to timely pay the debt
service on the SWIRFT Bonds. The foregoing notwithstanding, the TWDB consents to early
redemption, or prepayment of the Borrower Bonds, as provided for in this Agreement and
the Resolution. The Borrower Bonds may be prepaid by the Borrower on any date
beginning on or after the first scheduled interest payment date that occurs no earlier than
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10 years from the dated date of the Borrower Bonds. To confirm the terms of the Borrower
Bonds and SWIRFT Bonds, the Borrower shall execute this Agreement.
In order to mutually assure the performance of the Parties under this Agreement,
the Parties agree that the issuance and delivery of the SWIRFT Bonds and the issuance and
delivery of the Borrower Bonds to TWDB shall occur not more than forty-nine (49) days
apart as reflected in Attachment C. Notwithstanding the foregoing, it is the intent and
expectation of the Parties that the TWDB issue and deliver its SWIRFT Bonds
approximately thirty (30) days after execution of the TWDB's Bond Purchase Agreement or
such date as may be mutually agreed to in Attachment C.
SECTION 3. BINDING COMMITMENT. The TWDB agrees to take all necessary steps to issue
the SWIRFT Bonds for the purposes described in this Agreement and in the Resolution
upon receipt of this Agreement,which shall be signed and delivered by the Borrower to the
Executive Administrator of the TWDB at least fourteen (14) days prior to the initiation of
the pricing of the SWIRFT Bonds, as set forth in Attachment C. The Borrower
acknowledges that the schedule provided in Attachment C is a best estimate by the TWDB
and is subject to change. The TWDB expressly reserves the right to modify Attachment C at
any time and shall provide the Borrower with an updated Attachment C as soon as
practicable upon any modifications; provided that if such modification of Attachment C
occurs prior to the initiation of pricing of the SWIRFT Bonds and such modification results
in an earlier scheduled pricing date, no such modification of Attachment C may result in the
Borrower having fewer than ten (10) days between the receipt of the modified schedule and
the initiation of pricing of the SWIRFT Bonds.
SECTION 4. TERMINATION &BREACH OF AGREEMENT.
A. The Parties agree that the Borrower may terminate this Agreement in writing at any
time prior to seven (7) days before the initiation of the pricing of the SWIRFT Bonds,
as set forth in Attachment C,with no penalty.
B. The Borrower understands and agrees that the Borrower may terminate this
Agreement in writing between six (6) days and four (4) days prior to the initiation
of the pricing of the SWIRFT Bonds (currently estimated to occur on September 26,
2017) as set forth in Attachment C, provided the Borrower agrees to reimburse the
TWDB from lawfully available funds of the Borrower for its proportional share of
transaction costs incurred by the TWDB, such as, but not limited to, any fees or costs
related to any rating agency, financial advisor, legal counsel, or other similar party
or related costs pertaining to the SWIRFT Bonds in an amount not to exceed
$12,794.33. The Borrower shall be obligated to pay such costs to the TWDB no later
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than March 2, 2018.
C. The Borrower understands and agrees that the Borrower may terminate this
Agreement in writing within three (3) days prior to the initiation of the pricing of
the SWIRFT Bonds as set forth in Attachment C and no later than 9:00 am Central
Standard Time on the day before the TWDB Bond Pricing, provided the Borrower
agrees to pay 1.0 percent of the amount of the commitment authorized in Section 1
of this Agreement to the TWDB, and additionally shall reimburse the TWDB from
lawfully available funds of the Borrower for its proportional share of transaction
costs incurred by the TWDB, such as, but not limited to, any fees or costs related to
any rating agency, financial advisor, legal counsel, or other similar party or related
costs pertaining to the SWIRFT Bonds in an amount not to exceed $182,744.33. The
Borrower shall be obligated to pay such costs to the TWDB no later than March 2,
2018.
