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Res 18-25 Approving Texas Water Development Board Financing Agreement TOWN OF WESTLAKE RESOLUTION NO. 18-25 RESOLUTION APPROVING THE EXECUTION AND DELIVERY OF A FINANCING AGREEMENT WITH THE TEXAS WATER DEVELOPMENT BOARD REGARDING THE ISSUANCE OF CERTIFICATES OF OBLIGATION BY THE TOWN FOR WATER SYSTEM IMPROVEMENTS AND RELATED ISSUANCE COSTS, AND APPROVING THE OBLIGATIONS OF THE TOWN WITH RESPECT TO SUCH AGREEMENT; AND RESOLVING OTHER MATTERS RELATING TO THE SUBJECT WHEREAS, the Town of Westlake, Texas (the "Town") has received a commitment from the Texas Water Development Board ("TWDB") pursuant to which TWDB agrees to loan $2,100,000 to the Town (the "Loan"), as evidenced by the issuance of the Town's certificates of obligation to be sold to TWDB, to fund costs related to acquiring, constructing, installing and equipping improvements to the Town's water system, including a water transmission line; WHEREAS, TWDB has presented to the Town a financing agreement (the "Financing Agreement") in connection with the Loan, in which the Town agrees to certain conditions with respect to the Loan, including the payment by the Town to TWDB of termination fees and expenses if certain specified events occur or do not occur; WHEREAS, this Town Council hereby finds and determines that it is a public benefit to and in the best interests of the Town and its residents to enter into the Financing Agreement in order to obtain the Loan to fund needed improvements and additions to the Town's water supply system; and WHEREAS, it is hereby officially found and determined that the meeting at which this Resolution was passed, was open to the public and public notice of the time, place, and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: The Financing Agreement, Attachment "A", in substantially the form presented at this meeting, is hereby approved and the Town Manager of the Town is hereby authorized and directed to execute and deliver the Financing Agreement. SECTION 3: The Town hereby designates the Water and Wastewater Fund for payment of the amounts set forth in the Financing Agreement that may become due as described in the Financing Agreement. Until such time as the obligations of the Town under the Financing Resolution 18-25 Page 1 of 2 Agreement have terminated, such funds are hereby appropriated, budgeted and reserved for such purposes. SECTION 4: The Town Manager and Public Works Director of the Town, and each of them, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to take such actions and to execute and deliver in the name and on behalf of the Town all other instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Resolution. SECTION 5: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 15TH DAY OF AUGUST, 2018. ATTEST: � ,{� j Laura L. Wheat, Mayor . FA Kelily EdwaAls, Town Secretary Thomas E. Brymer, Town n APPROVED AS TO FORM: 1IEST� O L. Stanton Lowry, Town Attorney TEMP Resolution 18-25 Page 2 of 2 .6GVGL0,4 al`o4�`'9),I`do �•r r�V 1 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 Town of Westlake (Borrower). The TWDB and the Borrower may be referred to as the "Parties" in this Agreement. RECITALS WHEREAS, the TWDB adopted Resolution No. 18-087 (Attachment A, referred to as the Resolution) on July 26, 2018, making a commitment to the Borrower for financial assistance in the amount of$2,100,000 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 Borrower's $2,100,000 Town of Westlake,Texas Combination Tax and Surplus Revenue Certificates of Obligation, Proposed Series 2018 (Borrower Bonds) 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), 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 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 future sales of SWIRFT Bonds designated by the TWDB; and 1 Res 18-25 Page 1 of 1 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 hereby commits to borrow from the TWDB an amount not to exceed $2,100,000 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. The Borrower acknowledges that the SWIRFT bonds, the subject of this Agreement, are being issued for the purpose of funding the Borrower's requested financial assistance. 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 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. 2 Res 18-25 Page 1 of 1 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 fifty (50) 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 twenty-three (23) 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 thirteen (13) 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 by the TWDB. 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 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 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 17, 2018) 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 $2,095 (Transaction Cost Payment). The Borrower shall be obligated to pay such costs to the TWDB no later than March 1, 2019. 3 Res 18-25 Page 1 of 1 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 (Pre-pricing Termination Payment), and additionally shall reimburse the TWDB from lawfully available funds of the Borrower its Transaction Cost Payment. The Borrower shall be obligated to pay such costs to the TWDB no later than March 1, 2019. The Borrower understands and agrees that termination under this section will result in a total penalty amount of$23,095. D. The Borrower understands and agrees that TWDB would suffer and incur severe and irreparable damages if the Borrower Bonds are not issued and delivered. 