HomeMy WebLinkAbout04/20/2018 - Regular Agenda - Architectural Advisory Committee
PRELIMINARY OFFICIAL STATEMENT
DATED MAY __, 2018
NEW ISSUE - Book-Entry-Only
In the opinion of Bond Counsel, interest on the Certificates will be excludable from gross income for federal income tax purposes under statutes,
regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under “TAX MATTERS” herein.
CITY OF COLLEGE STATION, TEXAS
(a Home-Rule City located in Brazos County, Texas)
$36,885,000*
CERTIFICATES OF OBLIGATION
SERIES 2018
Dated Date: June 1, 2018 Due: February 15, as shown on inside cover
Interest Accrual Date: Date of Delivery The $36,885,000* City of College Station, Texas Certificates of Obligation, Series 2018 (the “Certificates”) are being issued by the City of
College Station, Texas (the “City”) pursuant to the terms of an ordinance adopted by the governing body of the City. In the ordinance, the City
Council of the City delegated authority to certain authorized officials of the City to finalize the pricing of the Certificates.
The Certificates are issuable only in fully registered form in the denomination of $5,000 principal amount or integral multiples thereof, initially
registered solely in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New
York, acting as securities depository for the Certificates. The Certificates initially will be available to purchasers in book-entry-form only. So
long as Cede & Co. is the registered owner of the Certificates, as nominee for DTC, the Paying Agent/Registrar, initially The Bank of New York
Mellon Trust Company, N.A., Dallas, Texas (the “Paying Agent/Registrar”) will pay the principal of and interest on the Certificates to Cede &
Co., which will, in turn, remit such amounts to DTC participants for subsequent disbursement to the beneficial owners of the Certificates.
Interest on the Certificates will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing
February 15, 2019 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months
(see “THE CERTIFICATES - GENERAL DESCRIPTION”)
The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2028, in whole or in part in
principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued
interest to the date of redemption (see “THE CERTIFICATES – OPTIONAL REDEMPTION”).
In addition to the foregoing optional redemption provision, if in connection with the pricing of the Certificates the principal amounts designated in
the Maturity Schedule herein are combined to create Term Certificates, each such Term Certificate shall be subject to mandatory sinking fund
redemption commencing on February 15 of the first year which has been combined to form such Term Certificate and continuing on February 15 in
each year thereafter until the stated maturity date of that Term Certificate, and the amount required to be redeemed in any year shall be equal to the
principal amount for such year set forth in the serial maturity schedule on the inside cover. Term Certificates to be redeemed in any year by mandatory
sinking fund redemption shall be redeemed at par and shall be selected by lot from the Term Certificates then subject to redemption (see “THE
CERTIFICATES - MANDATORY SINKING FUND REDEMPTION”).
SEE MATURITY SCHEDULE, INTEREST RATES AND YIELDS ON INSIDE COVER
The Certificates are payable from annual ad valorem taxes levied against all taxable property in the City, within the legal limits prescribed by
law. The Certificates are additionally payable from a subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined
utility system (see “THE CERTIFICATES – SECURITY AND SOURCE OF PAYMENT,” and “– TAX RATE LIMITATION”).
The Certificates are offered for delivery, when issued, and received by the initial purchaser (the “Initial Purchaser”) and subject to the opinion
of the Attorney General of the State of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel for the City
(see “APPENDIX C – FORMS OF OPINIONS OF BOND COUNSEL”). Certain legal matters will be passed upon for the City by McCall,
Parkhurst & Horton, L.L.P., Dallas, Texas, Disclosure Counsel for the City. It is expected that the Certificates will be available for delivery
through the services of DTC on or about June 19, 2018.
BIDS DUE TUESDAY, MAY 22, 2018, AT 10:30 A.M., CDT
Ratings:
Moody’s: "Applied for"
S&P: "Applied for"
(See “OTHER INFORMATION
– RATINGS” herein
Th
i
s
P
r
e
l
i
m
i
n
a
r
y
O
f
f
i
c
i
a
l
S
t
a
t
e
m
e
n
t
a
n
d
t
h
e
i
n
f
o
r
m
a
t
i
o
n
c
o
n
t
a
i
n
e
d
h
e
r
e
i
n
a
r
e
s
u
b
j
e
c
t
t
o
c
o
m
p
l
e
t
i
o
n
o
r
a
m
e
n
d
m
e
n
t
.
T
h
e
s
e
s
e
c
u
r
it
i
e
s
m
a
y
n
o
t
b
e
s
o
l
d
n
o
r
m
a
y
o
f
f
e
r
s
t
o
b
u
y
b
e
a
c
c
e
p
t
e
d
p
r
i
o
r
t
o
t
h
e
t
i
m
e
t
h
e
O
f
f
i
c
i
a
l
S
t
a
t
e
m
e
n
t
i
s
de
l
i
v
e
r
e
d
i
n
f
i
n
a
l
f
o
r
m
.
U
n
d
e
r
no
c
i
r
c
u
m
s
t
a
n
c
e
s
s
h
a
l
l
t
h
i
s
P
r
e
l
i
m
i
n
a
r
y
O
f
f
i
c
i
a
l
S
t
a
t
e
m
e
n
t
c
o
n
s
t
i
t
u
t
e
a
n
o
f
f
e
r
t
o
s
e
l
l
o
r
t
h
e
s
o
l
i
c
i
t
a
t
i
o
n
o
f
a
n
o
f
f
e
r
t
o
b
u
y
no
r
s
h
a
l
l
t
h
e
r
e
b
e
a
n
y
s
a
l
e
o
f
t
h
e
s
e
s
e
c
u
r
i
t
i
e
s
i
n
a
n
y
j
u
r
i
s
d
i
c
t
i
o
n
i
n
w
h
i
c
h
s
u
c
h
of
f
e
r
,
s
o
l
i
c
i
t
a
t
i
o
n
o
r
s
a
l
e
w
o
u
l
d
b
e
u
n
l
a
w
f
u
l
p
ri
o
r
t
o
r
e
g
i
s
t
r
a
t
i
o
n
o
r
q
u
a
l
i
f
i
c
a
t
i
o
n
u
n
d
e
r
t
h
e
s
e
c
u
r
i
t
i
e
s
l
a
w
s
o
f
a
n
y
s
u
c
h
j
u
r
i
s
d
i
c
t
i
o
n
.
__________
* Preliminary, subject to change. See "CONDITIONS OF SALE - ADVANCED ADJUSTMENT OF PRINCIPAL AMOUNT AND/OR TYPES OF BIDS" and " - POST BID MODIFICATION" in the Notice
of Sale and Bidding Instructions.
ii
MATURITY SCHEDULE*
$36,885,000*
Certificates of Obligation, Series 2018
* Preliminary, subject to change. See "CONDITIONS OF SALE - ADVANCED ADJUSTMENT OF PRINCIPAL AMOUNT AND/OR TYPES OF BIDS"
and " - POST BID MODIFICATION" in the Notice of Sale and Bidding Instructions.
(1) CUSIP numbers have been assigned to the Certificates by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American
Bankers Association, and are included solely for the convenience of the purchasers of the Certificates. Neither the City, the Financial Advisor
nor the Initial Purchaser shall be responsible for the selection or correctness of the CUSIP numbers set forth herein.
(2) The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2028, in whole or in part in
principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued
interest to the date of redemption.
Due Interest Due Interest
Feb. 15 Principal*Rate Yield CUSIP (1)Feb. 15 Principal*Rate Yield CUSIP (1)
2019 840,000$ 2029 (2)1,835,000$
2020 1,310,000 2030 (2)1,910,000
2021 1,375,000 2031 (2)1,990,000
2022 1,445,000 2032 (2)2,065,000
2023 1,520,000 2033 (2)2,145,000
2024 1,590,000 2034 (2)2,215,000
2025 1,675,000 2035 (2)2,290,000
2026 1,700,000 2036 (2)2,370,000
2027 1,785,000 2037 (2)2,440,000
2028 1,850,000 (2)2038 (2)2,535,000
iii
For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission, as amended and in effect on the date hereof (the “Rule”),
this document constitutes a Preliminary Official Statement of the City with respect to the Certificates that has been deemed “final” by the City as of its date except
for the omission of no more than the information permitted by the Rule.
This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in
any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale. No dealer, broker, salesperson or other person has been
authorized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information
or representations must not be relied upon.
The information set forth herein has been obtained from the City and other sources believed to be reliable, but such information is not guaranteed as to
accuracy or completeness and is not to be construed as the promise or guarantee of the Financial Advisor. This Official Statement contains, in part, estimates
and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions, or
that they will be realized. CUSIP numbers have been assigned to this issue by CUSIP Global Services, and are included solely for the convenience of the
owners of the Certificates. Neither the City, the Financial Advisor nor the Initial Purchaser shall be responsible for the selection or correctness of the CUSIP
numbers shown on the inside cover page.
The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any
sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described.
In connection with this offering, the Initial Purchaser may over-allot or effect transactions which stabilize the market price of the issue at a level above that
which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.
The Certificates are exempt from registration with the Securities and Exchange Commission and consequently have not been registered therewith. The
registration, qualification, or exemption of the Certificates in accordance with applicable securities law provisions of the jurisdiction in which these securities
have been registered or exempted should not be regarded as a recommendation thereof.
NEITHER THE CITY, ITS FINANCIAL ADVISOR NOR THE INITIAL PURCHASER MAKE ANY REPRESENTATION OR WARRANTY WITH RESPECT TO
THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT REGARDING THE DEPOSITORY TRUST COMPANY (“DTC”) OR ITS BOOK-
ENTRY-ONLY SYSTEM.
Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any
sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described
herein since the date hereof.
The Initial Purchaser has provided the following sentence for inclusion in this Official Statement. The Initial Purchaser has reviewed the information in this
Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and
circumstances of this transaction, but the Initial Purchaser does not guarantee the accuracy or completeness of such information.
THIS OFFICIAL STATEMENT CONTAINS “FORWARD-LOOKING” STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. SUCH STATEMENTS MAY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS TO BE DIFFERENT FROM THE FUTURE RESULTS,
PERFORMANCE AND ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED
THAT THE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS. See “OTHER
INFORMATION – FORWARD-LOOKING STATEMENTS DISCLAIMER” herein.
References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience.
Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this final official
statement for purposes of, and as that term is defined in, SEC Rule 15c2-12.
iv
TABLE OF CONTENTS
MATURITY SCHEDULE* ............................................. 2
OFFICIAL STATEMENT SUMMARY ......................... 5
SELECTED FINANCIAL INFORMATION ............................. 7
GENERAL FUND CONSOLIDATED STATEMENT SUMMARY 7
UTILITY SYSTEM CONDENSED STATEMENT OF
OPERATIONS ........................................................... 7
CITY OFFICIALS, STAFF AND CONSULTANTS ..... 8
ELECTED OFFICIALS ...................................................... 8
SELECTED ADMINISTRATIVE STAFF ................................ 8
CONSULTANTS AND ADVISORS ....................................... 8
INTRODUCTION ............................................................ 1
DESCRIPTION OF THE CITY ............................................. 1
PLAN OF FINANCING ................................................... 1
PURPOSE OF THE CERTIFICATES ..................................... 1
SOURCES AND USES OF PROCEEDS ................................. 1
THE CERTIFICATES ..................................................... 2
GENERAL DESCRIPTION ................................................. 2
AUTHORITY FOR ISSUANCE OF THE CERTIFICATES .......... 2
SECURITY AND SOURCE OF PAYMENT ............................ 2
TAX RATE LIMITATION .................................................. 2
OPTIONAL REDEMPTION ................................................ 2
MANDATORY SINKING FUND REDEMPTION .................... 2
NOTICE OF REDEMPTION ................................................ 3
BOOK-ENTRY-ONLY SYSTEM ........................................ 3
PAYING AGENT/REGISTRAR ........................................... 5
TRANSFER, EXCHANGE AND REGISTRATION ................... 5
RECORD DATE FOR INTEREST PAYMENT......................... 5
DEFEASANCE ................................................................. 5
REMEDIES OF HOLDERS OF CERTIFICATES ...................... 6
TAX INFORMATION ..................................................... 6
AD VALOREM TAX LAW ................................................ 6
CONSTITUTIONAL AMENDMENT ..................................... 7
EFFECTIVE TAX RATE AND ROLLBACK TAX RATE ......... 7
PROPERTY ASSESSMENT AND TAX PAYMENT ................. 8
PENALTIES AND INTEREST .............................................. 8
CITY APPLICATION OF PROPERTY TAX CODE ................. 8
TAX ABATEMENT POLICY .............................................. 9
ECONOMIC DEVELOPMENT............................................. 9
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL
OBLIGATION DEBT ................................................ 11
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY
CATEGORY ............................................................ 12
TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT
HISTORY ............................................................... 13
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY13
TABLE 5 - TEN LARGEST TAXPAYERS ......................... 13
TABLE 6 - TAX ADEQUACY ........................................ 13
TABLE 7 - ESTIMATED OVERLAPPING DEBT ................ 14
DEBT INFORMATION ................................................. 15
TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT
SERVICE REQUIREMENTS* ..................................... 15
TABLE 9 - INTEREST AND SINKING FUND BUDGET
PROJECTION .......................................................... 16
TABLE 10 – SELF-SUPPORTING DEBT* ........................ 16
TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS . 17
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT17
OTHER OBLIGATIONS ................................................... 17
PENSION FUND ............................................................ 17
OTHER POST EMPLOYMENT BENEFITS .......................... 17
FINANCIAL INFORMATION ..................................... 20
TABLE 12 - GENERAL FUND REVENUES AND
EXPENDITURE HISTORY ........................................ 20
TABLE 13 - MUNICIPAL SALES TAX HISTORY ............. 21
FINANCIAL POLICIES ................................................... 21
THE COMBINED UTILITY SYSTEM ....................... 22
WATERWORKS SYSTEM ............................................... 22
WASTEWATER SYSTEM ............................................... 23
ELECTRIC SUPPLY SOURCE .......................................... 23
WIND WATT RATES .................................................... 24
TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED)25
TABLE 15 - TEN LARGEST UTILITY CUSTOMERS .......... 25
TABLE 16 - CONDENSED STATEMENT OF OPERATIONS . 25
TABLE 17 – VALUE OF THE SYSTEM ............................. 26
TABLE 18 – CITY’S EQUITY IN THE SYSTEM ................. 26
TABLE 19 – UTILITY REVENUE BOND AND SYSTEM
SUPPORTED CERTIFICATE DEBT SERVICE .............. 27
INVESTMENTS ............................................................. 27
LEGAL INVESTMENTS .................................................. 27
INVESTMENT POLICIES ................................................ 28
ADDITIONAL PROVISIONS ............................................ 29
CITY’S INVESTMENT POLICY ....................................... 29
TABLE 20 - CURRENT INVESTMENTS ............................ 29
TAX MATTERS............................................................. 30
OPINION ...................................................................... 30
FEDERAL INCOME TAX ACCOUNTING TREATMENT OF
ORIGINAL ISSUE DISCOUNT ................................... 30
COLLATERAL FEDERAL INCOME TAX CONSEQUENCES . 31
STATE, LOCAL AND FOREIGN TAXES ........................... 31
INFORMATION REPORTING AND BACKUP WITHHOLDING31
FUTURE AND PROPOSED LEGISLATION ......................... 32
CONTINUING DISCLOSURE OF INFORMATION 32
ANNUAL REPORTS ....................................................... 32
EVENT NOTICES .......................................................... 32
LIMITATIONS AND AMENDMENTS ................................ 33
COMPLIANCE WITH PRIOR UNDERTAKINGS .................. 33
OTHER INFORMATION ............................................. 33
RATINGS ..................................................................... 33
LITIGATION ................................................................. 33
REGISTRATION AND QUALIFICATION OF CERTIFICATES
FOR SALE .............................................................. 33
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE
PUBLIC FUNDS IN TEXAS ....................................... 34
LEGAL OPINIONS ......................................................... 34
AUTHENTICITY OF FINANCIAL DATA AND OTHER
INFORMATION ....................................................... 34
FINANCIAL ADVISOR ................................................... 34
CERTIFICATION OF THE OFFICIAL STATEMENT AND NO-
LITIGATION CERTIFICATE ...................................... 34
FORWARD-LOOKING STATEMENTS .............................. 35
INITIAL PURCHASER .................................................... 35
MISCELLANEOUS ......................................................... 35
APPENDICES
GENERAL INFORMATION REGARDING THE CITY ................................. A
EXCERPTS FROM THE ANNUAL FINANCIAL REPORT ........................... B
FORMS OF OPINIONS OF BOND COUNSEL ............................................ C The cover page hereof, this page, the appendices included herein and any
addenda, supplement or amendment hereto, are part of the Official
Statement.
v
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement.
The offering of the Certificates to potential investors is made only by means of this entire Official Statement. No person is authorized to
detach this summary from this Official Statement or to otherwise use it without the entire Official Statement.
THE CITY ............................. The City of College Station, Texas (the “City”) is a political subdivision and a home-rule city of the State,
located in Brazos County, Texas. The City covers approximately 51.6 square miles (see “INTRODUCTION
- DESCRIPTION OF THE CITY”).
THE CERTIFICATES ............. The Certificates are issued as $36,885,000* City of College Station, Texas Certificates of Obligation, Series
2018. The Certificates are issued as serial certificates maturing on February 15 in each of the years 2019-
2038, inclusive (see “THE CERTIFICATES - GENERAL DESCRIPTION”). If two or more serial maturities of
the Certificates are grouped into a single maturity (the “Term Certificates”) by the Initial Purchaser, such
Term Certificates will be subject to mandatory sinking fund redemption in accordance with applicable
provisions of the Ordinance.
PAYMENT OF INTEREST ...... Interest on the Certificates will accrue from the date of delivery, and will be payable February 15 and August
15 of each year commencing February 15, 2019 until maturity or prior redemption and will be calculated on
the basis of a 360-day year consisting of twelve 30-day months (see “THE CERTIFICATES - GENERAL
DESCRIPTION”).
AUTHORITY FOR ISSUANCE
OF THE CERTIFICATES ....... The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1371, Texas
Government Code and Subchapter C of Chapter 271, Texas Local Government Code, as amended; and an
ordinance passed by the City Council of the City. In the ordinance authorizing the issuance of the Certificates,
the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of
sale of the Certificates (see “THE CERTIFICATES - AUTHORITY FOR ISSUANCE OF THE CERTIFICATES”).
SECURITY FOR THE
CERTIFICATES ..................... The Certificates constitute direct obligations of the City, secured by and payable from a combination of (i) the
levy and collection of an annual direct and continuing ad valorem tax, within the limits prescribed by law, on all
taxable property located within the City, and (ii) a subordinate lien on and pledge of $1,000 of the surplus
revenues derived from the City’s combined utility system (see “THE CERTIFICATES - SECURITY AND SOURCE
OF PAYMENT”). Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum
ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home-Rule Charter
of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed
Valuation.
