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HomeMy WebLinkAbout06/11/2020 - Regular Agenda Packet - City CouncilCollege Station, TX Meeting Agenda City Council Regular ­ Amended Phone: 888 475 4499 and Webinar ID: 969 6026 4785 Internet:  https://zoom.us/j/96960264785 June 11, 2020 6:00 PM 1101 Texas Ave, College Station,  TX 77840 College Station, TX Page 1    1.Call to Order, Pledge of Allegiance, Invocation, Consider Absence Request.     Speaker Protocol: An individual who wishes to address the City Council regarding any item on the  Regular Agenda shall register with the City Secretary prior to 4 p.m. on the day of the meeting. To  register the individual must provide a name and phone number by calling 979­764­3500 or emailing  CSO@cstx.gov prior to the start of the meeting. To submit written comments to the Council email  CSO@cstx.gov and they will be provided at the meeting. Upon being called to speak an individual  must state their name and city of residence, including the state of residence if the city is located out  of state. Speakers are encouraged to identify their College Station neighborhood or geographic  location. Each speaker’s remarks are limited to three (3) minutes. Any speaker addressing the  Council through the use of a translator may speak for six (6) minutes. At the (3) minute mark the City  Secretary will announce that the speaker must conclude their remarks.     2.Hear Visitors     During Hear Visitors an individual may address the City Council on any item which does not appear  on the posted agenda. The City Council will listen and receive the information presented by the  speaker, ask staff to look into the matter, or place the issue on a future agenda. Topics of operational  concern shall be directed to the City Manager.     3.Consent Agenda     During the Consent Agenda an individual may address the City Council on any Consent Agenda  Item. Presentation, discussion, and possible action on consent agenda items which consists of  ministerial or "housekeeping" items required by law. Items may be removed from the consent  agenda by majority vote of the Council.  3.1.Presentation, discussion, and possible action of minutes for: • May 28, 2020 Workshop Meeting • May 28, 2020 Regular Meeting • June 1, 2020 Special Meeting   Sponsors:Tanya Smith   Attachments:1.WKSHP052820 DRAFT Minutes 2.RM052820 DRAFT Minutes 3.SM060120 DRAFT Minutes Page 1 of 471  City Council Regular ­ Amended Page 2 June 11, 2020 3.2.Presentation, discussion, and possible action on an ordinance canceling the postponed special  election runoff for the purpose of electing city council member place 4, for an unexpired term.  (Presentación, discusión, y posible acción sobre una ordenanza que ordena la cancelación de  la segunda vuelta de las elecciones especiales pospuestas con propósito de elegir a un  miembro del Concejo Municipal, Lugar 4, por un término no vencido.)  Sponsors:Tanya Smith  Attachments:1.ORD Canceling 04 18 20 Runoff 2.ORD Canceling 04.18.20 Runoff ­ Spanish 3.3.Presentation, discussion, and possible action regarding a resolution approving an advance  funding agreement (AFA) in the amount of $1,992,413 between the City of College Station and  the State of Texas, acting through the Texas Department of Transportation (TXDOT) for the  city's contribution for utility relocations for the FM 2818 widening project and a Resolution  Declaring Intention to Reimburse Certain Expenditures with Proceeds from Debt.  Sponsors:Emily Fisher   Attachments:1.Resolution FM 2818 Utility Relocations v2 2.v2 AFA Utility ­ FM 2818 3.Debt Reimbursement Resolution 2818 Widening Project 3.4.Presentation, discussion, and possible action to ratify a General Service Contract with Precept  Insurance Solutions, LLC for an Online Benefits Administration Platform and to proceed with  the second year of the initial two (2) year contract term.  The initial contract term began July 12,  2019 and expires July 11, 2021 with an annual expenditure of $70,000 for a total expenditure of  $140,000.  Sponsors:Alison Pond  Attachments:1.19300595 Precept Insurance Solutions LLC (OR) 2.Precept Insurance Solutions Amendment Letter No. 1 3.5.Presentation, discussion, and possible action regarding the first renewal of a general service  contract for city­wide mowing and landscape maintenance with Green Teams, Inc. in an  amount not to exceed $1,108,394.  Sponsors:Donald Harmon  Attachments:1.19300490R1 Signed Renewal Letter 3.6.Presentation, discussion, and possible action on renewing the annual price agreement with  Techline, Inc. for the purchase of wire and cable which will be maintained in electrical inventory  and expended as needed. The total recommended renewal is for an amount not to exceed  $712,700.  Sponsors:Mary Ellen Leonard  Attachments:1.C18300591Renewal 2 Ltr Techline Inc 3.7.Presentation, discussion, and possible action to approve a short­term budget of probable  expenditures for the remaining sixty day period between termination notification on May 29,  2020 and contract termination on August 1, 2020 as provided for in Article VI of the Tri­Party  Agreement between the City of College Station, City of Bryan and Experience Bryan College  Station.  Sponsors:Natalie Ruiz  Attachments:1.Budget will be available in the City Secretary’s Office Page 2 of 471  City Council Regular ­ Amended Page 3 June 11, 2020    4.Regular Agenda     During the Regular Agenda an individual may address the City Council on any Regular Agenda item  including those items not posted for Public Hearing. For those items posted for a Public Hearing. If  the City Council needs additional information from the general public after the Public Hearing is  closed some limited comments may be allowed at the discretion of the Mayor.  4.1.Public Hearing, presentation, discussion and possible action regarding an ordinance amending  Appendix A, “Unified Development Ordinance,” Article 4, “Zoning Districts,” Section 4.2 “Official  Zoning Map,” of the Code of Ordinances of the City of College Station, Texas by changing the  zoning district boundaries from GC General Commercial and O Office to MF Multi­Family, NAP  Natural Areas Protected and GC General Commercial on approximately 14 acres of land  located at 2325 Harvey Mitchell Parkway South.  Sponsors:Treston Rodriguez   Attachments:1.Ordinance 2.Background Information 3.Rezoning Exhibit 4.Vicinity Map, Aerial, and Small Area Map 4.2.Public Hearing, presentation, discussion, and possible action regarding an ordinance amending  Appendix A, “Unified Development Ordinance,” Section 1.10 “Transitional Provisions,” Section  4.1 “Establishment of Districts,” Section 5.5 “Retired Districts,” Section 7.2.D “Required Yards  (Setbacks),” and Section 8.3.H.2 “Platting and Replatting within Older Residential Subdivisions”  of the Code of Ordinances of the City of College Station, Texas, regarding the Neighborhood  Prevailing Overlay (NPO).  Sponsors:Jade Broadnax   Attachments:1.NPO Ordinance 2.Sec._1.10.___Transitional_Provisions. Redlines 3.Sec._4.1.___Establishment_of_Districts. Redlines 4.Sec._5.5.___Retired_Districts. Redlines 5.Sec._7.2.___General_Provisions. Redlines 6.Sec._8.3.___General_Requirements_and_Minimum_Standards­ Redlines 4.3.Presentation, discussion, and possible action on an ordinance authorizing the issuance of up to  $23,685,000 in principal amount of “City of College Station, Texas Certificates of Obligation,  Series 2020”; delegating the authority to certain City Officials to execute certain documents  relating to the sale of the certificates; approving and authorizing instruments and procedures  relating to the certificates; and enacting other provisions relating to the subject.  Sponsors:Mary Ellen Leonard  Attachments:1.Ordinance (CO) (ver 1) 2.POS­College Station Series 2020 Page 3 of 471  City Secretary City Council Regular ­ Amended Page 4 June 11, 2020 4.4.Presentation, discussion, and possible action on an ordinance authorizing the issuance of up to  $19,300,000  in  principal  amount  of  “City  of  College  Station,  Texas  General  Obligation  Refunding  Bonds,  Series  2020”;  delegating  the  authority  to  certain  City Officials  to  execute  certain documents relating to the sale of the Bonds; approving and authorizing instruments and  other procedures relating to said bonds; and enacting other provisions relating to the subject. Sponsors:Mary Ellen Leonard Attachments:1.Ordinance (GO Ref) (ver 1) 2.POS­College Station Series 2020 5.Presentation,  discussion, and possible action on future agenda items and review of standing list of Council generated agenda items: A Council Member may inquire about a subject for which notice has not been given. A statement of  specific factual information or the recitation of existing policy may be given. Any deliberation shall be  limited to a proposal to place the subject on an agenda for a subsequent meeting.  6.Adjourn. The City council may adjourn into Executive Session to consider any item listed on the agenda if a  matter is raised that is appropriate for Executive Session discussion.  I certify that the above Notice of Meeting was posted on the website of the City of College Station at  3:00 p.m. on June 6, 2020. This  building  is  wheelchair  accessible.  Persons  with  disabilities  who  plan  to  attend  this meeting    and    who    may    need    accommodations,    auxiliary    aids,    or    services    such    as interpreters,   readers,  or  large  print  are  asked  to  contact  the  City  Secretary’s  Office  at  (979) 764­3541,  TDD   at  1­800­735­2989,  or  email  adaassistance@cstx.gov  at  least  two  business days  prior  to  the   meeting   so   that   appropriate   arrangements   can   be   made.   If   the   City   does  not   receive   notification  at  least  two  business  days  prior  to  the  meeting,  the  City  will  make  a reasonable  attempt to provide the necessary accommodations. Penal Code § 30.07. Trespass by License Holder with an Openly Carried Handgun. "Pursuant  to  Section  30.07,  Penal  Code  (Trespass  by  License  Holder  with  an  Openly  Carried     Handgun)     A     Person     Licensed     under     Subchapter     H,     Chapter     411,  Government   Code   (Handgun   Licensing   Law),   may   not   enter   this   Property   with   a  Handgun that is Carried Openly."  Codigo Penal § 30.07. Traspasar Portando Armas de Mano al Aire Libre con Licencia. “Conforme  a  la  Seccion  30.07 del  codigo  penal  (traspasar  portando  armas  de  mano al    aire   libre   con   licencia),   personas   con   licencia   bajo   del   Sub­Capitulo   H,   Capitulo  411,  Codigo  de  Gobierno  (Ley  de  licencias  de  arma  de  mano),  no  deben  entrar  a  esta  propiedad portando arma de mano al aire libre.” Page 4 of 471  City Council Regular ­ Amended Page 5 June 11, 2020 Page 5 of 471 June 11, 2020 Item No. 3.1. Council Minutes Sponsor:Tanya Smith, City Secretary Reviewed By CBC:City Council Agenda Caption: Presentation, discussion, and possible action of minutes for: • May 28, 2020 Workshop Meeting • May 28, 2020 Regular Meeting • June 1, 2020 Special Meeting Relationship to Strategic Goals: Good Governance Recommendation(s): Approval Summary: N/A Budget & Financial Summary: None Reviewed & Approved by Legal: No Attachments: 1.WKSHP052820 DRAFT Minutes 2.RM052820 DRAFT Minutes 3.SM060120 DRAFT Minutes Page 6 of 471 WKSHP052820 Minutes Page 1 MINUTES OF THE CITY COUNCIL WORKSHOP VIA TELECONFERENCE CITY OF COLLEGE STATION MAY 28, 2020 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: Karl Mooney, Mayor Council: Bob Brick John Crompton Linda Harvell John Nichols Dennis Maloney City Staff: Jeff Capps, Interim City Manager Jeff Kersten, Assistant City Manager Carla Robinson, City Attorney Tanya Smith, City Secretary Ian Whittenton, Deputy City Secretary 1. Call to Order and Announce a Quorum is Present With a quorum present, the Workshop of the College Station City Council was called to order by Mayor Mooney at 4:08 p.m. on Thursday, May 28, 2020 in the Council Chambers of the City of College Station City Hall, 1101 Texas Avenue, College Station, Texas 77840. 2. Executive Session In accordance with the Texas Government Code §551.071-Consultation with Attorney, and §551.074-Personnel, the College Station City Council convened into Executive Session at 4:08 p.m. on Thursday, May 28, 2020 in order to continue discussing matters pertaining to: A. Consultation with Attorney to seek advice regarding pending or contemplated litigation; to wit: Kathryn A. Stever-Harper as Executrix for the Estate of John Wesley Harper v. City of College Station and Judy Meeks; No. 15,977-PC in the County Court No. 1, Brazos County, Texas; and McCrory Investments II, LLC d/b/a Southwest Stor Mor v. City of College Station; Cause No. 17-000914-CV-361; In the 361st District Court, Brazos County, Texas City of College Station v. Gerry Saum, Individually, and as Independent Executrix of the Estate of Susan M. Wood, Deceased; Cause No. 17-002742-CV-361; In the 361st District Court, Brazos County, Texas Carrie McIver v. City of College Station; Cause No. 18-003271-CV-85; In the 85th District Court, Brazos County, Texas Page 7 of 471 WKSHP052820 Minutes Page 2 Veronica Alejandra Ibarra v. The City of College Station; Cause No. 20000325CV361; in the 361st District Court, Brazos County, Texas B.Consultation with attorney to receive legal advice; to wit: Legal advice regarding the FY20 funding agreements between the City and Experience Bryan College Station. Legal advice regarding special election runoff to elect City Councilmember Place 4. Legal advice concerning municipal regulation of short term rentals. C. Deliberation on the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer; to wit: Council Self-Evaluation City Manager City Secretary Executive Session recessed at 6:37 p.m. 3. Reconvene from Executive Session and take action, if any. MOTION: Upon a motion made by Councilmember Harvell and a second by Councilmember Crompton, the City Council voted six (6) for and none (0) opposed, to authorize the City Manager to prepare, sign and send on the City’s behalf, an advance written notice to Experience Bryan College Station notifying EBCS of the City’s termination of its current funding agreements with EBCS effective August 1, 2020, in compliance with the terms of said agreements. The motion carried unanimously. 4. Presentation, possible action and discussion on items listed on the consent agenda. Item 3.3 was pulled from Consent for clarification. (3.3): Mary Ellen Leonard, Director of Finance, explained that the banking and service fees associated with the acceptance of credit cards as a method of payment are charged to each department that accepts Visa, MasterCard and Discover. (3.4): Debbie Eller, Director of Community Services, gave a brief explanation of the tenant based rental assistance guidelines to assist College Station residents with rental assistance payments for College Station households affected by the disaster declarations due to COVID-19. (3.6): Carol Cotter, Planning & Zoning Commission, stated that this is a Semi-Annual Report on System-Wide Impact Fees for Water, Wastewater, and Roadway is required by law. (3.9): Natalie Ruiz, Director of Economic Development, stated that staff had begun looking at potential short-term leasing options for the existing police station building on Texas Avenue at the same time the International Leadership of Texas School was looking for a temporary space for their high school students, while a new building is being developed. The school currently owns and operates the educational facility located near the intersection of Longmire Drive and Graham Road that serves students from kindergarten through 8th grade. Starting this fall, the School will have their first high school students entering the 9th grade. Their plans are to add a grade level each year until they have all 9th, 10th, 11th, and 12th graders at one facility. Ideally, the permanent Page 8 of 471 WKSHP052820 Minutes Page 3 high school building will be ready for students in the fall of 2023. The initial lease term is three years with the option for two, one-year extensions. 5. Workshop 5.1 Presentation, discussion, and possible action regarding the FY20 Proposed Bond Issuance. Mary Ellen Leonard, Director of Fiscal Services, presented the status of the proposed FY20 Bond issuance and the proposed issuance parameters. Mrs. Leonard explained some options related to changes in the FY20 Bond issuance based on recent economic events. The ordinances related to the parameters for issuance of certificates of obligation, series 2020 are schedule to be brought to Council for approval on June 11, 2020. Staff has strategically evaluated the impact of the series 2020 Certificates on the City’s ability to meet debt service requirements and the effect they may have on the ad valorem tax rate. The project savings and rescheduling has resulted in a change in the parameters as originally budgeted. The recommendation is to move forward with this issuance with the revised parameters that will be presented. The impact on the tax rate and utility rates has been reviewed based on the most current information and will continually be reviewed as part of budget preparation. FY20 General Government Proposed Issuance Paid for from debt side of the Ad Valorem Tax Rate Staff would like to reduce the proposed offering from the budgeted $20,715,000 to $2,210,000. Accomplished by: 1.Realigning anticipated needs for projects based on COVID 19, other factors and utilization of project savings - $3.1 million 2.Eliminating issuing remaining tranche for City Hall as CMAR contract indicated it will not be needed - $6.8 million 3.Adding no additional projects from the unfunded capital list - $4.2 million 4.Reassigning issued debt for Southeast Park to other projects - $4.4 million FY20 Utility Funds Proposed Issuance Paid for from Utility Fund Revenue Staff would like to reduce the proposed offering from the budgeted $28,340,000 to $21,075,000. Accomplished by: 1.Realigning anticipated needs for projects based on COVID 19 other factors and utilization of project savings - $3.0 million 2.Reassigning issued debt for the purchase of water rights to the Rock Prairie Elevated Storage tank - $4.3 million FY20 Refunding Proposed Issuance Evaluating refunding the 2010 GO and 2010 thru 2012 COs Amount $19 - $41 million Average life remaining is 5.5 years Possible Net Present Value Savings $1.4 - $3.9 million Possible percentage savings on refunded bonds - 7.5% - 11.4% Refunding savings must >= 5% to proceed Page 9 of 471 WKSHP052820 Minutes Page 4 MOTION: Upon a motion made by Councilmember Nichols and a second by Councilmember Crompton, the City Council voted six (6) for and none (0) opposed, to move forward with the FY20 Proposed Bond Insurance as presented by staff. The motion carried unanimously. 5.2 Presentation, discussion, and possible action regarding the 2019 Incentive Compliance Report by the Brazos Valley Economic Development Corporation. Matt Prochaska and Chuck Martinez, BVEDC, stated that for 2019, six (6) projects under agreement were monitored for performance compliance by the Brazos Valley Economic Development Corporation on behalf of Brazos County, the City of Bryan, and the City of College Station. The incentive agreements with Nutrabolt closed in 2019 with all parties, as such no further monitoring is made. 2019 Compliance Report: Advanta US November 2016 announcement to establish global biotech R&D center in College Station. January 2018 facility ribbon cutting ceremony. $80,000 avg annual salary requirement: $95,257 (2019) Axis Pipe & Tube During first 3 years of Agreement (2013, 2014 and 2015), no payment to the City. For every year thereafter, the payment is equivalent of 50% of the amount the City would have collected in Ad Valorem tax that year. 2019 performance exceeds contracts’ benchmark valuation + salary formula FUJIFILM Diosynth Biotechnologies Texas @ Bio corridor BCAD 2017 valuation reflected partial facility and only real property –While the Company reported $73,236,000 improvements (real + personal property), the Company opted not to challenge BCAD 2017 valuation and consequently, 2017 incentives were foregone. Since 2018, BCAD reflects the updated valuation of facility complex. LSPI NOV 2017 ribbon cutting (met DEC 2017 requirement) $62.4M facility investment (met $25M requirement) BVEDC cash incentives paid ViaSat JAN 19th 2017 groundbreaking APR 10th 2018 ribbon cutting of $30M facility (exceeds $20M investment requirement) Wayfair 1st incentive grant released with $1.98M investment 2nd incentive grant released in July 2018 3rd / final incentive grant released in January 2020 MOTION: Upon a motion made by Councilmember Harvell and a second by Councilmember Brick, the City Council voted six (6) for and none (0) opposed, to receive the compliance report. The motion carried unanimously. 