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 the Borrower shall pay, from lawfully available funds of the Borrower, 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 Borrower shall be obligated to pay the Post-pricing Termination Payment to the TWDB no later than March 1, 2019. The Borrower shall also reimburse the TWDB from lawfully available funds of the Borrower, its Transaction Cost Payment, plus Borrower's proportional share of the underwriters' discount, no later than March 1, 2019. The Borrower understands and agrees that failure by the Borrower to issue Borrower Bonds by the date specificed in Attachment C, will result in a total penalty amount pursuant to this section not to exceed $116,598. SECTION 5.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 seven (7) 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 downward, subject to approval by the Executive Administrator of the TWDB, at any time prior to the seventh (7th) day before the initiation of pricing of the SWIRFT Bonds with no penalty. 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, from the Legislative Budget Board, 4 Res 18-25 Page 1 of 1 the Bond Review Bord, and the Texas Attorney General. The TWDB's obligation to purchase the Borrower's securities 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. 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 file the transcript of proceedings for the Borrower Bonds with 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 (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, as a matter of law, 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 no later than March 1, 2019, as provided in 5 Res 18-25 Page 1of1 Section 4D. The Borrower shall also reimburse the TWDB from lawfully available funds of the Borrower, its Transaction Cost Payment, plus Borrower's proportional share of the underwriters' discount, no later than March 1, 2019. The Borrower understands and agrees that if the Borrower does not obtain approval from the Texas Attorney General and issue its Borrower Bonds by the date specified in Attachment C, it will be subject to a total penalty amount pursuant to this section not to exceed $116,598. SECTION 7. REDEMPTION OF OUTSTANDING DEBT. Proceeds of the Borrower Bonds shall not 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 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 Town of Westlake Development Fund Manager Attn: Thomas E. Brymer, Town Manager P.O. Box 13231 1500 Solana Boulevard, Blgd 7, Ste. 7200 Austin, Texas 78711-3231 Westlake, Texas 76262 Telephone: (512) 475-4584 Telephone: (817) 430-0941 Facsimile: (512) 475-2053 Facsimile: (817) 430-1812 E-mail: tbrymer@westlake-tx.org 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 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. 6 Res 18-25 Page 1 of 1 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 MAJEURE. 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, 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. 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 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] Res 18-25 Page 1 of 1 EXECUTED in multiple counterparts, each of which shall be deemed to be an original. TOWN OF WESTLAKE By: Zi. <I IWI iii./i Name: Thomas E. Brym-r Title: Town Manager Date: 8I7-91 I es STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the 2q day of (41 2018, by Thomas E. Brymer, in his capacity as Town Manager, on behalf of the To of Westlake, Texas. (SEAL) 1aar P14 94, KELLY EDWARDS NOTARY PUBLIC STATE OF TEXAS IPI 1 ,�, MY COMM.EXP.02/03/2022 OF ,,Y NOTARY ID 12408268-8 Notary P 6, State of Texas 8 Res 18-25 Page 1 of 1 TEXAS W:TER DEVELOPMENT BOARD ti 4 j By: y Name: Jer V1(a,•.l r Title: ExecutivVAdministrator Date: 14f f . l8 STATE OF TEXAS COUNTY OF TRAVIS This instrument was acknowledged before me on the 4 day ofR eikif , 2018, 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. .4, 1!;,',;.,,, MELISSA C. HUFFMASTERLA6 z y�•n:Notary Public, State of Texas I A f, • y6 1 'Ja i, �. .. QF Comm. Expires 06-05-2021 7l••..••'}� I ��''n°;��` Notary ID 12944703-5 Nota 'ublic, State • 9 ATTACHMENT A TWDB RESOLUTION NO. 18-087 10 Res 18-25 Page 1 of 1 ATTACHMENT A A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE IN THE AMOUNT OF $2,100,000 TO TOWN OF WESTLAKE FROM THE STATE WATER IMPLEMENTATION REVENUE FUND FOR TEXAS THROUGH THE PROPOSED PURCHASE OF $2,100,000 TOWN OF WESTLAKE,TEXAS COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2018 (18-087) WHEREAS, the Town of Westlake (Town) has filed an application for financial assistance in the amount of$2,100,000 from the State Water Implementation Revenue Fund for Texas (SWIRFT)to finance the planning,design,and construction of certain water supply project(s) identified as Project No.51062 (Project); and WHEREAS, the Town seeks financial assistance from the Texas Water Development Board (TWDB) through the TWDB's proposed purchase of$2,100,000 Town of Westlake, Texas Combination Tax and Surplus Revenue Certificates of Obligation, Proposed Series 2018 (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 Fowl WHEREAS, the