REDEMPTION ....................... The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February
15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15,
2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE
CERTIFICATES – OPTIONAL REDEMPTION”). Additionally, the Certificates may be subject to mandatory
redemption in the event the Initial Purchaser elects to aggregate one or more maturities as a term Certificate.
(See “THE CERTIFICATES – MANDATORY SINKING FUND REDEMPTION”).
TAX EXEMPTION ................... In the opinion of Bond Counsel, the interest on the Certificates will be excludable from gross income for federal
income tax purposes under existing law. See “TAX MATTERS” for a discussion of the opinion of Bond Counsel
and Exhibit C.
USE OF CERTIFICATE
PROCEEDS .......................... Proceeds from the sale of the Certificates will be used for (i) constructing and improving streets and roads
including related drainage, landscaping, lighting, pedestrian improvements and signage related thereto; (ii)
designing, constructing, equipping and installing park and recreation equipment and improvements including
new and existing facilities, park infrastructure improvements, upgrades and rehabilitation; (iii) purchasing and
installing technology improvements including video surveillance; (iv) purchasing land for a new Fire Station;
(v) designing and constructing a new City Hall; (vi) constructing improvements and extensions to the City's
combined waterworks, sewer and electric systems including distribution, transmission, system lines, wells,
plant improvements, and acquisition of interests in land; and (vii) the payment of fiscal, engineering and legal
fees incurred in connection therewith (see “PLAN OF FINANCING – SOURCES AND USE OF PROCEEDS”).
RATINGS ............................. The Certificates and presently outstanding tax supported debt of the City are rated “__” by Moody's Investors
Service, Inc. (“Moody's”) and “__” by Standard & Poor's Ratings Services, a Standard & Poor’s Financial
Services LLC business (“S&P”), without regard to credit enhancement (see “OTHER INFORMATION –
RATINGS”).
__________
* Preliminary, subject to change. See "CONDITIONS OF SALE - ADVANCED ADJUSTMENT OF PRINCIPAL AMOUNT AND/OR TYPES OF BIDS" and " -
POST BID MODIFICATION" in the Notice of Sale and Bidding Instructions.
vi
BOOK-ENTRY-ONLY
SYSTEM .............................. The definitive Certificates will be initially registered and delivered only to Cede & Co., the nominee of The
Depository Trust Company (“DTC”) pursuant to the Book-Entry-Only System described herein. Beneficial
ownership of the Certificates may be acquired in denominations of $5,000 or integral multiples thereof. No
physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of and interest
on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution
of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners
of the Certificates (see “THE CERTIFICATES - BOOK-ENTRY-ONLY SYSTEM”).
PAYMENT RECORD .............. Other than a late payment on the City’s Certificates of Obligation, Series 2002 that occurred in 2003, the City
has never defaulted in payment of its general obligation tax debt.
[Remainder of Page Intentionally Left Blank]
vii
SELECTED FINANCIAL INFORMATION
_______________
(1) Source: The City.
(2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year.
(3) Payable from ad valorem taxes. Does not include self-supporting debt. See “TABLE 10 – SELF-SUPPORTING DEBT” for detail on the City’s
self supported tax debt.
(4) Certified taxable assessed valuation for tax year 2017 as reported by the Brazos Central Appraisal District. This amount is subject to change
during ensuing year.
(5) Projected, includes the Certificates.
(6) Collections as of February 28, 2018. A portion of the City’s taxpayer base has elected to provide split payments to the City which will be due
in part on June 30, 2018.
GENERAL FUND CONSOLIDATED STATEMENT SUMMARY
_______________
(1) The City’s financial policies require a General Fund balance of 15% of budgeted appropriations at year end. To the extent that the General
Fund balance exceeds this amount, this surplus may be expended in future years for one time expenditures such as capital items and short
term projects.
UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS
Ratio Tax
Fiscal Per Capita Per Capita Debt to
Year Estimated Taxable Taxable Net Net Taxable
Ended City Assessed Assessed Ad Valorem Ad Valorem Assessed
9/30 Population(1) Valuation(2)Valuation Tax Debt (3)Tax Debt Valuation
2013 99,918 5,944,312,987$ 59,492 $ 96,750,000$ 968 $ 1.63%100.30%
2014 102,117 6,231,119,010 61,019 88,100,000 863 1.41%100.15%
2015 106,465 6,654,600,834 62,505 101,630,000 955 1.53%99.17%
2016 109,859 7,162,738,280 65,199 118,350,000 1,077 1.65%100.03%
2017 109,936 7,623,964,171 69,349 169,595,000 1,543 2.22%100.31%
2018 117,841 8,902,090,555 (4)75,543 175,120,000 (5)1,486 (5)1.97%(5)88.96%(6)
Collection
Total
Percent
2017 2016 2015 2014 2013
Beginning Balance 19,133,202 $ 22,423,064 $ 20,244,248 $ 15,925,531 $ 16,492,693 $
Total Revenue 64,795,371 60,087,950 58,378,174 50,325,825 48,229,096
Total Expenditures 76,897,859 77,508,715 68,827,167 61,303,335 59,483,559
Other Financing Sources 15,483,809 14,130,903 12,627,809 15,296,227 10,687,301
Ending Balance(1)22,514,523 $ 19,133,202 $ 22,423,064 $ 20,244,248 $ 15,925,531 $
For Fiscal Year Ended September 30,
2017 2016 2015 2014 2013
Revenues:
Electric 99,179,570 $ 98,904,688 $ 98,763,293 $ 95,677,765 $ 92,892,541 $
Water and Wastewater 31,333,922 29,484,851 28,732,968 27,550,262 29,018,108
Interest 697,655 346,312 180,423 116,433 170,062
Other 3,179,821 3,636,420 3,546,138 2,890,061 3,670,710
Total Revenues 134,390,968 $ 132,372,271 $ 131,222,822 $ 126,234,521 $ 125,751,421 $
Expenses:
Total Expenses 78,766,516 $ 76,771,094 $ 82,079,813 $ 100,235,329 $ 90,519,871 $
Net Available for Debt Service 55,624,452 $ 55,601,177 $ 49,143,009 $ 25,999,192 $ 35,231,550 $
Water (Units Served)43,199 41,709 41,540 40,768 40,767
Wastewater (Units Served)42,840 40,866 40,806 39,128 38,608
Electric (Units Served)41,169 40,141 43,471 38,198 38,456
For Fiscal Year Ended September 30,
viii
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
_________________
(1) Elected November 2016 - Former City of College Station Council Member 2011-2016.
(2) Prior Council Member for 4 years prior to his current term.
SELECTED ADMINISTRATIVE STAFF
_______________
(1) Named Interim City Manager in April 2018. Assistant City Manager since June 2014; previously served as Chief of Police.
(2) Assistant City Manager and Chief Financial Officer since January 2014; previously served as Executive Director of Business Services and
Chief Financial Officer .
(3) Named Interim Assistant City Manager in February 2018. Previously served as Director of Water Services.
(4) Appointed City Secretary in July 2017. Previously served as Deputy City Secretary since 2008.
(5) Named Interim Director of Water Services February 2018. Previously served as Assistant Director of Water Services
(6) Director of Electric Utility since December 2012; previously served as Assistant Director of Electric Utility.
(7) New hire as Director of Information Technology in March 2018.
(8) Director of Parks and Recreation since May 2011; previously served as Assistant Director of Parks and Recreation.
(9) Director of Development Services since March 2014; previously Assistant Director of Development Services.
(10) Director of Public Works and CIP since January 2014; previously Assistant Director of Public Works and CIP.
CONSULTANTS AND ADVISORS
Auditors ................................................................................................................................................. Ingram, Wallis & Company
Bryan, Texas
Bond Counsel ............................................................................................................................. McCall, Parkhurst & Horton L.L.P.
Dallas, Texas
Financial Advisor.............................................................................................................................................. Hilltop Securities Inc.
Houston, Texas
Term
Name Position Expiration Occupation
Karl P. Mooney Mayor 1.5 Year (1)11/19 Texas A&M University Director
Bob Brick Council Member 0.5 Year 11/20 Research Scientist
Jerome Rektorik Council Member 1.5 Year 11/19 Retired
Linda Harvell Council Member 1.5 Year 11/20 Business Owner
Barry Moore Council Member 1.5 Year 11/18 Commercial Real Estate Broker
John Nichols Council Member 0.5 Year (2)11/20 Retired professor
James Benham Council Member 5.5 Year 11/18 Business Owner
Length of
Service
Name Position
Jeff Capps Interim City Manager 25.0 (1)
Jeff Kersten Assistant City Manager 27.0 (2)
David Coleman Interim Assistant City Manager 13.0 (3)
Carla Robinson City Attorney 16.5
Tanya D. Smith City Secretary 10.0 (4)
Ty Elliott Internal Auditor 10.5
Mary Ellen Leonard Director of Finance 2.0
Alan Gibbs Interim Director of Water Services 14.0 (5)
Timothy Crabb Director of Electric Utility 11.5 (6)
Sindhu Menon Director of Information Technology < 1 (7)
David Schmitz Director of Parks and Recreation 10.0 (8)
Lance Simms Director of Development Services 22.0 (9)
Donald Harmon Director of Public Works and CIP 18.5 (10)
Alison Pond Director of Human Resources 9.5
Jay Socol Public Communications Director 8.5
Length of Service
to the City
(in Years)
ix
x
For additional information regarding the City, please contact:
Jeff Kersten
Assistant City Manager
City of College Station
1101 Texas Avenue
College Station, Texas 77840
(979) 764-3555 Phone
or
Joe Morrow
Hilltop Securities Inc.
700 Milam Street, Suite 500
Houston, Texas 77002
(713) 651-9850 Phone
[Remainder of Page Intentionally Left Blank]
1
PRELIMINARY OFFICIAL STATEMENT
RELATING TO
CITY OF COLLEGE STATION, TEXAS
(a Home-Rule City located in Brazos County, Texas)
$36,885,000*
CERTIFICATES OF OBLIGATION
SERIES 2018
INTRODUCTION
This Official Statement, which includes the cover pages and Appendices hereto, provides certain information regarding the issuance of the
$36,885,000* City of College Station, Texas Certificates of Obligation, Series 2018 (the “Certificates”). Capitalized terms used in this Official
Statement, except as otherwise indicated herein, have the same meanings assigned to such terms in the ordinance authorizing the issuance of the
Certificates (the “Ordinance”). In the Ordinance, the City Council delegated to certain officers known as “Pricing Officers” of the City the
authority to finalize the pricing of the Certificates.
There follows in this Official Statement descriptions of the Certificates and certain information regarding the City and its finances. All
descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies
of such documents may be obtained from the City's Financial Advisor, Hilltop Securities Inc., Houston, Texas.
DESCRIPTION OF THE CITY
The City is a political subdivision and municipal corporation of the State of Texas (the “State”), duly organized and existing under the laws
of the State, including the City's Home Rule Charter. The City was incorporated in October 1938, and first adopted its Home-Rule Charter
in October 1938, which was last amended in November 2012. The City operates under a Council/City Manager form of government with a
City Council comprised of the Mayor and six Council members. Some of the services that the City provides are: public safety (police and
fire protection), highways and streets, electric, water and sanitary sewer utilities, health and social services, culture-recreation, public
transportation, public improvements, planning and zoning, and general administrative services. The 2010 Census population was 93,857 and
the current estimated population of the City is 117,841. The City covers approximately 51.6 square miles.
PLAN OF FINANCING
PURPOSE OF THE CERTIFICATES
Proceeds from the sale of the Certificates will be used for (i) constructing and improving streets and roads including related drainage,
landscaping, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing park and
recreation equipment and improvements including new and existing facilities, park infrastructure improvements, upgrades and rehabilitation;
(iii) purchasing and installing technology improvements including video surveillance; (iv) purchasing land for a new Fire Station; (v)
designing and constructing a new City Hall; (vi) constructing improvements and extensions to the City's combined waterworks, sewer and
electric systems including distribution, transmission, system lines, wells, plant improvements, and acquisition of interests in land; and (vii)
the payment of fiscal, engineering and legal fees incurred in connection therewith (see “PLAN OF FINANCING – SOURCES AND USE OF
PROCEEDS”).
SOURCES AND USES OF PROCEEDS
The proceeds from the sale of the Certificates will be applied approximately as follows:
Sources of Funds
Par Amount
Original Issue Premium
Total Uses of Funds -$
Use of Funds
Deposit to Project Fund
Underwriters' Discount
Costs of Issuance
Total Uses of Funds -$
__________
* Preliminary, subject to change. See "CONDITIONS OF SALE - ADVANCED ADJUSTMENT OF PRINCIPAL AMOUNT AND/OR TYPES OF BIDS" and " -
POST BID MODIFICATION" in the Notice of Sale and Bidding Instructions.
2
THE CERTIFICATES
GENERAL DESCRIPTION
The Certificates will bear interest from the date of delivery to the Initial Purchaser, and mature on February 15 in each of the years and in the
amounts shown on the inside cover page hereof. Interest on the Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months. Interest on the Certificates will accrue from the date of delivery, and will be payable February 15 and August 15 of
each year commencing February 15, 2019 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting
of twelve 30-day months. The definitive Certificates will be issued only in fully registered form in any integral multiple of $5,000 for any
one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company, New York,
New York (“DTC”) pursuant to the Book-Entry-Only System described herein. No physical delivery of the Certificates will be made to the
beneficial owners thereof. Principal of and interest on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which
will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the
Certificates (see “BOOK-ENTRY-ONLY SYSTEM”).
AUTHORITY FOR ISSUANCE OF THE CERTIFICATES
The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapter 1371, Texas
Government Code and Subchapter C of Chapter 271, Texas Local Government Code, as amended; and the Certificate Ordinance.
SECURITY AND SOURCE OF PAYMENT
The Certificates are secured by and payable from an annual continuing ad valorem taxes levied against all taxable property in the City, within
the legal limits prescribed by law and payable from a subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined
utility system.
TAX RATE LIMITATION
All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax
sufficient to provide for the payment of principal of and interest on all ad valorem tax debt within the limits prescribed by law. Article XI, Section
5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation
for all City purposes. The Home-Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable
Assessed Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate
for all debt service for obligations payable from annual ad valorem property taxes, as calculated at the time of issuance.
OPTIONAL REDEMPTION
The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2028, in whole or in part
in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus
accrued interest to the date of redemption. If less than all of the Certificates are to be redeemed, the City shall determine the Certificates, or
portions thereof, within such maturity to be redeemed. If Certificates (or any portion of the principal sum thereof) shall have been called for
redemption and notice of such redemption shall have been given, such Certificates (or the principal amount thereof to be redeemed) shall
become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided
funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date.
MANDATORY SINKING FUND REDEMPTION
In addition to the foregoing optional redemption provision, if principal amounts designated in the serial maturity schedule shown on the inside
cover page hereof are combined to create term certificates (the “Term Certificates”), each such Term Certificate shall be subject to mandatory
sinking fund redemption commencing on February 15 of the first year which has been combined to form such Term Certificate and continuing
on February 15 in each year thereafter until the stated maturity date of that Term Certificate, and the amount required to be redeemed in any year
shall be equal to the principal amount for such year set forth in the Maturity Schedule herein. Term Certificates to be redeemed in any year by
mandatory sinking fund redemption shall be redeemed at par and shall be selected by lot from the Term Certificates then subject to redemption.
The City, at its option, may credit against any mandatory sinking fund redemption requirement Term Certificates of the maturity then subject to
redemption which at least 45 days prior to the mandatory sinking fund redemption date have been purchased and canceled by the City or have
been redeemed and not theretofore applied as a credit against any mandatory sinking fund redemption requirement.
3
NOTICE OF REDEMPTION
Not less than 30 days prior to a redemption date for the Certificates, the City shall cause a notice of redemption to be sent by United States
mail, first class, postage prepaid, to the registered owners of the Certificates to be redeemed, in whole or in part, at the address of the registered
owner appearing on the registration books of the Paying Agent/Registrar. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY
PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE.
NOTICE HAVING BEEN SO GIVEN, THE CERTIFICATES CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE
ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY CERTIFICATE OR PORTION THEREOF HAS
NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH CERTIFICATE OR PORTION THEREOF SHALL CEASE TO
ACCRUE.
With respect to any optional redemption of the Certificates, unless certain prerequisites to such redemption required by the Ordinance have
been met and moneys sufficient to pay the principal of and premium, if any, and interest on the Certificates to be redeemed shall have been
received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said redemption may, at
the option of the City, be conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying Agent/Registrar
on or prior to the date fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional notice of
redemption is given and such prerequisites to the redemption and sufficient moneys are not received, such notice shall be of no force and
effect, the City shall not redeem such Certificates and the Paying Agent/Registrar shall give notice, in the manner in which the notice of
redemption was given, to the effect that the Certificates have not been redeemed.
BOOK-ENTRY-ONLY SYSTEM
This section describes how ownership of the Certificates is to be transferred and how the principal of and interest on the Certificates are to
be paid to and credited by the DTC while the Certificates are registered in its nominee name. The information in this section concerning
DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The City,
the Financial Advisor and the Initial Purchaser believe the source of such information to be reliable, but take no responsibility for the
accuracy or completeness thereof.
The City, the Financial Advisor and the Initial Purchaser cannot and do not give any assurance that (1) DTC will distribute payments of debt
service on the Certificates, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service
payments paid to DTC or its nominee (as the registered owner of the Certificates), or redemption or other notices, to the Beneficial Owners,
or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules
applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing
with DTC Participants are on file with DTC.
DTC will act as securities depository for the Certificates. The Certificates will be issued as fully-registered securities in the name of Cede &
Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered
certificate for each maturity will be issued for the Certificates, in the aggregate principal amount of such maturity, and will be deposited with
DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking
organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity,
corporate and municipal debt issues, and money market instrument from over 100 countries that DTC’s participants (“Direct Participants”)
deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in
deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates
the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the
DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”). Direct Participants and Indirect Participants are referred to collectively herein as “Participants”. DTC is rated AA+ by
Standard and Poor’s. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More
information about DTC can be found at www.dtcc.com.
4
Purchases of Certificates under the DTC system must be made by or through Direct Participants, which will receive a credit for such purchases
on DTC's records. The ownership interest of each actual purchaser of each Certificate (“Beneficial Owner”) is in turn to be recorded on the
Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however,
expected to receive written confirmations providing details of the transaction as well as periodic statements of their holdings, from the
Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Certificates are to be
accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Certificates, except in the event that use of the book-entry system described herein
is discontinued.