D. Upon execution of the Bond Purchase Agreement relating to the SWIRFT Bonds, the
Borrower understands and agrees that TWDB would suffer and incur severe and
irreparable damages if the SWIRFT Bonds are not issued and delivered according to
the terms of such Bond Purchase Agreement. Accordingly, on or after the day of the
execution of the Bond Purchase Agreement, the Borrower shall not have the right to
terminate this Agreement. If Borrower fails to issue the Borrower Bonds by the date
specified in Attachment C, as contemplated in this Agreement, it shall be a breach of
this Agreement and Borrower shall pay a "Post-pricing Termination Payment"to the
TWDB within thirty (30) days after the TWDB provides written notice that such
amounts are due. The Post-pricing Termination Payment shall be an amount equal
to 5.0 percent of the amount of the commitment authorized in Section 1 of this
Agreement. The Borrower shall also reimburse the TWDB from lawfully available
funds of the Borrower for its proportional share of transaction costs incurred by the
TWDB, such as, but not limited to, any fees or costs related to any rating agency,
financial advisor, legal counsel, underwriter's discount, or other similar party or
related costs pertaining to the SWIRFT Bonds in an amount not to exceed
$948,425.24. The Borrower shall be obligated to make such payment to the TWDB
no later than March 2, 2018.
SECTION S. AMORTIZATION STRUCTURE. The Borrower shall provide the TWDB a
maturity schedule in the form set forth in Attachment B at the time of execution of this
Agreement. A final amortization structure will be required at least fourteen (14) days
before the initiation of pricing of the SWIRFT Bonds in accordance with the provisions of
this Agreement. The par amounts included in Attachment B may be revised at any time
prior to the seventh (7th) day before the initiation of pricing of the SWIRFT Bonds with no
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penalty. On or after the seventh (7th) day before the initiation of pricing of the SWIRFT
Bonds, the Borrower understands and agrees that the Borrower may only modify, in
writing, the interest rates included on Attachment B to include final rates as provided by
the Executive Administrator in accordance with 31 Texas Administrative Code § 363.1306.
SECTION 6. CONTINGENCIES.
A. The Parties agree that the TWDB's obligation to purchase the Borrower's securities
with the SWIRFT is contingent upon the TWDB receiving all legally required
approvals for the issuance of the SWIRFT Bonds, and the purchase and delivery of
the SWIRFT Bond proceeds by the underwriters pursuant to the Bond Purchase
Agreement relating to the SWIRFT Bonds.
Accordingly, if any contingency described in the preceding paragraph above is
unmet, the TWDB, upon delivery of written notice thereof to the Borrower, may
extend or terminate this Agreement together with all of its obligations and duties
hereunder without incurring any cost, fee, or penalty for either the TWDB or the
Borrower.
B. The Parties agree that the Borrower's obligation to issue and deliver the Borrower
Bonds is contingent upon approval by the Texas Attorney General of the Borrower
Bonds. The Borrower agrees to use its best efforts to obtain approval by the Texas
Attorney General of the Borrower Bonds to satisfy the closing requirements set
forth in Section 2 of this Agreement. To this end,the Borrower agrees as follows:
(1) Borrower shall timely submit the transcript of proceedings for the
Borrower Bonds to the Texas Attorney General in accordance with the
schedule contained in Attachment C;
(2) Borrower shall comply with the requirements and conditions contained
in the Resolution;
(3) Borrower shall provide the TWDB with a copy of the preliminary
approval letter from the Texas Attorney General promptly upon receipt;
(4) Borrower shall provide the TWDB with a copy of its responses to the
preliminary approval letter concurrently with the submission of such
responses to the Texas Attorney General; and
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(5) Borrower shall allow TWDB to brief the Texas Attorney General on any
issues noted in the preliminary approval letter and initiate or participate
in conferences with the Texas Attorney General related to the approval of
the Borrower Bonds.
Accordingly, if, after the Borrower employs its best efforts to obtain approval by the Texas
Attorney General, and such approval cannot be obtained by the date specified in
Attachment C, as a matter of law, the TWDB at its sole discretion, may terminate this
Agreement and upon termination the Borrower shall pay, from any of its lawfully available
funds, the Post-pricing Termination Payment and any proportional share of transaction
costs, fees, and expenses incurred by the TWDB, such as, but not limited to, any fees or
costs related to any rating agency, financial advisor, legal counsel, underwriter's discount,
or other similar party or related costs pertaining to the SWIRFT Bonds as provided by
Section 4.D. The Borrower shall be obligated to pay such costs to the TWDB no later than
March 2, 2018.
SECTION 7. REDEMPTION OF OUTSTANDING DEBT. If proceeds of the $16,995,000 in
financial assistance are to be used, in whole or in part, to redeem outstanding bonds,
commercial paper, or other obligations issued by the Borrower, the Borrower agrees that it
will not take or fail to take any action that will cause the SWIRFT Bonds to be considered to
be advance refunding bonds under Section 148 of the Internal Revenue Code of 1986, as
amended. Specifically, the Borrower agrees to redeem any such outstanding bonds,
commercial paper, or other obligations within ninety (90) days of the date of delivery of
the SWIRFT Bonds and to take such other action as shall be required to comply with this
Section.