6. Council Calendar Council reviewed the calendar. Page 10 of 471 WKSHP052820 Minutes Page 5 7. Discussion, review, and possible action regarding the following meetings: Animal Shelter Board, Arts Council of Brazos Valley, Architectural Advisory Committee, Audit Committee, Bicycle, Pedestrian, and Greenways Advisory Board, Bio-Corridor Board of Adjustments, Brazos County Health Dept., Brazos Valley Council of Governments, Brazos Valley Economic Development Corporation, Bryan/College Station Chamber of Commerce, Budget and Finance Committee, BVSWMA, BVWACS, Compensation and Benefits Committee, Comprehensive Plan Evaluation Committee, Experience Bryan-College Station, Design Review Board, Economic Development Committee, Gulf Coast Strategic Highway Coalition, Historic Preservation Committee, Interfaith Dialogue Association, Intergovernmental Committee, Joint Relief Funding Review Committee, Landmark Commission, Library Board, Metropolitan Planning Organization, Operation Restart, Parks and Recreation Board, Planning and Zoning Commission, Research Valley Technology Council, Regional Transportation Committee for Council of Governments, Sister Cities Association, Spring Creek Local Government Corporation, Transportation and Mobility Committee, TAMU Student Senate, Texas Municipal League, Walk with the Mayor, YMCA, Zoning Board of Adjustments, (Notice of Agendas posted on City Hall bulletin board). Councilmember Nichols reported on the Transportation Committee. 8. Adjournment There being no further business, Mayor Mooney adjourned the workshop of the College Station City Council at 7:43 p.m. on Thursday, May 28, 2020. ________________________ Karl Mooney, Mayor ATTEST: _______________________ Tanya Smith, City Secretary Page 11 of 471 RM052820 Minutes Page 1 MINUTES OF THE REGULAR CITY COUNCIL MEETING VIA TELECONFERENCE CITY OF COLLEGE STATION MAY 28, 2020 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: Karl Mooney, Mayor Council: Bob Brick John Crompton Linda Harvell John Nichols Dennis Maloney City Staff: Jeff Capps, Interim City Manager Jeff Kersten, Assistant City Manager Carla Robinson, City Attorney Tanya Smith, City Secretary Ian Whittenton, Deputy City Secretary 1.Call to Order and Announce a Quorum is Present and Pledge of Allegiance, Invocation, consider absence request. With a quorum present, the Regular Meeting of the College Station City Council was called to order by Mayor Mooney at 7:57 p.m. on Thursday, May 28, 2020 in the Council Chambers of the City of College Station City Hall, 1101 Texas Avenue, College Station, Texas 77840. 2.Hear Visitors Comments David Flash, Leander, came before Council to give examples of what he believes are questionable practices in the College Station Police Department. 3.CONSENT AGENDA 3.1. Presentation, possible action, and discussion of minutes for: May 14, 2020 Workshop Meeting May 14, 2020 Regular Meeting 3.2. Presentation, discussion, and possible action on the second reading of a franchise agreement Ordinance No. 2020-4177 with Howdy Disposal LLC; for the collection of demolition and construction debris, recyclables, and organic waste from commercial, industrial and multifamily locations. Page 12 of 471 RM052820 Minutes Page 2 3.3. Presentation, discussion, and possible action to approve the provision of services by Global Payments Direct, Inc. for Merchant Card and Credit Card Payment Processing Services by approving Renewal No. 1 and Amendment No. 2 for a total estimated annual expenditure amount of $240,000. 3.4. Presentation, discussion, and possible action regarding the approval of Tenant Based Rental Assistance (TBRA) Guidelines to assist College Station residents with rental assistance payments for College Station households affected by the disaster declarations due to COVID- 19. 3.5. Presentation, discussion, and possible action regarding the first renewal of an Annual Electric System Construction and Maintenance Labor Contract with Kasparian Underground, LLC dba H&B Contractors for a not to exceed amount of $750,000. 3.6. Presentation, discussion, and possible action regarding a Semi-Annual Report on System- Wide Impact Fees for Water, Wastewater, and Roadway. 3.7. Presentation, discussion, and possible action on the BVWACS annual operation & maintenance and capital budget. 3.8. Presentation, discussion, and possible action on a General Service Contract Amendment with Emergicon, LLC. 3.9. Presentation, discussion, and possible action regarding the lease of 3.1 acres including an approximately 28,949 square foot building at 2611 Texas Avenue South, formerly used as headquarters for the police department, to International American Education Federation, Inc., d/b/a International Leadership of Texas, a Texas Domestic Nonprofit Corporation, for an initial term of three years for the total amount of approximately $1,015,580. 3.10. Presentation, discussion, and possible action regarding Resolution No. 05-28-20-3.10 approving an advance funding agreement (AFA) in the amount of $35,525 between the City of College Station and the State of Texas, acting through the Texas Department of Transportation (TXDOT) for the city's contribution for certain signal improvements for the intersection of FM 2347 and Dexter Drive. 3.11. Presentation, discussion, and possible action regarding Resolution No. 05-28-20-3.11 approving an advance funding agreement (AFA) in the amount of $323,345 between the City of College Station and the State of Texas, acting through the Texas Department of Transportation (TXDOT) for the city's contribution for certain signal improvements for the FM 2818 widening project. Mayor Mooney opened Citizens Comments. Rich Woodward, College Station, stated that flat rate impact fees are grossly unfair and economically inefficient; grandfathering of platted properties would have eliminated the short-term costs, but sent a message that the City will be moving to an appropriate sharing of the development burden in the future. Page 13 of 471 RM052820 Minutes Page 3 There being no further comments, Citizens Comments was closed. MOTION: Upon a motion made by Councilmember Nichols and a second by Councilmember Maloney, the City Council voted six (6) for and none (0) opposed, to approve the Consent Agenda. The motion carried unanimously. 4.REGULAR AGENDA 4.1. Public Hearing, presentation, discussion, and possible action regarding Ordinance No. 2020-4178 vacating and abandoning a 0.15 acre portion of the 20-foot Public Utility Easement, said portion lying along the northwest property line of Lot 1, of the Creekside Subdivision Phase 1 according to the plat recorded in Volume 14965, Page 276, of the Deed Records of Brazos County, Texas. Anthony Armstrong, Planning and Development, stated that this public utility abandonment is being requested by the applicant as a result of a change during the construction phase of the development. This originally platted easement is no longer needed, as the sewer line originally planned to run within this easement area has been constructed in a different location on the lot, and a Public Utility Easement is being placed over that location. The 0.15 acre public utility easement is located along William D. Fitch Parkway, northeast of the intersection of William D. Fitch Parkway and Williams Creek Drive. At approximately 8:12 p.m., Mayor Mooney opened the Public Hearing. Veronica Morgan, Mitchell & Morgan (Applicant), was unable to speak due to technical difficulties. There being no comments, the Public Hearing was closed at 8:14 p.m. MOTION: Upon a motion made by Councilmember Harvell and a second by Councilmember Maloney, the City Council voted six (6) for and none (0) opposed, to adopt Ordinance No. 2020- 4178, vacating and abandoning a 0.15 acre portion of the 20-foot Public Utility Easement, said portion lying along the northwest property line of Lot 1, of the Creekside Subdivision Phase 1 according to the plat recorded in Volume 14965, Page 276, of the Deed Records of Brazos County, Texas. The motion carried unanimously. 4.2 Public Hearing, presentation, discussion, and possible action regarding Ordinance No. 2020-4179 vacating and abandoning a 2-foot wide portion of a Public Utility Easement lying along Lots 2B-2 & 2B-3, of the Horse Haven Estates Lot 2B-1, 2B-2 & 2B-3 Subdivision, according to the plat recorded in Volume 8341, Page 233, of the Official Records of Brazos County, Texas. Alma Guerra, Planning and Development, stated that this partial Public Utility Easement abandonment is proposed by the applicant to address site constraints recognized during redevelopment of the property. The 2-foot wide portion of the easement is no longer necessary as the remainder of the 20-foot Public Utility Easement is adequate to serve all existing public infrastructure. Page 14 of 471 RM052820 Minutes Page 4 At approximately 8:16 p.m., Mayor Mooney opened the Public Hearing. There being no comments, the Public Hearing was closed at 8:16 p.m. MOTION: Upon a motion made by Councilmember Harvell and a second by Councilmember Nichols, the City Council voted six (6) for and none (0) opposed, to adopt Ordinance No. 2020-4179, vacating and abandoning a 2-foot wide portion of a Public Utility Easement lying along Lots 2B-2 & 2B-3, of the Horse Haven Estates Lot 2B-1, 2B-2 & 2B-3 Subdivision, according to the plat recorded in Volume 8341, Page 233, of the Official Records of Brazos County, Texas. The motion carried unanimously. 4.3 Public Hearing, presentation, discussion, and possible action regarding Ordinance No. 2020-4180 amending Appendix A, “Unified Development Ordinance, “Article 4, Zoning Districts,” Section 4.2 “Official Zoning Map,” of the Code of Ordinances of the City of College Station, Texas by changing the zoning district boundary from R Rural, O Office, and C-3 Light Commercial to GC General Commercial on approximately 15 acres of land located at 95 North Dowling Road B, 101 North Dowling Road A & B, 103 North Dowling Road, and 107 North Dowling Road. Rachel Lazo, Planning and Development, stated that the applicant has requested a rezoning for approximately 15 acres of land from R (Rural), O (Office), and C-3 (Light Commercial) to GC (General Commercial) designation. The subject property is adjacent to an existing multi-family development and surrounded by property also slated for dense urban-style development. This site does not have a high potential to be marketed as a rural/single-family residential development, as it is located along a major arterial and has limited access due to its proximity to a railroad right-of-way. Due to these characteristics, it has limited potential with an R zoning designation. The Planning & Zoning Commission heard this item at their May 7, 2020 Regular meeting where they voted 6-0 to recommend approval. Staff recommends approval of the rezoning. At approximately 8:21 p.m., Mayor Mooney opened the Public Hearing. There being no comments, the Public Hearing was closed at 8:21 p.m. MOTION: Upon a motion made by Councilmember Nichols and a second by Councilmember Brick, the City Council voted six (6) for and none (0) opposed, to adopt Ordinance No. 2020-4180, amending Appendix A, “Unified Development Ordinance, “Article 4, Zoning Districts,” Section 4.2 “Official Zoning Map,” of the Code of Ordinances of the City of College Station, Texas by changing the zoning district boundary from R Rural, O Office, and C-3 Light Commercial to GC General Commercial on approximately 15 acres of land located at 95 North Dowling Road B, 101 North Dowling Road A & B, 103 North Dowling Road, and 107 North Dowling Road. The motion carried unanimously. 4.4 Presentation, discussion, and possible action regarding Ordinance No. 2020-4181 consenting to and extending the Mayor's renewal of a disaster declaration due to public health emergency. Jeff Capps, Interim City Manager, stated that on May 22, 2020, the Mayor of College Station issued a proclamation pursuant to §418.014 of the Texas Government Code renewing the state of disaster Page 15 of 471 RM052820 Minutes Page 5 proclaimed by the Mayor on March 17, 2020 and April 21, 2020. The conditions necessitating the declaration of a state of disaster and mayoral orders continue to exist. The Council needs to consent and approve the Mayor's Disaster Declaration renewal. MOTION: Upon a motion made by Councilmember Brick and a second by Councilmember Harvell, the City Council voted six (6) for and none (0) opposed, to adopt Ordinance No. 2020-4181, consenting to and extending the Mayor's renewal of a disaster declaration due to public health emergency. The motion carried unanimously. 4.5 Public Hearing, presentation, discussion, and possible action regarding Ordinance No. 2020-4182 adopting the standards of care for the City's Parks and Recreation Department's elementary age (5-13) Youth Recreational Program. David Schmitz, Director of Parks & Recreation, stated that the Department of Human Services and Department of Protective and Regulatory Services passed updated legislation specifically regarding the regulation of certain facilities, homes, and agencies that provide child-care services. According to Section 42.041, the services provided by the Parks and Recreation Department within the City of College Station meet all exemptions to this legislation. However, our compliance must be evidenced through an approved Standard of Care Ordinance. In conjunction with the Legal Department, Parks & Recreation staff have drafted the ordinance for adoption. At approximately 8:25 p.m., Mayor Mooney opened the Public Hearing. There being no comments, the Public Hearing was closed at 8:25 p.m. MOTION: Upon a motion made by Councilmember Brick and a second by Councilmember Nichols, the City Council voted six (6) for and none (0) opposed, to adopt Ordinance No. 2020-4182, adopting the standards of care for the City's Parks and Recreation Department's elementary age (5-13) Youth Recreational Program. The motion carried unanimously. 4.6 Presentation, discussion, and possible action regarding Ordinance No. 2020-4183 regulating short-term rental units in College Station. Brian Piscacek, Assistant to City Manager, stated that staff presented a draft short term rental ordinance to Council during the Workshop portion of the City Council meeting on April 23, 2020. The draft ordinance proposed the regulation of short term rental units (STRs) and described how the City would permit and enforce STRs in College Station. The ordinance included elements to permit owner-occupied and non-owner-occupied STRs, mandated life safety inspections prior to permit issuance, instituted tenant information brochures for STR operations, required STR operators to collect and remit applicable hotel occupancy tax, and detailed a denial or revocation process for violations. At that meeting, staff received additional direction from Council to further examine the limits of non-owner-occupied STRs, address the presence of bed and breakfast facilities, and consider life safety inspections at more frequent intervals. Incorporating council direction, staff presented a revised ordinance which defines STRs into 3 categories and places restrictions in some zoning districts based on owner-occupancy. The ordinance also provided clarity on bed and breakfast facilities and establishes systematic life safety inspections. Page 16 of 471 RM052820 Minutes Page 6 This version is also updated to reflect the inclusion of the definition of a bed and breakfast facility and additional language concerning the remittance of hotel occupancy tax. At approximately 8:48 p.m., Mayor Mooney opened Citizens Comments. David Higdon, College Station, came before council speaking for a group of citizens and stated that in April 2020, CSAN presented to City Council a list of twelve recommendations that they believe are essential to include in a Short Term Rental Ordinance to protect the residential neighborhoods. Overall, the second draft is a good representation of what CSAN believes is vital to protecting neighborhoods from the introduction of investor owned STRs in our General Suburban (GS), Restricted Suburban (RS) and Wellborn Restricted Suburban (WRS) districts. Mr. Higdon noted that in addition to the primary residence stipulation, his group believes that this ordinance could be greatly enhanced with at least these following amendments: 1) Add a definition of “primary residence’ that includes a direct reference to “sole declared homestead for tax purposes in the State of Texas.” 2) The application for a license must include a signed agreement by the property owner that he/she fully understands the requirements of the licensing agreement, that the property is his /her primary residence and that he/she assumes full legal responsibility for any violations of the ordinance on their property. 3) Notification of licensing to neighbors within 200 feet of the property is an important safety issue as it aligns with the city’s ongoing “Neighborhood Watch” public safety programs and allows impacted neighbors to be aware of the cause of unknown persons and vehicles in the area. 4) Additional detail is needed to more clearly define the steps of the violation enforcement process that can result in revocation or refusal to renew a STR license. Diana Wood, College Station, explained how she came to come to Southwood View and noted that citizens depend on the support of the city to protect neighborhoods. Mrs. Wood stressed that she does not want to live next door to a party house and ask Council to support and enforce a strong STR ordinance. Lori Brown, College Station, state that it seems that the City of College Station is either not aware or is ignoring the court’s opinions on this matter and is opening themselves up for unnecessary legal intervention. Ms. Brown, also expressed that as an educated planner, real estate broker, and STR owner and operator, she understands both sides of this issue. She believes it is the City’s job to protect all citizens and their guests and when laws do not exist that will enhance and/or further the purpose to protect, then they should create those laws. Karl Wolfshohl, College Station, stated that he agrees with David Higdon and Diana Wood. He also expressed the need strict regulations for STR’s and referenced an incident he called into Code Enforcement where he was not satisfied with the enforcement options. John Woods, College Station, stated that he wanted to thank the Council and Staff for all the work they have done but has concerns about the regulations not being strict enough and questions the city’s ability to enforce them. Mr. Woods also asked for clarification on the ordinances for this item. Peter Bastian, College Station, stated that he was President of the Amber Lake Homeowners’ Association and came to represent residents who want a high quality of life. He expressed his concerns with the lack of regulations on STR’s and the impact taking no action will have on the neighborhoods with the game day rentals. Page 17 of 471 RM052820 Minutes Page 7 Rachel Smith, College Station, stated that Austin is not the city’s appellant court district, Waco is. Therefore we should not consider what Austin does. There being no further comments, Citizens Comments was closed at 9:28 p.m. MOTION: A motion was made by Councilmember Brick and seconded by Councilmember Crompton, to bring back a Draft Ordinance 2 and 3, regulating short-term rental units in College Station with Council direction from this meeting incorporated and grandfathering included. The motion and second were withdrawn. Council directed staff to review the feasibility of including grandfathering of the existing short term rentals and bring back two draft ordinances on STR’s with additional consideration given to tonight’s discussion. 