To facilitate subsequent transfers, all Certificates deposited by Direct Participants with DTC are registered in the name of DTC’s partnership
nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Certificates with
DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC
has no knowledge of the actual Beneficial Owners of the Certificates; DTC’s records reflect only the identity of the Direct Participants to
whose accounts such Certificates are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Certificates may wish to take certain steps to augment
the transmission to them of notices of significant events with respect to the Certificates, such as redemptions, tenders, defaults, and proposed
amendments to the Certificate documents. For example, Beneficial Owners of Certificates may wish to ascertain that the nominee holding
the Certificates for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may
wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Certificates within a maturity in the series are being redeemed, DTC’s practice
is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Certificates unless authorized by a Direct
Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts
Certificates are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Payments on the Certificates will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of
DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the
City and the Paying Agent/Registrar, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by
Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor
its nominee, the Paying Agent/Registrar, or the City, subject to any statutory or regulatory requirements as may be in effect from time to
time. Payment of redemption proceeds, principal and interest payments to Cede & Co. (or such other nominee as may be requested by an
authorized representative of DTC) is the responsibility of the City and the Paying Agent/Registrar. Disbursement of such payments to Direct
Participants will be the responsibility of DTC, and reimbursement of such payments to the Beneficial Owners will be the responsibility of
Participants.
DTC may discontinue providing its services as depository with respect to the Certificates at any time by giving reasonable notice to the City
and the Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtained, Certificates are required
to be printed and delivered.
The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event,
Certificates will be printed and delivered.
Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the
Certificates are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to
include the person for which the Participant acquires an interest in the Certificates, but (i) all rights of ownership must be exercised through DTC
and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinance will
be given only to DTC.
Information concerning DTC and the Book-Entry System has been obtained from DTC and is not guaranteed as to accuracy or completeness by,
and is not to be construed as a representation by the City or the Initial Purchaser.
5
PAYING AGENT/REGISTRAR
The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In the Ordinance, the City retains the
right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates
are duly paid and any successor Paying Agent/Registrar must be a bank, trust company, financial institution, or other entity duly qualified and
legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Certificates. Upon any change in the Paying
Agent/Registrar for the Certificates, the City will promptly cause a written notice thereof to be sent to each registered owner of the Certificates
by United States mail, first class, postage prepaid, which notice will also include the address of the new Paying Agent/Registrar.
TRANSFER, EXCHANGE AND REGISTRATION
In the event the Book-Entry-Only System should be discontinued, the Certificates may be transferred and exchanged on the registration books
of the Paying Agent/Registrar only upon presentation and surrender thereof to the Paying Agent/Registrar and such transfer or exchange will be
without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to
such registration, exchange and transfer. Certificates may be assigned by the execution of an assignment form on the respective Certificates or
by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Certificates will be delivered by the Paying
Agent/Registrar, in lieu of the Certificates being transferred or exchanged, at the corporate trust office of the Paying Agent/Registrar, or sent by
United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Certificates issued in an
exchange or transfer of Certificates will be delivered to the registered owner or assignee of the registered owner in not more than three business
days after the receipt of the Certificates to be canceled, and the written instrument of transfer or request for exchange duly executed by the
registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Certificates registered and delivered in
an exchange or transfer will be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Certificates
surrendered for exchange or transfer. See “BOOK-ENTRY-ONLY SYSTEM” herein for a description of the system to be utilized initially in regard
to ownership and transferability of the Certificates. Neither the City nor the Paying Agent/Registrar will be required to transfer or exchange any
Certificate called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of
transfer will not be applicable to an exchange by the registered owner of the uncalled balance of a Certificate.
RECORD DATE FOR INTEREST PAYMENT
The record date (“Record Date”) for determining the person to whom the interest is payable on the Certificates on any interest payment date
means the close of business on the last business day of the preceding month.
In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a
“Special Record Date”) will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (a “Special Payment Date,” which
will be 15 days after the Special Record Date) will be sent at least five days prior to the Special Record Date by United States mail, first class,
postage prepaid, to the address of each Holder of a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of
business on the day next preceding the date of mailing of such notice.
DEFEASANCE
The Ordinance provides for the defeasance of the Certificates when the payment of the principal of and premium, if any, on the Certificates, plus
interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), is provided by irrevocably
depositing with a paying agency, in trust (1) money sufficient to make such payment or (2) Defeasance Securities, certified by an independent
public accounting firm of national reputation to mature as to principal and interest in such amounts and at such times to insure the availability,
without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of the paying
agent for the Certificates. The Ordinance provides that “Defeasance Securities” means (a) direct, noncallable obligations of the United States of
America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of an agency or
instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent,
(c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and
that rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (d) any securities
and obligations now or hereafter authorized by Texas law that are eligible to refund, retire or otherwise discharge obligations such as the
Certificates. In the Ordinance, the Pricing Officer is authorized to restrict such eligible securities and obligations as deemed appropriate to
accommodate requests from potential investors. The City has additionally reserved the right, subject to satisfying the requirement of (1) and
(2) above, to substitute other Defeasance Securities for the Defeasance Securities originally deposited, to reinvestment the uninvested moneys
on deposit for such defeasance and to withdraw for the benefit of the City moneys in excess of the amount required for such defeasance.
6
REMEDIES OF HOLDERS OF CERTIFICATES
The Ordinance establishes specific events of default with respect to the Certificates. If the City defaults in the payment of the principal of or
interest on the Certificates when due or the City defaults in the observance or performance of any of the covenants, conditions, or obligations
of the City, the failure to perform which materially, adversely affects the rights of the owners of the Certificates including but not limited to,
their prospect or ability to be repaid in accordance with the Ordinance, and the continuation thereof for a period of 60 days after notice of
such default is given by any owner to the City, the Ordinance provides that any registered owner is entitled to seek a writ of mandamus from
a court of proper jurisdiction requiring the City to make such payment or observe and perform such covenants, obligations, or conditions.
The issuance of a writ of mandamus may be sought if there is no other available remedy at law to compel performance of the Certificates or
the Ordinance and the City's obligations are not uncertain or disputed. The issuance of a writ of mandamus is controlled by equitable
principles, so rests with the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Certificates
in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Ordinance does not
provide for the appointment of a trustee to represent the interest of the holders of the Certificates upon any failure of the City to perform in
accordance with the terms of the Ordinance, or upon any other condition and accordingly all legal actions to enforce such remedies would
have to undertaken of the initiative of, and be financed by, the registered owners of the Certificates. On June 30, 2006, the Texas Supreme
Court ruled in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) that a waiver of sovereign immunity in a contractual dispute must be
provided for by statute in “clear and unambiguous” language. Because it is unclear whether the Texas legislature has effectively waived the
City’s sovereign immunity from a suit for money damages, registered owners of the Certificates may not be able to bring such a suit against
City for breach of the Certificates of covenants contained in either Ordinance. Even if a judgment against the City could be obtained, it could
not be enforced by direct levy and execution against the City’s property. Further, the registered owners cannot themselves foreclose on
property within the City or sell property within the City to enforce the tax lien on taxable property to pay the principal of and interest on the
Certificates. Chapter 1371 of the Texas Government Code, which pertains to the issuance of public securities by issuers such as the City,
permits the City to waive sovereign immunity in the proceedings authorizing its obligations. The City has relied upon Chapter 1371 in
connection with the issuance of the Certificates, but the City has not waived sovereign immunity.
The City is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code (“Chapter 9”). Although Chapter 9 provides
for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support
of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an
automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or
registered owners of the Certificates of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of
Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that
the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary
powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions
relative to the enforceability of the Certificates are qualified with respect to the customary rights of debtors relative to their creditors,
principles of sovereign immunity and by general principles of equity which permit the exercise of judicial discretion.
TAX INFORMATION
AD VALOREM TAX LAW
The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District (the “Appraisal District”). Excluding
agricultural and open-space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under Title 1,
Texas Tax Code (referred to herein as the “Property Tax Code”) to appraise all property within the Appraisal District on the basis of 100%
of its market value and is prohibited from applying any assessment ratios. In determining the market value of property, different methods of
appraisal may be used, including the cost method of appraisal, the income method of appraisal and the market data comparison method of
appraisal, and the method considered most appropriate by the chief appraiser is to be used. State law further limits the appraised value of a
residence homestead for a tax year to an amount not to exceed the lesser of (1) the property’s market value in the most recent tax year in
which the market value was determined by the Appraisal District or (2) the sum of (a) 10% of the property’s appraised value for the preceding
tax year, (b) the appraised value of the property for the preceding tax year and (c) the market value of all new improvements to the property.
The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of three members
appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the
Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the
determination of appraised value of property within the City by petition filed with the Appraisal Review Board.
Reference is made to the Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted
from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the
levy and collection of ad valorem taxes.
Article VIII of the State Constitution (“Article VIII”) and State law provide for certain exemptions from property taxes, the valuation of
agricultural and open-space lands at productivity value, and the exemption of certain personal property from ad valorem taxation.
Under Section 1-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant: (1) An exemption of
not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older; (2) An exemption to the disabled
from all ad valorem taxes thereafter levied by the political subdivision; and (3) An exemption of up to 20% of the market value of residence
7
homesteads. The minimum exemption under this provision is $5,000. In addition State law mandates a complete exemption for the residential
homestead of disabled veterans determined to be 100% disabled by the U.S. Department of Veterans Affairs. Further, the surviving spouse
of a deceased veteran who had received a disability rating of 100% is entitled to receive a residential homestead exemption equal to the
exemption received by the deceased spouse until such surviving spouse remarries.
In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be levied against
the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy
would impair the obligation of the contract by which the debt was created.
State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or children
of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal property with the
amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000.
Article VIII provides that eligible owners of both agricultural land (Section 1-d) and open-space land (Section 1-d-1), including open-space land
devoted to farm or ranch purposes or open-space land devoted to timber production, may elect to have such property appraised for property
taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1-d and 1-d-1. Article VIII, Section 1-n
of the Texas Constitution provides for an exemption from taxation for “goods-in-transit,” which are defined as (i) personal property acquired or
imported into the State and transported to another location inside or outside the State, (ii) stored under a contract for bailment in public warehouses
not in any way owned or controlled by the owner of the stored goods, and (iii) transported to another location inside or outside the State within
175 days of the date the property was acquired or imported into the State. The exemption excludes oil, natural gas, petroleum products, aircraft
and special inventory, including motor vehicle, vessel and out-board motor, heavy equipment and manufactured housing inventory. On December
8, 2011, the Council passed an ordinance approving taxation on certain goods-in-transit. After taking such official action, the goods-in-transit
remain subject to taxation by the taxing unit until the governing body of the taxing unit rescinds or repeals its previous action to tax goods-in-
transit. If, however, a taxing unit took official action prior to October 1, 2011 to tax goods-in-transit and pledged the taxes imposed on the goods-
in-transit for the payment of a debt, taxes may continue to be imposed on goods-in-transit until the debt is discharged, if cessation of the imposition
of the tax would impair the obligation of the contract by which the debt was created.
Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a
political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation.
Article VIII, Section 1-j, provides for “freeport property” to be exempted from ad valorem taxation. Freeport property is defined as goods
detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Decisions to continue
to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal.
The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones within the City, under
which the tax values on property in the zone are “frozen” at the value of the property at the time of creation of the zone. The City also may
enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain
improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements
until the expiration of the agreement. The abatement agreement could last for a period of up to 10 years. See “- TAX ABATEMENT POLICY”
for a discussion of the City’s economic development guidelines and criteria.
CONSTITUTIONAL AMENDMENT
In a statewide election held on September 13, 2003, voters approved an amendment to Section 1-b, Article VIII of the Texas Constitution,
that authorized a county, city, town or junior college district to establish an ad valorem tax freeze on residence homesteads of the disabled
and of the elderly and their spouses. City Council did not take action to establish the tax limitation. Voters within the City were authorized
to submit a petition signed by five percent of the registered voters of the City requiring the City Council to call an election to determine by
majority vote whether to establish the tax limitation.
A petition was submitted and an election was held on May 10, 2008. The voters of College Station voted to approve the ad valorem tax
freeze. The City can provide no assurances of the impact, if any, implementation of this ad valorem tax freeze may have on the City’s
finances.
Under the tax freeze, the total amount of ad valorem taxes imposed by the City on a homestead that receives the exemption may not be
increased while it remains the residence homestead of that person or that person's spouse who is disabled or sixty-five years of age or older,
except to the extent the value of the homestead is increased by improvements other than repairs. If a disabled or elderly person dies in a year
in which the person received a residence homestead exemption, the total amount of ad valorem taxes imposed on the homestead by the taxing
unit may not be increased while it remains the residence homestead of that person's surviving spouse if the spouse is fifty-five years of age
or older at the time of the person's death. In addition, the Texas Legislature by general law may provide for the transfer of all or a proportionate
amount of the tax limitation applicable to a person's homestead to be transferred to the new homestead of such person if the person moves to
a different residence within the taxing unit. Once established, the governing body of the taxing unit may not repeal or rescind the tax limitation.
EFFECTIVE TAX RATE AND ROLLBACK TAX RATE
8
By the later of September 28th or 60 days after the certified appraisal roll is delivered to the City, the City Council adopts a tax rate per $100
taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation expenditures,
and (2) a rate for debt service.
Under the Property Tax Code, the City must annually calculate and publicize its “effective tax rate” and “rollback tax rate”. A tax rate cannot
be adopted by the City Council that exceeds the lower of the rollback tax rate or the effective tax rate until two public hearings are held on
the proposed tax rate following a notice of such public hearing (including the requirement that notice be posted on the City’s website if City
owns, operates or controls an internet website and public notice be given by television if the City has a free access to a television channel)
and the City Council has otherwise complied with the legal requirements for the adoption of such tax rate. If the adopted tax rate exceeds the
rollback tax rate the qualified voters of the City by petition may require that an election be held to determine whether or not to reduce the tax
rate adopted for the current year to the rollback tax rate.
“Effective tax rate” means the rate that will produce last year’s total tax levy (adjusted) from this year’s total taxable values (adjusted). “Adjusted”
means lost values are not included in the calculation of last year’s taxes and new values are not included in the year’s taxable values.
“Rollback tax rate” means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's values (adjusted)
multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted) divided by the anticipated tax
collection rate.
The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an additional
one-half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax rate calculations
are required to be offset by the revenue that will be generated by the sales tax in the current year.
Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation
of the various defined tax rates.
PROPERTY ASSESSMENT AND TAX PAYMENT
Property within the City is generally assessed as of January 1 of each year. Business inventory may, at the option of the taxpayer, be assessed
as of September. Effective January 1, 2012, oil and gas reserves are assessed on the basis of a valuation process that uses pricing information
contained in the most recent published Early Release Overview of the Annual Energy Outlook published by the United States Energy
Information Administration, as well as appraisal formulas developed by the State Comptroller of Public Accounts. Taxes become due October
1 of the same year, and become delinquent on February 15 of the following year. Taxpayers 65 years old or older are permitted by State law
to pay taxes on homesteads in four installments with the first due before February 15 of each year and the final installment due before August
15.
PENALTIES AND INTEREST
Charges for penalties and interest on the unpaid balance of delinquent taxes are made as follows:
Cumulative Cumulative
Month Penalty Interest Total
February 6% 1% 7%
March 7 2 9
April 8 3 11
May 9 4 13
June 10 5 15
July 12 6 18
After July, penalty remains at 12%, and interest increases at the rate of 1% each month. In addition, if an account is delinquent in July, an
amount up to 20% attorney's collection fee is added to the total tax penalty and interest charge. Under certain circumstances, taxes which
become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or
interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the
amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law
provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any
petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition
taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the
bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the
bankruptcy court.
CITY APPLICATION OF PROPERTY TAX CODE
The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000. The City has
not granted an additional exemption of 20% of the market value of residence homesteads. Ad valorem taxes are not levied by the City against
9
the exempt value of residence homesteads for the payment of debt. The City does not tax nonbusiness personal property. The City does
permit split payments, but discounts are not allowed. The City does collect the additional one-half cent sales tax for reduction of ad valorem
taxes. The City has adopted a tax abatement policy (see “TAX INFORMATION - TAX ABATEMENT POLICY”). An election was held on May
10, 2008 and the voters of College Station approved the ad valorem tax freeze for residential homesteads for disabled and age 65 or older
persons. Brazos County collects the taxes for the City.
TAX ABATEMENT POLICY
The City has established tax abatement guidelines and criteria for economic development prospects in the City. In order to be eligible for
designation as a Reinvestment Zone and receive tax abatement, the planned improvement:
1. Must be expected to have an increased appraised ad valorem tax value of at least $1,000,000 based upon the Brazos Central
Appraisal District’s assessment of the eligible property.
2. Must be expected to prevent the loss of payroll or retain, increase or create a payroll on a permanent basis in the City.
The following factors among others should be considered in determining whether to grant tax abatement and, if so, the percentage of value
to be abated and the duration of the tax abatement:
1. Value of land and existing improvements, if any;
2. Type and value of proposed improvements;
3. Productive life of proposed improvements;
4. Number of existing jobs to be retained by proposed improvements;
5. Number of type of new jobs to be created by proposed improvements;
6. Amount of local payroll to be created;
7. Whether persons residing or projected to reside within the City will have the opportunity to fill the new jobs being created;
8. Amount of local taxes to be generated directly;
9. Amount of property tax base valuation which will be increased during term of abatement and after abatement, which shall include
a definitive commitment that such valuation shall not, in any case, be less than $1,000,000;
10. The costs to be incurred by the City to provide facilities or services directly resulting from the new improvements;
11. The amount of ad valorem taxes to be paid to the City during the abatement period considering (a) the existing values, (b) the
percentage of new value abated, (c) the abatement period, and (d) the value after expiration of the abatement period;
12. The population growth of the City that occurs directly as result of new improvements;
13. The types of public improvements, if any, to be made by the applicant seeking abatement;
14. Whether the proposed improvements compete with existing businesses to the detriment of the local economy;
15. The impact on the business opportunities of existing businesses;
16. The attraction of other new businesses to the area;
17. The overall compatibility with the zoning ordinances and comprehensive plan for the area; and/or
18. Whether the project is environmentally compatible with no negative impact on quality of life perceptions.
Neither a Reinvestment Zone nor abatement agreement shall be authorized if it is determined that:
1. There would be substantial adverse affect on the provision of government service or tax base;
2. The applicant has insufficient financial capacity;
3. Planned or potential use of the property would constitute a hazard to public safety, health or morals;
4. Violation of other code or laws;
5. The agreement was signed after the commencement of construction, alteration or installation of improvements related to the
project; or
6. Any other reason deemed appropriate by the City Council
ECONOMIC DEVELOPMENT
In the fall of 2013, the College Station City Council adopted an Economic Development Master Plan. This document represents the City’s
first such effort and joins the many other Master Plans, Neighborhood, Corridor, and District Plans created to aid in successful implementation
of the Comprehensive Plan. The Master Plan defines the goals and objectives of the City’s economic development efforts and lays out
strategies and detailed actions to achieve these goals and objectives. The plan specifically identified six strategic initiatives that the City’s
economic development program area should focus its efforts on: sustain and enhance high quality of life; support and partner with Texas
A&M University and the Texas A&M University System; support retail development; support and stimulate biotechnology research and
advanced manufacturing; support and stimulate health and wellness market; and support and stimulate sports, entertainment, and hospitality
market.