SECTION 8. NOTICES. All notices, agreements or other communications required
hereunder shall be given, and shall be deemed given, when delivered in writing to the
address,facsimile or email of the identified party or Parties set forth below:
Brushy Creek Regional Utility Authority
Texas Water Development Board Attn: Tom Gallier, General Manager
Development Fund Manager 221 East Main St.
P.O. Box 13231 Round Rock,Texas 78664
Austin,Texas 78711-3231 Telephone: (512) 218-5400
Telephone: (512) 475-4584 Facsimile: (512) 218-7097
Facsimile: (512) 475-2053 E-mail: tgallier@bcrua.org
SECTION 9. SEVERABILITY. In the event any provision of this Agreement shall be held
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illegal, invalid, or unenforceable by any court of competent jurisdiction, such holding shall
not invalidate, render unenforceable, or otherwise affect any other provisions hereof.
SECTION 10. AMENDMENTS, SUPPLEMENTS AND MODIFICATIONS. Other than the
changes allowed under Section 3 and Section 5, this Agreement may be amended,
supplemented, or modified only in a writing executed by duly authorized respresentatives
of the Parties.
SECTION 11. APPLICABLE LAW. This Agreement and any amendments shall be governed
by and construed in accordance with the laws of the State of Texas.
SECTION 12. STATE AUDIT. By executing this Agreement and delivering the Borrower
Bonds, the Borrower accepts the authority of the Texas State Auditor's Office to conduct
audits and investigations in connection with all state funds received pursuant to this
Agreement. The Borrower shall comply with any directive from the Texas State Auditor
and shall cooperate in any such investigation or audit. The Borrower agrees to provide the
Texas State Auditor with access to any information the Texas State Auditor considers
relevant to the investigation or audit. The Borrower also agrees to include a provision in
any contract or subcontract related to this Agreement that requires the contractor and the
subcontractor to submit to audits and investigations by the Texas State Auditor's Office in
connection with any state funds received pursuant to the contract or subcontract.
SECTION 13. FORCE MA,EURE. Either party may be excused from performance under this
contract for any period when performance is prevented as the result of an act of God,
strike, war, civil disturbance, epidemic, or court order, provided that the party
experiencing the event of Force Majeure has prudently and promptly acted to take any and
all steps that are within the party's control to ensure performance and to shorten the
duration of the event of Force Majeure. The party suffering an event of Force Majeure shall
provide notice of the event to the other party as soon as practicable but not later than five
business days after the event. Subject to this provision, such nonperformance shall not be
deemed a breach or a ground for termination.
SECTION 14. EFFECTIVE DATE. This Agreement shall be effective as of the date of the last
signature below.
SECTION 15. BINDING AGREEMENT. The execution of this Agreement has been authorized
by the governing boards of both Parties. The respective commitments of the TWDB and the
Borrower set forth above shall be binding upon the TWDB and the Borrower upon both
Parties' execution of this Agreement.
[Remainder of Page Intentionally Left Blank]
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EXECUTED in multiple counterparts,each of which shall be deemed to be an original.
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
By:
Name: Tom Gallier
Title: General Manager
Date:
STATE OF TEXAS
COUNTY OF
This instrument was acknowledged before me on the day of , 2017,
by in his/her capacity as . on behalf of
(SEAL)
Notary Public,State of Texas
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TEXAS WATER DEVELOPMENT BOARD
By:
Name: Jeff Walker
Title: Executive Administrator
Date:
STATE OF TEXAS
COUNTY OF TRAVIS
This instrument was acknowledged before me on the _ day of , 2017, by
Jeff Walker in his capacity as Executive Administrator of the Texas Water Development
Board, an agency of the State of Texas,on behalf of said agency.