5.Presentation, discussion, and possible action on future agenda items and review of standing list of Council generated agenda items: A Council Member may inquire about a subject for which notice has not been given. A statement of specific factual information or the recitation of existing policy may be given. Any deliberation shall be limited to a proposal to place the subject on an agenda for a subsequent meeting. Councilmember Crompton requested a future agenda item evaluating the costs of installing and maintaining landscaping on City thoroughfares. 6.Adjournment. There being no further business, Mayor Mooney adjourned the Regular Meeting of the City Council at 11:00 p.m. on Thursday, May 28, 2020. ________________________ Karl Mooney, Mayor ATTEST: ___________________________ Tanya Smith, City Secretary Page 18 of 471 SM060120 Minutes Page 1 MINUTES OF THE CITY COUNCIL SPECIAL MEETING VIA TELECONFERENCE CITY OF COLLEGE STATION June 1, 2020 STATE OF TEXAS § § COUNTY OF BRAZOS § Present: Karl Mooney, Mayor Council: Bob Brick John Crompton Linda Harvell John Nichols Dennis Maloney City Staff: Jeff Capps, Interim City Manager Jeff Kersten, Assistant City Manager Carla Robinson, City Attorney Tanya Smith, City Secretary Ian Whittenton, Deputy City Secretary 1. Call to Order and Announce a Quorum is Present With a quorum present, the Special Meeting of the College Station City Council was called to order by Mayor Mooney at 6:33 p.m. on Thursday, April 16, 2020 in the Council Chambers of the City of College Station City Hall, 1101 Texas Avenue, College Station, Texas 77840. 2. Executive Session In accordance with the Texas Government Code §551.071-Consultation with Attorney, and §551.074-Personnel, the College Station City Council convened into Executive Session at 6:33 p.m. on Monday, June 1, 2020, in order to continue discussing matters pertaining to: A.Consultation with attorney to receive legal advice; to wit: Legal advice regarding special election runoff to elect City Councilmember Place 4. B. Deliberation on the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer; to wit: City Secretary Executive Session recessed at 7:16 p.m. 3. Reconvene from Executive Session and take action, if any. Page 19 of 471 SM060120 Minutes Page 2 No vote or action was taken in Executive Session. 4. Special Agenda 4.1. Presentation, possible action, and discussion regarding Ordinance 2020-4184 ordering a Runoff Election to be held on August 18, 2020 for the purpose of electing a City Council Member, Place 4, for an unexpired term. (Presentación, posible acción, y discusión sobre una ordenanza que ordena una elección de la segunda vuelta que se celebrará el 18 de agosto de 2020 con el propósito de elegir a un miembro del Concejo Municipal, Lugar 4, por un término no vencido.) Tanya Smith, City Secretary, explained that this item is for council to consider calling a runoff election for August 18th for the purpose of electing City Councilmember Place 4. At approximately 7:19 p.m., Mayor Mooney opened Citizens Comments. Jorge Sanchez, College Station, came before council to urge that the council postpone the election several weeks after August 18th. He believes that this date would cause a lower student voter turnout. Elizabeth Cunha, College Station, came before council to urge the council to hold the election at a date later than August 18th. She specifically cited concerns around voter turnout, specifically college students. Joe Guerra, College Station, stated that he supports the August 18th election date as the seat has remained vacant for some time. There being no further comments, Citizens Comments was closed at 7:29 p.m. By consensus the council directed the City Secretary to place an item on a future agenda to call a runoff election on November 3rd. 5. Adjournment There being no further business, Mayor Mooney adjourned the Special Meeting of the College Station City Council at 7:35 p.m. on Monday, June 1, 2020. ________________________ Karl Mooney, Mayor ATTEST: _______________________ Tanya Smith, City Secretary Page 20 of 471 June 11, 2020 Item No. 3.2. Canceling Special Runoff Election (Cancelación de elecciones especiales de segunda vuelta) Sponsor:Tanya Smith, City Secretary Reviewed By CBC:N/A Agenda Caption:Presentation, discussion, and possible action on an ordinance canceling the postponed special election runoff for the purpose of electing city council member place 4, for an unexpired term. (Presentación, discusión, y posible acción sobre una ordenanza que ordena la cancelación de la segunda vuelta de las elecciones especiales pospuestas con propósito de elegir a un miembro del Concejo Municipal, Lugar 4, por un término no vencido.) Relationship to Strategic Goals: - Good Governance - (Buen gobierno) Recommendation(s): Approve as presented to the City Council. (Aprobar tal como se presenta al Concejo Municipal.) Summary: This ordinance would cancel the previously postponed runoff election for the purpose of electing City Councilmembers, Place 4, for an unexpired term. At a future meeting an ordinance will be brought to council for this purpose, to be held with the November 3rd General Election. (Esta ordenanza cancelaría las elecciones de segunda vuelta previamente pospuesta para el propósito de elegir al Miembro del Consejo Municipal, Lugar número 4, por un término no vencido. En una reunión futura, se llevará una ordenanza al consejo para este propósito, ser sostenido con a con la Elección General del 3 de Noviembre.) Budget & Financial Summary: Holding the Special Runoff Election with the General Election is estimated to incur no additional cost. The current costs already incurred total around $8,000. (Se estima que la celebración de la Elección Especial de Escorrentía con la Elección General no tiene costo adicional. Los costos actuales ya incurridos totalizan alrededor de $ 8,000.) Reviewed & Approved by Legal: No Attachments: 1.ORD Canceling 04 18 20 Runoff 2.ORD Canceling 04.18.20 Runoff - Spanish Page 21 of 471 ORDINANCE NO. ________________ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COLLEGE STATION CANCELING THE POSTPONED SPECIAL ELECTION RUNOFF FOR THE PURPOSE OF ELECTING CITY COUNCIL MEMBER PLACE 4; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. RECITALS: 1. On January 28, 2020, the City of College Station held a special election for the purpose of electing City Councilmember Place 4, for an unexpired term. 2. On February 6, 2020, the City Council canvassed the results of the January 28, 2020, election and found that no candidate received a majority of the votes. 3. On February 6, 2020, the City Council ordered a special election runoff for the purpose of electing City Council Member Place 4 to be held on the 18 th day of April, 2020. 4. On March 30, 2020, the City Council postponed the April 18, 2020, special election runoff for the purpose of electing City Councilmember Place 4, due to factors relating to COVID19 including a countywide Shelter in Place Order. 5. On June 1, 2020, the City Council directed the City Secretary to prepare an ordinance ordering the special election runoff for the purpose of electing City Council Member Place 4 to be held on November 3, 2020. 6. In compliance with the City Council’s direction, the City Secretary prepared this Ordinance canceling the postponed April 18, 2020, special election runoff for the purpose of electing City Council Member Place 4, in preparation for the City Council’s future action to order the special election runoff to be held on November 3, 2020. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: SECTION 1. The postponed April 18, 2020, special election runoff for the purpose of electing City Council Member Place 4 is hereby canceled. SECTION 2. In canceling the postponed April 18, 2020, special election runoff for the purpose of electing City Council Member Place 4, the ballots that were mailed in regards to said election are hereby canceled. SECTION 3. If any portion of this Ordinance is held by a court of competent jurisdiction, the remaining provisions of this Ordinance shall remain in full force and effect. Page 22 of 471 SECTION 4. That this Ordinance shall take effect immediately from and after its passage. APPROVED AND ADOPTED by the City Council of the City of College Station this ______ day of __________________, 2020. CITY OF COLLEGE STATION: __________________________________ Karl Mooney, Mayor ATTEST: _____________________________________ Tanya Smith, City Secretary APPROVED AS TO FORM: _____________________________________ Carla Robinson, City Attorney Page 23 of 471 ORDENANZA NO.. ________________ UNA ORDENANZA DEL CONSEJO DE LA CIUDAD DE COLLEGE STATION QUE CANCELA LA ELECCIÓN ESPECIAL POSPONIDA PARA EL PROPÓSITO DE ELEGIR EL LUGAR DEL MIEMBRO DEL CONSEJO 4; PROPORCIONANDO UNA CLÁUSULA DE SEPARABILIDAD; Y PROPORCIONANDO UNA FECHA EFECTIVA. ANTECEDENTES: 1.El 28 de Enero de 2020, la Cuidad de College Station celebró una elección para el propósito de elegir el lugar del Miembro del Consejo Lugar 4, para un término no vencido. 2.El 6, de Febrero de 2020, el Consejo de la Cuidad sondeó los resultados de la elección del 28 de Enero de 2020 y encontró que ninguno de los candidatos obtuvo la mayoría de los votos. 3.El 6 de Febrero de 2020, el Consejo de la Cuidad ordenó una segunda vuelta electoral especial con el propósito de elegir al Miembro Lugar 4 del Consejo de la Ciudad que se celebrará el 18 de abril de 2020. 4.El 30 de Marzo de 2020, la Cuidad de College Station, el Consejo de la Ciudad pospuso la segunda vuelta de las elecciones especiales del 18 de abril de 2020 con el propósito de elegir al Miembro del Consejo de la Ciudad, Lugar 4, debido a factores relacionados con COVID19, incluida una Orden de Refugio en el Lugar en todo el condado. 5.El 1 de Junio de 2020, el Consejo de la Ciudad ordenó a la Secretaria de la Ciudad que preparara una ordenanza que ordenara la segunda vuelta de las elecciones especiales con el propósito de elegir al Miembro del Consejo de la Ciudad, Lugar 4 que se celebrará el 3 de Noviembre de 2020. 6.En cumplimiento de la dirección del Consejo de la Ciudad, la Secretaria de la Ciudad preparó esta Ordenanza cancelando la segunda vuelta de las elecciones especiales pospuestas el 18 de abril de 2020 con el propósito de elegir al Miembro del Consejo de la Ciudad Lugar 4, en preparación para la acción futura del Consejo de la Ciudad para ordenar la segunda vuelta de las elecciones especiales a realizarse el 3 de Noviembre de 2020. SEA ORDENADO POR EL CONSEJO DE LA CIUDAD DE COLLEGE STATION, TEXAS: Page 24 of 471 SECCIÓN 1. La segunda vuelta de las elecciones especiales pospuesta para el 18 de abril de 2020 con el fin de elegir al Miembro 4 del Concejo Municipal se cancela por la presente. SECCIÓN 2. Al cancelar la segunda vuelta de las elecciones especiales aplazada el 18 de abril de 2020 con el propósito de elegir al Miembro del Consejo de la Ciudad, Lugar 4, las boletas que fueron enviados por correo con respecto a dicha elección se cancelan. SECCIÓN 3. Si alguna parte de esta Ordenanza se lleva por un tribunal de jurisdicción competente, las disposiciones restantes de esta Ordenanza permanecerán en pleno vigor y efecto. SECCIÓN 4. Que esta Ordenanza surtirá efecto inmediatamente después de su aprobación. APROBADA Y ADOPTADA por el Consejo de la Ciudad de College Station este ______ día del mes de ___________________ de 2020. CIUDAD DE COLLEGE STATION: __________________________________ Karl Mooney, Alcalde DOY FE: _____________________________________ Tanya Smith, Secretaria de la Ciudad APROBADA EN CUANTO A FORMA: _____________________________________ Carla Robinson, Abogada de la Ciudad Page 25 of 471 June 11, 2020 Item No. 3.3. FM 2818 Utility Relocation AFA Sponsor:Emily Fisher, Assistant Director of Public Works Reviewed By CBC:City Council Agenda Caption:Presentation, discussion, and possible action regarding a resolution approving an advance funding agreement (AFA) in the amount of $1,992,413 between the City of College Station and the State of Texas, acting through the Texas Department of Transportation (TXDOT) for the city's contribution for utility relocations for the FM 2818 widening project and a Resolution Declaring Intention to Reimburse Certain Expenditures with Proceeds from Debt. Relationship to Strategic Goals: 1. Core Services & Infrastructure 2. Improving Mobility Recommendation(s): Staff recommends approval of this resolution and recommends approval of the resolution declaring intention to reimburse certain expenditures with proceeds from debt. Summary: The City of College Station, in conjunction with TXDOT, is designing and constructing a widening of FM 2818 within the general limits of FM 2154 (Wellborn Rd) to FM 60 (University Dr/Raymond Stotzer Pkwy). As part of this project, portions of the city’s water infrastructure will need to be moved because of conflicts with the road widening, drainage infrastructure, or other infrastructure needed for the project. TXDOT usually requires the owner of the utility in conflict to clear the utility separately. However, in this case, TXDOT agreed that it is more economical and efficient for such relocations be included in the State’s highway construction contract. The FM 2818 project is scheduled to let in August 2020 and take approximately 2 years to construct. Budget & Financial Summary: Budget in the amount of $2,200,000 is included in the Water Capital Improvement Projects Fund. A total of $200,821 has been expended or committed to date, leaving a balance of $1,999,179 for this AFA and future project expenses. The “Resolution Declaring Intention to Reimburse Certain Expenditures with Proceeds from Debt” is necessary for this project because the long term debt projected to be issued for this project has not yet been issued. The debt for the project is scheduled to be issued later this fiscal year. Reviewed & Approved by Legal: No Attachments: 1.Resolution FM 2818 Utility Relocations v2 Page 26 of 471 2.v2 AFA Utility - FM 2818 3.Debt Reimbursement Resolution 2818 Widening Project Page 27 of 471 Resolution FM 2818 Utility Relocations v2 RESOLUTION NO. ____________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS, APPROVING AN ADVANCE FUNDING AGREEMENT WITH THE STATE OF TEXAS ACTING THROUGH THE TEXAS DEPARTMENT OF TRANSPORTATION (“TXDOT”) AUTHORIZING THE PARTIPATION IN THE COST OF CERTAIN ROADWAY IMPROVEMENTS INCLUDING UTILITY RELOCATIONS FORTHE FM 2818 WIDENING PROJECT WHEREAS, FM 2818 is owned and maintained by the Texas Department of Transportation; and WHEREAS, TXDOT has deemed it necessary to make certain highway improvements on FM 2818 from 0.5 miles north of FM 60 to FM 2154 (the “Project”); and WHEREAS, any construction or improvements on Texas Department of Transportation right of way must be approved through the Texas Department of Transportation permitting process; and WHEREAS, the City of College Station possesses facilities that are affected by the Project; and the State agrees that it is more economical or efficient for such relocation to be effected by including in the State’s highway construction contract; and WHEREAS, the City of College Station desires to participate in the Project by funding portions of the Project including utility relocations by entering into this Advance Funding Agreement for Voluntary Utility Relocation Contributions on State Highway Improvement Projects. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: PART 1: That the City Council hereby approves the agreement with TXDOT to contribute an amount not to exceed $1,992,413 for the costs associated with utility relocations. PART 2: That the City Council herby authorizes the City Manager to execute the agreement. PART 3: That this resolution shall take effect immediately from and after its passage. ADOPTED this day of , A.D. 2020. ATTEST: APPROVED: ______________________________ _________________________________ City Secretary MAYOR APPROVED: _______________________________ City Attorney Page 28 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 1 of 5 Revised 02/20/2019 STATE OF TEXAS § COUNTY OF TRAVIS § ADVANCE FUNDING AGREEMENT FOR VOLUNTARY UTILITY RELOCATION CONTRIBUTIONS ON STATE HIGHWAY IMPROVEMENT PROJECTS THIS AGREEMENT is made by and between the State of Texas, acting through the Texas Department of Transportation (“State”) and The City of College Station (“Utility”), WITNESSETH WHEREAS, Transportation Code, Chapters 201, 221, and 361, authorize the State to lay out, construct, maintain, and operate a system of streets, roads and highways that comprise the State Highway System; and, WHEREAS, Transportation Code, Chapter 203, Subchapter E, Transportation Code §203.092 authorizes the State to regulate the placement of public utility facilities along a state highway; and, WHEREAS, Texas Transportation Commission Minute Order Number 115550 authorizes the State to undertake and complete a highway improvement generally described as: FM 2818 Widening (“Project”); and, WHEREAS, Utility possesses facilities that are affected by the above mentioned highway improvement and Utility, and the State agrees that it is more economical or efficient for such relocation to be effected by including said contract in the State’s highway construction contract; NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements of the parties hereto, to be by them kept and performed as hereafter set forth, the State and Utility do agree as follows: AGREEMENT 1. Time Period Covered This agreement becomes effective when signed by the last party whose signing makes the agreement fully executed, and the State and Utility will consider it to be in full force and effect until the Project described in this agreement has been completed and accepted by all parties or unless terminated, as provided. 2. Project Funding and Work Responsibilities A. The State will authorize the performance of only those Project items of work which are eligible for relocation reimbursements or for which Utility has requested and has agreed to pay for as described in Attachment A - Payment Provision and Work Responsibilities, which is attached to and made a part of this contract. In addition to identifying those Page 29 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 2 of 5 Revised 02/20/2019 items of work to be paid for by payments to the State, Attachment A - Payment Provision and Work Responsibilities, also specifies those Project items of work that are the responsibility of Utility and will be carried out and completed by Utility, at no cost to the State. The Utility shall be responsible for costs that are shown on Attachment B, Estimated Utility Costs, which is attached to and made a part of this agreement. The utility bid costs for water and wastewater, as shown in Attachment B, are fixed. The Utility will be responsible for any cost resulting from any change orders made at the request of the Utility. B. If the Utility will perform any work under this contract for which reimbursement will be provided by or through the State, the Utility must complete training before a letter of authority is issued. Training is complete when at least one individual who is working actively and directly on the Project successfully completes and receives a certificate for the course entitled Local Government Project Procedures and Qualification for the Texas Department of Transportation. The Utility shall provide the certificate of qualification to the State. The individual who receives the training certificate may be an employee of the Utility or an employee of a firm that has been contracted by the Utility to perform oversight of the Project. The State in its discretion may deny reimbursement if the Utility has not designated a qualified individual to oversee the Project. C. Payment under this contract beyond the end of the current fiscal biennium is subject to availability of appropriated funds. If funds are not appropriated, this contract shall be terminated immediately with no liability to either party. 3. Termination A. This agreement may be terminated in the following manner: 1. By mutual written agreement and consent of both parties; 2. By either party upon the failure of the other party to fulfill the obligations set forth in this agreement; or 3. By the State if it determines that the performance of the Project or utility work is not in the best interest of the State. B. If the agreement is terminated in accordance with the above provisions, Utility will be responsible for the payment of Project costs incurred by the State on behalf of Utility up to the time of termination. 