R-2024-211 - 8/22/2024 RESOLUTION NO. 2024-211
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, in connection with a proposed issuance of contract revenue bonds by the BCRUA
for the City, the Texas Water Development Board has presented BCRUA with a Financing Agreement
as a requirement for such issuance; 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 22nd day of August, 2024.
CRA ORG , Mayor
City of ound ck, Texas
ATTEST: 7A'JI
M AGAN S KS, ty Clerk
0112.20242;4867-1352-1111
Exhibit A
FINANCING AGREEMENT
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a
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. (Authority).The TWDB and the Authority may be
referred to as the"Party" or"Parties"in this Agreement.
RECITALS
WHEREAS,the TWDB adopted Resolution No. 23-054 (Attachment A,referred to as
the Resolution) on July 25, 2023, making a commitment to the Authority for financial
assistance in the amount of$98,055,000 from the State Water Implementation Revenue
Fund for Texas (SWIRFT) administered by the TWDB; and
WHEREAS,through this Agreement,the Authority intends to sell to the TWDB the
Authority's $31,500,000 Brushy Creek Regional Utility Authority, Inc.City of Round Rock,
Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and Distribution
Project), Proposed Series 2024 (Authority's Bonds) for the TWDB's financial assistance
from the SWIRFT,as further described in Attachment B; and
WHEREAS,the Authority shall execute (a) separate financing agreement(s) for the
remaining amount(s) of the commitment made in the Resolution at a date or dates to be
determined by the Executive Administrator of the TWDB; and
WHEREAS,the SWIRFT is funded in part with proceeds of the expected issuance of
TWDB's revenue bonds (SWIRFT Bonds),issued under authority of Texas Water Code
§§ 15.472 and 15.475,and Texas Constitution,Article 111, 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
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
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
I
future sales of SWIRFT Bonds designated by the TWDB; and
WHEREAS,the TWDB intends to provide financial assistance from the SWIRFT to
the Authority with proceeds of SWIRFT Bonds designated by the TWDB; and
WHEREAS,the TWDB and the Authority desire to enter into this Agreement to set
forth the obligations of the Parties with respect to the TWDB providing financial assistance
to the Authority 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 Authority agree as follows:
AGREEMENT
SECTION 1. MUTUAL COMMITMENTS.As further described in the Resolution,the TWDB
committed to the Authority and the Authority hereby commits to borrow from the TWDB
an amount not to exceed $31,500,000 from the SWIRFT to be evidenced by the issuance
and delivery of Authority 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
Authority 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 Authority Bonds
to evidence the commitment described in Section 1.The Authority 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.The Authority acknowledges that the SWIRFT Bonds,the subject of this
Agreement,are being issued for the purpose of funding the Authority's requested financial
assistance.
With respect to the Authority 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 Authority Bonds, as provided for in this Agreement and
the Resolution.The Authority Bonds may be prepaid by the Authority on any date
beginning on or after the first scheduled interest payment date that occurs no earlier than
10 years from the dated date of the Authority Bonds.To confirm the terms of the Authority
Bonds and the SWIRFT Bonds,the Authority 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 Authority Bonds to TWDB shall occur not more than fifty-six (56) days apart
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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as reflected in Attachment C. Notwithstanding the foregoing,the Parties intend and expect
that the TWDB issue and deliver its SWIRFT Bonds approximately fourteen (14) 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 Authority to the
Executive Administrator of the TWDB at least nineteen (19) days before the initiation of
the pricing of the SWIRFT Bonds,as set forth in Attachment C.The Authority acknowledges
that the schedule provided in Attachment C is a best estimate by the TWDB and is subject
to change by the TWDB.The TWDB expressly reserves the right to modify Attachment C at
any time and shall provide the Authority with an updated Attachment C as soon as
practicable upon any modification; provided that,if such modification of Attachment C
occurs before 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
Authority having fewer than five (5) days between the receipt of the modified schedule and
the TWDB posting the Preliminary Official Statement for the SWIRFT Bonds.
SECTION 4.TERMINATION&BREACH OF AGREEMENT.
A. The Parties agree that the Authority may terminate this Agreement in writing with no
penalty at any time up to fourteen (14) days before the initiation of the pricing of the
SWIRFT Bonds,as set forth in Attachment C.
B. The Authority understands and agrees that the Authority may terminate this
Agreement in writing between thirteen (13) days and six(6) days prior to the initiation
of the pricing of the SWIRFT Bonds (currently estimated to occur on September 25,
2024) as set forth in Attachment C,provided the Authority agrees to reimburse the
TWDB from lawfully available funds of the Authority 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 $23,094.00
(Transaction Cost Payment). The Authority shall be obligated to pay such costs to the
TWDB no later than March 5,2025.