(SEAL)
Notary Public, State of Texas
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ATTACHMENT A
TWDB RESOLUTION NO. 17-072
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ww" A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD
APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE IN THE AMOUNT OF
$16,995,000 TO BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
FROM THE STATE WATER IMPLEMENTATION REVENUE FUND FOR TEXAS
THROUGH THE PROPOSED PURCHASE OF
$4,435,000 BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC., CITY OF ROUND ROCK,
TEXAS CONTRACT REVENUE BONDS, PROPOSED SERIES 2017 (BRUSHY CREEK
REGIONAL WATER TREATMENT AND DISTRIBUTION PROJECT);
$4,430,000 BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC., CITY OF CEDAR PARK,
TEXAS CONTRACT REVENUE BONDS, PROPOSED SERIES 2017 (BRUSHY CREEK
REGIONAL WATER TREATMENT AND DISTRIBUTION PROJECT);AND
$8,130,000 BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC., CITY OF LEANDER,
TEXAS CONTRACT REVENUE BONDS, PROPOSED SERIES 2017 (BRUSHY CREEK
REGIONAL WATER TREATMENT AND DISTRIBUTION PROJECT)
(17-072)
WHEREAS, the Brushy Creek Regional Utility Authority, Inc. (Authority), located in
Travis and Williamson Counties, has filed an application for financial assistance in the
amount of $16,995,000 from the State Water Implementation Revenue Fund for Texas
(SWIRFT) to finance the construction of certain water supply project(s) identified as
Project No. 51049 (Project) to serve the Cities of Round Rock, Cedar Park, and Leander
(Cities); and
WHEREAS, the Authority seeks financial assistance from the Texas Water
Development Board (TWDB) through the TWDB's proposed purchase of$4,435,000 Brushy
Creek Regional Utility Authority, Inc., City of Round Rock, Texas Contract Revenue Bonds,
Proposed Series 2017 (Brushy Creek Regional Water Treatment and Distribution Project);
$4,430,000 Brushy Creek Regional Utility Authority, Inc., City of Cedar Park,Texas Contract
Revenue Bonds, Proposed Series 2017 (Brushy Creek Regional Water Treatment and
Distribution Project); and $8,130,000 Brushy Creek Regional Utility Authority, Inc., City of
Leander, Texas Contract Revenue Bonds, Proposed Series 2017 (Brushy Creek Regional
Water Treatment and Distribution Project), (together with all authorizing documents
(Obligations)), all as is more specifically set forth in the application and in
recommendations of the Executive Administrator's staff; and
WHEREAS, the Authority has offered a pledge of contract revenues as sufficient
security for the repayment of the Obligations; and
WHEREAS, interest rate subsidies are available to the Authority at the following
levels: 35% for a term of 20 years, 25% for a term of 21 to 25 years, and 20% for a term of
26 to 30 years. The interest rate subsidy applicable to each proposed series will be set
through each financing agreement executed between the TWDB and the Authority,
pursuant to this Resolution; and
WHEREAS, these interest rate subsidies given above are based on assumptions ,....,
necessary to generate an optimum debt service structure for the anticipated TWDB
SWIRFT bond issuance, and are subject to modification as necessary to preserve and
maintain the integrity of the SWIRFT program; and
WHEREAS,the TWDB hereby finds:
1. that the application and assistance applied for meet the requirements of Texas
Water Code, Chapter 15, Subchapters G and H and 31 TAC Chapter 363,
Subchapters A and M;
2. that the Project is a recommended water management strategy project in the State
Water Plan adopted pursuant to Texas Water Code § 16.051, in accordance with
Texas Water Code§ 15.474(a);
3. that a water conservation plan is not required because the Authority is not a holder
of a water right under Texas Water Code§ 11.1271;
4. that the Authority satisfactorily completed all requests by the Executive
Administrator or a regional planning group for information relevant to the Project,
including a water infrastructure financing survey under Texas Water Code
§ 16.053(q),in accordance with 31 TAC§ 363.1309(b)(2); and
5. that the Authority has acknowledged its legal obligation to comply with any
applicable requirements of federal law relating to contracting with disadvantaged
business enterprises and any applicable state law relating to contracting with
historically underutilized businesses, in accordance with Texas Water Code
§ 15.435(h) and 31 TAC§ 363.1309(b)(3).
NOW THEREFORE,based on these findings,the TWDB resolves as follows:
1. A commitment is made by the TWDB to Brushy Creek Regional Utility Authority, Inc.
for financial assistance in the amount of $16,995,000 from the State Water
Implementation Revenue Fund for Texas, to be evidenced by the TWDB's proposed
purchase of:
a) $4,435,000 Brushy Creek Regional Utility Authority, Inc., City of Round Rock,
Texas Contract Revenue Bonds, Proposed Series 2017 (Brushy Creek Regional
Water Treatment and Distribution Project);
b) $4,430,000 Brushy Creek Regional Utility Authority, Inc., City of Cedar Park,
Texas Contract Revenue Bonds, Proposed Series 2017 (Brushy Creek Regional
Water Treatment and Distribution Project);and
c) $8,130,000 Brushy Creek Regional Utility Authority, Inc., City of Leander, Texas pow
Contract Revenue Bonds, Proposed Series 2017 (Brushy Creek Regional Water
Treatment and Distribution Project).