4. Right of Access If Utility is the owner of any part of the Project site, Utility shall permit the State or its authorized representative access to the site to perform any activities required to execute the work. 5. Adjustments Outside the Project Site Utility will provide for all necessary right of way and utility adjustments needed for performance of the work on sites not owned or to be acquired by the State. Page 30 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 3 of 5 Revised 02/20/2019 6. Responsibilities of the Parties and Indemnity Utility acknowledges that it is not an agent, servant, employee of the State, nor is it engaged in a joint enterprise, and it is responsible for its own acts and deeds and for those of its agents or employees during the performance of the work on the Project. To the extent permitted by law, Utility agrees to indemnify and hold harmless the State, its agents and employees, from all suits, actions, or claims and from all liability and damages for any and all injuries or damages sustained by any person or property in consequence with the performance of design, construction, maintenance, or operation of the Utility facility. Such indemnity includes but is not limited to any claims or amounts arising or recovered under the “Worker’s Compensation Law”, the Texas Tort Claims Act, Chapter 101, Texas Civil Practice and Remedies Code; or any other applicable laws or regulations, all as time to time may be amended. 7. Sole Agreement In the event the terms of the agreement are in conflict with the provisions of any other existing agreements between Utility and the State, the latest agreement shall take precedence over the other agreements in matters related to the Project. 8. Successors and Assigns The State and Utility each binds itself, its successors, executors, assigns, and administrators to the other party to this agreement and to the successors, executors, assigns, and administrators of such other party in respect to all covenants of this agreement. 9. Amendments By mutual written consent of the parties, the scope of work and payment provisions of this agreement may be amended prior to its expiration. 10. Inspection and Conduct of Work Unless otherwise specifically stated in Attachment A - Payment Provision and Work Responsibilities, to this contract, the State will supervise and inspect all work performed hereunder and provide such engineering inspection and testing services as may be required to ensure that the Project is accomplished in accordance with the approved plans and specifications. All correspondence and instructions to the contractor performing the work will be the sole responsibility of the State. Unless otherwise specifically stated in Attachment A to this contract, all work will be performed in accordance with the Utility Accommodation Rules as set forth in 43 Texas Administrative Code §21.31 et. seq. adopted by the State and incorporated in this agreement by reference, or special specifications approved by the State. 11. Maintenance Upon completion of the Project, Utility will assume responsibility for the maintenance of the completed Utility facility unless otherwise specified in Attachment A to this agreement. Page 31 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 4 of 5 Revised 02/20/2019 12. Notices All notices to either party by the other required under this agreement shall be delivered personally or sent by certified or U.S. mail, postage prepaid, addressed to such party at the following addresses: Utility: City of College Station Director of Public Works PO Box 9960 College Station, Texas 77842 State: Texas Department of Transportation Director of Contract Services125 E. 11th Street Austin, Texas 78701 All notices shall be deemed given on the date so delivered or so deposited in the mail, unless otherwise provided in this agreement. Either party may change the above address by sending written notice of the change to the other party. Either party may request in writing that such notices shall be delivered personally or by certified U.S. mail and such request shall be honored and carried out by the other party. 13. State Auditor The state auditor may conduct an audit or investigation of any entity receiving funds from the State directly under this contract or indirectly through a subcontract under this contract. Acceptance of funds directly under this contract or indirectly through a subcontract under this contract acts as acceptance of the authority of the state auditor, under the direction of the legislative audit committee, to conduct an audit or investigation in connection with those funds. An entity that is the subject of an audit or investigation must provide the state auditor with access to any information the state auditor considers relevant to the investigation or audit. 14. Signatory Warranty Each signatory warrants that the signatory has necessary authority to execute this agreement on behalf of the entity represented. 15. Access to Information The Utility is required to make any information created or exchanged with the state pursuant to this contract, and not otherwise excepted from disclosure under the Texas Public Information Act, available in a format that is accessible by the public at no additional charge to the state. Page 32 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 5 of 5 Revised 02/20/2019 Each party is signing this agreement on the date stated under that party’s signature. THE UTILITY _________________________________ Signature _________________________________ Typed or Printed Name _________________________________ Title _________________________________ Date THE STATE OF TEXAS _________________________________ District Engineer _________________________________ Date Page 33 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 1 of 3 Attachment A ATTACHMENT A PAYMENT PROVISION AND WORK RESPONSIBILITIES 1. Description of the Work Items The parties agree that the existing water and wastewater facilities shall be relocated and adjustments shall be made along FM 2818. The water and wastewater facilities shall be owned, operated, and maintained by Utility from and after completion and final acceptance by the State and Utility. The estimated total construction cost for the relocated and adjusted facilities is $1,992,413. The parties agree that it is their intent to complete the relocation improvements within this estimate of cost. 2. Actual Cost Agreement Utility will be responsible for paying all costs associated with the planning, specification, and estimate (PS&E) development, and construction of the proposed utility work to the extent such is not reimbursed pursuant to state law. All the costs associated with construction of the water and wastewater items for the Project shall be provided as defined under the Standard Utility Agreement, Utility Joint Use Agreement, and/or the Agreement to Contribute Funds executed between the State and Utility. 3. Schedule of Payments A. At least forty-five (45) days prior to the date set for receipt of the construction bids, the Utility shall remit its remaining financial share for the State’s estimated construction oversight and construction costs. Utility must advance to the State one hundred percent (100%) of its share of the estimated Project utility construction costs. The amount to be advanced for the utility improvements is estimated to be $1,992,413. (See Attachment B – Estimated Utility Costs) B. In the event the State determines that additional funding is required by the Utility at any time during the Project, the State will notify the Utility in writing. The utility bid costs for water, as shown in Attachment B, are fixed. The Utility is responsible for any cost resulting from any change orders made at the request of the Utility. The Utility will make payment to the State within thirty (30) days from receipt of the State’s written notification. C. Whenever funds are paid by the Utility to the State under this agreement, the Utility will remit a warrant made payable to the “Texas Department of Transportation.” The warrant will be deposited by the State and managed by the State. Until the final Project accounting, funds may only be applied by the State to the Project. D. Upon completion of the Project, the State will perform an audit of the Project costs. Any funds due by the Utility, the State, or the Federal Government will be promptly paid by the owing party. 4. Work Responsibilities A. The Utility shall provide the following services under this contract: i. Responsible for engaging the services of a Texas Registered Professional Engineer to prepare drawings and technical specifications for waterline relocations and adjustments along FM 2818 from FM 60 to Jones Butler Road. Page 34 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 2 of 3 Attachment A ii. Provide the plans and specifications to the State to include in the current planning specifications and estimate package being prepared by representatives of the Texas Department of Transportation’s Bryan District Office. iii. Secure all necessary permitting as may be required for the installation of the water and wastewater line. iv. Arrange and coordinate with the contractor, through the State, materials and equipment testing, rejection of all work not conforming to minimum requirements of the construction contract documents, maintenance of the proposed water and wastewater facilities during construction, and the relocation of water and wastewater facilities and connection of services to customers. v. Advise the State of work that Utility determines should be corrected or rejected. vi. Arrange, observe, and inspect all acceptance testing and notify the State of the results of these activities. vii. Provide inspection services for the construction, notify the State of defects and deficiencies in the work, and observe actions of the contractor to correct such defects and deficiencies. viii. Assume all responsibility for the maintenance of the existing water and wastewater facilities during and upon completion of the construction contract. ix. Ensure all Texas Commission on Environmental Quality and all other regulatory rules, regulations and laws are strictly adhered to. x. Prepare and submit both a certificate of substantial completion and a list of observed items requiring completion or correction for the relocations and adjustments to the Project Engineer for concurrence. xi. Coordinate all construction activities performed by Utility’s staff for the relocations and adjustments through the Project Engineer. B. The State shall provide the following services under this contract: i. Combine the water and wastewater facilities relocation and adjustment plans with the plans being prepared for the Project. ii. Review and approve the final construction plans prior to any construction-related activities. In order to ensure federal and/or state funding eligibility, projects must be authorized by the State prior to advertising for construction. iii. Advertise for construction bids, issue bid proposals, receive and tabulate the bids, and award and administer the contract for construction of the Project. iv. Negotiate and administer all field changes and change orders required for the Project. All change orders increasing construction costs for Utility’s Project shall be submitted to Utility for review and approval together with an evaluation. Utility agrees to review and either approve or disapprove all change orders within five (5) business days after receipt of such order unless Utility Board’s approval is necessary in which case Utility shall bring the item to Utility Board as soon as reasonably possible. v. Provide overall project management to supervise the day-to-day activities of the construction and monitor the activities of the contractor to promote the timely and efficient completion of the Project in accordance with the approved Plans and Specifications and construction schedule. Page 35 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 3 of 3 Attachment A vi. Conduct field observations and coordinate with Utility’s inspectors and the contractor to cure defects and deficiencies in the construction prior to final acceptance. vii. Make timely payment to the contractor for work performed in connection with the Project. viii. Ensure access and permit Utility’s inspectors and other authorized representatives to inspect the waterline construction at all times. ix. Conduct and coordinate final inspection of the Project in the presence of Utility’s Engineer and Inspector, transmit final list of items to be completed or repaired and observe contractor correction of same. x. Maintain job file. Page 36 of 471 CSJ # 2399-01-074 ROW CSJ # 2399-01-079 U # 16014 District # 17-Bryan Code Chart 64 # 09050 Project: FM 2818 Widening AFA Utility Page 1 of 1 Attachment B ATTACHMENT B ESTIMATED UTILITY COSTS Based on various calculations, the dollar figures below are the amounts due and payable for Utility’s costs associated with this project. The utility bid costs for water and wastewater are fixed. The Utility is responsible for any cost as a result of any change orders made at the request of the Utility. Except for the costs of change order requests from the Utility, the State will be responsible for 100% of the project cost overruns after the Utility funding reaches its maximum obligated amount. Description Amount Total Bid Costs $ 1,778,940 Less Betterment Amount Due from Utility (0%) $ - Amount of Total Utility Relocation Costs $ 1,778,940 Estimated Amount Eligible for Reimbursement (calculated eligibility ratio = 0%) $ - Amount of Utility Adjustment Due from Utility $ 1,778,940 Estimated Amount to be included in Construction Agreement: A. Betterment $ - B. Utility Adjustment $ 1,778,940 C. Barricades - 2% $ 35,579 D. Mobilization - 5% $ 88,947 E. Engineering/Contingency - 5% $ 88,947 Total Due to State from Utility $ 1,992,413 Page 37 of 471 Page 38 of 471 RESOLUTION NO. -------- RESOLUTION DECLARING INTENTION TO REIMBURSE CERTAIN EXPENDITURES WITH PROCEEDS FROM DEBT WHEREAS, the City of College Station, Texas (the "City") is a home-rul e municipality and political subdivision of the State of Texas; WHEREAS, the City expects to pay expenditures in connection with the design, plannin g, acquisition and construction of the projects described on Exhibit "A" hereto (collectively, the "Project") prior to the issuance of obligations by the City in connection with the financing of the Project from available funds; WHEREAS, the City finds, considers, and declares that the reimbursement of the City for the payment of such expenditures will be appropriate and consistent with the lawful objectives of the City and , as such, chooses to declare its intention , in accordance with the provisions of Section 1.150-2 of the Treasury Regulations , to reimburse itself for such payments at such time as it iss ues obligations to finance the Project; THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS THAT: Section 1. The City rea sonably expects it will incur debt, as one or more series of obligations , with an aggregate maximum principal amount not to exceed $2,200,000, for the purpose of pay in g the aggregate costs of the Project. Section 2. All costs to be reimbursed pursuant he reto will be capital expenditures. No tax-exempt obligations will be issued by the City in furtherance of this Statement after a date which is later than 18 months after the later of (I) the date the expenditures are paid or (2) the date on which the property, with respect to which such expenditures were made, is placed in service. Section 3. The foregoing notwithstanding, no tax-exempt obligation will be issued pursuant to this Statement more than three years after the date any expenditure which is to be reimbursed is paid . PASSED AND APPROVED THIS 11th DAY OF June, 2020. Karl Mooney, Mayor ATTEST: Tanya Smith, City Secretary (Seal) Page 39 of 471 APPROVED: 11 , Parkhurst & Horton L.L.P. Bond Counsel Page 40 of 471 Exhibit "A" The projects to be financed that are the subject of this Statement are: WA1900003 FM 2818 Widening Project and Utility Relocations ($2,200,000) The City of College Station (the City) in conjunction with the Texas Department ofTranspo1iat ion (TXDOT) is designing and constructing a widening of FM 2818 within th e general limits of FM 2 15 4 (Wellborn Rd) to FM 60 (University Dr/Raymo nd Statzer Pkwy). As part of this project, portions of the city's water infrastructure will need to be moved because of conflicts with the road widening, drainage infrastructure, or other infrastructure needed for the project. TXDOT usually req uires the owner of the utility in conflict to clear the utility separately, howeve r, in this case TXDOT agreed that it is more economical and efficient for such relocations be included in the State's hi g hway construction contract. These funds will be used for the advanced fundin g agreement (AF A) between th e C ity and TXDOT for the C ity 's contribution for utility relocations related to the FM 2818 widening project. June 11, 2020 Item No. 3.4. Online Benefits Administration Platform Sponsor:Alison Pond, Director of Human Resources Reviewed By CBC:City Council Agenda Caption:Presentation, discussion, and possible action to ratify a General Service Contract with Precept Insurance Solutions, LLC for an Online Benefits Administration Platform and to proceed with the second year of the initial two (2) year contract term. The initial contract term began July 12, 2019 and expires July 11, 2021 with an annual expenditure of $70,000 for a total expenditure of $140,000. Relationship to Strategic Goals: Core Services and Infrastructure Recommendation(s): Staff respectfully recommends approving the ratification of the General Service Contract and to proceed with the second year of the initial two (2) year contract term. Summary: A competitive sealed proposal process was conducted May 2019, and five (5) responses were received, evaluated and ranked. Upon completion of the evaluation process, Precept Insurance Solutions, LLC was determined to be the highest ranking firm based on the specified weighted selection criteria. The resulting contract provides for an initial two (2) year term plus three (3) additional one (1) year terms for a total of five (5) years. It was recently discovered the contract amount was inadvertently documented as $70,000.00 and routed to the City Manager for approval. City Council’s ratification of this contract will formally authorize approval of the General Service Contract with an initial contract term of two (2) years for a total expenditure of $140,000.00. The contract may be renewed, upon mutual consent by all parties, for three (3) additional one (1) year terms at $70,000.00 per year. Budget & Financial Summary: Funds are budgeted and available in the benefits fund. Reviewed & Approved by Legal: No Attachments: 1.19300595 Precept Insurance Solutions LLC (OR) 2.Precept Insurance Solutions Amendment Letter No. 1 Page 41 of 471 Page 42 of 471 CITY 01' COJLEGE STATION Hom e o/Texns A &M U11i vmity" CONTRACT & AGREEMENT ROUTING FORM 19300595 CONTRACT#: __ _ PROJECT#: N/ A BID#: N/A RFP#: N/A Project Name I contract Description : Online Benefits Administration Platform Name of Contractor: Precept Insurance Solutions, LLC CONTRACT TOTAL VALUE: $ 70,000.00 Debarment Check D Yes [iJ No D N/ A Section 3 Plan Incl. D Yes [iJ No D N/ A Grant FundedD Yes [iJ No~--­ lf yes , what is the grant number: ~I --~ Davis Bacon Wages Used D Yes~ NoD N/A Buy America Required D Yes ~ NoD N/ A Transparency Report D Yes~ No D N/ A [i] NEW CONTRACT D RENEWAL# --D CHANGE ORDER# --D OTHER----- BUDGETARY AND FINANCIAL INFORMATION (include number of bids solicited , number of bids received , funding source, budget vs . actual cost, summary tabulation) Th e C ity issued RF P #19 -062 fo r an onli ne be nefi ts ad min pla tform in April of 2019 an d rece ive d fi ve (5) res ponses. Afte r eval uati ng each s ubmi ssio n, th e C ity se lected Precept In su rance Soluti o ns. Fun ds are bud ge ted and ava il a bl e in th e benefits fund. CRC Approval Date *: _N_/_A __ _ (If required)* Council Approval Date*: _N_/_A ____ Agenda Item No*: N/A --Secti n to e completed by Risk, Purch~or City Secretary's O~~nly-<;;@> Insurance Certificates: , Performance Bond: NI.Al Payment Bond: N ~ Form 1295: _N_f __ SIGNATURES RE(:OMMENDING APPROVAL MAYOR (i f appli ca bl e) N/A CITY SECRETARY (ifappli Gab le) 2-origina/(s) sent to CSO on'2b Z,.. N/A N/A Scanned in to Laserfiche on~ { /?