C. The Authority understands and agrees that the Authority may terminate this
Agreement in writing within five (5) 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 Authority agrees to pay to
the TWDB from lawfully available funds 1.0 percent of the amount of the commitment
authorized in Section 1 of this Agreement (Pre-pricing Termination Payment),and
additionally shall reimburse the TWDB from lawfully available funds of the Authority
its Transaction Cost Payment. The Authority shall be obligated to pay such costs to the
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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TWDB no later than March 5, 2025.The Authority understands and agrees that
termination under this section will result in a total penalty amount of$338,094.00.
D. The Authority understands and agrees that TWDB would suffer and incur severe and
irreparable damages if the Authority Bonds are not issued and delivered. Failure to
issue the Authority Bonds by the date specified in Attachment C,as contemplated in this
Agreement,shall be a breach of this Agreement and the Authority shall pay,from
lawfully available funds of the Authority, a"Post-pricing Termination Payment"to the
TWDB.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
Authority shall pay the Post-pricing Termination Payment to the TWDB no later than
March 5, 2025.The Authority shall also reimburse the TWDB from lawfully available
funds of the Authority, its Transaction Cost Payment, plus the Authority's proportional
share of the underwriters' discount incurred by the TWDB, no later than March 5, 2025.
The Authority understands and agrees that failure by the Authority to issue the
Authority Bonds by the date specified in Attachment C,will result in a total penalty
amount pursuant to this section not to exceed$1,747,761.00.
SECTION 5.AMORTIZATION STRUCTURE.The Authority 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 amount included in Attachment B may be revised,subject to
approval by the Executive Administrator of the TWDB,at any time up to the fourteenth
(14) day before the initiation of pricing of the SWIRFT Bonds with no penalty.
The final amortization schedule adopted by the Authority as included in the Authority's
Private Placement Memorandum and Bond Resolution must reflect the final amortization
structure set forth in Attachment B.The Authority must provide the TWDB a final
amortization schedule at least seven (7) days prior to adoption of Authority's Bond
Resolution.To the extent the amortization schedule included in Attachment B does not
match the amortization schedule included in the finally adopted bonds,the Authority will
be subject to the penalty described above in Section 41).
SECTION 6.CONTINGENCIES.
A. The Parties agree that the TWDB's obligation to purchase the Authority's Bonds with
the SWIRFT is contingent upon the TWDB receiving all legally required approvals for
the issuance of the SWIRFT Bonds from the Legislative Budget Board,the Bond Review
Board,and the Texas Attorney General.The TWDB's obligation to purchase the
Authority's Bonds with the SWIRFT is also contingent upon the purchase and delivery
of the SWIRFT Bond proceeds by the underwriters pursuant to the Bond Purchase
Agreement relating to the SWIRFT Bonds.
Disclaimer: This is a working document and is provided as a courtesy.All information contained
herein is subject to change upon further review of the TWDB.
4
Accordingly,if any contingency described in the preceding paragraph above is unmet,
the TWDB, upon delivery of written notice thereof to the Authority,may extend or
terminate this Agreement together with all of its obligations and duties without
incurring any cost,fee,or penalty for either the TWDB or the Authority.
B. The Parties agree that the Authority's obligation to issue and deliver the Authority
Bonds is contingent upon approval by the Texas Attorney General of the Authority
Bonds.The Authority agrees to use its best efforts to obtain approval by the Texas
Attorney General of the Authority Bonds to satisfy the closing requirements set forth in
Section 2 of this Agreement.To this end,the Authority agrees as follows:
(1)Authority shall timely file the transcript of proceedings for the Authority Bonds with
the Texas Attorney General in accordance with the schedule contained in
Attachment C;
(2)Authority shall comply with the requirements and conditions contained in the
Resolution;
(3)Authority shall provide the TWDB with a copy of the preliminary approval letter
from the Texas Attorney General promptly upon receipt;
(4)Authority 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
(5)Authority 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 Authority Bonds.