Furthermore, the Plan also details how the plan should be monitored and updated over time, and identifies a series of formal economic
development policy guidelines that were also adopted. These guidelines state that in order to ensure the ongoing competitiveness of the
community, no State authorized incentive should immediately be discounted. The Texas Constitution and multiple State statutes identify the
role of economic development by both the State and its municipalities as a public purpose. While recognizing there is no standard strategy,
policy, or program for economic development, the Texas Legislature has created a vast array of tools that local governments have at their
10
disposal. The objective of these tools is to not only encourage development and diversification of the Texas economy, but to simultaneously
enhance the participating community’s overall quality of life. Incentives to consider may include, but not be limited to: Chapter 380 financing;
development fee rebates; enterprise zone program sponsorship; Freeport exemptions; infrastructure assistance; land transactions; delayed
annexation or limited purpose annexation; special districts; reinvestment zones (tax abatement or tax increment); and fast track development
process.
The City and the City of Bryan, Texas have also entered into an “Interlocal Cooperation and Joint Development Agreement” (the “Interlocal
Agreement”) in connection with implementing a joint economic development program known as the Joint Research Valley BioCorridor
Development Project (the “Project”). Under the terms of the Interlocal Agreement, the City will make funds available to the City of Bryan,
and the City of Bryan will make funds available to the City, for certain defined public infrastructure projects that are intended to enhance
development of the Project. The obligations of each city under the Interlocal Agreement shall not constitute a debt for purposes of any
provision of the State Constitution, and are intended to be paid from the general revenues of each city.
[Remainder of Page Intentionally Left Blank]
11
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT
* Preliminary, subject to change. See "CONDITIONS OF SALE - ADVANCED ADJUSTMENT OF PRINCIPAL AMOUNT AND/OR TYPES OF BIDS" and " - POST
BID MODIFICATION" in the Notice of Sale and Bidding Instructions.
(1) Certified taxable assessed valuation for tax year 2017 as reported by the Brazos Central Appraisal District. This amount is subject to change during
ensuing year.
(2) The debt service on a portion of the Certificates will be internally allocated by the City as being payable from the surplus revenues from the respective
enterprise funds. Although the City expects to pay for this portion of the Certificates with surplus enterprise funds, the Certificates are secured solely by
a pledge of ad valorem taxes and by a pledge of combined utility system surplus net revenues limited to $1,000. See “THE CERTIFICATES- SECURITY
AND SOURCE OF PAYMENT.” There is no guarantee that payments from these enterprise funds will be made. If payments are not made from the enterprise
funds, the City will be required to levy ad valorem taxes in amounts sufficient to make such payments.
(3) In the past, the City has sold certificates of obligation to finance projects for the City’s water and sewer system, and electric system and has internally allocated
portions of this debt as payable from the respective enterprise funds. The self-supporting amounts listed above are projections of debt that is expected to be
retired by the City based on actual historical payments from these funds to pay for debt service the outstanding certificates of obligation. There is no guarantee
that payments from these funds will continue in the future. Includes a portion of the Certificates. See “DEBT INFORMATION – TABLE 10 – SELF
SUPPORTING DEBT.”
(4) Net of Interest and Sinking Fund as of September 30, 2017.
2017/2018 Market Valuation Established by Brazos Central Appraisal District 9,173,108,485 $
(excluding exempt property)
Less Exemptions/Reductions at 100% Market Value:
Productivity Loss 116,780,298 $
Over 65 Homestead Exemptions 94,578,557
Pollution Control 209,480
Member Armed Service Surviving Spouse 596,250
Freeport 11,763,418
Disabled Veteran 25,970,006
Homestead 14,176,649
Abatements 6,943,272 271,017,930
2017/2018 Taxable Assessed Valuation 8,902,090,555 $ (1)
Debt Payable from Ad Valorem Taxes (as of 2/15/2018)
General Obligation Improvement Bonds, Series 2008 845,000
Certificates of Obligation, Series 2008 2,535,000
General Obligation Refunding Bonds, Series 2009 910,000
Certificates of Obligation, Series 2009(2)3,670,000
General Obligation Improvement Bonds, Series 2009(2)490,000
General Obligation Refunding Bonds, Series 2010 12,815,000
Certificates of Obligation, Series 2010 1,995,000
General Obligation Improvement Bonds, Series 2010 13,510,000
Certificates of Obligation, Series 2011 5,880,000
General Obligation Improvement Bonds, Series 2011 0
Certificates of Obligation, Series 2012 12,655,000
General Obligation Improvement and Refunding Bonds, Series 2012 11,515,000
Certificates of Obligation, Series 2013 8,335,000
General Improvement and Refunding Bonds, Series 2013 14,040,000
Certificates of Obligation, Series 2014 27,865,000
General Improvement and Refunding Bonds, Series 2014 25,400,000
Certificates of Obligation, Series 2016 22,650,000
General Improvement and Refunding Bonds, Series 2016 36,330,000
General Improvement and Refunding Bonds, Series 2017 29,310,000
Certificates of Obligation, Series 2017 54,365,000
The Certificates (2)36,885,000 *322,000,000
Less: Self Supporting Debt (3)146,880,000 $
Less: Interest and Sinking Fund as of 9/30/2017 5,061,437
Net Debt Payable from Ad Valorem Taxes 170,058,563 $
Ratio of Net Debt Payable from Ad Valorem Taxes to Taxable Assessed Valuation(4)1.91%
Per Capita Taxable Assessed Valuation - $75,543
Per Capita Net Funded Debt - $1,443 (4)
2018 Estimated Population - 117,841
12
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY
NOTE: Valuations shown are certified taxable assessed values reported by the Brazos Central Appraisal District to the State Comptroller of
Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District
updates records.
Taxable Appraised Value, Fiscal Year Ending September 30,
2018 2017 2016
% of % of % of
Category Amount Total Amount Total Amount Total
Real, Residential, Single-Family 4,891,101,082$ 53.32%4,470,806,990$ 56.58%3,942,774,761$ 53.35%
Real, Residential, Multi-Family 1,951,938,574 21.28%1,275,467,653 16.14%1,326,289,539 17.95%
Real, Vacant Lots/Tracts 166,018,722 1.81%158,722,669 2.01%142,089,823 1.92%
Real, Acreage (Land Only)117,980,979 1.29%87,626,228 1.11%92,882,946 1.26%
Real, Farm and Ranch Improvements 95,828,034 1.04%113,059,943 1.43%108,202,479 1.46%
Real, Commercial/Industrial 1,497,083,484 16.32%1,340,756,747 16.97%1,330,864,915 18.01%
Real, Oil, Gas & Other Mineral Reserves 4,375,082 0.05%5,036,746 0.06%10,793,941 0.15%
Real and Tangible Personal, Utilities 40,806,430 0.44%40,325,800 0.51%30,944,850 0.42%
Tangible Personal, Business 360,514,767 3.93%371,077,880 4.70%369,625,180 5.00%
Tangible Personal, Other 2,449,980 0.03%1,988,130 0.03%2,024,340 0.03%
Real Property Inventory 31,155,861 0.34%23,079,643 0.29%17,672,671 0.24%
Special Inventory 13,855,490 0.15%13,282,100 0.17%15,787,080 0.21%
Total Appraised Value Before Exemptions 9,173,108,485$ 100.00%7,901,230,529$ 100.00%7,389,952,525$ 100.00%
Less: Total Exemptions/Reductions 271,017,930 277,266,358 227,214,245
Taxable Assessed Value 8,902,090,555$ 7,623,964,171$ 7,162,738,280$
2015
% of % of
Category Amount Total Amount Total
Real, Residential, Single-Family 3,657,836,541$ 53.15%3,449,698,417$ 53.49%
Real, Residential, Multi-Family 1,296,417,661 18.84%1,121,645,054 17.39%
Real, Vacant Lots/Tracts 141,077,944 2.05%142,441,840 2.21%
Real, Acreage (Land Only)109,675,903 1.59%111,056,120 1.72%
Real, Farm and Ranch Improvements 74,289,622 1.08%76,318,782 1.18%
Real, Commercial/Industrial 1,204,879,922 17.51%1,159,961,447 17.99%
Real, Oil, Gas & Other Mineral Reserves 3,227,032 0.05%3,329,602 0.05%
Real and Tangible Personal, Utilities 37,673,140 0.55%35,261,190 0.55%
Tangible Personal, Business 330,937,290 4.81%318,648,040 4.94%
Tangible Personal, Other 2,096,570 0.03%2,138,640 0.03%
Real Property Inventory 13,256,668 0.19%18,049,612 0.28%
Special Inventory 10,534,560 0.15%10,293,530 0.16%
Exempt Property Adjustment - 0.00%- 0.00%
Total Appraised Value Before Exemptions 6,881,902,853$ 100.00%6,448,842,274 $ 100.00%
Less: Total Exemptions/Reductions 227,302,019 217,723,264
Taxable Assessed Value 6,654,600,834$ 6,231,119,010 $
Taxable Appraised Value, Fiscal Year Ending September 30,
2014
13
TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY
(1) Source: The City.
(2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year.
(3) Payable from ad valorem taxes. Does not include self-supporting debt.
(4) Certified taxable assessed valuation for tax year 2017 as reported by the Brazos Central Appraisal District. This amount is subject to change during
ensuing year.
(5) Projected, includes the Certificates. Preliminary, subject to change.
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY
(1) Collections as of February 28, 2018. A portion of the City's taxpayer base has elected to provide split payments to the City which will be due in part on
June 30, 2018.
TABLE 5 - TEN LARGEST TAXPAYERS
GENERAL OBLIGATION DEBT LIMITATION . . . No general obligation debt limitation is imposed on the City under current State law or the
City's Home Rule Charter (see “THE CERTIFICATES - TAX RATE LIMITATION”).
TABLE 6 - TAX ADEQUACY
Ratio of Net
Fiscal Taxable G.O. Tax Debt
Year Taxable Assessed to Taxable Net G.O.
Ended Estimated Assessed Valuation Net G.O.Assessed Tax Debt
9/30 Population(1) Valuation(2)Per Capita Tax Debt (3)Valuation(4)Per Capita
2013 97,534 5,944,312,987$ 60,946$ 96,750,000$ 1.63%992$
2014 99,918 6,231,119,010 62,362 88,100,000 1.41%882
2015 102,117 6,654,600,834 65,166 101,630,000 1.53%995
2016 106,465 7,162,738,280 67,278 118,350,000 1.65%1,112
2017 109,936 7,623,964,171 69,349 169,595,000 2.22%1,543
2018 117,841 8,902,090,555 (4)75,543 175,120,000 (5)1.97%(5)1,486 (5)
Fiscal Year General Interest and % Current % Total
Ended 9/30 Tax Rate Fund Sinking Fund Tax Levy Collections Collections
2013 0.4307$ 0.2351$ 0.1956$ 25,503,096$ 99.31%100.30%
2014 0.4260 0.2329 0.1931 26,407,915 99.26%100.15%
2015 0.4525 0.2594 0.1931 29,803,314 98.70%99.17%
2016 0.4525 0.2594 0.1931 32,065,351 98.95%100.03%
2017 0.4725 0.2772 0.1953 37,007,711 100.08%100.31%
2018 0.4975 0.2772 0.2203 43,310,628 88.53%(1)88.96%(1)
2017/2018 % of Total
Taxable Taxable
Nature Assessed Assessed
Name of Taxpayer of Property Valuation Valuation
CPP College Station I LLC Real Estate 74,768,400$ 0.84%
Woodridge College Station LLC Mall 69,000,000 0.78%
Woodridge College Station Phase II LLC Mall 68,000,000 0.76%
POM-College Station LLC Mall 56,954,330 0.64%
Culpepper Family LP Real Estate 55,510,436 0.62%
SHP-The Callaway House LP Apartment Buildings 54,997,208 0.62%
College Station Hospital LP Hospital 54,727,080 0.61%
Israel Weinberg Commercial 52,322,094 0.59%
SW Meadows Point LP Apartment Buildings 52,241,125 0.59%
BVP 2818 Place LP Apartment Buildings 49,686,952 0.56%
588,207,625$ 6.61%
14
(1) Includes the Certificates and excludes self supporting debt. Interest has been estimated for the purpose of illustration. Preliminary, subject to change.
TABLE 7 - ESTIMATED OVERLAPPING DEBT
Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties
within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct
and estimated overlapping ad valorem tax debt (“Tax Debt”) was developed by the City from information obtained from the Brazos Central
Appraisal District. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such
information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may
have issued additional debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of
additional debt, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the
City.
Source: Municipal Advisory Council of Texas.
(1) Certified taxable assessed valuation for tax year 2017 as reported by the Brazos Central Appraisal. This amount is subject to change during ensuing year.
(2) Projected, includes the Certificates and excludes self supporting debt. Preliminary, subject to change.
Net Maximum Tax Supported Principal and Interest Requirements (2018)………………………………19,447,623 $ (1)
$0.22067 Tax Rate at 99% Collection Produces ………………………………………………………19,447,801 $
Net Average Tax Supported Principal and Interest Requirements (2018-2038)…………………………11,912,056 $ (1)
$0.13517 Tax Rate at 99% Collection Produces ………………………………………………………11,912,626 $
City's
Total Estimated Overlapping
2017/2018 Taxable 2017 Tax Debt as %Tax Debt as
Assessed Value Tax Rate of 3/31/2018 Applicable of 3/31/2018
City of College Station 8,902,090,555 $ (1)0.4975 175,120,000 $ (2)100.00%175,120,000 $
Brazos County 17,555,003,472 0.4850 85,725,000 49.18%42,159,555
Bryan ISD 7,037,668,662 1.3400 213,345,000 1.86%3,968,217
College Station ISD 8,844,981,231 1.3980 360,700,000 88.85%320,481,950
15
DEBT INFORMATION
TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS*
* Preliminary, subject to change. See "CONDITIONS OF SALE - ADVANCED ADJUSTMENT OF PRINCIPAL AMOUNT AND/OR TYPES OF BIDS " and " - POST BID MODIFICATION" in the Notice of Sale and
Bidding Instructions.
(1) Interest has been estimated at current market rates for the purpose of illustration.
(2) In the past, the City has sold certificates of obligation to finance projects for the City’s water and sewer system, and electric system and has internally allocated portions of this debt as payable from the respective
enterprise funds. The self-supporting amounts listed above are projections of debt that is expected to be retired by the City based on actual historical payments from these funds to pay for debt service the
outstanding certificates of obligation. There is no guarantee that payments from these funds will continue in the future. Includes a portion of the Certificates. See “TABLE 10 – SELF SUPPORTING DEBT” and
the accompanying footnotes.
Total Net
Year Total Less: Tax Supported
End Outstanding Self-Supporting Debt Service
9/30 Debt Principal Interest (1)Total Debt Service(2)Requirements(2)
2018 36,363,848$ 16,916,225$ 19,447,623$
2019 32,921,690 840,000$ 986,190$ 1,826,190$ 17,056,900 17,690,980
2020 32,941,293 1,310,000 1,462,358 2,772,358 17,592,924 18,120,727
2021 31,317,075 1,375,000 1,396,858 2,771,858 17,230,973 16,857,960
2022 28,831,125 1,445,000 1,328,108 2,773,108 15,142,135 16,462,097
2023 27,863,480 1,520,000 1,255,858 2,775,858 14,164,240 16,475,097
2024 27,144,558 1,590,000 1,179,858 2,769,858 13,825,018 16,089,397
2025 25,178,172 1,675,000 1,100,358 2,775,358 13,284,866 14,668,663
2026 23,942,930 1,700,000 1,016,608 2,716,608 12,673,196 13,986,341
2027 21,260,486 1,785,000 931,608 2,716,608 11,304,999 12,672,094
2028 19,234,540 1,850,000 860,208 2,710,208 10,016,094 11,928,654
2029 16,936,024 1,835,000 786,208 2,621,208 8,931,031 10,626,201
2030 14,973,766 1,910,000 712,808 2,622,808 7,224,286 10,372,288
2031 13,310,480 1,990,000 636,408 2,626,408 7,009,609 8,927,279
2032 12,715,175 2,065,000 556,808 2,621,808 6,415,854 8,921,129
2033 11,305,125 2,145,000 474,208 2,619,208 5,257,598 8,666,735
2034 9,971,938 2,215,000 404,495 2,619,495 4,512,548 8,078,885
2035 6,897,350 2,290,000 331,400 2,621,400 2,688,363 6,830,388
2036 6,895,925 2,370,000 254,113 2,624,113 2,690,325 6,829,712
2037 4,915,625 2,440,000 174,125 2,614,125 2,265,644 5,264,106
2038 2,535,000 88,725 2,623,725 1,386,900 1,236,825
404,920,604$ 36,885,000$ 15,937,303$ 52,822,303$ 207,589,725$ 250,153,181$
The Certificates*
16
TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION
__________
(1) Excludes self-supporting debt. Includes the Certificates. Preliminary, subject to change.
(2) The outstanding portion of the Certificates of Obligation, Series 2009, supported by the Convention Center, have been paid for in full as one transfer in
the amount of $157,979.48 to the Interest and Sinking Fund. That amount will be used to pay off future payments of the Certificates of Obligation, Series
2009 supported by the Convention Center.
TABLE 10 – SELF-SUPPORTING DEBT*
______________
* Preliminary, subject to change.
(1) Includes a portion of the City’s Certificates of Obligation, Series 2008, Series 2009, Series 2010, Series 2011, Series 2012, Series 2013, Series 2014 and
a portion of the General Obligation Refunding Bonds, Series 2010, General Obligation Improvement and Refunding Bonds, Series 2012, Series 2013,
Series 2014, Series 2016 and Series 2017. Includes a portion of the Certificates.
(2) Includes a portion of the City’s Certificates of Obligation, Series 2008, Series 2010, Series 2011, Series 2012, Series 2013, Series 2014, Series 2017 and
a portion of the General Obligation Refunding Bonds, Series 2010, General Obligation Improvement and Refunding Bonds, Series 2012, Series 2013,
Series 2014, Series 2016. Includes a portion of the Certificates.
(3) Includes a portion of the City’s Certificates of Obligation, Series 2008, Series 2009, Series 2012, Series 2014, Series 2016, Series 2017 and a portion of
the General Obligation Refunding Bonds, Series 2010, General Obligation Improvement and Refunding Bonds, Series 2013, Series 2014, Series 2016,
and Series 2017. Includes a portion of the Certificates.