Town has offered a pledge of ad valorem taxes and surplus net revenues of its waterworks and sewer system as sufficient security for the repayment of the Obligations; and WHEREAS, subject to the Town's use of an approved debt service structure, interest rate subsidies are available to the Town at up to the following levels: 28% for financial assistance for a term of 20 years, 20% for financial assistance for a term of 21 to 25 years, and 16% for financial assistance 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 Town, pursuant to this Resolution; 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 the Town satisfactorily completed all requests by the Executive Administrator or a regional planning group for information relevant to the Project, including a water I Res 18-25 Page 1 of 1 ATTACHMENT A infrastructure financing survey under Texas Water Code § 16.053(q), in accordance with 31 TAC§ 363.1309(b)(2); 4. that the current water audit has been completed by the Town and filed with the TWDB in accordance with Texas Water Code§ 16.0121 and 31 TAC§ 358.6; 5. that the Town 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: A commitment is made by the TWDB to Town of Westlake for financial assistance in the amount of$2,100,000 from the State Water Implementation Revenue Fund for Texas, to be evidenced by the TWDB's proposed purchase of $2,100,000 Town of Westlake, Texas Combination Tax and Surplus Revenue Certificates of Obligation, Series 2018. This commitment will expire on December 31, 2018. 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 Town 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 Town; 3. this commitment is contingent upon the Town'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 Town 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; �-, 5. interest rate subsidies for non-level debt service structure are subject to adjustment by the Executive Administrator; 2 Res 18-25 Page 1 of 1 ATTACHMENT A p., 6. the Town 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: 7. 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; 8. the Obligations must include a provision wherein the Town, 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 Town'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 meaning of such rule, such continuing disclosure undertaking being for the benefit of the TWDB and the beneficial owners of the Town's Obligations,if the TWDB sells or otherwise transfers such Obligations, and the beneficial owners of the TWDB's bonds if the Town is an obligated person with respect to such bonds under SEC Rule 15c2-12; 9. the Obligations must contain a provision requiring the Town to levy a tax and/or maintain and collect sufficient rates and charges to produce system revenues in an amount necessary to meet the debt service requirements of all outstanding obligations and to maintain the funds established and required by the Obligations; 10. the Obligations must include a provision requiring the Town to use any 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; 11. 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; 12. 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 3 Res 18-25 Page 1 of 1 ATTACHMENT A accordance with the Public Funds Investment Act, Government Code, Chapter 2256, and the Public Funds Collateral Act, Government Code,Chapter 2257; 13. financial assistance proceeds shall not be used by the Town 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 Town 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 Town, its contractors, consultants, agents, officials and employees as a result of activities relating to the Project to the extent permitted by law; 14. the Obligations must include a provision stating that the Town 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; 15. 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); 16. the Obligations must contain a provision that provides as follows: a. if system revenues are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year,then the amount of taxes which otherwise would have been required to be levied and collected may be reduced to the extent and by the amount of revenues then on deposit in the Interest and Sinking Fund; or b. if surplus revenues are based upon budgeted amounts: i. the Obligations must include a requirement that the Town transfer and deposit in the Interest and Sinking Fund each month an amount of not less than 1/12th of the annual debt service on the Obligations until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the Obligations; further, that the ordinance authorizing the issuance of the Obligations must include a requirement that the Town shall not transfer any funds from the Town's pledged system revenues to any fund other than the Interest and Sinking Fund until such time as an amount equal to the annual debt service on the Obligations for the then-current fiscal year has been deposited in the Interest and Sinking Fund; 4 Res 18-25 Page 1 of 1 ATTACHMENT A the Obligations must include a requirement that for each year the Obligations are outstanding,and prior to the time taxes are to be levied for such year, the Town shall establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient surplus pledged revenues and/or tax revenues,the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof,into