Accordingly, if,after the Authority 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,the TWDB,as a matter of law,at its sole discretion,may terminate this
Agreement and upon termination the Authority shall pay,from any of its lawfully available
funds,the Post-pricing Termination Payment no later than March 5, 2025,as provided in
Section 4D.The Authority shall also reimburse the TWDB from lawfully available funds of
the Authority its Transaction Cost Payment plus the Authority's proportional share of the
underwriters' discount no later than March 5, 2025.The Authority understands and agrees
that if the Authority does not obtain approval from the Texas Attorney General and issue its
Authority Bonds by the date specified in Attachment C,it will be subject to a total penalty
amount pursuant to this section not to exceed$1,747,761.00.
SECTION 7. REDEMPTION OF OUTSTANDING DEBT. Proceeds of the Authority Bonds shall
not be used, in whole or in part,to redeem outstanding bonds, commercial paper, or other
obligations issued by the Authority.The Authority agrees that it will not take or fail to take
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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any action that will cause the SWIRFT Bonds to be considered to be advance refunding
bonds under Section 149(d) of the Internal Revenue Code of 1986,as amended.
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:
Texas Water Development Board Brushy Creek Regional Utility Authority,
Development Fund Manager Inc.
P.O. Box 13231 Attn: Sam Roberts, General Manager
Austin,Texas 78711-3231 221 E. Main Street
Telephone: (512) 475-4584 Round Rock,Texas 78664
Facsimile: (512) 475-2053 Telephone: (512) 799-4526
E-mail: Finance-Debt-Management@twdb.texas.gov I E-mail: sroberts@bcrua.or
SECTION 9. SEVERABILITY. In the event any provision of this Agreement shall be held
illegal,invalid, or unenforceable by any court of competent jurisdiction,such holding shall
not invalidate,render unenforceable, or otherwise affect any of its other provisions.
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 representatives 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 Authority
Bonds,the Authority 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 Authority shall comply with any directive from the Texas State Auditor and
shall cooperate in any such investigation or audit.The Authority agrees to provide the
Texas State Auditor with access to any information the Texas State Auditor considers
relevant to the investigation or audit.
SECTION 13. FORCE MAJEURE.Either Party to this Agreement may be excused from
performance under this Agreement for any period when performance is prevented as the
result of an act of God, strike,war, civil disturbance, or epidemic,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.
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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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 individuals executing this Agreement have the
legal authority to bind each respective Party to the terms and conditions of this Agreement.
The respective commitments of the TWDB and the Authority set forth above shall be
binding upon the TWDB and the Authority upon both Parties' execution of this Agreement.
[Remainder of Page Intentionally Left Blank]
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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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: Sam Roberts
Titel: General Manager
Date:
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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TEXAS WATER DEVELOPMENT BOARD
By:
Name: Bryan McMath
Title: Interim Executive Administrator
Date:
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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ATTACHMENT A
TWDB RESOLUTION NO. 23-054
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
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A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD
APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE IN THE AMOUNT OF
$98,055,000 TO BRUSHY CREEK REGIONAL UTILITY AUTHORITY,INC.
FROM THE STATE WATER IMPLEMENTATION REVENUE FUND FOR TEXAS
THROUGH THE PROPOSED PURCHASE OF
$7,605,000 BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
CITY OF CEDAR PARK,TEXAS CONTRACT REVENUE BONDS,
(BRUSHY CREEK REGIONAL WATERTREATMENT AND DISTRIBUTION PROJECT),
PROPOSED SERIES 2023
AND
A MULTI-YEAR COMMITMENT OF
$90,450,000 BRUSHY CREEK REGIONAL UTILITY AUTHORITY,INC.
CITY OF ROUND ROCK,TEXAS CONTRACT REVENUE BONDS,
(BRUSHY CREEK REGIONAL WATERTREATMENT AND DISTRIBUTION PROJECT),
PROPOSED SERIES 2023, 2024, and 2026
(23-054)
Recitals:
The Brushy Creek Regional Utility Authority, Inc. (Authority)has filed an application
for financial assistance in the amount of$98,055,000 from the State Water Implementation
Revenue Fund for Texas (SWIRFT)to finance the construction of a water supply project
identified as Project No. 51049 (Project).
The Authority seeks financial assistance from the Texas Water Development Board
(TWDB)through the TWDB's proposed purchase of$7,605,000 Brushy Creek Regional
Utility Authority, Inc. City of Cedar Park, Texas Contract Revenue Bonds, (Brushy Creek
Regional Water Treatment and Distribution Project), Proposed Series 2023, and through a
multi-year commitment, the proposed purchase of$90,450,000 Brushy Creek Regional
Utility Authority, Inc. City of Round Rock, Texas Contract Revenue Bonds, (Brushy Creek
Regional Water Treatment and Distribution Project), Proposed Series 2023, 2024, and 2026
(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.