-/17 DATE DATE _,_Original(s) sent to A"scal on I} 12- Page 43 of 471 CITY OF COLLEGE STATION GENERAL SERVICE CONTRACT This General Service Contract is by and between the City of College Station, a Texas Home-Rule Municipal Corporation (the "City") and McGriff Insurance, Inc. DBA Precept Insurance Solutions, LLC (the "Contractor"), for the following work: Online Benefits Administration Platform as described in the Scope of Se1vices attached as Exhibit "A". ARTICLE I PAYMENT AND TERM 1.1 Consideration. In consideration for the services performed in the Scope of Se1vices and Contractor's Completion of work in conformity with this Contract, the City shall pay the Contractor an amount not to exceed Seventy Thousand and No /100 Dollars ~~~~~~~~~~~~~~~~~~~~~~~~~~~ ($ 70,000.00 ). 1.2 Payment Application. Within seven (7) calendar days of completion of the services the Contractor will submit its payment application to the City. 1.3 City's Payment and Approval. The City will pay Contractor as shown in Exhibit "B" Payment Schedule, for the se1vices performed no later than thirty (30) calendar days from the date of the City's receipt of the payment application and the City's approval of the services. D 1.4 Time is of the Essence. The Contractor must complete all the services described in the Scope of Services by the following dates: OR 0 1.4 Term. The initial tenn of the Contract is for two (2) years with the option to renew for three (3) additional one (I) year terms for a total of five ( 5) years. Any renewal must be in writing and executed by the parties. 1.5 Executed Contract. The "Notice to Proceed" will not be given nor shall any work commence until this Contract is fully executed and all exhibits and other attachments arc completely executed and attached to the Contract. ARTICLE II CHANGE ORDERS 2.1 Changes will not be made, nor will invoices for changes, alterations, modifications, deviations, or extra work or services be recognized or paid, except upon the prior written order from Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page I 1 Page 44 of 471 authorized personnel of the City. The Contractor will not execute change orders on behalf of the City or othe1wise alter the financial scope of the services except in the event of a duly authorized change order approved by the City as provided in this Contract. (a) City Manager Approval. When the original Contract amount plus all change orders is $I 00,000 or less, the City Manager or his designee may approve the written change order provided the change order does not increase the total amount set forth in the Contract to more than $100,000. For such contracts, when a change order results in a total contract amount that exceeds $100,000, the City Council of the City must approve such change order prior to commencement of the services or work; and (b) City Council Approval. When the original contract amount plus all change orders is greater than $100,000, the City Manager or his designee may approve the written change order provided the change order does not exceed $50,000. For such contracts, when a change order exceeds $50,000, the City Council of the City must approve such change order prior to commencement of the services or work. The sum of all change orders may not exceed 25% of the original contract amount. (c) Increase in Scope. Any request by the Contractor for an increase in the Scope of Services and an increase in the amount listed in A1iicle I of this Contract shall be made and approved by the City prior to the Contractor providing such services or the right to payment for such additional services shall be waived. (d) Dispute. If there is a dispute between the Contractor and the City respecting any service provided or to be provided hereunder by the Contractor, including a dispute as to whether such service is additional to the Scope of Services included in this Contract, the Contractor agrees to continue providing on a timely basis all services to be provided by the Contractor hereunder, including any service as to which there is a dispute. ARTICLE III INDEPENDENT CONTRACTOR AND SUBCONTRACTORS 3.1 Independent Contractor. It is understood and agreed by the parties that the Contractor is an independent contractor retained for the services described in the Scope of Services. The Contractor shall be solely responsible for and have control over the means, methods, techniques and procedures, and for coordination of all portions of the work or services. Unless otherwise provided in the Contract, the Contractor shall provide and pay for labor, materials, equipment, tools, utilities, transportation, and other facilities and services necessary for proper execution and completion of the work or services. In addition, at the appropriate times, the Contractor shall arrange and bear cost of tests, inspections, and approvals of portions of the work or services required by the Contract or by laws, statutes, ordinances, codes, rules and regulations, or lawful orders of public authorities. The City will not control the manner or the means of the Contractor's performance, but shall be entitled to a work product as in the Scope of Services. The Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 12 Page 45 of 471 City will not be responsible for reporting or paying employment taxes or other similar levies that may be required by the United States Internal Revenue Service or other State or Federal agencies. This Contract does not create a joint venture. 3.2 Subcontractor. The term "subcontractor" shall mean and include only those hired by and having a direct contact with Contractor for performance of work or services on the Project. The City shall have no responsibility to any subcontractor employed by a Contractor for performance of work or services on the Project, and all subcontractors shall look exclusively to the Contractor for any payments due. The Contractor shall be fully responsible to the City for the acts and omissions of its subcontractors. Nothing contained herein shall create any contractual or employment relations between any subcontractor and the City. ARTICLE IV INSURANCE 4.1. The Contractor shall procure and maintain, at its sole cost and expense for the duration of this Contract, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the services performed by the Contractor, its officers, agents, volunteers, and employees. 4.2. The Contractor's insurance shall list the City of College Station, its officers, agents, volunteers, and employees as additional insureds. More specifically, the following shall be required. Certificates of insurance evidencing the required insurance policies are attached in Exhibit "C". Throughout the term of this Agreement the Contractor must comply with the following. 4.3. Types. Contractor shall have the following types of insurance: (a) Commercial General Liability (b) Business Automobile Liability (c) Workers' Compensation (d) Professional Liability (e) Cyber Liability 4.4. General Requirements Applicable to All Policies. The following General requirements applicable to all policies shall apply: (a) Certificates of Insurance shall be prepared and executed by the insurance company or its authorized agent (b) Certificates of Insurance and endorsements shall be furnished on the most current State of Texas Department of Insurance-approved forms to the City's Representative at the time of execution of this Agreement; shall be attached to this Agreement as Exhibit C; and shall be approved by the City before work begins Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page I 3 Page 46 of 471 (c) Contractor shall be responsible for all deductibles on any policies obtained in compliance with this Agreement. Deductibles shall be listed on the Certificate of Insurance and are acceptable on a per-occurrence basis only (d) The City will accept only licensed Insurance Carriers authorized to do business in the State of Texas (c) The City will not accept "claims made" policies (f) Coverage shall not be suspended, canceled, non-renewed or reduced in limits of liability before thirty (30) days written notice has been given to the City 4.5. Commercial General Liability. The following Commercial General Liability requirements shall apply: (a) General Liability insurance shall be written by a carrier rated "A:VIII" or better under the current A. M. Best Key Rating Guide. (b) Policies shall contain an endorsement listing the City as Additional Insured and further providing "primary and non-contributory" language with regard to self-insurance or any insurance the City may have or obtain (c) Limits of liability must be equal to or greater than $1,000,000 per occurrence for bodily injury and property damage, with an annual aggregate limit of $2,000,000.00. Limits shall be endorsed to be per project. (d) No coverage shall be excluded from the standard policy without notification of individual exclusions being submitted for the City's review and acceptance (e) The coverage shall not exclude the following: premises/operations with separate aggregate; independent contracts; products/completed operations; contractual liability (insuring the indemnity provided herein) Host Liquor Liability, and Personal & Advertising Liability. 4.6. Business Automobile Liability. The following Business Automobile Liability requirements shall apply: (a) Business Automobile Liability insurance shall be written by a carrier rated "A: VIII" or better under the current A. M. Best Key Rating Guide. (b) Policies shall contain an endorsement listing the City as Additional Insured and further providing "primary and non-contributory" language with regard to self-insurance or any insurance the City may have or obtain (c) Combined Single Limit of Liability not less than $1,000,000 per occurrence for bodily injury and property damage. (d) The Business Auto Policy must show Symbol l in the Covered Autos Portion of the liability section in Item 2 of the declarations page Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 14 Page 47 of 471 (e) The coverage shall include any autos, owned autos, leased or rented autos, non-owned autos, and hired autos. 4.7. Workers' Compensation Insurance. The following Workers' Compensation Insurance shall include the following terms: apply: (a) Employer's Liability minimum limits of liability not less than $1,000,000 for each accident/each disease/each employee are required (b) "Texas Waiver of Our Right to Recover From Others Endorsement, WC 42 03 04" shall be included in this policy (c) TEXAS must appear in Item 3A of the Workers' Compensation coverage or Item 3C must contain the following: "All States except those listed in Item 3A and the States of NV, ND, OH, WA, WV, and WY" 4.8. Professional Liability. The following Professional Liability requirements shall (a) Coverage shall be written by a carrier rated "A: VIII" or better in accordance with the current A. M. Best Key Rating Guide. (b) Minimum limits of liability of $1,000,000 per occurrence and $2,000,000 aggregate, with a maximum deductible of $100,000.00 unless otherwise agreed in writing by both parties. Financial statements shall be furnished to the City upon request. (c) For "claims made" policies, the availability of a 24-month extended reporting period is required. 4.9. Cyber Liability. Minimum limits of $5,000,000.00 for third party losses. Coverage must include: (a) Event Management (b) Unauthorized Access/use (c) Computer Virus ( d) Denial of Service Attack (e) Libel, Cyber-libel, Slander, Product disparagement (t) Violation of right of privacy (g) Regulatory costs (h) Privacy Costs -Privacy Injury and Identity Theft (i) Programming Errors & Omissions Liability (j) Replacement or Restoration of Electronic Data (First party) (k) Extortion Threats (I) Business income and extra expense (to$ I million) Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Pagel5 Page 48 of 471 (m) Public Relations Expense (n) Security Breach Expense ARTICLE V INDEMNIFICATION AND RELEASE 5.1 Indemnification. The Contractor shall indemnify, hold harmless, and defend the City, its Council members, officials, officers, agents, volunteers, and employees from and against any and all claims, losses, damages, causes of action, suits, and liability of every kind, including all expenses of litigation, court costs, and attorneys' fees, for injury to or death of any person or for damage to any property arising out of or in connection with the work or services done by the Contractor under this Contract. Such indemnity shall apply regardless of whether the claims, losses, damages, causes of action, suits, or liability arise in whole or in part from the negligence of the City, any other party indemnified hereunder, the Contractor, or any third party. 5.2 Release. The Contractor assumes full responsibility for the work to be performed hereunder and hereby releases, relinquishes, and discharges the City, its Council members, officials, officers, agents, volunteers, and employees from all claims, demands, and causes of action of every kind and character, including the cost of defense thereof, for any injury to or death of any person and any loss of or damage to any property that is caused by, alleged to be caused by, arising out of, or in connection with the Contractor's work to be performed hereunder. This release shall apply regardless of whether said claims, demands, and causes of action are covered in whole or in part by insurance and regardless of whether such injury, death, loss, or damage was caused in whole or in part by the negligence of the City, any other party released hereunder, the Contractor, or any third party. ARTICLE VI GENERAL TERMS 6.1 Performance. Contractor, its employees, associates, or subcontractors shall perform all the work or services described in the Scope of Services in a good, workmanlike, and professional manner and in accordance with this Contract, and all applicable laws, codes, and regulations. Contractor shall be fully qualified and competent to perform the work or services. Contractor shall unde1take and complete the work or services in a timely manner. 6.2 Termination. The City may terminate the Project and this Contract, at any time, for convenience. In the event of such termination the City will notify the Contractor in writing and the Contractor shall cease work immediately. Contractor shall be compensated for the work or services performed. Should the City terminate this Contract for convenience, the City shall pay Contractor for the work or services performed and expenses incurred before the date of termination. Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page I 6 Page 49 of 471 6.3 Venue. This Contract has been made under and shall be governed by the laws of the State of Texas. The parties agree that performance and all matters related thereto shall be in Brazos County, Texas. 6.4 Amendment. This Contract may only be amended by written instrument approved and executed by the parties. 6.5 Taxes. The City is exempt from payment of state and local sales and use taxes on labor and materials incorporated into the project. If necessary, it is the Contractor's responsibility to obtain a sales tax permit, resale ce11ificate, and exemption certificate that shall enable the Contractor to buy any materials to be incorporated into the project and then resell the aforementioned materials to the City without paying the tax on the materials at the time of purchase. 6.6 Compliance with Laws. The Contractor will comply with all applicable federal, state, and local statutes, regulations, ordinances, and other laws, including but not limited to the Immigration Reform and Control Act (IRCA). The Contractor may not knowingly obtain the labor or services of an undocumented worker. The Contractor, not the City, must verify eligibility for employment as required by IRCA. 6.7 Waiver of Terms. No waiver or deferral by either pat1y of any term or condition of this Contract shall be deemed or construed to be a waiver or deferral of any other term or condition or subsequent waiver or deferral of the same term or condition. 6.8 Assignment. This Contract and the rights and obligations contained herein may not be assigned by the Contractor without the prior written approval of City. 6.9 Invalid Provisions. If any provision of this Contract shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a cou11 of competent jurisdiction finds that any provision of this Contract is invalid or unenforceable, but that by limiting such provision it may become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited. 6.10 Entire Agreement. This Contract represents the entire and integrated agreement between the City and Contractor and supersedes all prior negotiations, representations, or agreements, either written or oral. This Contract may only be amended by written instrument approved and executed by the patties. 6.11 Agree to Terms. The patties state that they have read the terms and conditions of this Contract and agree to the terms and conditions contained in this Contract. 6.12 Effective Date. This Contract will be effective when it is signed by the last party making it fully executed. 6.13 Notice. Any official notice under this Contract will be sent to the following addresses: Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 17 Page 50 of 471 CITY OF COLLEGE STATION Attn: Jennifer Cabezas PO BOX 9960 1101 Texas Ave College Station, TX 77842 _____ J_· c_ab_e_z_as_· @cstx.gov McGriff Insurance, Inc. OBA Precept Insurance Solutions, LLC Attn: Douglas King, COO 130 Theory, Ste. 200 Irvine, CA 92617 douglas@preceptgroup.com 6.14 Severability. In the event any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the other provisions, and in lieu of each provision that is invalid, illegal or unenforceable, there shall be added a new provision to this Contract as similar in terms to such invalid, illegal, or unenforceable provision as may be possible and yet be valid, legal and enforceable, by means of good faith negotiation by the Parties to this Contract or by reform by a court of competent jurisdiction. 6.15 Duplicate Originals. The parties may execute this Contract in duplicate originals, each of equal dignity. 6.16 Exhibits. All exhibits to this Contract are incorporated and made part of this Agreement for all purposes. 6.17 Verification No Boycott Israel. To the extent this Contract is considered a contract for goods or services subject to § 2270.002 Texas Government Code, Contractor verifies that it i) does not boycott Israel; and ii) will not boycott Israel during the term of this contract. 6.18 Cyber Security Requirements. The cyber security requirements set forth m Exhibit "D" hereto must be followed by Contractor. Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 18 Page 51 of 471 List of Exhibits A. Scope of Services 8. Payment Schedule C. Certificates oflnsurance D. Cyber Security Requirements McGriff Insurance, Inc. DBA Precept Insurance Solutions, LLC Printed Name: D~ ~ ~ , ~ Title: <?:_..../ p Date: -, r d t ~ Contract No. 19300595 Genera l Service Contract Benefits System RFP CR C 04-05-19 CITY OF COLLEGE ST A TI ON Assist Date: ~--I---''----''--" Page 19 Page 52 of 471 EXHIBIT A SCOPE OF SERVICES The terms and conditions of this Contract shall take precedence and control over any term or provision of the Scope of Services that in any way conflicts with, differs from, or attempts to alter the terms of this Contract. (See following page for proposal/scope of services) Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 53 of 471 TABA RFP QUESTIONNAIRE I 1) General Questionnaire a. Briefly describe your company history. Be sure to discuss your qualifications and experience, including : 1. Name and contact information for your organization ii. Primary line of business and organizational size 111. A copy of your company's most recent financial report 1v . Structure and history of the organization; Is your company partly owned by I held by private equity interests or hospital/physician 's group? If so , please describe. v. Experience in the provision of the services requested in this RFP v1. The location of the office that will service the City's account vii. Qualifications (including relevant professional designations and descriptions) and experience of the personnel who will be directly assigned to carry out the services described in this RFP Response: Precept is a multi-disciplinary consulting and administration firm headquartered in California, with offices in Irvine and San Ramon. We focus solely on employer-sponsored, employee benefit plans with services offered for consulting/brokerage, benefits administration, health management services, and retirement plan consulting, including 3(21) investment advisory services. We have 135 employees . We are a division of McGriff Insurance Services, Inc. a subsidiary of BB&T Insurance Holdings, Inc ., the fifth largest insurance broker in the United States and the world . BB&T Insurance Holdings is owned by BB&T Corporation, one of the largest and best managed financial institutions in the Country. BB&T Ins urance Ho ldings BB&T Insurance Holdings combines a full array of products with exceptional market expertise and industry knowledge to deliver comprehensive insurance programs designed specifically for each client . Our national capabilities, regional focus, and local relationship-driven service place BB&T Insurance Holdings ahead of the competition in effective insurance planning . BB&T Insurance Holdings consists of retail and wholesale brokerage, a captive insurance company, a third party administrator, and claims and risk control consulting. Revenues in 2018 were in excess of $1.9 billion, making us the fifth largest broker in the United States and the sixth largest broker in the world. Our portfolio of services includes risk management capabilities for commercial clients ranging in size from middle market to Fortune 500 . BB&T Insurance Ho ldings Emp loyee Benefi ts Group BB&T Insurance Holdings Employee Benefits Group includes a network of three complementary organizations focused on Employee Benefits: • McGriff Insurance Services, Inc. -Multi-location, multi-line insurance operation 1 Page 54 of 471 including; FSA and HSA Administration, COBRA Administration and actuarial services • Precept Insurance Solutions, LLC -Employee benefits consulting, health engagement and management, retirement advisory services, group health and employer administrative services • McGriff, Seib~ls & Williams, Inc. -Commercial insurance, focused on the Fortune 500 market The Precept Service Team who will support the City of College Station is located in Irvine, California. The current support team would remain in place for the City and has a combined total of over 30 years of benefits and technology experience. The main contact is Traci Reitz, VP Client Experience COO. 949.798-1250, Treitz@preceptgroup.com. Precept has been providing enrollment technology solutions and support since 1999. A summary of our company evolution is below: Precept Evo lution of Client Services Company Focus Brand Transformation Scalability & Growth Cha n ge Management Int egrated Solutions Brokerage & Consu lting Services Services Provided 2018 2013 Integrated all service brands: Precept, ProView Resource Group and Precept Advisory Group under a si ngle brand -Precept Group. launched Data Ana lytics technology, mnhilP fll'P'>, ori11c; in c;::irp management, etc. 2013 National CarePlusoffering 2012 ProView Resource Group launch 2011 Joined BB&T Insurance Services, In c. 2010 Introduced CarePlus 2008 Created claims analytic tool 2006 Established EE portal to drive educat ion and hea lth improvement 2004 Estab li shed Health Management practice 1999 Establi shed online enrollment and administration system 1996 Establi shed Customer Care Center 1993 Acquired ProView (TPA) to support H&W administration 1991 Supporting larger clients with Total Rewards 1987 Precept founded, focused on product placement and servicing b . Provide information on additional services you may offer that are not specifically noted in the above question (if applicable). Response: Additional services offered through the enrollment system include: Dependent Verification, Total Rewards Statements, COBRA Administration and FSA Administration. Precept as an organization offers health engagement and management services as well as retirement plan consulting. c. Please provide the total number of employer clients you are working with. i. How many municipalities do you currently service? 2 Page 55 of 471 Response: Precept has 124 clients. Three of our clients are municipalities. d. Please provide the size of your largest client (total eligible employees). Please provide the average size of your client base (total eligible employees). Response: Precept's largest client has 15,864 employees and our average size client has 1,746 employees. e. Disclose any active or planned mergers, sale or acquisition(s). Response: Our parent company, BB&T will combine in a merger of equals with SunTrust. This will create the sixth largest U.S. bank holding company, based on assets and deposits. f. Is your firm HIP AA compliant, including applicable provisions of the Health Information Technology for Economic and Clinical Health Act (HITECH Act)? Response: Yes, Precept is compliant with HIPAA and HITECH. g. Please describe your method of accounting and payment remittance. Will you provide the City will a dedicated billing representative for questions and inquiries? Response: Precept will bill monthly and payment is due within 30-days from the invoice date. The City will continue to have a designated billing representative to contact for questions and inquiries. h. Will the City be able to provide initial and ongoing enrollment via SSO (enrollment) and EDI file feed (eligibility/terminations) from your technology solution to the City's current vendors? (Listed in I. I) Please provide a list of all vendors your technology solution can connect to? Response: SSO Connectivity: The Businessolver team will work with any business partner to establish an SSO connection. Typically, the implementation and testing process will take 6 to 8 weeks. EDI data exchange files do not require SSO connection and there are thousands of transmissions supported daily. Each file exchange begins with a review of layout requirements and case-specific needs. We prefer the use of ANSI 834 5010 layouts using the HIPAA guidelines as a standard. 3 Page 56 of 471 i. Please provide an implementation timeline/detailed project plan. Please include a detailed description of each step or phase including the employee communication materials (handouts) that will be provided. 1. What is your recommended implementation timeframe in weeks? 11. Will the City have a dedicated implementation manager? 111. What tools are available to the client throughout implementation and ongoing? Response: Precept currently maintains and supports the City's enrollment system so a new implementation would not be required. As a point of reference new implementations run on a twelve week schedule. J. What is the open enrollment implementation timeline annually? Please provide a sample timeline/detailed open enrollment checklist. Timing for open enrollment is dependent on the complexity level of configuration changes that will be required as outlined in the matrix below. Please Refer to Exhibit A for checklists, requirements and timing standards. Complexity Definition Timing Low Rate changes only 6 weeks Medium Changes to existing payroll, census or 8 weeks carrier EDI file High Carrier change, plan change new payroll, 10 weeks census or carrier file needed k. Please describe your test plan process -the test strategies and methods (e.g., test scripts) the project will deploy to ensure that the system will do what the user expects. Response: Test Environment: The system has two test environments to verify new structures, rates, plans, etc. both during implementation and beyond. The test environments are replicated environments from the production environment. The same access restrictions and controls are in place within the test environl"!lents as with the production environment; these environments are refreshed on a nightly basis and a weekly basis to mirror the data in production. Test Scripts: Please refer Exhibit B for samples. I. How often are file feeds with eligibility transmitted to carriers? Response: Currently, the system transmits eligibility files to the City's carriers weekly . The schedule can easily be adjusted as needed . 4 Page 57 of 471 m. How many analysts will be assigned to the account? Response: The City would have a designated Precept Account Manager. The Account Manager is responsible for collaborating with a team of designated Businessovler Analysts for open enrollment and maintenance support throughout the year to ensure that the desired functionality and outcomes are delivered. n. Please provide an account/relationship/operations organization chart for this client showing the proposed team members and whether they are dedicated or shared resources. Please note the City requires a dedicated account manager. Gary Cunningham Account Manager (dedicated) Precept Implementation/Renewal Specialist Technology Analyst 1 (shared) (shared) Technology Analyst 2 (shared) Technology Analyst 3 (shared) o. Is your system proprietary? If not , what is the back end of the system? Response: Precept has a ten year partnership with Businessolver to provide our Benefits Enrollment system. The systems technology is built on a single code base that makes data integration seamless and security rock solid between other enterpr ise systems and vendors/carriers. p . What self-service options are available to employees? What administrative controls does Human Resources Staff have to limit or grant self-service permissions? i. If self-service is available , which technologies can employees access the platform from? Response: The City can establish rules regarding levels of administrator access. Client administrators can have the ability to manually update and override information in the system. Each change is date and time stamped, along with the name of the person making the change and the reason for the change. Some changes may need to be updated in the HRIS/payroll system, to ensure that full-file overrides do not change the data back to the old values. The Precept Account Manager will assist in establishing security and connectivity for the City's team . With regards to the tracking of changes, a full history transaction is maintained on all records which means any time an employee, administrator, or import file touches or changes the employee's information, a history transaction is logged in that employee's personal record. On the history results page, all transactions are listed with the editor (administrator name or 5 Page 58 of 471 employee name), the reason for change, the input method (manual vs. system) and the date/time stamp. Furthermore, each transaction maintains a complete detail on what values changed, the before and after values, and the field name. Administrators with appropriate access rights may view historical information on employee records through the employee history screen. q. Do you have decision support tools for employees? Are they included in your proposed pricing? Response: The system offers a robust decision support tool for an annual fee of $1,500 . r. What is the turnaround time on setting up and testing new EDI files with new carriers? Response: New EDI files take between six to eight weeks to configure and test. s. Do you offer ACA reporting and filing service? What is included inthose services? Response: Precept currently provides ACA reporting and filing service to the City through the enrollment system. We support 1094/1095 data storage, form production and IRS transmission. There is also the option of adding fulfillment services for the distribution of 1095 forms to employees. There are standard ACA reports available in the system for administrator review. An additional ACA service available is the Status Tracker that allows you to configure your measurement, stability, and administrative periods; track overlapping new hire and ongoing employee periods; and apply determined eligibility status directly to employees' records within the same technology. There is an additional fee for ACA tracking. t. Will the City administration have access to reporting? What type of reporting capabilities are available? Response: The system includes powerful, built-in reporting and analytic functionality. Since all enrollment and eligibility data is housed in the same system, reports are comprehensive and real-time. The system includes standard, configurable reporting; ad hoc reporting; and interactive analytical tools that allow administrators to visually monitor many aspects of system performance and employee interaction. The system features over 80 standard reports and hundreds of reporting options through the Build a Report feature. Reports can be downloaded in Excel CSV format, allowing clients to further analyze the data in Excel or other third-party tools. Administrators can access the built-in reporting tool in the system and generate reports on-demand. There is an easy-to -use interface that allows administrators to quickly generate reports without any technical knowledge; administrators simply click the report they want and the fields they want to include, then either generate the report or save and schedule the report to be run on a future date. 6 Page 59 of 471 i. Is ad-hoc reporting available? Response: Yes, the system offers ad hoc reporting in the Build a Report tool. Administrators can create ad hoc reports at any time, including the ability to add report columns and add multiple conditions via the easy-to-use tool. Reports created by the Build a Report tool are saved as Report Profiles for easy ongoing report generation in the future. What types of standard reports are included? Response: The system has 80 standard pre-programmed reports. Essentially, each data field in the system can be exported into a report. Further, we are continuously adding new standard reports based on client requests. If you have a request that is not currently supported in the system, we will evaluate the report need to see if it would benefit all clients, at which point it could be added to our product roadmap and delivered to all clients without additional customization fees to you. 11. Is there a fee for customized reporting? Response: Yes, standard reports in the system are configurable. When an administrator runs a report, they will select the report type and the Structure Groups they would like to report on, as well as any advanced reporting filters that apply. Administrators can save those reports as profiles for ongoing report generation. There is not fee for an administrator customizing a report. iii. Can scheduled reports be emailed to Human Resources Staff? Response: Yes, administrators can access the built-in reporting tool in the system and generate reports on-demand or they can schedule reports to be run on a future date. When running a report, the administrator may select "Generate Report" to generate the report immediately, or select "Save and Schedule" to input the date they would like the report to generate. The administrator can view their scheduled reports in the "scheduled" tab of the Reports Dashboard. Further, the administrator who scheduled the report will receive an automated email from the system alerting them when the report is available. LL Do employees have the capability to submit/upload verification documents via the portal? Response: Yes, employees are able to upload verification documents via upload to the system. This process requires the system to send an automated message to the employee notifying them of the verification requirements which then opens the channel/portal for the employee to upload the required documents. 7 Page 60 of 471 v. Does your system offer an employer site/portal to house case notes/documents/certificates/required documents for employees? Response: Yes, enrollment system administrators have the ability to make case notes within the system. Additionally, there are features that allow employers to post documents, video's etc. as resources for employees. w. Please explain any kind of customization that is available to the City via the portal. (color scheme/branding/etc.) Response: The Benefits Portal can have a customized color scheme and logos for branding. Precept would work with The City to understand all marketing and design requirements. x. What push notification capabilities does your platform have? Response: The platform is able to collect cell phone numbers and preferred email address so that messages can be pushed to employees. y. Please provide samples of employee communications. Are these customizable? Response: Any automated system letter such as a new hire notification or Annual Enrollment status/reminder can be customized. Refer to Exhibit A for a samples. z. Does your platform offer single sign-on options? Response: Yes, our platform has single-sign-on functionality currently being used by clients. aa. Does your platform include the ability to provide payroll reports via secure FTP or through the online platform? Response: The platform can export a file via SFTP or can post a file to the platform that would be available for download. bb. Will you accept any fee offset by the City's carriers if available? Response: Yes, Precept will accept fee offset by the City's carriers. cc. Do you have any partnerships in place for fee offset? Response: We do not currently have partnerships in place for fee offset. dd. Please list any additional programs/services offered through your Online Benefits Administration Platform solution. Response: The platform will also provide: COBRA, FSA and Direct Bill Administration, Total Rewards Statements, Texting and Dependent Verification. 8 Page 61 of 471 ee. What sensitive information is captured by app? Response The enrollment system has mobile optimization and was developed to work on any mobile browser, on any mobile platform. It was designed using responsive web design, which allows users to perform the same enrollment functions across all devices without the need for a mobile application installed on the device . Further, the MyChoice mobile application-available on iOS and Android-provides employees access to their important benefit information in one convenient location when and where they need it most. The mobile application enables employees to view their current and future elected coverages, upload documentation when required (such as for dependent verification), store their insurance cards for easy access, contact a representative for questions regarding their benefits, send and receive benefit-related messages, view beneficiaries, and more. ff. How is da ta protected during transfer a nd in re st ? Is data encrypted ? Response: We have integrated with our clients and their carriers/service providers a few different ways. The most common method of passing data in or out of the system is through scheduled file feeds. Data transfers can be performed in a number of secured methods and the preference is SFTP (secured via SSH_RSA key). However, PGP over SFTP, PGP over FTP, secure email, or through the system's built-in document center which is transferred over HTIPS can be supported . We can tailor the data transmission format dependent on the City's needs; however, all data transmitted to and from the system must be encrypted with a minimum 128-bit encryption prior to transmission Great care is taken with clients' data by encrypting data in transit and at rest , and strong encryption is leveraged for both. The system requires all Pll/PHI transmitted to and from the system to be encrypted during transmission. The preference is to transfer files via SFTP (secured via SSH_RSA key); however, we do support other options for file transfers. The application is only accessible via HTIPS, and all traffic is secured with a strong encryption key. All data stored is encrypted on its systems using strong cryptography such as AES-256; all primary and standby databases containing Benefitsolver data are encrypted to this level. Application data is encrypted by the application as it is being captured and written to the database. These measures allow for the maintenance of speed and efficiency to handle large volumes of data and mainta i n efficient response times without compromising security . gg. Wh e re is th e data stored ? Response The system is different than other benefits administration outsourcing solutions due to the true single-source, Software as a Service (SaaS) technology. While many others in our market claim to have one technology source, a quick look under the hood tells a different story-disparate systems , separate data flows and data sets, additional integrations. Because benefits administ ration technology has always been our sole focus, we have ensured that all services, all data, and all experiences are administered from one system . This means that all of your data from enrollment/eligibility to ACA to billing is managed in one system. This also ensures a best-in-class approach to data security because we do not have multiple systems that we are trying to secure. 