(4) Includes a portion of the City’s Certificates of Obligation, Series 2009. The City has transferred to the Interest and Sinking Fund $157,979.48 from the
Convention Center fund to pay the debt service shown in this column. Includes a portion of the Certificates.
(5) Includes a portion of the City's Certificates of Obligation, Series 2009. Includes a portion of the Certificates.
(6) Includes a portion of the City’s General Obligation Refunding Bonds, Series 2009.
(7) The debt service described in this table is general obligation debt for which repayment is provided from revenues from other sources. It is the City’s
current policy to provide these payments from such sources. There is no assurance that the use of these sources to make these payments will continue in
the future. If payments are not made from such sources in the future, the difference will be paid for with ad valorem taxes.
Total Net Tax Supported Debt Service Requirements, Fiscal Year Ending September 30, 2018(1)19,447,623$
Interest and Sinking Fund, September 30, 2017(2)5,061,437$
Budgeted Interest and Sinking Fund Tax Levy 18,985,125
Budgeted Investment Earnings 50,000
Budgeted Transfers 464,553 24,561,115
Estimated Balance, September 30, 2018 5,113,492$
Year Total
End Electric Wastewater Water Convention Parking Self-Supporting
9/30 Fund(1) Fund (2)Fund(3)Center(4)Landfill(5)Garage(6) Debt Service (7)
2018 5,780,408$ 4,506,475$ 6,027,844$ 12,980$ 363,781$ 224,738$ 16,916,225$
2019 5,865,351 4,660,281 5,943,443 12,388 352,963 222,475 17,056,900
2020 6,036,408 4,916,229 6,054,936 7,100 353,850 224,400 17,592,924
2021 6,014,924 4,862,263 5,992,836 6,900 354,050 - 17,230,973
2022 5,920,266 3,968,933 4,922,961 6,675 323,300 - 15,142,135
2023 5,695,486 3,624,193 4,516,586 6,425 321,550 - 14,164,240
2024 5,342,324 3,605,783 4,541,686 6,175 329,050 - 13,825,018
2025 5,034,803 3,350,478 4,562,986 5,925 330,675 - 13,284,866
2026 4,776,075 3,350,760 4,209,136 5,675 331,550 - 12,673,196
2027 4,213,287 3,133,654 3,620,958 5,425 331,675 - 11,304,999
2028 4,054,364 2,768,106 2,863,999 5,225 324,400 - 10,016,094
2029 3,593,974 2,613,608 2,388,499 5,075 329,875 - 8,931,031
2030 2,735,953 2,616,306 1,872,027 - - - 7,224,286
2031 2,545,044 2,591,916 1,872,649 - - - 7,009,609
2032 2,185,110 2,365,795 1,864,949 - - - 6,415,854
2033 1,635,748 1,952,451 1,669,399 - - - 5,257,598
2034 1,037,385 1,804,876 1,670,286 - - - 4,512,548
2035 440,550 1,027,406 1,220,406 - - - 2,688,363
2036 437,556 1,027,519 1,225,250 - - - 2,690,325
2037 439,225 1,026,453 799,966 - - - 2,265,644
2038 439,875 698,625 248,400 - - - 1,386,900
74,224,115 $ 60,472,108 $ 67,040,837 $ 85,968 $ 4,046,719 $ 671,613 $ 207,589,725 $
17
TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS
_______________
(1) Contains projects which may have been completed or abandoned; therefore, the remaining authorized but unissued bonds are not likely to ever be issued.
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT
The City has no firm plans for the issuance of additional general obligation debt payable from ad valorem taxes within the next twelve months.
OTHER OBLIGATIONS
Currently, the City has no outstanding capital leases or loans.
PENSION FUND
The City provides pension benefits for all of its full-time employees through the Texas Municipal Retirement System (“TMRS”), a State-wide
administered pension plan. The City makes annual contributions to the plan equal to the amounts accrued for pension expense. (For more
detailed information concerning the retirement plan, see “APPENDIX B - EXCERPTS FROM THE ANNUAL FINANCIAL REPORT” -Note 21.)
The City received the contribution rates from TMRS as determined by the December 31, 2016 actuarial valuation. The City’s contribution rate
for January 1, 2018 will be 13.38%. The City’s contributions rate of 13.28% became effective January 1, 2017. On September 13, 2012, Council
approved revisions to the City's TMRS Ordinance. The revisions include a reduction in the updated service credits (USC) for current employees
and a reduction in the Annuity Increase Cost of Living Adjustment (COLA) for retirees. The funding status as of December 31, 2016 is as
follows:
OTHER POST EMPLOYMENT BENEFITS
PROGRAM DESCRIPTION . . . In addition to pension benefits, as required by state laws and defined by City policy, the City makes available
postretirement medical, dental, vision, drug and life insurance benefits to all employees who meet TMRS retirement qualifications, are a
minimum of fifty five (55) years of age, retire from the City with a minimum of five (5) years of service to the City, and who enroll themselves
and their eligible dependent(s) on or before the effective date of their retirement through the City’s single-employer defined benefit other
post-employment benefit (OPEB) plan. The life insurance plan provides a $10,000 fully insured death benefit coverage upon retirement
which ceases upon attainment of age 65 for retirees. So long as monthly premium payments are made, the healthcare plan provides insurance
to eligible retirees, their spouses and dependents through the City’s group health insurance plan, which covers both active and retired
members, until attainment of age 65. Benefit provisions as well as retiree premium contributions are established by management.
The City determines the employer and participant contribution rates annually based on recommendations of City staff and the City’s
consultant. All medical, dental, vision and drug care benefits are provided through the City’s self-insured health plan. The benefit levels are
the same as those afforded to active employees. Life insurance for eligible retirees is paid entirely by the City.
Date of Amount Issued
Authorization Purpose Authorized To Date Unissued
1/24/1984 (1)Fire Substation Building 700,000$ -$ 700,000$
1/24/1984 (1)Street Improvements 6,325,000 5,825,000 500,000
11/4/2003 Municipal Complex Improvements 7,610,000 3,955,000 3,655,000
11/4/2008 Street Improvements 48,785,000 48,785,000 -
11/4/2008 Library Improvements 8,385,000 8,385,000 -
11/4/2008 Park Improvements 12,790,000 12,145,000 645,000
84,595,000$ 79,095,000$ 5,500,000$
12/31/2016
Actuarial Value of Assets 226,024,775 $
Actuarial Accrued Liability (AAL)267,674,838
Percent of Pension Benefit Obligation 84.44%
Unfunded Actuarial Accrued Liability (UAAL)41,650,063 $
Annual Covered Payroll 53,016,848
Percent of Covered Payroll 78.56%
Estimated Employer Contribution 6,969,939 $
18
During fiscal year 2017, 86 former employees were covered under this arrangement, with claims less retiree contributions totaling
$540,239.
ANNUAL OPEB COST AND NET OPEB OBLIGATION . . .The City’s annual OPEB cost is based on the annual required contribution (ARC) of
the City, an amount actuarially determined in accordance with the parameters of GASB Statement 45. Despite the apparent implications of
the term ARC, the City is not required to contribute the ARC to the plan each year, Instead, the ARC provides a basis for evaluating whether
the City’s contributions for OPEB are adequate to fund the benefits during the working lifetime of current employees (i.e., the normal cost)
and to amortize existing unfunded obligations (i.e., the obligations for current retirees plus that portion of the current employees’ obligations
that are attributed to past service) in a systematic manner over the amortization period prescribed by GASB.
The annual OPEB cost is the annual accounting expense recorded on the City’s Statement of Revenues, Expenses and Changes in Net Assets
and on the City’s Statement of Activities. The annual OPEB cost is equal to (1) the ARC for the current fiscal year, plus (2) interest on the
Net OPEB Obligation at the beginning of the year, reduced by (3) an adjustment to the ARC which is equal to an amortization of the beginning
of the year Net OPEB Obligation.
Generally, the Net OPEB Obligation is the cumulative difference since the effective date of GASB 45 between the annual OPEB cost and
the employer’s contributions to the plan including the OPEB liability/(asset) at transition, if any. Whenever the City contributes an amount
less than the annual OPEB cost, this shortfall will increase the City’s Net OPEB Obligation.
On September 11, 2017 the City Council approved a resolution adopting the Public Agencies Retirement Services (PARS) Post-Retirement
Health Care Plan Trust and on September 25, 2017, the City Council pass a resolution appropriating the funds. Effective September 27,
2017, with the initial employer contribution of $1,493,809, the City entered into a section 115 Irrevocable Exclusive Benefit agent multiple-
employer trust to fund its Other Post Employment Benefit obligation.
ACTUARIAL METHODS AND ASSUMPTIONS . . . Actuarial valuations involve estimates of the value of reported amounts and assumptions about
the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared
to past expectations and new estimates are made about the future.
The required schedule of funding progress immediately following the notes to the financial statements presents multi-year trend information
about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
GASB No. 45 calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation
and on the pattern of sharing of costs between the employer and plan participants to that point. In addition, the projection of benefits for
financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of
cost sharing between the employer and plan participants in the future.
Actuarial calculations reflect a long-term perspective. In addition, consistent with that perspective, actuarial methods and assumptions used
in developing the amounts in this report include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities.
2014 2015 2016 2017
Annual Required Contribution (ARC)1,449,844 $ 1,810,895 $ 1,910,536 $ 1,841,068 $
Interest on Net OPEB Obligations 397,569 400,494 456,941 513,022
Adjusted to the ARC (492,618) (522,847) (596,541) (489,016)
Annual OPEB Cost 1,354,795 1,688,542 1,770,936 1,865,074
Contributions Made (406,326) (434,136) (705,451) (2,034,048)
Increase in net OPEB obligation 948,469 $ 1,254,406 $ 1,065,485 $ 168,974 - $
Net OPEB Obligation, beginning of year 7,951,378 8,899,847 10,154,253 11,219,738
Net OPEB Obligation, end of year 8,899,847 $ 10,154,253 $ 11,219,738 $ 11,050,764 $
Percentage
Fiscal Annual Actual of Annual
Year OPEB Contribution OPEB Cost Net OPEB
Ended 9/30 Costs Made Contribution Obligation
2014 1,354,795 406,326 29.99%8,899,847
2015 1,688,542 434,136 25.71%10,154,253
2016 1,770,936 705,451 39.83%11,219,738
2017 1,865,073 2,034,048 109.06%11,050,764
Four-Year Trend Information
19
The required contribution rates were determined as part of the October 1, 2016 actuarial valuation. Significant methods and assumptions
follow:
FUNDING STATUS AND FUNDING PROGRESS . . . The Schedule of Funding Progress presents information as of the current valuation date and
the two preceding valuation dates. As of the date of this financial statement, the City has had three valuations
There are factors that affect the ability to compare amounts reported from one actuarial valuation date to the next. The assumptions that have
been changed since the previous valuation are:
- Mortality, Disability and Termination assumptions were updated to reflect current assumptions used by the TMRS actuary in
valuing the pension plan;
- the Assumed Per Capita Health Benefit Costs for retirees and dependents have been updated to reflect changes in claims
expectations; and
- the Health Benefit Cost and Retiree Contribution Trends and Expense Trend Rate has been updated to reflect changes in recent
experience and its effect on short-term expectations.
The City has had three separate valuations, one of which used the October 1, 2012 valuation date, October 1, 2014 and October 1, 2016
valuation date. The October 1, 2012 valuation date was used to develop results for the fiscal years ending September 30, 2013 and 2014. The
plan was changed effective January 1, 2012 to eliminate post-65 medical coverage and was changed effective January 1, 2013 to eliminate
one of the PPO benefit options. While the plan typically undergoes a biennial valuation, pursuant to paragraph 12 of GASB 45, a new
valuation must be performed if there are significant changes to the plan since the previous valuation. The October 1, 2014 valuation date was
used to develop results for the fiscal years ending September 30, 2015 and 2016, as part of the plan’s biennial valuation. The October 1, 2016
valuation date was used to develop results for the fiscal year ending September 30, 2017.
Actuarial valuation date 10/1/2016
Asset Valuation Method:Market
Actuarial Cost Method:Projected Unit Credit
Actuarial Assumption:
Investment Rate of Return*4.50%
*Includes Inflation at:3.50%
Projected Salary Increases N/A
Annual Healthcare Trend Rates:8.50% in FYE 2017 declining
to 5.25% in FYE 2024
Amortization Method:Level Dollar
Remaining Amortization Period:30 year open period
Unfunded Annual UAAL as
Actuarial Actuarial Actuarial Actuarial Covered Percentage of
Valuation Value of Accrued Liability Funded Accrued Payroll Covered
Date Assets (AAL)Ratio Liability (AAL)(Fiscal Year)Payroll
10/1/2012 -$ 10,897,037$ 0.00%10,897,037$ 42,255,425$ 25.79%
10/1/2014 - 15,013,856 0.00%15,013,856 45,654,271 32.89%
10/1/2016 - 15,564,973 0.00%15,564,973 53,016,848 29.36%
20
FINANCIAL INFORMATION
TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY
Source: The City’s audited financial statements.
2017 2016 2015 2014 2013
Revenues:
Taxes 53,749,315$ 48,737,894$ 46,750,120$ 41,951,522$ 39,654,465$
Licenses & Permits 2,127,142 2,132,802 1,500,777 1,424,598 1,238,967
Intergovernmental 828,510 1,373,950 355,083 189,103 469,783
Charges for Services 3,863,744 3,809,206 3,572,684 2,987,778 2,605,519
Fines, Forfeits and Penalties 2,917,735 3,255,051 2,693,647 3,038,926 3,252,418
Investment Income 241,880 148,302 116,074 66,264 88,198
Rents & Royalties 284,351 187,328 136,228 542,816 650,407
Contributions 7,580 8,880 1,251 11,016 56,990
Other 775,114 434,537 3,252,310 113,802 212,349
Total Revenues 64,795,371$ 60,087,950$ 58,378,174$ 50,325,825$ 48,229,096$
Expenditures:
General Government 6,228,021$ 5,524,471$ 4,853,358$ 5,108,448$ 3,825,760$
Fiscal Services 3,815,223 3,733,550 3,314,990 3,029,566 2,970,342
Police Department 21,372,560 20,170,450 18,533,889 17,080,568 16,515,820
Fire Department 17,001,580 16,916,819 14,881,983 13,585,022 13,297,527
Planning & Development Services 3,741,263 3,243,768 3,106,143 2,867,857 3,505,029
Parks and Recreation 8,621,075 9,279,126 8,194,670 4,596,645 4,463,535
Information Technology 4,600,556 4,491,009 4,112,987 4,207,305 4,271,209
Public Works 8,151,055 11,162,508 9,156,069 7,611,303 6,519,248
Library Services 1,097,876 1,098,326 1,138,568 1,078,851 994,476
Contributions 1,280,215 1,220,251 1,187,500 1,184,115 1,086,012
Other - 863 217,114 222,034 1,300,627
Capital Improvement Projects 988,435 667,574 129,896 731,621 733,974
Total Expenditures 76,897,859$ 77,508,715$ 68,827,167$ 61,303,335$ 59,483,559$
Other Financing Sources (Uses):
Sale of General Fixed Assets 47,478$ -$ 8,974,205$ 4,582,111$ -$
Operating Transfers In 18,347,351 16,507,346 15,094,866 15,158,581 14,664,450
Operating Transfers Out (2,911,020) (2,376,443) (11,441,262) (4,444,465) (3,977,149)
Total Other Financing Sources (Uses)15,483,809$ 14,130,903$ 12,627,809$ 15,296,227$ 10,687,301$
Net Change in Fund Balance 3,381,321$ (3,289,862)$ 2,178,816$ 4,318,717$ (567,162)$
Fund Balance, Beginning of Year 19,133,202 22,423,064 20,244,248 15,925,531 16,492,693
Fund Balance, End of Year 22,514,523$ 19,133,202$ 22,423,064$ 20,244,248$ 15,925,531$
Fiscal Year Ended September 30,
21
TABLE 13 - MUNICIPAL SALES TAX HISTORY
The City has adopted the Municipal Sales and Use Tax Act, Texas, Tax Code, Chapter 321, which grants the City the power to impose and levy
a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to the payment of the Certificates.
Collections and enforcements are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits the proceeds of
the tax, after deduction of a 2% service fee, to the City monthly. In May 1990, the voters of the City approved the imposition of an additional
sales and use tax of one-half of one percent (½ of 1%) for property tax reduction. The total sales tax rate for the City is 1.5%.
(1) Provided by the City.
(2) Based on population estimates provided by the City.
FINANCIAL POLICIES
Basis of Accounting . . .The accounts of the City are organized and operated on the basis of funds and account groups. A fund is an
independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended
purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum
number of funds is maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for
certain assets and liabilities of the governmental funds not recorded directly in those funds. Government funds are used to account for the
City’s general government activities. Governmental fund types use the flow of current financial resources measurement focus and the
modified accrual basis of accounting.
General Fund . . . The General Fund is the City’s primary operating fund. It is used to account for all activities typically considered
governmental functions of the City. These include Public Safety, Public Works, Parks and Recreation, Economic and Planning and
Development Services, the support functions for these areas, and the administrative functions for the City.
The General Fund for the 2017-2018 fiscal year is influenced by current policies and any approved policy changes. The policies include
inter-fund equity; maintaining a balance between revenues and expenditures; and maintaining the level of service currently provided as the
City experiences residential and commercial growth.
The City’s financial policies are for a General Fund balance of 15% of budgeted appropriations at year end. To the extent that the General
Fund balance exceeds this amount, this surplus is to be expended in future years for one time expenditures such as capital items and short
term projects.
Debt Service Fund . . .The Debt Service Fund accounts for the servicing of general long-term debt not being financed by proprietary or
nonexpendable trust funds. It is the City’s policy to maintain at least 8 1/3% of annual appropriated expenditures for debt service and any
associated fees as the Debt Service Fund balance at fiscal yearend. The City is in compliance with that policy.
Budgetary Procedures . . .Prior to September 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year
commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. All budget
requests are compiled by the Finance Department and presented with comparative and supporting data to the Mayor and City Council for
review. Public hearings are properly advertised and conducted at City Hall for taxpayer comments. Prior to September 27, the budget is
legally enacted through passage of an ordinance. The City Council must approve all transfers of budgeted amounts between departments
within any fund and any revision that alters the total expenditure of any fund. An amount is also budgeted each year for contingencies which
may arise.