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Pon" 2. This commitment will expire on December 31, 2017.
Such commitment is conditioned as follows:
Standard Conditions:
1. this commitment is contingent on a future sale of bonds by the TWDB or on the
availability of funds on hand;
2. this commitment is contingent upon the issuance of a written approving opinion of
the Attorney General of the State of Texas stating that the Authority has complied
with all of the requirements of the laws under which said Obligations were issued;
that said Obligations were issued in conformity with the Constitution and laws of
the State of Texas; and that said Obligations are valid and binding obligations of the
Authority;
3. this commitment is contingent upon the Authority's continued compliance with all
applicable laws, rules, policies, and guidance as these may be amended from time to
time to adapt to a change in law,in circumstances, or any other legal requirement;
4. this commitment is contingent upon the Authority executing a separate financing
,.� agreement, approved as to form and substance by the Executive Administrator, and
submitting that executed agreement to the TWDB consistent with the terms and
conditions described in the financing agreement;
S. the Authority shall use a paying agent/registrar in accordance with 31 TAC
§ 363.42(c)(2), and shall require the paying agent/registrar to provide a copy of all
receipts documenting debt service payments to the TWDB and to the TWDB's
designated Trustee;
The Following Conditions Must Be Included in the Obligations:
6. the Obligations must provide that the Obligations can be called for early redemption
only in inverse order of maturity, on any date beginning on or after the first interest
payment date that is 10 years from the dated date of the Obligations, at a
redemption price of par, together with accrued interest to the date fixed for
redemption;
7. the Obligations must include a provision wherein the Authority, or an obligated
person for whom financial or operating data is presented to the TWDB in the
application for financial assistance either individually or in combination with other
issuers of the Authority's Obligations or obligated persons, will, at a minimum,
regardless of the amount of the Obligations, covenant to comply with requirements
for continuing disclosure on an ongoing basis substantially in the manner required
by Securities and Exchange Commission (SEC) in 17 CFR§ 240.15c2-12 (Rule 15c2-
12) and determined as if the TWDB were a Participating Underwriter within the
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meaning of such rule, such continuing disclosure undertaking being for the benefit
of the TWDB and the beneficial owners of the Authority's Obligations, if the TWDB
sells or otherwise transfers such Obligations, and the beneficial owners of the
TWDB's bonds if the Authority is an obligated person with respect to such bonds
under SEC Rule 15c2-12;
8. the Obligations must include a provision requiring the Authority to use any loan
proceeds from the Obligations that are determined to be surplus proceeds
remaining after completion of the Project for the following purposes as approved by
the Executive Administrator: (1) deposit into the Interest and Sinking Fund or other
debt service account for the payment of interest or principal on the Obligations
owned by the TWDB; or (2) eligible costs for the Project as authorized by the
Executive Administrator;
9. the Obligations must contain a provision that the TWDB may exercise all remedies
available to it in law or equity, and any provision of the Obligations that restricts or
limits the TWDB's full exercise of these remedies shall be of no force and effect;
10. loan proceeds are public funds and, as such, the Obligations must include a
provision requiring that these proceeds shall be held at a designated state
depository institution or other properly chartered and authorized institution in
accordance with the Public Funds Investment Act, Government Code, Chapter 2256,
and the Public Funds Collateral Act, Government Code,Chapter 2257; "''
11. loan proceeds shall not be used by the Authority when sampling, testing, removing,
or disposing of contaminated soils and/or media at the Project site. The Obligations
shall include an environmental indemnification provision wherein the Authority
agrees to indemnify, hold harmless and protect the TWDB from any and all claims,
causes of action or damages to the person or property of third parties arising from
the sampling, analysis, transport, storage, treatment, recycling and disposition of
any contaminated sewage sludge, contaminated sediments and/or contaminated
media that may be generated by the Authority, its contractors, consultants, agents,
officials and employees as a result of activities relating to the Project to the extent
permitted by law;
12. the Obligations must include a provision stating that the Authority shall report to
the TWDB the amounts of Project funds, if any, that were used to compensate
historically underutilized businesses that worked on the Project, in accordance with
31 TAC§ 363.1312;
13. the Obligations must contain a provision that the TWDB will purchase the
Obligations, acting through the TWDB's designated Trustee, and the Obligations
shall be registered in the name of Cede & Co. and closed in book-entry form in �-•,
accordance with 31 TAC§ 363.42(c)(1);
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Wo" 14. the Obligations must include a provision prohibiting the Authority from using the