9 Page 62 of 471 Client data within the system is logically separated within a single instance of the database. Access controls inherent within the programming logic maintain the data segregation rules, which are applied throughout the application and database. This system architecture provides consistent change management and access management controls within the system, while at the same time allowing optimal system response and performance. To ensure that our clients' data integrity is maintained within the system, testing occurs weekly by internal IT and quality assurance teams. Additionally, third party's are leveraged for conducting quarterly independent application security testing to ensure that system logic, including data segregation rules, are appropriately applied and that the integrity of our clients' data is maintained. Businessolver owns the servers and storage systems that host the system. LightEdge Solutions and Cyxtera are used to provide the physical hosting environments where the servers and networking infrastructure are maintained. Networking and power management equipment is shared; servers, storage, and other stack-specific hardware are dedicated to, owned by, and operated by Businessolver. Routine detailed vendor assessment are performed as part of the vendor selection process, including reviewing internal security processes and procedures, external audit reports (SSAE 18), and financial stability audits. hh. Please share SOC II reports. We're required to verify the security audit report. Response: Please refer to Exhibit B for SOC reporting of Businessolver's Enrollment System. 10 Page 63 of 471 ii. How is data backed up? frequency? Response: In addition to the Multiple Production Operating Datacenters (PODs), each night the primary database is backed up to hard disk and transferred offsite. Physical backups are maintained in storage and retained for eight years. jj. Please share your disaster recovery plan. Response: Businessolver has established a Disaster Recovery Plan for the enrollment platform that can be executed in the event of a disaster. This plan identifies the responsibilities of the Disaster Recovery Team, whose function is to restore production operations to Benefitsolver in the event of a disaster. Multiple Production Operating Datacenters (PODs) exist to maintain an active/active processing environment. Dedicated connections are utilized to synchronize production data between PODs. Each of the PODs has redundancy across all systems, hardware, and software in the event of an individual system component failing. In the event of an emergency, a recovery time objective of one hour from the occurrence of an event has been set as the minimum to maintain for the purposes of the disaster recovery plan. Production processing could be reassigned to the unaffected data centers and a near real-time recovery point could occur. Recovery points would be based on the type of incident that occurred. If the data structure or underlying data were directly affected and corrupted, and this corruption potentially replicated to all three POD locations, RMAN backups could be utilized to recover the database to any point in time during the prior seven day period. In the event that the incident occurred more than seven days in the past, nightly backups and/or database snapshots could be utilized to load the data into a non-production environment for import of the data into the affected production database. If all three locations in the multi-POD environment were completely inaccessible and/or destroyed, recovery would be performed utilizing the off-site nightly backups. In addition to the multi-POD environment, each night the primary database is backed up to hard disk and transferred offsite. Physical backups are maintained in storage and retained for eight years. Businessolver performs semi-annual testing of disaster recovery systems. We identify the recovery point and time of systems in the event that the plan would be executed. In addition, we perform business continuity testing procedures on an annual basis to verify that business continuity procedures exist and function adequately to maintain continuity of service in the event of a disaster. Furthermore, Businessolver has redundancy in operations through our additional office locations. In the event of a disaster, the teams in Denver, Charlotte, Chicago, Seattle, and Iowa City can provide back-up support. Additional details can be provided upon request. 11 Page 64 of 471 kk. Can the system be integrated with Microsoft Active Directory? Response: Yes, there can be single-sign-on connectivity. Typically it takes approximately 6 to 8 weeks to establish and test. 12 Page 65 of 471 TABB RA TES AND EXPENSES I Please provide a quote for fees associated with providing an Online Benefit Administration Portal, including completing the below "Chart A." McGriff, Seibels & Williams is the City's assigned Benefits Consultant/Agent of Record. No fees shall be paid to any other third party or agent. CHART A Product Description Pricing Benefits Administration $4 .30 per employee per month Implementation Fee Waived History Loads Included but shou ld not be required as we maintain the current system of record. Carrier File Feeds Included Payroll Connection Included Reporting fncluded Billing Reconciliation lrhe Billing module within lthe system is inc luded in t he $4.30 pepm fee. Reconciliation service is a separate service that can be priced Decision Support Tools $1,500 annually ACA Tracking/Employer Reporting $10.00 per 1095C form $4,500 per IRS transmittal $1,000 per subsequent ~ransmittal New Carrier Feeds $1,500 to $3,500 Ongoing Fees (i .e. new carrier set up) Included Other Items rrexting = $0.15 pepm Dependent Verification = $25 per K:ustom Reporting = klependent on complexity Please provide cost proposals with the following options: • An initial contract term with rate guarantee of three (3) years with the option to renew for two (2) additional one (1) year terms for a total of five (5) years. • An initial contract term with rate guarantee of two (2) years Page 66 of 471 with the option to renew for three (3) additional one (1) year terms for a total of (5) years. • An initial contract term with rate guarantee of one (1) year with the option to renew for four ( 4) additional (1) year terms for a total of five (5) years. Response: Precept is presenting an initial contract term with a rate guarantee of two (2) years with the option to renew for three (3) additional one (1) year terms. 2 Page 67 of 471 TABC 1. References Using the format outlined below, please provide three current client references and three former client references for which you provided the same services. References should be based on the office that will be providing services to the CITY. Current Client -References 1 Organization name: City of Contact and title: Cedar Hill Angelica Morales, HR Generalist Address: Phone number: 285 Uptown Blvd. (952) 291-5100 ext. 1052 Cedar Hill, TX 75104 Effective date of contract: 2015 #of enrolled employees: 336 Description of services provided: Enrollment System, Data Management, Benefits Portal E-mail address:angelica.morales@cedarhilltx.com Current Client -Reference 2 Organization name: Tokyo Contact and title: Vickie Lee, SVP Human resources Electron Address:2400 Grove Blvd Phone number: Austin, TX. 78741 (512) 424-1553 Effective date of contract: 2006 #of enrolled employees: 1,755 Description of services provided: Description of services provided: Benefits enrollment system, benefits portal, customer care center, enrollment & eligibility management, data management, consolidated billing E-mail address: vickie.lee@us.tel.com Current Client -Reference 3 Organization name: Hoag Contact and title: Hospital Socorro Zamora, Manager Benefits Address: Phone number: One Hoag Drive (949) 764-5743 Newport Beach , CA 92658 Effective date of contract: 2011 #of enrolled employees: 6,000 Description of services provided: Benefits enrollment system, benefits portal, customer care center, enrollment & eligibility management, data management, consolidated billing E-mail address: socorro.zamora@hoag.org 1 Page 68 of 471 Former Client -Reference 1 Organization name: Contact and title: Mission Healthcare Irene Hernandez, HR Coordinator Address: Phone number: 619 757-2700 2385 Northside Drive Suite 200 San Diego, CA 92108 Effective date of contract: # of enrolled employees: 627 Description of services provided: Benefits enrollment system, benefits portal, customer care center, enrollment & eligibility management, data management, consolidated billing and reconciliation. E-mail address:jhernandez@missionhh.com 2 Page 69 of 471 TAB D CERTIFICATION I The undersigned affirms that they are duly authorized to execute this contract, that this RFP has not been prepared in collusion with any other firm, and that the contents of this RFP have not been communicated to any other firm prior to the official opening of this RFP. Additionally, the undersigned affirms that the firm is willing to sign the enclosed Standard Form of Agreement. Any exceptions to the City's Standard Form of Agreement shall be clearly identified on company letterhead. Sign€ci'B ____ Title: Chief Operating Officer ~----·- Typed Name: Douglas King McGriff Insurance Services, Inc. Company Name: Precept Group a Division of Phone No.: (949) 679-2188 Fax No.: _____________ _ Email: douglas@preceptgroup.com Bid Address: 130 Theory Suite 200 Irvine Ca 92617 P.O. Box or Street City State Zip Order Address: 130 Theory Suite 200 Irvine Ca 92617 P.O. Box or Street City State Zip Remit Address: 130 Theory Suite 200 Irvine Ca 92617 P.O. Box or Street City State Federal Tax ID No.: ~5~6~-1~6_2~32~9~3 _______ _ DUNS No.: __ o~z_. L-_! ~Ci ~3~0~0~1 b~3_-____ _ Date: May, 9, 2019 END RFP NO. 19-062 ***DO NOT MODIFY THIS FORM*** Page 70 of 471 Date: To: from: Re: Cr.rr OF Corr.EGE S'rxnoN Home ofTtXllS Ad-M University• City of College Stlltion 1101 Texlts A1•e *College Station, 1X 77840 * (979) 764-3555 www.cstx.gm· April 25, 2019 All Interested Parties Lisa D. Davis, Buyer ADDENDUM NO. 1 RFP NO. 19-062 RFP 19-062, Online Benefits Administration Platform The following information related to Request for Proposal Nq. 19-062 is hereby made a part of the RFP Documents for the above referenced project as fully and as completely as though the same were included therein. RFP Questionnaire/Submittal Requirement Item hh. of the RFP Questionnaire is hereby revised as follows: • hh. Please submit a copy r?f'your company's Non-Disclosure Agreement (NDA). Details: The City will request SOC II reports from one or fl)brc top-ranked offeror(s) who submit proposals that are reasonably susceptible of being selcqfod for negotiation. NDA's shall be submitted with proposals to allow the City's Legal staff to review the NDA's while proposals arc being reviewed and ranked by the evaluation committee. REMINDERS Deadline for Questions and Inquiries .................................. May 1, 2019 @ 2:00 p.m. CST Proposal Submission Deadline ........................................... May 9, 2019 (<Ji 2:00 p.m. CST Please acknowledge receipt of this addendum with signature and date a_nd return with completed proposal. Failure to do so may cause your proposal to be considered non-responsive. Receipt <~f this Addendum No. l is hereby acknowledged Authorized Signature Date ?r~~ep-f-bvoup, ., Company Name 0-. div'i$ tOY) o(Mc..i.:~v"i··f+ lv\<;u..J,..li:V\Ce.. Page I of I Page 71 of 471 PRECEPT GROUP PROPOSAL EXHIBIT A Page 72 of 471 Plan Year XX Open Enrollment Timeline for Administrative Services STEP A f ·t C IV1'V ASSIGNED OWNER TARGET DATE .. • 11• 1 Begins: 2 Ends: l:",::l•H::;:Jlll •l •'!..!••hi l •'li l r'W~••l::ll;..1 1 -·.-•J ::I 4 OPen Enrollment Kick-off Meetina: All Stakeholders All .1.i 1•i.,1 ::::.::::11 .1 •• '~·' 6 Return Renewal Specification Document Broker 7 Provide New Rate Table to Precept Broker Confirm if mapping and/or defaults are required. Discuss 8 on weekly conference call Precept 9 Begin: system configuration Analyst 10 Complete OE updated medical comparison matrix Broker Complete OE opening/welcome screen and other text 11 changes Client 12 Send New Plan Year Payroll Calendar Client 13 Provide name of Testing Team members Client/Broker 14 STOP: system configuration Analyst 15 Begin system testing Precept 16 Provide Client with Testina Documents Precept 17 BEGIN: system testing Client/Broker 18 Provide Feedback Client/Broker 19 Update issues loa Precept 20 STOP: system testing Client/Broker IY •••~W l'I '.!1•,r·•- 22 Send Open Enrollment TEST files to carriers Businessolver 23 1:>end open Enrollment files to carriers Businessolver ........... 1 1• Coordinate call with Client payroll to complete 25 questionnaire. Precept 26 Send test payroll file to Client Precept 27 Provide results of test file processing Client 28 Last payroll file of the vear Precept 29 Deliver ER HSA Funding Report (if applicable) Precept 30 Transmit OE pavroll deduction file Precept : .•... Send new plan year employee communications to Precept 32 and review Portal Client Begin: Make updates based on new documents, add OE 33 wording and links Precept 34 STOP: Benefit Portal changes Precept 35 Portal review with Client internal team All 36 Make changes to portal based on Client feedback Precept 37 Remove OE references Precept . . • ,,_,.,, 39 Po::;T OE Data Audits Precept 40 Schedule Open Enrollment After Action Review Precept DATE COMPLETED I COMMENTS I I Page 73 of 471 PRECEPT GROUP PROPOSAL EXHIBITB Page 74 of 471·-. -pus"or._f;j!I ~or_faU passorfaP passorfall passorfan GENERAL . Type of Enrollment ompare emp oyee expenence o e enewa or oomorero ensure it is set up based on what is being requested GENERAL . Logo 1vemy me memoer sees correct company1a1v1s1on 1090 GENERAL . Open EnrollmenUStart Here Button en1y au11 y o access me vpen c:nro11men ouuon anu 1s snowing me enrollment period GENERAL . Opening Message Comoare emnlovee communications to site Check for tvoo's arammar and communication PROFILE . Employee demographic information Verify only client specific applicable fields are editable -If preferred email is inclurl"'rl "'n.:.ure that it is editable bv the emoln""'"' Check for tvno's arammar and communication-screen text DEPENDENTS • Available Tiers and Dependent rules Add/chance child aae to over student status aae Spouse, Domestic Partner, Children, Disabled dependents Verifv cannot delete decendent who is covered on oroducts Verifv can add same-sex soouse/DP if aoolicable Verifv cannot have both DP and Snouse If no deoendents: "No deoendents on file" text aooears Check for tvoo's arammar and communication -screen text MEDICAL • Medical Plans Check nlans offered based on location Verifv Plan names match header Verifv PCP is disolavina for addina a HMO alan if aaalicable Try different dependents selected but select "no" for employee (should not be allo....ved must check "ves" for EE) Verifv if vou can not elect benefits for the over ane denendent 26 Verify employee/er rates shown for eligible tiers display vvith correct member cost "list tiers/cnc:tc: that should disolav oer clan" Check for tvno's arammar and communication Wellness • For clients that offer a ....vellness credit/debit that is built in the system Check to ensure the wellness nuestion/credit annears nronerlv Make changes to employees ......ellness eligibility to ensure it shows up as exoected Check for tvno's nrammar and communication -screen text Surcharges • For clients that have a surcharge that is built within the system Confirm the surcharne annears correct! in the svstem Validate that it is attached to the linked olan as exoected Check for tvoo's arammar and communication -screen text HSA Contribution • HSA Contribution Verifv text and bank info Verifv nlan name and availabilit to em lovees location Verifv Plan names match header Verifv Max is reduced bv ER Fundina Plan amount displays correctly per contribution amount and paydays remaininn for vear. Confirm that Over aae 55 is allovvina extra S1000 Check for tvoo's. arammar and communication-screen text DENTAL • Dental Plan Try different dependents selected but select "no" for employee (should not bP ll'"'·· .... .-1 m11dr.hPrk'"''"' "fnri=i=\ Verifv if vou can not elect benefits for the over aae deoendent 26 Verifv olan name and availabilitv to emolovees location Verifv Plan names match header Verify employee/er rates shown for eligible tiers display vvith correct mPmhPr ,..,..,.,.+ "lic::t tiPr<::/'"''"'""+ ... thl'lt c::hrnilrf rfic:.nfl'lv nPr •ll'ln" Check for tvoo's. arammar and communication-screen text VISION • VSP Vision Plan Try different dependents selected but select "no" for employee (should not be allovved must check "ves" for EE) Verifv if vou can not elect benefits for the over aae deoendent 26 Veritv nlan name and availabilitv to emolovees location Verifv Plan names match header Verify employee/er rates shown for eligible tiers display vvith correct member cost "list tiers/costs that should disolav oer rilan" Check for tvno's nrammar and communication-screen text BASIC LIFEIAD&D • Basic Life and ADD Plan Verifv Plan details disolav correctlv fi.e. 1 x) Verifv clan name and availabilitv to emclovees location Verifv Plan names match header Check for tvno's nrammar and communication-screen text SUPPLEMENTAUVOLUNTAR • Employee Voluntary Life and ADD Verifv maximum increment shown <based on clan rules/comn) Y LIFE EMPLOYEE Verify Gl/EOI rules: i.e. Jfyou elected over GI, next screen should be EOI <n•oon Verifv Plan names match header Verifv rates based on olan ane Check for tvco's arammar and communication-screen text SUPPLEMENTAUVOLUNTAR • Spouse Voluntary Life and ADD Verifv maximum increment shown <based on nlan rules/comn\ Y LIFE SPOUSE Verify Gl!EOI rules: i.e. If you elected over GI, next screen should be EOI loo•oon Verifv Plan names match header Verifv rates based on clan aae If oot-out emolovee olan verifv scouse clan not available Page 75 of 471Check for tvoo's arammar and communication-screen text SUPPLEMENTALNOLUNTAR • Child Voluntary Life and ADD Verifv maximum increment shown Y LIFE CHILD(REN) Verifv rates Verifv Plan names match header Verifv if vou can not elect benefits for over aae deoendents If oot-out emolovee nlan verifv child o!an not available Check for tvoo's arammar and communication-screen text STD • Short Term Disability Verifv if Emolover oaid. automatic election Verifv Plan names match header Check for tvoo's arammar and communication-screen text LTD • Long Term Disability Verifv if Emolover oaid automatic election Verifv Plan names match header Check for tvoo's orammar and communication-screen text Health Care FSA . HC FSA Annual max $2,650 Plan amount displays correctly per contribution amount and pay periods • Limited FSA Annual max $2,650 remaininn for vear. Verifv olan name and availabHitv to emolovee Verifv Plan names match header Verifv min and max amounts -error nane Verifv e!ectina HSA limits FSA Check for tvoo's. arammar and communication-screen text Dependent Care FSA . DC FSA Annual max $5,000 Plan amount displays correctly per contribution amount and pay periods remaininn for vear. Verifv o!an name and availabilitv to emolovee Verifv Plan names match header Verifv min and max amounts -error nane Check for tvoo's. arammar and communication Parking Plan amount displays correctly per contribution amount and pay periods remainina for vear. Verifv ri!an name and availabilitv to emnlovee Verifv Plan names match header Verifv min and max amounts -error oaae Check for tvoo's arammar and communication Transit Plan amount displays correctly per contribution amount and pay periods remaininn forvear. Verifv olan name and avai!abilitv to emo!ovee Verifv Plan names match header Verifv min and max amounts -error nane Check for tvoo's arammar and communication VOLUNTARY BENEFITS • Voluntary Accident Text Onlv Screen -Voluntarv Accident and Critical Illness/Cancer • Voluntary Critical Illness/Cancer Verifv Plan names match header • 11-.. -·--1-··~ c:-~-n <:::<:::() tn ---:-~ .:>tr-_ -----~ h.:> ~--~-...i in Check for tvoo's arammar and communication-screen text BENEFICIARIES . The den<=>ndents show ac: e!i ible b<=>neficiari"'S Trv incorrect beneficiarv desi nations/nercentanes . Arlditional Beneficiaries can be added Beneficiaries are reauired for Life & Vol Life nroducts Add additional beneficiaries and desianate under clans Check for tvoa's arammar and communication BENEFITS SUMMARY . EE and ER fdenendinn on client' ner nav neriod costs Verifv EE and ER ner nav neriod costs . nJsr.losure statl'!ments Trv links (if aoolicab!e) to disclosure statements EOl/Gl -verifv election and oendina show correctlv Verifv red text messaaes Check for tvoo's. arammar and communication-screen text GENERAL . Closing Message Comnare emclovee communications and screen text document to site Is all Carrier Arbitration listed and accurate Check for tvoo's. arammar and communication-screen text GENERAL • Order of Plans and Flow of benefit offerings Ensure that the system correctly lists the plans in order and it flows the way the client exoects Page 76 of 471 PRECEPT GROUP PROPOSAL EXHIBIT C Page 77 of 471 Notice of New Hire Benefits Enrollment Action Required: Elect your new hire benefits and submit before your eligibility window closes. Welcome to CLIENT NAME! As a newly eligible employee, you must complete your benefit elections within 31 days from your date of hire. To begin your enrollment, please log onto the on line enrollment system at company . l.websiteurl. Please wait 24 hours from receipt of this notice before registering as a New User on the CLIENT NAME Benefits enrollment system! Login Instructions for first time users: 1. Click on the link New User? Click here to register. 