Fiscal
Year % of Equivalent of
Ended Total Ad Valorem Ad Valorem Per
9/30 Collected (1)Tax Levy Tax Rate Capita(2)
2012 21,498,319$ 86.06%0.38$ 223$
2013 23,064,035 90.44%0.39 236
2014 24,565,649 93.02%0.40 246
2015 26,687,963 89.55%0.41 261
2016 27,163,480 84.71%0.38 255
2017 28,561,762 77.18%0.36 260
22
THE COMBINED UTILITY SYSTEM
WATERWORKS SYSTEM
Since December 1981, the City has had the capability to produce and deliver 100% of its water. The system has been expanded to a system
of nine wells, with a combined capacity of 29 million gallons per day. The water is delivered to the distribution system by 14 miles of 30-
inch diameter and 36 inch diameter pipeline and two pumping stations.
Two of the wells mentioned above are shallow wells, less than 1,500 feet deep, drilled into the Carrizo and Sparta aquifers. The remaining
seven are deep wells, approximately 3,000 feet, drilled in the Simsboro Sand formation of the Carrizo-Wilcox aquifer. This is a very prolific
aquifer of high quality water that has the capacity to provide an adequate water supply for the City and surrounding communities through the
year 2060, and well beyond, if managed properly.
The Simsboro Sand, and all local aquifers, are regulated by the Brazos Valley Groundwater Conservation District, and permitting
requirements have been implemented for all new water wells. College Station has obtained a Drilling/Operating Permit from the
Groundwater District for the City to drill another Simsboro Well, Well #9, which will complete construction in FY-18. This well will meet
our projected demands for water for many years into the future. Well #10 remains in the planning stages, and would be constructed in
approximately 2022, depending upon the rate of growth of water demands. College Station is also investigating other water supply strategies
for the future. One example is Aquifer Storage and Recovery (ASR), which would store treated wastewater effluent in an aquifer for future
use, most likely during summer peaks. If implemented, this ASR system would greatly reduce the demand on the groundwater production
system and ensure a very stable water supply for the City.
The City has completed a Water Reclamation project, which pumps effluent from the wastewater treatment plant up to Veteran’s Park for
irrigation of playing fields, reducing the demand on the potable water system by approximately 350,000 gallons per day during watering
season. Additional phases of the reclaimed water system are in the planning stages. In 2016, the City completed a two year agreement with
an oil company, which provided the City with $470,000 of revenue for providing just under 200 million gallons of reclaimed water, and is
currently in a second contract that has generated $125,000 revenue so far.
The City also has stand by generators at strategic locations sufficient to provide adequate potable water for health and safety during an
extended area-wide electrical power outage.
Water rates were established by ordinance, passed and approved by the City Council, and the following rates will become effective July 1,
2018. The Residential rates are inclined block rates to encourage water conservation.
Type of Customer
Usage Charge (per 1,000 gallons)
Service Charge
Meter
Size
Residential, Commercial and Industrial 10.80 per mo. 3/4”
13.55 per mo. 1”
20.17 per mo. 1 1/2”
31.85 per mo. 2”
100.53 per mo. 3”
149.35 per mo. 4”
181.82 per mo. 6”
181.82 per mo. 8”
Residential $2.40 for usage from 0-10,000 gallons
$3.12 for usage from 11,000-15,000 gallons
$3.83 for usage from 16,000-20,000 gallons
$4.54 for usage from 21,000-25,000 gallons
$5.26 for usage from 26,000 gallons and more
Commercial $2.64 per 1,000 gallons
Commercial Irrigation Usage Charge
Commercial Irrigation Multifamily 3+ units
MUD #1 Residential and Commercial
$2.84 per 1,000 gallons
$2.64 per 1,000 gallons
Rates as above with an added 50% surcharge
23
WASTEWATER SYSTEM
The City’s waste water is treated by three City-owned wastewater treatment plants, Carter Creek Treatment Plant, Lick Creek Treatment Plant,
and Carter’s Lake Treatment Plant located within the City limits. The three plants have a combined treatment capacity of 11.5 mgd as compared
to annual average average daily demand of 7.4 mgd. The treatment plant’s capacity is estimated to be adequate to serve a population of 125,000.
Sewer rates were established by ordinance, passed and approved by the City Council, and became effective on October 1, 2016.
Residential (metered water) .......................................................... $20.28 including 4,000 gallons of metered water
Usage Charge ................................................................................ $4.06 per 1,000 gallons of additional metered water
$44.64 maximum per month
Residential (without meter to each unit)....................................... $25.80 per unit per month
Commercial and Industrial ........................................................... $17.40 per month
Usage
Charge ...........................................................................................
.......................................................................................................
$4.83 per 1,000 gallons of metered water usage
There are 2,476 customers (units) who receive their water from Wellborn Water, but sewer is provided by the City of College Station. Those
customers pay an initial usage charge of $44.64 per month. After six months of documented waste water usage, rates can be adjusted
downward on a tiered scale.
ELECTRIC SUPPLY SOURCE
The City has multiple Power Purchase Agreements (PPAs) in order to meet its load requirements. The PPAs are currently with AEPEP (AEP
Energy Partners) and Garland Power and Light (GP&L). With AEPEP, the City has fixed block ATC PPA that expires in 2027. The City
also has a PPA with AEPEP for wind power that expires in 2028. The City has a load following PPA with GP&L that expires in 2021. While
the PPAs with AEPEP are considered base load power, the load following PPA with GP&L covers the load above the base power provided
by AEPEP's PPAs. GP&L is also the City’s Qualified Scheduling Entity (QSE). GP&L's QSE schedules and settles all the contract resources
owned by the City. On City's advice the QSE also procures any replacement power as needed on behalf of the City.
Other wholesale/power supply costs include Congestion costs, Ancillary Services and Transmission Cost of Service (TCOS). Since the City
owns transmission assets, it not only pays but also receives TCOS payments based on TCOS rates approved by the Public Utility Commission
of Texas.
The City owns 20 miles of 138kV transmission lines, seven substations, and 458 miles of distribution lines. ERCOT servesas the RTO/ISO
for the area.
The current electric rates were established by ordinance passed and approved by the City Council and became effective on October 1, 2016.
The electric rates are subject to a transmission delivery adjustment (TDA) charge which requires that the net energy charge per kilowatt hour
must be increased or decreased by an amount per kilowatt hour equal to additional transmission charges above those accounted for in the
wholesale rate. The TDA is currently set at $0.005 per kilowatt hour of energy consumed.
In January 2009, College Station Utilities began offering residential electric customers renewable wind energy. In February 2010, the
renewable wind energy program was expanded to include commercial customers. Wind energy is generated from the South Trent Mesa Wind
Project located west of Abilene, Texas.
24
Single Family Residential ........................... Service Charge .............................................. $7.00 per month
plus:
kWh (May through October) ........................ $0.1169 per kWh
kWh (November through April) ................... $0.1123 per kWh
Tax ................................................................. 1.50%
Transmission Delivery Adjustment (TDA) .. $0.005 per kWh
Master Metered Multiple Dwelling Units . Service Charge ............................................... $100.00 per month per master meter
plus:
kWh (May through October) ......................... $0.1181 per kWh
kWh (November through April) .................... $0.1134 per kWh
Tax .................................................................. 1.50%
TDA ................................................................ $0.005 per kWh
Small Commercial (1-10 KW demand) ..... Service Charge ............................................... $9.00 per month
plus:
First 1,000 kWh ............................................. $0.1344 per kWh
Over 1,000 kWh ............................................ $0.1028 per kWh
Tax ................................................................. 8.25%
TDA ............................................................... $0.005 per kWh
Medium Commercial (15-300 KW) .......... Service Charge ............................................... $25.00 per month
plus:
Demand Charge (Per KW) ............................ $10.40 per KW
Energy Charge All kWh ................................ $0.0729 per KW
Minimum Monthly Charge ........................... $181.00
Tax ................................................................. 8.25%
TDA ............................................................... $0.005 per kWh
Large Commercial (300 – 1,500 KW) ....... Service Charge ............................................... $75.00 per month
plus:
Demand Charge (Per KW) ............................ $10.40 per KW
Energy Charge All kWh ................................ $0.0703 per KW
Minimum Monthly Charge ........................... $3,195.00
Tax ................................................................. 8.25%
TDA ............................................................... $0.005 per kWh
Industrial (1,500 KW and over) ................. Service Charge ............................................... $250.00 per month
plus:
Demand Charge (Per KW) ............................. $9.85
Energy Charge (first 500,000 kWh) .............. $0.0689 per KW
Minimum Monthly $15,034.85
Tax .................................................................. 8.25%
TDA ................................................................ $0.005 per kWh
WIND WATT RATES
Wind rates were established by Ordinance #2012-3397 on February 23, 2012, passed and approved by the City Council, and became effective
on March 1, 2012.
Participation Level: Residential & Commercial
10% ..................................................................... $0.0005 per KW
50% ..................................................................... $0.0025 per KW
100% ................................................................... $0.005 per KW
25
TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED)
TABLE 15 - TEN LARGEST UTILITY CUSTOMERS
TABLE 16 - CONDENSED STATEMENT OF OPERATIONS
2017 2016 2015 2014 2013
Water 43,199 41,709 41,540 40,768 40,767
Wastewater 42,840 40,866 40,806 39,128 38,608
Electric 39,300 40,141 43,471 38,198 38,456
Fiscal Year Ended September 30,
Total Percent
FY 2017 KWH of KWH
Utility Customer Type of Business Consumption Consumed
CSISD Schools 24,723,977 2.95%
Scott & White Clinc/Hospital/Pharmacy 22,420,785 2.68%
City of College Station Municipality 22,073,366 2.63%
Texas A&M University 12,840,933 1.53%
Wal-Mart Retail 9,045,760 1.08%
College Station Medical Center Hospital 8,903,407 1.06%
CBL & Associates Retail Mall 8,880,320 1.06%
HEB Grocery Retail 8,465,040 1.01%
Biotechnologies Texas LLC Medical 7,948,100 0.95%
Dealer Computer Services Inc Retail 4,581,200 0.55%
129,882,888 15.50%
2017 2016 2015 2014 2013
Revenues:
Electric 99,179,570 $ 98,904,688 $ 98,763,293 $ 95,677,765 $ 92,892,541 $
Water and Wastewater 31,333,922 29,484,851 28,732,968 27,550,262 29,018,108
Interest 697,655 346,312 180,423 116,433 170,062
Other 3,179,821 3,636,420 3,546,138 2,890,061 3,670,710
Total Revenues 134,390,968 $ 132,372,271 $ 131,222,822 $ 126,234,521 $ 125,751,421 $
Expenses:
Total Expenses 78,766,516 $ 76,771,094 $ 82,079,813 $ 100,235,329 $ 90,519,871 $
Net Available for Debt Service 55,624,452 $ 55,601,177 $ 49,143,009 $ 25,999,192 $ 35,231,550 $
Water (Units Served)43,199 41,709 41,540 40,768 40,767
Wastewater (Units Served)42,840 40,866 40,806 39,128 38,608
Electric (Units Served)39,300 40,141 43,471 38,198 38,456
For Fiscal Year Ended September 30,
26
TABLE 17 – VALUE OF THE SYSTEM
TABLE 18 – CITY’S EQUITY IN THE SYSTEM
__________
(1) Includes OPEB Net Pension Obligations.
2017 2016 2015 2014 2013
Utility Systems 553,774,054$ 527,435,531$ 507,758,485$ 459,071,713$ 446,518,318$
Construction in Progress 30,240,705 23,520,025 13,213,020 43,281,736 36,982,355
584,014,759$ 550,955,556$ 520,971,505$ 502,353,449$ 483,500,673$
Less: Accumulated Depreciation 229,374,628 213,325,487 198,339,390 183,756,067 171,069,875
Net System Value 354,640,131$ 337,630,069$ 322,632,115$ 318,597,382$ 312,430,798$
Fiscal Year Ended September 30,
Resources 2017 2016 2015 2014 2013
Net System Value 354,640,131$ 337,630,069$ 322,632,115$ 318,597,382$ 312,430,798$
Current Assets 70,636,223 63,085,837 52,023,881 42,939,476 59,428,776
Restricted Assets 30,149,917 21,849,829 19,977,038 27,760,893 5,757,167
Other Resources - - - 0 120,000
Deferred Charges 5,197,104 5,425,502 2,381,933 1,305,356 1,665,943
Total 460,623,375$ 427,991,237$ 397,014,967$ 390,603,107$ 379,402,684$
Obligations
Current Liabilities 10,681,761$ 9,511,319$ 13,688,841$ 19,092,357$ 23,329,045$
Current Liabilities Payable from
Restricted Assets 15,887,617 15,462,903 10,735,825 7,292,731 7,190,577
General Obligation Debt 59,325,710 55,626,759 43,175,000 47,995,000 36,930,000
Certificates of Obligation 77,282,370 78,814,496 83,445,000 87,210,000 66,695,000
Revenue Bond Debt - - 13,395,000 14,920,000 34,765,000
Other Debt (1)8,899,938 9,418,425 8,593,734 9,385,034 4,825,184
Total Liabilities 172,077,396$ 168,833,902$ 173,033,400$ 185,895,122$ 173,734,806$
City's Equity in System 288,545,979$ 259,157,335$ 223,981,567$ 204,707,985$ 205,667,878$
Percentage of Equity in System 62.64%60.55%56.42%52.41%54.21%
Fiscal Year Ended September 30,
27
TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED CERTIFICATE DEBT SERVICE
__________
* Preliminary, subject to change. Includes a portion of the Certificates.
(1) Represents refunding bonds.
(2) Certificates of Obligation supported in whole or in part by Utility System revenues.
(3) General Obligation Improvement Bonds supported in part by the Utility System revenues.
INVESTMENTS
The City invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City
Council. Both state law and the City’s investment policies are subject to change.
LEGAL INVESTMENTS
Under State law, the City is authorized to invest in: (1) obligations of the United States or its agencies and instrumentalities, including letters
of credit; (2) direct obligations of the State or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a
federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the
United States; (4) other obligations, the principal of and interest on which are unconditionally guaranteed or insured by, or backed by the full
faith and credit of, the State or the United States or their respective agencies and instrumentalities, including obligations that are fully
guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States; (5) obligations
of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized
investment rating firm not less than A or its equivalent; (6) bonds issued, assumed, or guaranteed by the State of Israel; (7) certificates of
deposit and share certificates (i) issued by a depository institution that has its main office or a branch office in the State of Texas, that are
guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to
principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law for City deposits, or (ii)
where (a) the funds are invested by the City through (I) a broker that has its main office or a branch office in the State of Texas and is selected
from a list adopted, at least annually, by the City as required by law or (II) a depository institution that has its main office or a branch office
in the State of Texas that is selected by the City; (b) the broker or the depository institution selected by the City arranges for the deposit of
the funds in certificates of deposit in one or more federally insured depository institutions, wherever located, for the account of the City; (c)
the full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality
of the United States, and (d) the City appoints the depository institution selected under (a) above, a custodian as described by Section
2257.041(d) of the Texas Government Code, or a clearing broker-dealer registered with the Securities and Exchange Commission and
operating pursuant to Securities and Exchange Commission Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with respect
to the certificates of deposit; (8) fully collateralized repurchase agreements that have a defined termination date, are fully secured by a
combination of cash and obligations described in clause (1) which are pledged to the City, held in the City’s name, and deposited at the time
the investment is made with the City or with a third party selected and approved by the City and are placed through a primary government
securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State of Texas; (9) bankers’ acceptances
Original Outstanding
Principal Principal
Amount as of 9/30/2017
2008 (2)15,925,000 2,340,000
2009 (2)19,490,000 3,700,000
2010 (2)2,850,000 2,120,000
2010 (1)(3)25,905,000 12,400,000
2011 (2)7,920,000 6,205,000
2012 (2)16,415,000 13,355,000
2012 (1)(3)9,570,000 5,430,000
2013 (2)10,230,000 8,735,000
2013 (1)(3)6,255,000 4,185,000
2014 (2)23,555,000 20,955,000
2014 (1)(3)14,455,000 9,475,000
2016 (2)7,250,000 6,985,000
2016 (1)(3)18,710,000 17,960,000
2017 (2)12,140,000 12,140,000
2017 (1)(3)9,205,000 9,205,000
2018 (2)18,935,000 18,935,000 *
218,810,000 $ 154,125,000 $
Series
28
with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least “A-1” or “P-1”
or the equivalent by at least one nationally recognized credit rating agency; (10) commercial paper that is rated at least “A-1” or “P-1” or the
equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is
fully secured by an irrevocable letter of credit issued by a bank organized and existing under the laws of the United States or any state; (11)
no-load money market mutual funds regulated by the Securities and Exchange Commission that have a dollar weighted average portfolio
maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share; (12)
no-load mutual funds registered with the Securities and Exchange Commission that: have an average weighted maturity of less than two
years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment quality by at least
one nationally recognized investment rating firm of not less than “AAA” or its equivalent; provided, however, that the City is not authorized
to invest in the aggregate more than 15% of its monthly average fund balance, excluding bond proceeds and reserves and other funds held
for debt service, in such no-load mutual funds, and (13) for bond proceeds, guaranteed investment contracts that have a defined termination
date, are secured by obligations of the United States or its agencies and instrumentalities in an amount equal to the amount invested under
the contract, and are pledged to the City and deposited with the City or a third party selected and approved by the City.
The City is also authorized to invest its funds through an eligible investment pool if the governing body of the City by rule, ordinance, or
resolution, as appropriate, authorizes investment in the particular pool. To be eligible to receive funds from and invest funds on behalf of the
City, an investment pool must furnish to the investment officer or other authorized representative of the City an offering circular or other
similar disclosure instrument that contains, at a minimum, the following information: (1) the types of investments in which money is allowed
to be invested; (2) the maximum average dollar-weighted maturity allowed, based on the stated maturity date, of the pool; (3) the maximum
stated maturity date any investment security within the portfolio has; (4) the objectives of the pool; (5) the size of the pool; (6) the names of
the members of the advisory board of the pool and the dates their terms expire; (7) the custodian bank that will safekeep the pool's assets; (8)
whether the intent of the pool is to maintain a net asset value of one dollar and the risk of market price fluctuation; (9) whether the only
source of payment is the assets of the pool at market value or whether there is a secondary source of payment, such as insurance or guarantees,
and a description of the secondary source of payment; (10) the name and address of the independent auditor of the pool; (11) the requirements
to be satisfied for an entity to deposit funds in and withdraw funds from the pool and any deadlines or other operating policies required for
the entity to invest funds in and withdraw funds from the pool; and (12) the performance history of the pool, including yield, average dollar-
weighted maturities, and expense ratios.
Governmental bodies in the State are authorized to implement securities lending programs if (i) the securities loaned under the program are
100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured
by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of credit
issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than “A” or its
equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph under
this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental body, held in
the name of the governmental body and deposited at the time the investment is made with the City or a third party designated by the City;
(iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business
in the State; and (iv) the agreement to lend securities has a term of one year or less.