proceeds of this loan in a manner that would cause the Obligations to become
"private activity bonds" within the meaning of§ 141 of the Internal Revenue Code as
amended (Code) and the Treasury Regulations promulgated thereunder
(Regulations);
15. the Obligations must provide that no portion of the proceeds of the loan will be
used, directly or indirectly, in a manner that would cause the Obligations to be
"arbitrage bonds" within the meaning of § 148(a) of the Code and Regulations,
including to acquire or to replace funds that were used, directly or indirectly, to
acquire Nonpurpose Investments (as defined in the Code and Regulations) that
produce a yield materially higher than the yield on the TWDB's bonds that are
issued to provide financing for the loan (Source Series Bonds), other than
Nonpurpose Investments acquired with:
a. proceeds of the TWDB's Source Series Bonds invested for a reasonable
temporary period of up to three (3) years after the issue date of the Source
Series Bonds until such proceeds are needed for the facilities to be financed;
b. amounts invested in a bona fide debt service fund, within the meaning of
§ 1.148-1(b) of the Regulations; and
C. amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed the least of maximum annual debt
service on the Obligations, 125% of average annual debt service on the
Obligations, or 10 percent of the stated principal amount (or, in the case of a
discount,the issue price) of the Obligations;
16. the Obligations must include a provision requiring the Authority take all necessary
steps to comply with the requirement that certain amounts earned on the
investment of gross proceeds of the Obligations be rebated to the federal
government in order to satisfy the requirements of § 148 of the Code. The
Obligations must provide that the Authority will:
a. account for all Gross Proceeds, as defined in the Code and Regulations,
(including all receipts, expenditures, and investments thereof) on its books of
account separately and apart from all other funds (and receipts, expenditures
and investments thereof) and retain all records of such accounting for at
least six years after the final Computation Date.The Authority may, however,
to the extent permitted by Iaw, commingle Gross Proceeds of its loan with
other money of the Authority, provided that the Authority separately
accounts for each receipt and expenditure of such Gross Proceeds and the
obligations acquired therewith;
b. calculate the Rebate Amount, as defined in the Code and Regulations, with
respect to its loan, not less frequently than each Computation Date, in
5
accordance with rules set forth in § 148(f) of the Code, § 1.148-3 of the
Regulations, and the rulings thereunder. The Authority shall maintain a copy
of such calculations for at least six years after the final Computation Date;
C. as additional consideration for the making of the loan, and in order to induce
the making of the loan by measures designed to ensure the excludability of
the interest on the TWDB's Source Series Bonds from the gross income of the
owners thereof for federal income tax purposes, pay to the United States the
amount described in paragraph (b) above within 30 days after each
Computation Date;
d. exercise reasonable diligence to assure that no errors are made in the
calculations required by paragraph (b) and, if such error is made, to discover
and promptly to correct such error within a reasonable amount of time
thereafter, including payment to the United States of any interest and any
penalty required by the Regulations;
17. the Obligations must include a provision prohibiting the Authority from taking any
action that would cause the interest on the Obligations to be includable in gross
income for federal income tax purposes;
18. the Obligations must provide that the Authority will not cause or permit the
Obligations to be treated as "federally guaranteed" obligations within the meaning
of§ 149(b) of the Code;
19. the Obligations must provide that neither the Authority nor a related party thereto
will acquire any of the TWDB's Source Series Bonds in an amount related to the
amount of the Obligations to be acquired from the Authority by the TWDB;
Contract Revenue Pledge:
20. the Obligations must contain a provision requiring that, upon request by the
Executive Administrator, the Authority shall submit annual audits of contracting
parties for the Executive Administrator's review;
21. the Obligations must contain a provision requiring the Authority to maintain and
enforce the contracts with the Cities so that the revenues paid to the Authority by
the Cities are sufficient to meet the revenue requirements of the Authority's
obligations arising from the operation of the water system;
22. the Obligations must contain a provision that the pledged contract revenues from
the Authority may not be pledged to the payment of any additional parity
obligations of the Authority secured by a pledge of the same contract revenues ^
unless the Authority demonstrates to the Executive Administrator's satisfaction that
the pledged contract revenues will be sufficient for the repayment of all Obligations
and additional parity obligations;
6
PM"
_Conditions to Close or for Release of Funds:
23. prior to closing, if not previously provided with the application, the Authority shall
submit executed contracts for engineering, and, if applicable, financial advisor and
bond counsel, for the Project that are satisfactory to the Executive Administrator.