the Interest and Sinking Fund for the repayment of the Obligations; and ii. the Obligations must include a requirement that the Town shall at all times maintain and collect sufficient rates and charges in conjunction with any other legally available funds so that after payment of the costs of operating and maintaining the system, it produces revenues in an amount not less than 1.10 times debt service requirements of all outstanding Obligations of the Town and other obligations of the Town that are secured in whole or in part by the pledged revenues,for which the Town is budgeting the repayment of such Obligations,or the Town shall provide documentation that evidences the levy and collection of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds, sufficient for the repayment of debt service requirements; Conditions to Close or for Release of Funds: 17. prior to closing, the Town shall submit documentation evidencing the adoption and implementation of sufficient system rates and charges or,if applicable,the levy of an interest and sinking tax rate sufficient for the repayment of all system debt service requirements; 18. prior to closing,if not previously provided with the application,the Town 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; 19. prior to closing,when any portion of financial assistance is to be held in escrow or in trust, the Town 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; PROVIDED, however,the commitment is subject to the following special conditions: Special Conditions: 20. 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 5 Res 18-25 Page 1 of 1 ATTACHMENT A Project that proposes surface water or groundwater development, the Executive Administrator must have either issued a written finding that the Town 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; 21. 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 Town has the right to use the water that the Project financed by the TWDB will provide; 22. the Town must comply with the terms and conditions of the United States Army Corps of Engineers Nationwide Permit 12 for Utility Line Activities; 22. the Town must comply with all conditions as specified in the final environmental finding of the Executive Administrator, including the standard emergency discovery conditions for threatened and endangered species and cultural resources. APPROVED and ordered of record this, the 26th day of July, 2018. TEXAS WATER DEVELOPMENT BOARD !top, Peter M. Lake, Chairman DATE SIGNED: /2-/ ATTEST: /A),/, / Jeff Vralltr, Executive Administrator 6 Res 18-25 Page 1 of 1 ATTACHMENT A • _ ^ 11 f \ , • Res 18-25 Page 1of1 ATTACHMENT B DESCRIPTION OF TOWN OF WESTLAKE BONDS 11 Res 18-25 Page 1 of 1 ATTACHMENT B ATTACHMENT B DESCRIPTION OF BORROWER FUNDS Title of Borrower Funds: $2,100,000 Town of Westlake, Texas Combination Tax and Surplus Revenue Certificates of Obligation, Taxable Series 2018 Project Name: Increase Delivery Infrastructure from Fort Worth Project Number: 51062 Aggregate Principal Amount of Borrower Bonds: $2,100,000 Anticipated Closing Date: 11/02/2018 Dated Date: 11/02/2018 First Principal Payment Date: 2/15/2019 First Interest Payment Date: 2/15/2019 Maturity Schedule: Maturity Principal Maturity Principal Date Amount Date Amount 2/15/2019 $ 5,000 2/15/2029 $ 110,000 2/15/2020 $ 85,000 2/15/2030 $ 110,000 2/15/2021 $ 90,000 2/15/2031 $ 115,000 2/15/2022 $ 90,000 2/15/2032 $ 120,000 2/15/2023 $ 95,000 2/15/2033 $ 120,000 2/15/2024 $ 95,000 2/15/2034 $ 125,000 2/15/2025 $ 95,000 2/15/2035 $ 130,000 2/15/2026 $ 100,000 2/15/2036 $ 130,000 2/15/2027 $ 105,000 2/15/2037 $ 135,000 2/15/2028 $ 105,000 2/15/2038 $ 140,000 Res 18-25 Page 1 of 1 ATTACHMENT C FINANCING SCHEDULE 12 Res 18-25 Page 1of1 ATTACHMENT C ATTACHMENT C FINANCING SCHEDULE* DATE ACTION 07/26/2018 TWDB approval of commitments 09/03/2018 Labor Day Holiday Financing agreement-last day to execute 09/04/2018 (13 days prior to initiation of pricing) Financing agreement(Sec.4A) -last day political subdivisions can terminate without penalty 09/10/2018 (7 days prior to initiation of pricing) Financing agreement(Sec. 5) -last day political subdivisions can modify maturity schedule 09/10/2018 (7 days prior to initiation of pricing) Financing agreement(Sec.4B) -last day political subdivisions can terminate 09/13/2018 with costs of issuance (4 days prior to initiation of pricing) Financing agreement(Sec.4C) -before 9:00 a.m.political subdivisions can 09/17/2018 terminate with costs of issuance and 1%penalty(1 day prior to pricing). 09/17/2018 TWDB bond pricing initiation(pre-pricing begins) 09/18/2018 TWDB bond pricing 09/20/2018 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 10/08/2018 Columbus Day Holiday(TWDB open) 10/11/2018 TWDB bond closing(political subdivisions must close within 50 days) 10/12 to 11/30/2018 Closings on political subdivision obligations 11/09/2018 Veteran's Day Holiday 11/22/2018 Thanksgiving Holiday 11/23/2018 Thanksgiving Holiday 11/30/2018 Last day to close on political subdivision obligations Financing agreement(Sec. 4D) -penalty applied to any political subdivision failing to issue debt Start of post-pricing termination payment period (includes costs of issuance and 12/01/2018 5%penalty) 03/01/2019 Last due date for penalties payments *-Preliminary-subject to change Res 18-25 Page 1 of 1