The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that
the pools are rated no lower than “AAA” or “AAAm” or an equivalent by at least one nationally recognized rating service. The City is
specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance
of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream
of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated
final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that
adjusts opposite to the changes in a market index.
INVESTMENT POLICIES
Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and
liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a
list of authorized investments for City funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-
weighted maturity allowed for pooled fund groups, methods to monitor the market price of investments acquired with public funds, a requirement
for settlement of all transactions, except investment pool funds and mutual funds, on a delivery versus payment basis, and procedures to monitor
rating changes in investments acquired with public funds and the liquidation of such investments consistent with the PFIA. All City funds must
be invested consistent with a formally adopted “Investment Strategy Statement” that specifically addresses each funds’ investment. Each
Investment Strategy Statement will describe its objectives concerning (1) suitability of investment type, (2) preservation and safety of principal,
(3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield.
29
Under Texas law, City investments must be made “with judgment and care, under prevailing circumstances, that a person of prudence,
discretion, and intelligence would exercise in the management of the person’s own affairs, not for speculation, but for investment, considering
the probable safety of capital and the probable income to be derived.” At least quarterly the investment officers of the City will submit an
investment report detailing (1) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3)
the beginning market value and ending market value for each pooled fund group, (4) the book value and market value of each separately
listed asset at the end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund
group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted
investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council.
ADDITIONAL PROVISIONS
Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies; (2) require any investment officers’
with personal business relationships or relatives with firms seeking to sell securities to the entity to disclose the relationship and file a
statement with the Texas Ethics Commission and the City Council; (3) require the registered principal of firms seeking to sell securities to
the City to: (a) receive and review the City’s investment policy, (b) acknowledge that reasonable controls and procedures have been
implemented to preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4) perform an
annual audit of the management controls on investments and adherence to the City’s investment policy; (5) provide specific investment
training for the Finance Director, Treasurer, Assistant City Manager and investment officers; (6) restrict reverse repurchase agreements to
not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase
agreement; (7) restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt
service and to no more than 15% of the entity’s monthly average fund balance, excluding bond proceeds and reserves and other funds held
for debt service; (8) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation,
and advisory board requirements and (9) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage
in investment transactions with the City.
Under Texas law, the City may contract with an investment management firm registered under the Investment Advisers Act of 1940 (15
U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other
funds under its control for a term up to two years, but the City retains ultimate responsibility as fiduciary of its assets. In order to renew or
extend such a contract, the City must do so by order, ordinance or resolution. The City has not contracted with, and has no present intention
of contracting with, any such investment management firm or the State Securities Board to provide such services.
CITY’S INVESTMENT POLICY
The Assistant City Manager or his designee will promptly cause all City funds to be deposited with the bank depository and invested in
accordance with the provisions of the current Bank Depository Agreement or in any negotiable instrument that the City Council has authorized
under the provisions of the PFIA, as amended, and in accordance with the City Council approved Investment Policies.
At the end of each fiscal year, a report on investment performance will be provided to the City Council. In conjunction with the quarterly
financial report, the Assistant City Manager or his designee will prepare and provide a written recapitulation of the City’s investment portfolio
to the Council, detailing each City investment instrument with its rate of return and maturity date.
The City's adopted investment policy permits the City to invest its funds and funds under its control in all of the enumerated investments
authorized by the PFIA.
TABLE 20 - CURRENT INVESTMENTS
As of February 28, 2018, the City’s investable funds were invested in the following categories:
Book Market
Investment Type Value Value
Cash 5,000,000 $ 5,000,000 $
Local Government Investment Pool 8,245,491 8,245,491
Money Market Mutual Fund 223,103,678 223,103,678
US Agencies and Securities 41,000,000 40,552,860
277,349,169$ 276,902,029$
30
TAX MATTERS
OPINION
On the date of initial delivery of the Certificates, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel, will render its opinion
that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof (“Existing Law”), (1) interest
on the Certificates for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Certificates
will not be treated as “specified private activity bonds” the interest on which would be included as an alternative minimum tax preference
item under section 57(a)(5) of the Internal Revenue Code of 1986 (the “Code”). Except as stated above, Bond Counsel will express no
opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Certificates. See Appendix
C - FORMS OF OPINIONS OF BOND COUNSEL.
In rendering its opinions, Bond Counsel will rely upon (a) certain information and representations of the City, including information and
representations contained in the City's federal tax certificate, and (b) covenants of the City contained in the Ordinance authorizing the
Certificates relating to certain matters, including arbitrage and the use of the proceeds of the Certificates and the property financed or
refinanced therewith. Failure of the City to comply with these representations or covenants could cause the interest on the Certificates, as
the case may be, to become includable in gross income retroactively to their date of issuance.
The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the
Certificates in order for interest on the Certificates to be, and to remain, excludable from gross income for federal income tax purposes. Failure
to comply with such requirements may cause interest on the Certificates to be included in gross income retroactively to the date of issuance of
the Certificates. The opinions of Bond Counsel are rendered in reliance upon the compliance by the City with such requirements, and Bond
Counsel has not been retained to monitor compliance with these requirements subsequent to the issuance of the Certificates.
Bond Counsel's opinions are not a guarantee of a result, but represent its legal judgment based upon its review of Existing Law and reliance
on the aforementioned information, representations and covenants. Existing Law is subject to change by the Congress and to subsequent
judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that Existing Law or
the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or
disposition of the Certificates.
A ruling was not sought from the Internal Revenue Service by the Issuer with respect to the Certificates or the property financed or refinanced
with proceeds of the Certificates. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the
Certificates, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an Internal Revenue Service audit
is commenced, under current procedures the Internal Revenue Service is likely to treat the Issuer as the taxpayer and the Certificate holders may
have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability.
FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT
The initial public offering price to be paid for one or more maturities of the Certificates may be less than the principal amount thereof or one or more periods for the payment of interest on the Certificates may not be equal to the accrual period or be in excess of one year (the “Original
Issue Discount Certificates”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue
Discount Certificate, and (ii) the initial offering price to the public of such Original Issue Discount Certificate would constitute original issue
discount. The “stated redemption price at maturity” means the sum of all payments to be made on the Certificates less the amount of all
periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal
period if it is the initial or final period) and which are made during accrual periods which do not exceed one year.
Under Existing Law, any owner who has purchased such Original Issue Discount Certificate in the initial public offering is entitled to exclude
from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Certificate equal
to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax
consequences, see discussion set forth below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Certificate prior to stated maturity, however,
the amount realized by such owner in excess of the basis of such Original Issue Discount Certificate in the hands of such owner (adjusted
upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Certificate was held by
such initial owner) is includable in gross income.
Under Existing Law, the original issue discount on each Original Issue Discount Certificate is accrued daily to the stated maturity thereof (in
amounts calculated as described below for each accrual period within each accrual period) and the accrued amount is added to an initial
owner's basis for such Original Issue Discount Certificate for purposes of determining the amount of gain or loss recognized by such owner
upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the
issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts
payable as current interest during such accrual period on such Original Issue Discount Certificate.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Certificates
which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those
described above. All owners of Original Issue Discount Certificates should consult their own tax advisors with respect to the determination
31
for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Certificates and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption,
sale or other disposition of such Original Issue Discount Certificates.
COLLATERAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or
disposition of the Certificates. This discussion is based on Existing Law, which is subject to change or modification, retroactively.
The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial
institutions, property and casualty insurance companies, life insurance companies, individual recipients of Social Security or Railroad
Retirement benefits, individuals allowed an earned income credit, certain S corporations with accumulated earnings and profits and excess
passive investment income, foreign corporations subject to the branch profits tax, taxpayers qualifying for the health insurance premium
credit and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations.
THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT
TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT
WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT
OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE CERTIFICATES.
Under section 6012 of the Code, holders of tax-exempt obligations, such as the Certificates, may be required to disclose interest received or
accrued during each taxable year on their returns of federal income taxation.
Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation,
such as the Certificates, if such obligation was acquired at a “market discount” and if the fixed maturity of such obligation is equal to, or
exceeds, one year from the date of issue. Such treatment applies to “market discount bonds” to the extent such gain does not exceed the
accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A “market discount
bond” is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a
bond issued at an original issue discount, the “revised issue price” (i.e., the issue price plus accrued original issue discount). The “accrued
market discount” is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the
obligation bears to the number of days between the acquisition date and the final maturity date.
STATE, LOCAL AND FOREIGN TAXES
Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Certificates
under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to
investors who are not United States persons.
Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Certificates
will be sent to each registered holder and to the Internal Revenue Service. Payments of interest and principal may be subject to backup
withholding under section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number
or other taxpayer identification number ("TIN"), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup
withholding tax. Any amounts so withheld would be allowed as a credit against the recipient's federal income tax. Special rules apply to
partnerships, estates and trusts, and in certain circumstances, and in respect of Non-U.S. Holders, certifications as to foreign status and other
matters may be required to be provided by partners and beneficiaries thereof.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Certificates
will be sent to each registered holder and to the IRS. Payments of interest and principal may be subject to backup withholding under section
3406 of the Code if a recipient of the payments fails to furnish to the payor such owner’s social security number or other taxpayer identification
number (“TIN”), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so
withheld would be allowed as a credit against the recipient’s federal income tax. Special rules apply to partnerships, estates and trusts, and
in certain circumstances, and in respect of Non-U.S. Holders, certifications as to foreign status and other matters may be required to be
provided by partners and beneficiaries thereof.
32
FUTURE AND PROPOSED LEGISLATION
Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the federal or state level, may adversely affect
the tax-exempt status of interest on the Certificates under federal or state law, and could affect the market price or marketability of the
Certificates. Any of the foregoing could limit the value of certain deductions and exclusions, including the exclusion for tax-exempt interest.
The likelihood of any of the foregoing becoming effective cannot be predicted. Prospective purchasers of the Certificates should consult
their own tax advisors regarding the foregoing matters.
CONTINUING DISCLOSURE OF INFORMATION
In the Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of Certificates. The City is
required to observe the agreement for so long as it remains obligated to advance funds to pay the Certificates. Under the agreement, the City
will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified events, to the
Municipal Securities Rulemaking Board (the “MSRB”). This information will be publicly available at no cost on the Electronic Municipal
Market Access of the MSRB, with the web address www.emma.msrb.org (“EMMA”). The agreement specifies that all documents provided
to the MSRB shall be accompanied by identifying information as prescribed by the MSRB.
ANNUAL REPORTS
The City will provide certain updated financial information and operating data to the MSRB on an annual basis in an electronic format that
is prescribed by the MSRB and available via the Electronic Municipal Market Access System ("EMMA") at www.emma.msrb.org. The
information to be updated includes all quantitative financial information and operating data with respect to the City of the general type
included in this Official Statement under Tables numbered 1 through 6; 8 through 20 and in Appendix B. The City will update and provide
the information in Tables 1 through 6 and 8 through 20 within six months after the end of each fiscal year ending in and after 2018. The City
will additionally provide audited financial statements when and if available, and in any event, within 12 months after the end of each fiscal
year ending in or after 2018. If the audit of such financial statements is not complete within 12 months after any such fiscal year end, then
the City will file unaudited financial statements within such 12 month period and audited financial statements for the applicable fiscal year,
when and if the audit report on such statements becomes available. Any such financial statements will be prepared in accordance with the
accounting principles described in Appendix B or such other accounting principles as the City may be required to employ from time to time
pursuant to State law or regulation.
The financial information and operating data to be provided may be set forth in full in one or more documents or may be included by specific
reference to any document available to the public on the MSRB’s Internet Web site identified below or filed with the United States Securities
and Exchange Commission (the "SEC"), as permitted by SEC Rule 15c2-12 (the "Rule").
The City’s current fiscal year end is September 30. Accordingly, the City must provide updated information included in 1 through 6 and 8
through 20 by the last day of March in each year, and audited financial statements for the preceding fiscal year (or unaudited financial
statements if the audited financial statements are not yet available) as described above. If the City changes its fiscal year, it will file notice of
the change (and of the date of the new fiscal year end) with the MSRB prior to the next date by which the City otherwise would be required
to provide financial information and operating data as set forth above.
EVENT NOTICES
The City will also provide timely notices of certain events to the MSRB. The City will provide notice of any of the following events with
respect to the Certificates to the MSRB in a timely manner (but not in excess of ten business days after the occurrence of the event): (1)
principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves
reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or
liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the
tax status of the Certificates, or other material events affecting the tax status of the Certificates; (7) modifications to rights of holders of the
Certificates, if material; (8) Certificate calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property
securing repayment of the Certificates, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership, or similar event of the
City, which shall occur as described below; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale
of all or substantially all of its assets, other than in the ordinary course of business, the entry into of a definitive agreement to undertake such
an action or the termination of a definitive agreement relating to any suchactions, other than pursuant to its terms, if material; and (14)
appointment of a successor or additional paying agent or the change of name of a paying agent, if material. In addition, the City will provide
timely notice of any failure by the City to provide annual financial information in accordance with their agreement described above under
“Annual Reports”. For these purposes, any event described in clause (12) is considered to occur when any of the following occur: the
appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the
assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of
the assets or business of the City.
33
The City will provide each notice described in the previous paragraph to the MSRB through EMMA, in accordance with the Rule.
LIMITATIONS AND AMENDMENTS
The City has agreed to update information and to provide notices of specified events only as described above. The City has not agreed to
provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or
prospects or agreed to update any information that is provided, except as described above. The City makes no representation or warranty
concerning such information or concerning its usefulness to a decision to invest in or sell Certificates at any future date. The City disclaims
any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any
statement made pursuant to its agreement, although holders of Certificates may seek a writ of mandamus to compel the City to comply with
its agreement.
The City may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in
legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i) the agreement, as
amended, would have permitted an underwriter to purchase or sell Certificates in the offering described herein in compliance with the Rule,
taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances,
and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Certificates consent to the amendment or (b) any
person unaffiliated with the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the
interests of the holders and beneficial owners of the Certificates. If the City so amends the agreement, it has agreed to include with the next
financial information and operating data provided in accordance with its agreement described above under “ANNUAL REPORTS” an
explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and
operating data so provided.
COMPLIANCE WITH PRIOR UNDERTAKINGS
In connection with prior transactions, the City has entered into undertakings pursuant to which it agreed to provide certain updated financial
information and operating data within six months of the end of the City’s fiscal year along with notices of specified material events at required
times. In addition, the City previously agreed to provide audited financial statements within six months of the end of the City’s fiscal year if
audited financial statements were available by such time. If audited financial statements were not available, the City agreed to provide
unaudited financial statements for the applicable fiscal year.
During the last five years, the City has not failed to comply in any material respect with any material provisions of the continuing disclosure
agreements made by the City in accordance with Rule 15c2-12.
OTHER INFORMATION
RATINGS
The Certificates and presently outstanding tax supported debt of the City are rated “__” by Moody's and “__” by S&P, without regard to
credit enhancement. The ratings reflect only the respective views of such organizations and the City makes no representation as to the
appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be
revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies,
circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the
market price of the Certificates.
LITIGATION
The City is a party to legal proceedings, many of which occur in the normal course of operations. It is not possible at the present time to
estimate ultimate outcome or liability, if any, of the city with respect to the various proceedings. The City’s management believes that the
ultimate outcome of the various lawsuits will not have a material adverse effect on the City’s financial position.
REGISTRATION AND QUALIFICATION OF CERTIFICATES FOR SALE
The sale of the Certificates has not been registered under the federal Securities Act of 1933, as amended, in reliance upon the exemption
provided thereunder by Section 3(a)(2); and the Certificates have not been qualified under the Securities Act of Texas in reliance upon various
exemptions contained therein; nor have the Certificates been qualified under the securities acts of any jurisdiction. The City assumes no
responsibility for qualification of the Certificates under the securities laws of any jurisdiction in which the Certificates may be sold, assigned,
pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the
Certificates must not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration
provisions.
34
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code) provides that the Certificates are negotiable
instruments, investment securities governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments
for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies
of the State of Texas. With respect to investment in the Certificates by municipalities or other political subdivisions or public agencies of
the State of Texas, the PFIA requires that the Certificates be assigned a rating of at least “A” or its equivalent as to investment quality by a
national rating agency. See “OTHER INFORMATION - RATINGS” herein. In addition, various provisions of the Texas Finance Code
provide that, subject to a prudent investor standard, the Certificates are legal investments for state banks, savings banks, trust companies with
at capital of one million dollars or more, and savings and loan associations. The Certificates are eligible to secure deposits of any public funds
of the State, its agencies, and its political subdivisions, and are legal security for those deposits to the extent of their market value. The City
has made no investigation of other laws, rules, regulations or investment criteria which might apply to such institutions or entities or which
might limit the suitability of the Certificates for any of the foregoing purposes or limit the authority of such institutions or entities to purchase
or invest in the Certificates for such purposes. No review by the City has been made of the laws in other states to determine whether the
Certificates are legal investments for various institutions in those states.
LEGAL OPINIONS
The City will furnish a complete transcript of proceedings incident to the authorization and issuance of the Certificates, including the
unqualified approving legal opinion of the Attorney General of Texas approving the Certificates and to the effect that the Certificates are
valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the legal opinion of Bond
Counsel, to like effect and to the effect that the interest on the Certificates will be excludable from gross income for federal income tax
purposes under section 103(a) of the Code, subject to the matters described under “TAX MATTERS” herein, including the alternative
minimum tax on corporations. In its capacity as Bond Counsel, McCall, Parkhurst & Horton L.L.P. has reviewed the information under the
captions “PLAN OF FINANCING” (except for the subsection “SOURCES AND USES OF PROCEEDS”), “THE CERTIFICATES,” “TAX
MATTERS,” “OTHER INFORMATION – LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS,” “OTHER
INFORMATION – REGISTRATION AND QUALIFICATION OF CERTIFICATES FOR SALE,” “OTHER INFORMATION – LEGAL OPINIONS,” and
“CONTINUING DISCLOSURE OF INFORMATION” (except under the subheading “COMPLIANCE WITH PRIOR UNDERTAKINGS”, as to
which no opinion is expressed) in the Official Statement to determine whether such information fairly summarized matters of law and the
provisions of the documents referred to therein, and Bond Counsel is of the opinion that the information relating to the Certificates and the
Ordinance contained under such captions is a fair and accurate summary of the information purported to be shown. The legal fee to be paid
to Bond Counsel for services rendered in connection with the issuance of the Certificates is contingent on the sale and delivery of the
Certificates. The legal opinion will accompany the Certificates deposited with DTC or will be printed on the Certificates in the event of the
discontinuance of the Book-Entry-Only System. Certain legal matters will be passed upon for the City by McCall, Parkhurst & Horton,
L.L.P., Dallas, Texas, Disclosure Counsel for the City. In connection with the transactions described in the Official Statement, Bond Counsel
represents only the City.