Fees to be reimbursed under the contracts must be reasonable in relation to the
services performed, reflected in the contract, and acceptable to the Executive
Administrator;
24. prior to closing,when any portion of financial assistance is to be held in escrow or in
trust, the Authority shall execute an escrow agreement or trust agreement,
approved as to form and substance by the Executive Administrator,and shall submit
that executed agreement to the TWDB;
25. prior to closing, the Authority's bond counsel must prepare a written opinion that
states that the interest on the Obligations is excludable from gross income or is
exempt from federal income taxation. Bond counsel may rely on covenants and
representations of the Authority when rendering this opinion;
26. prior to closing, the Authority's bond counsel must prepare a written opinion that
,..., states that the Obligations are not "private activity bonds." Bond counsel may rely
on covenants and representations of the Authority when rendering this opinion;
27. the transcript must include a No Arbitrage Certificate or similar Federal Tax
Certificate setting forth the Authority's reasonable expectations regarding the use,
expenditure and investment of the proceeds of the Obligations;
28. the transcript must include evidence that the information reporting requirements of
§ 149(e) of the Internal Revenue Code will be satisfied. This requirement may be
satisfied by filing an IRS Form 8038 with the Internal Revenue Service. In addition,
the applicable completed IRS Form 8038 or other evidence that the information
reporting requirements of § 149(e) have been satisfied must be provided to the
Executive Administrator within fourteen (14) days of closing. The Executive
Administrator may withhold the release of funds for failure to comply;
29. prior to closing, the Authority must submit executed contracts between the
Authority and the contracting parties regarding the contract revenues pledged to
the payment of the Authority's Obligations, in form and substance acceptable to the
Executive Administrator. Such contracts shall include provisions consistent with
the provisions of this Resolution regarding the contracting parties' annual audits,
the setting of rates and charges and collection of revenues sufficient to meet the
MM" Authority's debt service obligations and additional parity obligations;
PROVIDED,however, the commitment is subject to the following special conditions:
Special Conditions: .g
30, prior to the release of funds for the costs of planning, engineering, architectural,
legal, title, fiscal,economic investigation, studies, surveys, or designs for that portion
of the Project that proposes surface water or groundwater development, the
Executive Administrator must have either issued a written finding that the
Authority has the right to use the water that the Project financed by the TWDB will
provide or a written determination that a reasonable expectation exists that Such. a
finding will be made before the release of funds for construction; and
31. prior to the release of construction funds for that portion of a Project that proposes
surface water or groundwater development, the Executive Administrator must:have
issued a written finding that the Authority has the right to use the water that the
Project financed by the TWDB will provide.
APPROVED and ordered of record this, the 20th day of July, 2017.
TEXAS WATER DEVEI_,OPME-WT BOARD
V-1
t�
Bech K. Brunn, Chairman
DATE SIGNED: �'<�t � �""7
ATTEST:
fj/ D
Jeff W k. f
Executiv�A'dministrator
ATTACHMENT B
Description of Brushy Creek Regional Utility Authority,Inc.
Borrower Bonds
Title of Borrower Brushy Creek Regional Utility Authority,Inc.,City of Round Rock
Bonds (Brushy Creek Regional Water Treatment&Distribution Project),
Contract Revenue Bonds,Series 2017
Project Name Brushy Creek Regional Water Treatment&Distribution Project
Aggregate Principal $ 4,435,000
Amount of
Borrower Bonds
Anticipated Closing 11/30/17
Date (tentative)
Dated Date 11/30/17
First Principal 8/15/2018
Payment Date
First Interest 2/15/2018
Payment Date
Maturity Schedule:
Maturity Principal
(8/15) Amount
2018 $ 205,000
2019 190,000
2020 190,000
2021 190,000
2022 195,000
2023 200,000
2024 205,000
2025 210,000
2026 210,000
2027 215,000
2028 220,000
2029 225,000
2030 230,000
2031 235,000
2032 240,000
2033 245,000
2034 250,000
2035 255,000
2036 260,000
2037 265,000
$ 4,435,000
ATTACHMENT B
Description of Brushy Creek Regional Utility Authority,Inc.