The Authority has offered a pledge of contract revenues as sufficient security for the
repayment of the Obligations.
Subject to the Authority's use of an approved debt service structure, interest rate
subsidies are available to the Authority for State Fiscal Year 2023 at up to the following
levels: 25% for financial assistance for a term of 20 years, 18% for financial assistance for a
term of21 to 25 years, and 14% for financial assistance for a term of 26 to 30 years. The
interest rate subsidy applicable to each subsequent proposed series may be different than
the interest rate subsidy available for State Fiscal Year 2023 and will be set through each
financing agreement executed between the TWDB and the Authority.
Page T WS
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The interest rate subsidies provided 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.
Findings:
1. 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. 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. The Authority,a wholesale water supplier,and all other contracting parties have
submitted and implemented a water conservation plan in accordance with Texas
Water Code§ 16.4021 and 31 TAC§ 363.1309(b)(1).
4. The Authority acknowledges its legal obligation to comply with any applicable
requirements of federal law related to contracting with disadvantaged business
enterprises and any applicable state law related 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 commits to the following:
The TWDB will provide financial assistance to Brushy Creek Regional Utility
Authority, Inc. in the amount of$98,055,000 from the State Water Implementation
Revenue Fund for Texas to be evidenced by the TWDB's proposed purchase of-
a.
fa. $7,605,000 Brushy Creek Regional Utility Authority,Inc.City of Cedar Park,Texas
Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and
Distribution Project), Proposed Series 2023, to expire on December 31,2023;
b. $41,750,000 Brushy Creek Regional Utility Authority,Inc.City of Round Rock,
Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and
Distribution Project), Proposed Series 2023, to expire on December 31,2023;
c. $31,500,000 Brushy Creek Regional Utility Authority, Inc. City of Round Rock,
Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and
Distribution Project), Proposed Series 2024, to expire on December 31, 2024; and
d. $17,200,000 Brushy Creek Regional Utility Authority,Inc.City of Round Rock,
Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and
Distribution Project), Proposed Series 2026, to expire on December 31, 2026.
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The commitment is subject to the following:
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 the Obligations were issued,
that the Obligations were issued in conformity with the Constitution and laws of the
State of Texas, and that the 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 the executed agreement to the TWDB consistent with the terms and
conditions described in it.
5. Interest rate subsidies for non-level debt service structure are subject to adjustment
by the Executive Administrator.
6. 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.
Required Obligation Conditions:
7. The Obligations must provide that the Obligations can be called for early redemption
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.
8. The Obligations must provide that the Authority will comply with all applicable
TWDB laws and rules related to the use of the financial assistance.
The Obligations must provide that the Authority must comply with all conditions as
9 specified in the final environmental finding of the Executive Administrator when
issued, including the standard emergency discovery conditions for threatened and
endangered species and cultural resources.
Page 3 of8
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10. The Obligations must contain a provision requiring the Authority to maintain
insurance coverage sufficient to protect the TWDB's interest in the project.
11. The Obligations must include a provision wherein the Authority, or an obligated
person for whom financial or operating data is presented to the T"B 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 the Securities and Exchange Commission (SEC) in 17 CFR§ 240.15c2 -12 (Rule
15c2-12) and determined as if the T"B were a Participating Underwriter within
the meaning of SEC rule 15c2-12, the 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 the Obligations, and the beneficial owners of the
T"B's bonds if the Authority is an obligated person with respect to the bonds
under SEC Rule 15c2-12.
12. The Obligations must include a provision requiring the Authority to use any proceeds
from the Obligations that are determined to be surplus proceeds remaining after
completion of the Project and completion of a final accounting in a manner approved
by the Executive Administrator.
13. 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.
14. Financial assistance 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.
15. Financial assistance proceeds shall not be used by the Authority when sampling,
testing, removing, or disposing of contaminated soils or media at the Project site. The
Obligations shall include a provision that states the Authority is solely responsible
for liability resulting from acts or omissions of the Authority, its employees,
contractors, or agents arising from the sampling, analysis, transport, storage,
treatment, recycling, and disposition of any contaminated sewage sludge,
contaminated sediments 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.
16. The Obligations must include a provision stating that the Authority shal 1 report to the
TWDB the amounts of Project funds, if any,that were used to compensate historical I
underutilized businesses that worked on the Project, in accordance with 31 TAC
§ 363.1312.
Page 4 of8
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17. 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-only form in
accordance with 31 TAC§ 363.42(c)(1).