The various legal opinions to be delivered concurrently with the delivery of the Certificates express the professional judgment of the attorneys
rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer
or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the
transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.
AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION
The financial data and other information contained herein have been obtained from City records, audited financial statements and other
sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized.
All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made subject to all of the provisions
of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is
made to such documents for further information. Reference is made to original documents in all respects.
FINANCIAL ADVISOR
Hilltop Securities Inc. is employed as Financial Advisor to the City in connection with the issuance of the Certificates. The Financial
Advisor's fee for services rendered with respect to the sale of the Certificates is contingent upon the issuance and delivery of the Certificates.
Hilltop Securities Inc., in its capacity as Financial Advisor, has relied on the opinions of Bond Counsel and has not verified and does not
assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the
federal income tax status of the Certificates, or the possible impact of any present, pending or future actions taken by any legislative or
judicial bodies.
The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the
City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the
Financial Advisor does not guarantee the accuracy or completeness of such information.
CERTIFICATION OF THE OFFICIAL STATEMENT AND NO-LITIGATION CERTIFICATE
At the time of payment for and delivery of the Certificates, the Initial Purchaser will be furnished a certificate, executed by the proper City
officials, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or
35
pertaining to the City contained in its Official Statement and any addenda, supplement or amendment thereto, for its Certificates on the date
of such Official Statement, on the date of purchase of said Certificates, and on the date of delivery, were and are true and correct in all
material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does
not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and
statements, including financial data, of, or pertaining to, entities other than the City and their activities contained in such Official Statement
are concerned, such statements and data have been obtained from sources which the City believes to be reliable and that the City has no
reason to believe that they are untrue in any material respect; (d) there has been no material adverse change in the financial condition of the
City since September 30, 2017, the date of the last audited financial statements of the City and (e) except as disclosed herein, no litigation of
any nature has been filed or is pending, as of that date, of which the City has notice to restrain or enjoin the issuance, execution or delivery
of the Certificates, in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Certificates; or
which would affect the provisions made for their payment or security, or in any manner question the validity of the Certificates.
FORWARD-LOOKING STATEMENTS
The statements contained in this Official Statement, and in any other information provided by the City, that are not purely historical, are
forward-looking statements, including statements regarding the City's expectations, hopes, intentions, or strategies regarding the future.
Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement
are based on information available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking
statements. The City's actual results could differ materially from those discussed in such forward-looking statements.
The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently subject to
various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates
and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions
and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative,
judicial, and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among
other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to
predict accurately and many of which are beyond the control of the City. Any of such assumptions could be inaccurate and, therefore, there
can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate.
INITIAL PURCHASER
After requesting competitive bids for the Certificates, the City accepted the bid of ______________ (the "Initial Purchaser of the Certificates")
to purchase the Certificates at the interest rates shown on the (inside) cover page of the Official Statement at a price of ______(%) of par plus
a cash premium of $____________. The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed
for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the
Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will
be the responsibility of the Initial Purchaser of the Certificates.
MISCELLANEOUS
The Ordinance authorizing the issuance of the Certificates will also approve the form and content of this Official Statement, and any addenda
or amendment thereto, and authorize its further use in the reoffering of the Certificates by the Initial Purchaser.
Mayor
City of College Station, Texas
ATTEST:
City Secretary
City of College Station, Texas
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
A - 1
THE CITY
The City, located in Brazos County, is situated in the middle of a triangle bounded by Dallas/Fort Worth, Houston, and San
Antonio/Austin. Approximately 80% of the Texas population is located within a 200 mile radius of the City. In addition to being a
residential community for faculty, students and other personnel of Texas A&M University, the City also serves as a regional
manufacturing, retail and health care hub.
The City was incorporated in 1938 and has a Council-City Manager form of government with City employees totaling 1,001.50
currently.
The City adopted and enforces comprehensive zoning and building restrictions aimed at assuring orderly growth and development.
The City’s ordinances require all subdividers, at their own expense and without provision for refund, to install streets and water and
wastewater lines in any planned subdivision. These facilities are constructed under the City’s specifications and inspection and when
completed are deeded to the City free and clear. All areas within the City are now adequately served with water, wastewater and
electric service.
Proximity to three of the nation’s largest cities, college-town cultural amenities, low cost of living, varied housing options, warm
climate and low crime rate have resulted in significant population growth over the last decade.
CITY OWNED FACILITIES
The City maintains approximately 543 linear miles of streets within city limits, 99% of which are hard surface. The City has a
complete water distribution, wastewater collection and treatment system with 786 miles of wastewater and water lines. The City
owns the electrical distribution system with approximately 471 miles of distribution lines and 20 miles of 138kv transmission lines.
The City has a fully equipped police department with 144 full time police officers and 76 support personnel. The department has 70
police patrol cars and one holding facility with a capacity of 17. The fire department consists of 152 full time fire fighters and 8
support personnel. There are six stations and a total of 8 engines, 6 ambulances, 2 command vehicles, 1 rescue truck, 2 ladder trucks,
1 tanker truck, and 1 grass fire truck.
EDUCATIONAL FACILITIES
The College Station Independent School District (the “School District”) is a fully accredited system offering 17 educational campuses
for pre-kindergarten through high school. The School District has a student enrollment in excess of 12,500 and employs close to
1,700 people. On November 3, 2015 the voters passed a bond proposition for the School District that includes the construction of
three additional facilities. The bonds would fund a third intermediate school in the 2017-2018 school year and a third middle school
and tenth elementary school in the 2018-2019 school year. The School District’s facilities are also used by Blinn College, a
community college offering two years of college level courses.
College Station is home to Texas A&M University which provides higher education, offering both four year college programs and
graduate degree programs to over 66,000 enrolled students.
HEALTH CARE
College Station Medical Center, affectionately called ‘The Med’, is a 200,000 square foot community healthcare provider located
on 25 acres within the city limits of College Station. The Med is a 167-bed facility and is a licensed Level III Trauma unit. College
Station Medical Center is the only hospital in the Brazos Valley Region to receive national certification in joint replacement from
the Joint Commission. They are also an accredited Chest Pain Center, a certified Primary Stroke Center and the region’s first
accredited Sleep Center. The over 650 healthcare professionals work every day to be a place of healing, caring and connection for
patients and families in the community.
Rock Prairie Behavioral Health is a 72-bed state-of-the-art psychiatric hospital built specifically with patients’ needs in mind and is
dedicated to providing quality behavioral health care to promote growth and recovery for patients and families throughout the state
of Texas. The acute psychiatric hospital treats adolescents, adults, and seniors in both inpatient and outpatient settings. The
treatment facility is located in the heart of the Brazos Valley, conveniently located in College Station.
Baylor Scott & White Medical Center – College Station is a 403,000 square foot, five story, 143-bed hospital located on a 98 acre
campus near the intersection of Texas Highway 6 and Rock Prairie Road within the City of College Station. Baylor Scott & White
Medical Center – College Station is a nationally accredited Chest pain Center as well as a Level III Trauma Center. Scott & White
Clinic – Rock Prairie, a four-story medical office building, is also located on the campus adjacent to the hospital. Baylor Scott and
White Medical Center - College Station houses an emergency department, cardiac services including cath labs, neonatal intensive
care unit, comprehensive cancer services, operating rooms, maternity services suites, endoscopic procedure suites, intra operative
robotics and other specialty services, all supported by a pharmacy, comprehensive state-of-the-art imaging technology and other
diagnostic capabilities.
A - 2
Other area health care providers include: St. Joseph Regional Health Care Center, Baylor Scott and White Clinic, and The Physicians
Centre.
Medical District
The City recently amended its Comprehensive Plan to include the College Station Medical District Master Plan. The Master Plan
establishes guiding principles for the development of approximately 1,700 acres in south College Station to accommodate medical
facilities, walkable village centers, commercial space, and a variety of residential unit types, all in close proximity to parks, open space,
and trails. To ensure the long-term success of the District, the City has created a Tax Increment Reinvestment Zones to help fund the
necessary infrastructure. The City activated a Municipal Management District along the relatively undeveloped east side of State
Highway 6 to be used as a tool for development of these areas as well.
TRANSPORTATION
U.S. Highway 190/State Highway 21 links the City to Interstate 45 which is located approximately 35 miles to the east. State Highway
21 via U.S. Highway 290 also links the City to Austin, located approximately 110 miles to the west. State Highway 6 links the City to
Waco (100 miles) and Interstate 35 to the north and Houston (90 miles) to the south. Also, State Highway 30 links the City to Huntsville
(45 miles) and Interstate 45 to the east.
Airlines Commercial, corporate and private airport facilities are provided by Easterwood Airport, which is located
on the City’s west side and is owned and operated by Texas A&M University. American Eagle Airlines
provides daily flights to and from Dallas-Fort Worth Airport out of Easterwood. United Airlines provides
daily flights to and from Houston Bush Intercontinental Airport out of Easterwood. This airport recently
completed a $15 million renovation to the terminal.
Coulter Field is located north of the City of Bryan and provides a 4,000 foot lighted runway. Coulter Field
offers all types of services for the private aircraft.
Bus Lines Two bus lines serve the City with daily service connecting the City with Houston and Dallas.
Railroads Rail freight service is provided by the Union Pacific Railroad. Union Pacific Railroad operates a main freight
line from Houston through Bryan-College Station to Dallas-Fort Worth and beyond.
RECREATION
The College Station park system presently includes 58 parks encompassing 1448 acres, including a 515 acre wilderness park, and a 150-
acre regional athletic park. Collectively, these parks contain 63 playgrounds, 33 soccer fields, 26 basketball courts, 43 softball/baseball
backstops, 14 tennis courts, 3 swimming pools, a spray park, a skate park, a gymnasium, an outdoor amphitheater with a green room
and plaza area, 1 festival site and a number of picnic shelters and 8 picnic pavilions. The Parks and Recreation Department sponsors a
variety of organized athletic and aquatic programs as well as many special events throughout the year.
POPULATION
__________
(1) U.S. Census Bureau, American Community Survey
ECONOMIC BACKGROUND
Texas A&M University and System
Texas A&M opened its doors in 1876 as the state’s first public institution of higher learning. Located in College Station, Texas (about
90 miles northwest of Houston and within a two to three-hour drive from Austin and Dallas), Texas A&M’s main campus is home to
over 66,000 students, with more than 469,000 former students worldwide. As one of only 62 members of the prestigious Association
of American Universities (AAU), an association of leading public and private research universities in the United States and Canada,
Texas A&M boasts some of the top programs in academic research and scholarship. Texas A&M and the Texas A&M University
System employ more than 27,000 full and part-time personnel.
Texas A&M is one of only 17 institutions in the nation to hold the triple designation as a land-grant, sea-grant, and space-grant university.
In May 2016, the Chancellor of The Texas A&M University System unveiled plans to invest $150 million to create a new research and
development campus to help companies move ideas from the laboratory to the marketplace while also offering a new path toward a
1970 1980 1990 2000 2010
City of College Station 17,676 37,272 52,456 67,890 93,857
Brazos County 57,978 93,588 121,862 152,415 194,851
Official U.S. Census(1)
A - 3
college degree. The facility, to be located at a revamped and renamed Riverside Campus in Brazos County, initially will include a
cluster of seven new buildings and test beds to encourage the private sector to develop secure research facilities adjacent to the System’s
site. The facility, named the RELLIS Campus will focus on robotics, driverless and connected vehicles, advanced manufacturing, large-
scale testing as well as smart power grids and water systems.
George Bush Presidential Library and Museum
The City is the site of the George Bush Presidential Library and Museum, located on the campus of Texas A&M University. Texas
A&M provides programs and facilities such as research and instructional programs related to the library and museum, a conference
center, communications center, educational museum/library center, and family-oriented facilities such as a park surrounding the
presidential library and museum. The Presidential Library and Museum is also part of the George Bush Presidential Library Center
which is home to the prestigious Bush School of Government and Public Service.
Century Square
The City continues to experience a sustained period of growth. The growth has resulted in continued retail development, especially in
the Tower Point and Caprock developments in the southern part of the City with new restaurants and other businesses opening and
others under construction to serve the ever growing residential populations in that area of the City. However, that growth has expanded
to the north side of College Station where mixed-used facilities and additional hotels near the Texas A&M campus are under
construction.
One such development is Century Square. This 60-acre development creates a dynamic community center where people congregate
from across the region to experience a walkable, urban destination. The project features premier retail and restaurant establishments,
entertainment venues, 60,000 SF of Class-A office, two full-service hotels: The George and Cavalry Court, luxury apartment homes:
100 Park, and an activated central gathering space.
Athletics
Athletics is an integral part of College Station. Texas A&M University, along with the City, hosts a multitude of athletic events. Texas
A&M University is the home of Kyle Field, Reed Arena, Olsen Field at Bluebell Park, Aggie Softball Complex, George P. Mitchell
Tennis Center and Gilliam Indoor Track Stadium. Several of Texas A&M teams have won both conference and national titles over the
past five years with every university varsity level team competing in post-season play for the 2015-2016 season. This has positioned
the University to host regional payoffs as well as national championship games. Texas A&M’s move to the Southeastern Conference
(SEC) in 2012 has proved positive for the City. For the Texas A&M’s football team ranked third in the nation in average attendance
for both the 2015 and 2016 seasons, and fifth in the nation for the 2017 season, according to figures released by the NCAA.
For the 2016 season, A&M drew 101,917 fans per game last season at the rebuilt Kyle Field, trailing only Michigan (110,468) and Ohio
State (107,278). Capacity at Kyle Field is 102,512, the largest in the Southeastern Conference.
The City’s sport complexes as well as the ease to get around makes College Station attractive to several organizations. Over the past
several years, the Amateur Softball Association and the Texas Amateur Athletic Federation have chosen College Station to host state
tournaments and events. In addition, the City facilitates two major softball tournaments, a soccer tournament, a 7 on 7 flag football
tournament and baseball tournaments throughout the year. The City plans to add 2 additional synthetic athletic fields at Veterans Park
and Athletic Complex. This is anticipated to allow additional tournaments to be held in this area.
A - 4
MAJOR AREA EMPLOYERS
Source: Research Valley Partnership
Employment is provided by a variety of high growth industries located in, or adjacent to, the City which include ambulatory health care
services; professional, scientific, and technical services; specialty trade contractors; food manufacturing; administrative and support
services as identified in the Local Employment Dynamics data. Additionally College Station is also home to the 350 acre Research Park,
located on the Texas A&M University campus, which houses 30 public-private tenants including the Research Valley Partnership,
Schlumberger, Texas A&M Transportation Institute, and Offshore Technology Research Center. The City also developed the 200-acre,
Class “A” Business Center at College Station (BCCS), tenants of which include Reynolds and Reynolds Cognizant Technology Solution,
Suddenlink Media, Stata Corporation, Heat Transfer Research, Inc. (HTRI), and the Texas A&M University System. In addition, the
City has worked to develop a new Science Park at Research Valley, which currently houses Lynntech, Inc. and RBC Technologies.
Number of
Firm Name Product Employees
Texas A&M University System Education 27,000+
Bryan ISD Education 2,000 +
College Station ISD Education 2,000 +
Texas A &M Health Science Center Education 2,000 +
Reynolds & Reynolds IT 1,800 +
Blinn College Education 1,000 +
Sanderson Farms Food Manufacturing 1,000 +
CHI St . Joseph Health System Health Care 1,000 +
Walmart Retail 1,000 +
HEB Grocery Retail 1,000 +
City of College Station Government 1,000 +
Brazos County Government 500 - 999
City of Bryan Government 500 - 999
College Station Medical Center Health Care 500 - 999
Ply Gem Windows Manufacturing 500 - 999
Baylor Scott & White Health Health Care 500 - 999
A - 5
LABOR STATISTICS
College Station
Brazos County
Source: Texas Workforce Commission.
(1) Average as of February 28, 2018.
BUILDING PERMITS
College Station has grown rapidly over the past 30 years as evidenced by an increase in population from 37,272 in 1980 to 93,857 in
2010. As of 2018, the estimated population of College Station was 117,841. The following table sets forth the number and value of
construction permits issued by the City over the past several years.
Source: The City.
Labor Total
Force Employment Unemployment Rate
2013 51,136 48,665 2,471 4.8%
2014 52,028 49,945 2,083 4.0%
2015 52,739 51,023 1,716 3.3%
2016 55,788 53,913 1,875 3.4%
2017 58,145 56,364 1,781 3.1%
2018 (1)60,265 58,520 1,745 2.9%
Year
Labor Total
Force Employment Unemployment Rate
2013 103,089 98,074 5,015 4.9%
2014 104,334 100,180 4,154 4.0%
2015 105,935 102,343 3,592 3.4%
2016 110,420 106,643 3,777 3.4%
2017 113,424 109,948 3,476 3.1%
2018 (1)117,588 114,153 3,435 2.9%
Year
Residential Construction Commercial Construction Total
Number Number Number
of Permits Value of Permits Value of Permits Value
2008 1,131 164,494,779 $ 346 154,313,994 $ 1,477 318,808,773 $
2009 792 82,316,558 243 46,947,099 1,035 129,263,657
2010 860 93,158,066 309 162,053,510 1,169 255,211,576
2011 971 124,132,135 359 123,779,052 1,330 247,911,187
2012 1,208 149,737,218 325 67,478,910 1,533 217,216,128
2013 1,030 145,142,757 333 67,516,132 1,363 212,658,889
2014 1,167 211,909,494 338 67,570,229 1,505 279,479,723
2015 1,687 206,336,883 294 78,209,095 1,981 284,545,978
2016 1,802 325,247,597 424 207,892,402 2,226 533,139,999
2017 1,189 267,381,810 344 172,755,189 1,533 440,136,999
Calendar
Year
A - 6
COUNTY CHARACTERISTICS
Brazos County was created in 1841 from Robertson and Washington Counties. The economy is diversified primarily by agribusiness,
computer manufacturing, research and development, and education. The Texas Almanac designates cattle, hogs, sorghums, corn, cotton,
wheat, oats and pecans as the principal sources of agricultural income.
The County had a 2010 population of 194,851, an increase of 27.8% since 2000. Minerals produced in the County include sand and
gravel, lignite, gas and oil.
[Remainder of Page Intentionally Left Blank]
APPENDIX B
EXCERPTS FROM THE
CITY OF COLLEGE STATION, TEXAS
ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 2017
The information contained in this Appendix consists of excerpts from the City of College
Station, Texas Annual Financial Report for the Year Ended September 30, 2017, and is not
intended to be a complete statement of the City's financial condition. Reference is made to
the complete Report for further information.
APPENDIX C
FORMS OF OPINIONS OF BOND COUNSEL