Borrower Bonds
Title of Borrower Brushy Creek Regional Utility Authority,Inc.,City of Cedar Park(Brushy
Bonds Creek Regional Water Treatment&Distribution Project),Contract
Revenue Bonds,Series 2017
Project Name Brushy Creek Regional Water Treatment&Distribution Project
Aggregate Principal $ 4,430,000
Amount of
Borrower Bonds
Anticipated Closing 11/30/17
Date (tentative)
Dated Date 11/30/17
(tentative)
First Principal 8/15/2018
Payment Date
First Interest 2/15/2018
Payment Date
Maturity Schedule:
Maturity Principal
(8/15) Amount
2018 $ 205,000
2019 185,000
2020 190,000
2021 190,000
2022 195,000
2023 200,000
2024 205,000
2025 210,000
2026 210,000
2027 215,000
2028 220,000
2029 225,000
2030 230,000
2031 235,000
2032 240,000
2033 245,000
2034 250,000
2035 255,000
2036 260,000
2037 265,000
$ 4,430,000
ATTACHMENT B
Description of Brushy Creek Regional Utility Authority,Inc.
Borrower Bonds
Title of Borrower Brushy Creek Regional Utility Authority,Inc.,City of Leander
Bonds (Brushy Creek Regional Water Treatment&Distribution
Project),Contract Revenue Bonds,Series 2017
Project Name Brushy Creek Regional Water Treatment&Distribution
Project
Aggregate Principal $ 8,130,000
Amount of
Borrower Bonds
Anticipated Closing 11/30/17
Date (tentative)
Dated Date 11/30/17
(tentative)
First Principal 8/15/2018
Payment Date
First Interest 2/15/2018
Payment Date
Maturity Schedule:
Maturity Principal
(8/15) Amount
2018 $ 365,000
2019 335,000
2020 345,000
2021 350,000
2022 360,000
2023 365,000
2024 375,000
2025 380,000
2026 390,000
2027 400,000
2028 405,000
2029 415,000
2030 425,000
2031 430,000
2032 440,000
2033 450,000
2034 460,000
2035 470,000
2036 480,000
2037 490,000
$ 8,130,000
ATTACHMENT C
FINANCING SCHEDULE
DATE ACTION
07/20/2017 TWDB approval of commitments
09/04/2017 Labor Day Holiday
Financing agreement-last day to execute
09/11/2017 14 days prior to initiation o ricin
Financing agreement(Sec.4A) -last day political subdivisions can terminate
without penalty
09/18/2017 J7 days prior to initiation of ricin
Financing agreement(Sec.5) -last day political subdivisions can modify
09/18/2017 maturity schedule. 7 days prior to initiation of ricin
Financing agreement(Sec.413) -last day political subdivisions can terminate
09/21/2017 with costs of issuance 4 days prior to initiation of ricin
Financing agreement(Sec.4C) -before 9:00 a.m.political subdivisions can
09/25/2017 terminate with costs of issuance and 1%penalty(1 day prior to pricing).
09/25/2017 TWDB bond pricing initiation(pre-pricing begins)
09/26/2017 TWDB bond pricing
10/05/2017* TWDB approves interest rates available to political subdivisions
Political subdivisions adopt bond resolutions and/or board participation
various agreements
Political subdivisions submit transcripts to Texas Attorney General in
various preparation of closing
10/09/2017 Columbus Day Holiday TWDB open)
10/12/2017 TWDB bond closing(political subdivisions must close within 49 days)
10/13 to
11/30/2017 Closings on political subdivision obligations
11/10/2017 Veteran's Day Holiday
11/23/2017 Thanksgiving Holiday
11/24/2017 Thanksgiving Holiday
11/30/2017 Last day to close on political subdivision obligations
Financing agreement(Sec.4D and Sec. 6) penalty applied to any political
subdivision failing to issue debt.Start of post-pricing termination payment
12/01/2017 period includes costs of issuance and 5%penalty)
03/02/2018 Last due date for post-pricing termination payments
*-Preliminary subject to change