18. The Obligations must provide that the Authority will submit annually an audit
prepared by a certified public accountant in accordance with generally accepted
auditing standards.
Tax-Exempt Conditions:
19. The Obligations must include a provision prohibiting the Authority from using the
proceeds of this financial assistance in a manner that would cause the Obligations to
become "private activity bonds" within the meaning of section 141 of the Internal
Revenue Code as amended(Code) and the Treasury Regulations promulgated under
it(Regulations).
20. The Obligations must provide that no portion of the proceeds of the financial
assistance will be used, directly or indirectly, in a manner that would cause the
Obligations to be "arbitrage bonds" within the meaning of section 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 issued to provide the financial assistance (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 the proceeds are needed for the facilities to be financed;
b. amounts invested in a bona fide debt service fund within the meaning of
section 1.148-1(b) of the Regulations; and
C. amounts deposited in any reasonably required reserve or replacement fund to
the extent the amounts do not exceed the lesser 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.
21. The Obligations must include a provision that the Authority must take all necessary
steps to comply with the requirement that amounts earned on the investment of
gross proceeds of the Obligations be rebated to the federal government in order to
satisfy the requirements of section 148 ofthe Code.The Obligations must provide
that the Authority will:
Page 5 of8
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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 the accounting for at least
six years after the final Computation Date. The Authority may, however, to the
extent permitted by law, commingle Gross Proceeds of its financial assistance
with other money of the Authority, provided that the Authority separately
accounts for each receipt and expenditure of the Gross Proceeds and the
obligations acquired with the Gross Proceeds;
b. calculate the Rebate Amount, as defined in the Code and Regulations, with
respect to its financial assistance, not less frequently than each Computation
Date, in accordance with rules set forth in section 148(f) of the Code,
section 1.148-3 of the Regulations, and the associated rulings. The Authority
shall maintain a copy of the calculations for at least six years after the final
Computation Date;
C. pay to the United States the amount described in paragraph (b) above within
30 days after each Computation Date as additional consideration for
providing financial assistance and in order to induce providing financial
assistance by measures designed to ensure the excludability of the interest on
the TWDB's Source Series Bonds from the gross income of the owners of
TWDB's Bonds for federal income tax purposes;
d. exercise reasonable diligence to ensure that no errors are made in the
calculations required by paragraph (b) and, if an error is made, to discover
and promptly correct the error within a reasonable amount of time, including
payment to the United States of any interest and any penalty required by the
Regulations.
22. 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.
23. 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
section 149(b) of the Code.
24. The Obligations must contain a covenant that the Authority will refrain from using
the proceeds of the Obligations to pay debt service on another issue of the
borrower's obligations in contravention of section 149(d) of the Code (related to
"advance refundings").
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16
25. The Obligations must provide that neither the Authority nor a party related to it 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.
Pledge Conditions:
26. The Obligations must contain a provision requiring that, upon request by the
Executive Administrator,the Authority shall submit annual audits ofcontracting
parties for the Executive Administrator's review.
27. The Obligations must contain a provision requiring the Authority to maintain and
enforce the contracts with its customers so that the revenues paid to the Authority
by its customers are sufficient to meet the revenue requirements of the Authority's
obligations arising from the operation of the water system.
28. 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.
Conditions To Close or for Release of Funds:
29. Before 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.
30. Before 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.
31. Before closing, the Authority shall provide certification that the average weighted
maturity of the Obligations purchased by the TWDB does not exceed 120% of the
average reasonably expected economic life of the Project.
32. Before 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.
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17
33. Before closing,the Authority's bond counsel mus t prepare a written opinion tha t
states that the O blig a tions are not "private act ivi t y bonds." Bon d counsel may rely on
covenants and represe nta tions of th e Aut ho rit y when rend e r i ng th is opinion.
34. The transcript must i nclu de a No Arbitrage Certificate or si m it ar Fe dera 1 Ta x
Certificate setting forth the Authority's reas ona ble a xpe cta tions rega rd i ng the us e,
expend itu re, and inv estment of the proceeds of the Ob lig atio ns.
35. The transcript must include evidence that the information reporting requirements of
section 149(e) of the Internal Re venue Code will be sa tis fi ed. Th is requirement may
be satisfied by filing a n IRS Form 8038 with the I me rn al Reve n u e Service. In
additi on,the a pplic a ble completed IRS Form 8038 or other evidence that the
in forma ti on reporting requ it a ments of sect i on 1 49 (e) have bee n sa tis fied must be
provided to the Executive Ad mi nis t ra for within fourteen (14) days of closing. The
Executive Adminis tr a for may wit h hold t he release of fu n ds for failure to comply.
36. Before clos in g,the Authority must subm i t executed co nt racts between the Authority
and th a contracting parties regarding the contract revenues pledged to the pa yme nt
of the Au t hor ity's Obliga tions , i n form and substance acce pta ble to the Ex ec utiv e
Administrator. The contracts sha 11 i nclud a provis ions consistent wit h the p ro vis ions
of this Resolution regard ing the contracting parties' an nua 1 and its,th a sett ing of
ra tes and charges and collect ion of reve n ues sufficient to meet the Authority's debt
service obligations and additional pa ri ty obligations.
APPROVED and ordered of record th is , the 25th day of July 2023 .
TEXAS WATE R DEVE LOPM EN T BOARD
6 4
a _ )401")
Brooke T. Paup,Chairwoman U
DATE SIG NE D: :,L J
ATTEST:
�, j
Jeff W61 11
Executive/Administrator
Page 8 of 8
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ATTACHMENT B
DESCRIPTION OF BORROWER BONDS
Title of Borrower Bonds: Brushy Creek Regional Utility Authority,Inc.City of Round Rock,
Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and Distribution
Project),Series 2024
Project Name: Brushy Creek RUA Regional Water Treatment and Distribution Project
Project Number: 51049
Aggregate Principal Amount of Borrower Bonds: $31,500,000
Anticipated Closing Date: November 14, 2024
Dated Date: November 14, 2024
First Principal Payment Date: 8/1/2025
First Interest Payment Date: 2/1/2025
Maturity Schedule:
Maturity Principal Amount
8/1/2025 $1,140,000
8/1/2026 860,000
8/1/2027 885,000
8/1/2028 910,000
8/1/2029 940,000
8/1/2030 965,000
8/1/2031 995,000
8/1/2032 1,025,000
8/1/2033 1,055,000
8/1/2034 1,090,000
8/1/3035 1,120,000
8/1/2036 1,155,000
8/1/2037 1,195,000
8/1/2038 1,235,000
8/1/2039 1,275,000
8/1/2040 1,320,000
8/1/2041 1,370,000
8/1/2042 1,415,000
8/1/2043 1,470,000
8/1/2044 1,525,000
8/1/2045 1,580,000
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
8/1/2046 1,645,000
8/1/2047 1,710,000
8/1/2048 1,775,000
8/1/2049 1,845,000
Disclaimer: This is a working document and is provided as a courtesy. All information contained
herein is subject to change upon further review of the TWDB.
ATTACHMENT C
FINANCING SCHEDULE*
DATE ACTION
07/23/2024 TWDB approval of commitments
09/2/2024 Labor Day Holiday**
Financing agreement-last day to execute
09/6/2024 19 days prior to initiation o ricin
Financing agreement(Sec.4A) -last day political subdivisions can terminate
without penalty
09/11/2024 (14 days prior to initiation of pricing)
Financing agreement(Sec.5) -last day political subdivisions can modify
maturity schedule
09/11/2024 (14 days prior to initiation of pricing)
Financing agreement(Sec.413) -last day political subdivisions can terminate
09/20/2024 with costs of issuance 5 days prior to initiation of ricin
Financing agreement(Sec.4C) -before 9:00 a.m.political subdivisions can
09/25/2024 terminate with costs of issuance and 1%penalty(1 day prior to pricing).
09/25/2024 TWDB bond pricing initiation(pre-pricing begins)
09/26/2024 TWDB bond pricing
10/10/2024 TWDB bond closing(political subdivisions must close within 56 days)
10/11 to
12/5/2024 Closings on political subdivision obligations
10/14/2024 Columbus Day Holiday(TWDB open)**
10/17/2024 TWDB approves interest rates available to political subdivisions
Various Political subdivisions adopt bond resolutions and/or master agreements
Political subdivisions submit transcripts to Texas Attorney General in
Various preparation of closing
11/11/2024 Veteran's Day Holiday**
11/28/2024 Thanksgiving Holiday**
11/29/2024 Thanksgiving Holiday**
12/5/2024 Last day to close on political subdivision obligations
Financing agreement(Sec.41)) -penalty applied to any political subdivision
failing to issue debt
Start of post-pricing termination payment period (includes costs of issuance,
12/6/2024 underwriters'discount and 5%penalty)
03/5/2025 Last due date for payment of penalties
*Preliminary,subject to change
**State agency holidays are reflected to show when TWDB is closed;they are counted towards
deadlines.
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