2. You will register by entering your last name, the last 4 digits of your social security number, and your date of birth. 3. You will also be asked to choose a User ID and Password. 4. Please keep your user ID and Password for your future use during open enrollment. Please use this checklist for your new hire benefits enrollment process: 1. Login at company .l.websiteurl. Before you begin enrollment, take the time to educate yourself on all of the benefit options that are available to you . CLIENT NAME provides the Benefits Guide and additional intranet resources to help you make the best benefit decisions for you and your family. 2. Begin your new hire enrollment process by clicking the "Enroll" link on the page. 3. Once you have completed your enrollment on line, print a copy of the confirmation page, review it for accuracy, and retain it for your records. Unless you experience a qualified status change (i.e. marriage, birth, a change to spouse's employment status), your next opportunity to enroll is during the next open enrollment period . Your benefits will be effective on your date of hire. Please refer to your benefit guide for further details. For assistance with the on line enrollment system or if you have any questions about your benefit coverage, please contact the CLIENT NAME Benefits Center at company.1.supportphone (6 :00am - S:OOpm PST Monday through Friday) or company .l.supporttext@preceptgroup.com . Thank you, companyname Benefits Center Page 78 of 471 OPEN ENROLLMENT NOTICE Please Complete Your Employee Benefits Enrollment Dear member.1.fname member.1.lname, CLIENT NAME Annual Open Enrollment has now started! Please log into company.l.websiteurl to learn about your benefit options, make changes, and approve your elections. Medical and Dental plan elections will not roll over to the 2019 plan year. If you do not enroll on line for the new plan year, you are electing to waive coverage for the new plan year . Health Savings Account (HSA) employee elections from the prior year do not roll over. You must re-elect these benefits each year or they will be waived for next plan year. Flexible Spending Account (FSA) employee elections from the prior year do not roll over. You must re - elect these benefits each year. The Annual Open Enrollment period will run from October 30, 2018 through November 9, 2018. Once Open Enrollment closes you will not be allowed to make any changes unless you experience a qualifying life event, such as marriage, birth of a child, or an adoption. If you will be covering other dependents such as a spouse or child, please have their date of birth and social security number on hand. If you have questions, please contact the companyname Benefits Center at company.1.supportphone (6:00am -S:OOpm PST Monday through Friday) or company .l.supporttext@preceptgroup.com .. Thank you, companyname Benefits Center Page 79 of 471 Benefits Enrollment Reminder Your benefit elections are incomplete Dear member.1.fname member.1.lname, You recently started an enrollment and/or a change to your benefit elections, however, the process was not completed. If your transaction is not completed, your enrollment/changes will NOT be approved. It is very important that you take action to ensure that you and your family have insurance coverage. Login to company.1.websiteurl to review your options and make your elections for the upcoming year. If you do not complete your transaction prior to the window close date, you will be unable to make changes to your employee benefits until the next annual enrollment, unless you experience a qualifying life event, such as a marriage, birth, or adoption. If you have any questions, please login to company.1.websiteurl to review important information regarding your benefit options. You can also call the companyname Benefits Center at company.1.supportphone. For faster service, we recommend first reviewing the information provided within your account via the website link provided in this notice. This information is available at your convenience, with no wait times. Thank you, companyname Benefits Team Page 80 of 471 EXHIBIT B PAYMENT SCHEDULE D The Contractor must submit monthly invoices to the City, accompanied by an explanation of charges, fees, services, and expenses. The City will pay such invoices in compliance with the Texas Prompt Payment Act. -OR- [2J Payment is a fixed fee in the amount listed in Article I of this Contract. This amount shall be payable by the City pursuant to the schedule listed below and upon completion of the services and written acceptance by the City. The City will pay such invoices in compliance with the Texas Prompt Payment Act. Schedule of Payment for each phase: (Sec following page for detailed rates and expenses) Contract 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 81 of 471 TABB (revised 6/20 /19) [Best and Final Offer (BAFO) RA TES AND EXPENSES P lease provide a quote for fees associated with providing an Online Benefit Administration Portal , including completing the be low "Chart A." McGriff, Seibels & Williams is the City's assigned B e nefits Cons ultant/Agent of R e cord. No fees shall be paid to any other third party or agent. Product Description Benefits Administration Impl e mentation Fee Hi story Loads Ca rrier F ile Fee ds Payroll Connection · Reporting Billing Reconciliation Deci s ion Support Tool s ACA Tracking/Employer Re portin g New Carrier Fee d s Ongoin g Fe es (i.e . new c a rri e r set up) Othe r It e ms : Te xtin g Othe r Items: De pe nd e nt Verification Modul e CHART Pricing Year 1 and Year 2 ~4.30 per employee per month Not applicable Included but should not be required as we maintain the current system of record. Included Included Included The Billing module within the system is included in the $4.30 oepm fee. Reconciliation service is a separate service that can be priced. $1,500 annually J>9 .00 per electronic 1095C form $10.00 per paper 1095C form $4 ,5 00 per IRS transmittal $1,000 per subsequent transmittal $1,500 to $3,500 Included S0.15 pepm !Automated message triggered by census and business rules in ~ystem included in pepm fee. Fee ailso includes up to four ad- hoc tex b message templates per ~Don th. Fee waived for set-up and km plates. (-Sensitive-) 1 Pricing Year3 $4.52 per employee per month Not applicable Included but should not be equired as we maintain the current system of record. Included Included Included fhe Billing module within the system is included in the $4.52 tpepm fee. Reconciliation service is a separate service that can be tpriced. ~ 1,500 annually $9.00 per electronic 1095C form $10.00 per paper 1095C form $4,500 per IRS transmittal ~ 1,000 per subsequent transmittal ~ 1,5 00 to $3,500 Included TBD y II Fee waived for set-up and em plates. Page 82 of 471 Other It em s : Action Manager Fee waived for a ll templates. Fee waived for a ll templates. Other Items: Total Rewards Statements $0.65 pepm fo r onlin e access a nd Kl.65 pepm fo r online access and ~b ili ty to print statement t o PDF ability to print statement to PDF Fu lfi llm ent fees for printing and Fu lfi llm ent fees for printing and mailing= $2.25 per statement mailing= $2.25 per statement includes postage) inc lud es postage) Other Items : Sofia $0.45 per eligible emp lo yee per TBD month Other Items: Direct Bill Set-up fee : $1,500 TBD $5.00 per leave per month $0.55 postage per mailing Other Items: Set-up fee: $1,500 TBD FSA Administration $4.95 per participant per month (through the Businessolver system) $0.55 postage per mailing Other Items: Set-up fee: $1,500 rrBD COBRA Administration $0.50 per employee per month (through the Businessolver system) Takeover notices@$7.50 per notice Open Enro llm ent kits@$13.00 per kit II 2% admin fee retained by Businessolver II !Non-sufficient funds fees (if II app li cable) wi ll be charged back ~o c li ent Please provide cost proposals with the following options: • An initial contract term with rate guarantee of three (3) years with the option to renew for two (2) additional one (1) year terms for a total of five (5) years. • An initial contract term with rate guarantee of two (2) years with the option to renew for three (3) additional one (1) year terms for a total of (5) years. • An initial contract term with rate guarantee of one (1) year with the option to renew for four (4) additional (I) year terms for a total of five (5) years. Response: Precept is presenting an initial contract term with a rate guarantee of two (2) years with the option to renew for three (3) additional one (1) year terms. [-Sensitive-] 2 Page 83 of 471 Contract 19300595 General Service Contract Benefits System RFP CRC 04-05-19 EXHIBITC CERTIFICATES OF INSURANCE Page 84 of 471 ACORD® CERTIFICATE OF LIABILITY INSURANCE I DATE (MMIDDNYYY) ~ 07/01/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, ANDTHE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT NAME: MCGRIFF, SEIBELS & WILLIAMS, INC. ritJgNNEo Extl: 404 497-7500 I FAX 3400 Overton Park Drive SE (AIC Nol: Suite 300 E-MAIL Atlanta, GA 30339 ADDRESS: INSURER(S) AFFORDING COVERAGE NAIC# INSURER A :XL Specialty Insurance Company 37885 INSURED INSURER B :U.S. Specialty Insurance Company 29599 BB&T Corp & Subs c/o BB&T lnsSvcs INSURER c :Westchester Fire Insurance Company 10030 300 College Street, Suite 208 INSURER D :National Union Fire Insurance Company of Pittsburgh, PA 19445 Asheville, NC 28801 INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER:ZKJV9B4B REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE ADDL l:SUBR POLICY EFF POLICY EXP LIMITS LTR IN"D WVD POLICY NUMBER IMMIDDNYYYl IMM/DDNYYYl COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ -D CLAIMS-MADE D OCCUR l;((t:N1t:U PREMISES Ea occurrence\ $ MED EXP (Any one person) $ - PERSONAL & ADV INJURY $ - GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ =l DPRO-DLOC PRODUCTS -COMP/OP AGG $ POLICY JECT OTHER: $ AUTOMOBILE LIABILITY fE~~~b~~RtflNGLE LIMIT $ - ANY AUTO BODILY INJURY (Per person) $ --OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per accident) $ -HIRED -NON-OWNED iP~?~6c~le~t~AMAGE $ -AUTOS ONLY -AUTOS ONLY $ UMBRELLA LIAB H OCCUR EACH OCCURRENCE $ -EXCESS LIAB CLAIMS-MADE AGGREGATE $ OED I I RETENTION$ $ WORKERS COMPENSATION I tr~~UTE I IOTH- AND EMPLOYERS' LIABILITY ER YIN ANY PROPRIETOR/PARTNER/EXECUTIVE D NIA E.L. EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED? (Mandatory in NH) E.L. DISEASE -EA EMPLOYEE $ If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $ A Fl Bond Liability (Includes Cyber) ELU 157689-18 10/01/2018 10/01/2019 Fl Bond $ 15,000,000 B Excess Fl Bond Liability 14-MGU-18-A44856 $10,000,000 Excess of $ 15,000,000 c Excess Fl Bond Liability DOX G24581093 010 $15,000,000 Excess of $ 25,000,000 D Excess Fl Bond Liability 01-933-18-98 $15,000,000 Excess of $ 40,000,000 $ DESCRIPTION OF OPERATIONS I LOCATIONS /VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Excess Fl Bond Liability (continued) -Effective 10/01/18-10/01/19 *Continental Casualty Company (NAIC#: 20443) -(Policy#: 596616800) -Limit -$10,000,000 in excess of $55,000,000 *Freedom Specialty Insurance Company (NAIC#: 22209) -(Policy#: XMF1802468) -Limit -$5,000,000 in excess of $65,000,000 *U.S. Specialty Insurance Company (NAIC#: 29599) -(Policy#: 14-MGU-18-A44872) -Limit-$15,000,000 in excess of $70,000,000 •Freedom Specialty Insurance Company (NAIC#: 22209) (Lead Quota Share) -(Policy#: XMF1801888) -Limit -$15,000,000 part of $50,000,000 in excess of $85,000,000 •Argonaut Insurance Company (NAIC#: 19801) (Quota Share) -(Policy#: MLX 7602158-2) -Limit -$15,000,000 part of $50,000,000 in excess of $85,000,000 •Markel American Insurance Company (NAIC#: 28932) (Quota Share) -(Policy#: MKLM6EL0003918) -Limit -$10,000,000 part of $50,000,000 in excess of $85,000,000 *Axis Insurance Company (NAIC#: 37273) (Quota Share) -(Policy#: MNN/776743/01/2018) -Limit-$10,000,000 part of $50,000,000 in excess of $85,000,000 (continued next page) CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of College Station AUTHORIZED REPRESENTATIVE ~d PO Box 9960 College Station, TX 77845 /-~ ,4/ Page 1of3 © 1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Page 85 of 471 ADDITIONAL REMARKS SCHEDULE Page2of3 PRODUCER INSURED MCGRIFF, SEIBELS & WILLIAMS, INC. BB&T Corp & Subs c/o BB&T lnsSvcs POLICY NUMBER CARRIER I NAIC CODE ISSUE DATE: 07/01/2019 ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE: (continued from previous page) * Beazley Insurance Company (NAIC#: 37540) (Lead Quota Share) -(Policy#: V2499F180101) -Limit -$25,000,000 part of $115,000,000 in excess of $135,000,000 * Allianz Global Risks US Insurance Company (NAIC#: 36420) (Quota Share) -(Policy #: USF00181118) -Limit - $10,000,000 part of $115,000,000 in excess of $135,000,000 * Fidelity Deposit Company of Maryland (NAIC#: 39306) (Quota Share) -(Policy #: FIB0007060-05) -Limit - $15,000,000 part of $115,000,000 in excess of $135,000,000 * QBE Insurance Company (NAIC#: 39217) (Quota Share) -(Policy#: QPL0157382) -Limit -$10,000,000 part of $115,000,000 in excess of $135,000,000 * National Union Fire Insurance Company (NAIC#: 19445) (Quota Share) -(Policy #: 01-933-19-59) -Limit - $10,000,000 part of $115,000,000 in excess of $135,000,000 * Liberty Mutual Insurance Company (NAIC#: 23035) (Quota Share) -(Policy#: FI4NAA7JTM004) -Limit -$10,000,000 part of $115,000,000 in excess of $135,000,000 *Argonaut Insurance Company (NAIC#: 19801) (Quota Share) -(Policy#: MLX 7601575-03) -Limit -$5,000,000 part of $115,000,000 in excess of $135,000,000 * Everest National Insurance Company (NAIC#: 10120) (Quota Share) -(Policy#: FL5EX00082-181) -Limit -$5,000,000 part of $115,000,000 in excess of $135,000,000 *AXIS Insurance Company (NAIC#: 37273) (Quota Share) -(Policy#: MNN/797397/01/2018) -Limit -$5,000,000 part of $115,000,000 in excess of $135,000,000 * Freedom Specialty Insurance Company (NAIC#: 22209) (Quota Share) -(Policy#: XMF1801886) -Limit -$15,000,000 part of $115,000,000 in excess of $135,000,000 * Twin City Fire Insurance Company (NAIC#: 29459) (Quota Share) -(Policy#: 20MB029820718) -Limit -$5,000,000 part of $115,000,000 in excess of $135,000,000 FI Bond Deductible is $20,000,000 FI Bond includes Cyber Liability. Bankers Professional Liability-Effective 10/01/18-10/01/19 *XL Specialty Insurance Co. (NAIC#: 37885) -(Policy #: ELU157686-18) -Limit -$15,000,000 *US Specialty Insurance Co. (NAIC#: 29599) -(Policy#: 14-MGU-18-A44857) -Limit -$10,000,000 in excess of $15,000,000 *ACE American Insurance Co. (Quota Share Lead) (NAIC#: 22667) -(Policy#: DOX G25568084 010) -Limit-$15,000,000 part of $20,000,000 in excess of $25,000,000 *Arch Insurance Co. (Quota Share) (NAIC#: 11150) -(Policy #: BLX9300032-02) -Limit-$5, 000, 000 part of $20,000,000 in excess of $25,000,000 *National Union Fire Insurance Company of Pittsburgh, Pa. (NAIC#: 19445) -(Policy #: 01-933-19-03) -Limit- $15, 000, 000 in excess of $45,000,000 *Continental Casualty Co. (NAIC#: 20443) -(Policy#: 596729338) -Limit-$10,000,000 in excess of $60,000,000 *Endurance Risk Solutions (Quota Share Lead) (NAIC#: 43630) -(Policy#: FIX10005599204) -Limit-$12,500,000 part of $30,000,000 in excess of $70,000,000 *Freedom Specialty Insurance Co. (NAIC#: 22209) -(Policy#: XMF1802469) -Limit-$7,500,000 part of $30,000,000 in excess of $70,000,000 *Markel American Insurance Co. (NAIC#: 28932) -(Policy#: MKLM6EL0003916) -Limit-$10,000,000 part of $30,000,000 in excess of $70,000,000 Bankers' Professional Deductible is $25,000,000 Insurance Agents' E&O Deductible is $15,000,000. Bankers' Professional Liability includes Insurance Agents' E&O. McGriff Seibels & Williams, Inc. and McGriff Insurance Services, Inc. are wholly owned subsidiaries of BB&T Insurance Holdings, Inc. Crump Life Insurance Services are wholly owned subsidiaries of BB&T Insurance Holdings, Inc. CRC Insurance Services, Inc. and its wholly owned subsidiaries are wholly owned subsidiaries of BB&T Insurance Holdings, Inc. Hanleigh Management, Inc., Cooper Gay Re and J.H Blades & Co. Inc. are wholly owned subsidiaries of CRC Insurance Services, Inc. CRC includes the operations of the following divisions: TAPCO Underwriters, Inc., CRC Swett, scu, SCU Transportation, Negley Associates, 5 Star Specialty Programs, Southern Marine and Aviation, Target Insurance Services, Professional Insurance Concepts, Energy Technical Underwriters, Southern Hospitality Underwriters, Ethos Underwriting, Pro-Praxis, The ABC Program, and Argenia, LLC. AmRisc is a subsidiary of BB&T -Loxley Insurance Services is part of AmRisc ACORD 101 (2008/01) © 2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD CERTIFICATE NUMBER: ZKJV9B4B Page 86 of 471 ADDITIONAL REMARKS SCHEDULE Page3of3 PRODUCER INSURED MCGRIFF, SEIBELS & WILLIAMS, INC. BB&T Corp & Subs c/o BB&T lnsSvcs POLICY NUMBER CARRIER I NAICCODE ISSUE DATE: 07/01/2019 ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE: (continued from previous page) Sterling Capital Management, LLC is a subsidiary of BB&T ACORD 101 (2008/01) © 2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD CERTIFICATE NUMBER: ZKJV9B4B Page 87 of 471 ACORD® CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DD/YYYY) ~ 7/1/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER ~2~~~CT Nila Swink BB&T Insurance Services, Inc. r~gN90 ""''" 828-277-3917 I FAX Risk Management Department IA/C Nol: 888-632-4250 301 College Street, Suite 208 ~t1DA~~ss: CertificateRequests@bbandt.com Asheville NC 28801 INSURER(S) AFFORDING COVERAGE NAIC# INSURER A: Hartford Fire Insurance Company 19682 INSURED 01BBTMAIN INSURER B: Travelers Property Casualty Co of Amer 25674 BB&T Corporation and Subsidiaries INSURER c: XL Insurance America, Inc. 24554 c/o BB&T Insurance Services Inc. 301 College Street, Suite 208 INSURER D: Twin City Fire Insurance Company 29459 Asheville NC 28801 INSURER E : Fireman's Fund Insurance Companv 21873 INSURER F: Continental Insurance Comoanv 35289 COVERAGES CERTIFICATE NUMBER: 2116337535 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDL SUBR POLICY EFF ,~g~6%~1 LTR TYPE OF INSURANCE >M~n wun POLICY NUMBER IMMIDDNYYYl LIMITS A x COMMERCIAL GENERAL LIABILITY y y 22CSES44603 5/1/2019 5/1/2020 EACH OCCURRENCE $1,000,000 ~ ~ CLAIMS-MADE 0 OCCUR ~~~~~~JYE~~~J~~ence\ $ 300,000 ~ MED EXP (Any one person) $10,000 PERSONAL & ADV INJURY $1,000,000 ~ GEN'L AGGREGATE LIMIT APPLIES PER: GENERALAGGREGATE $ 2,000,000 Fl DPRO-0LoC PRODUCTS -COMP/OP AGG $ 2,000,000 POLICY JECT OTHER: $ A AUTOMOBILE LIABILITY y y 22CSES44604 5/1/2019 5/1/2020 PE~~~b~d~~t~INGLE LIMIT $1,000,000 A ~ 22CSES44605 5/1/2019 5/1/2020 ANY AUTO BODILY INJURY (Per person) $ -OWNED SCHEDULED x BODILY INJURY (Per accident) $ AUTOS ONLY -AUTOS x HIRED x NON-OWNED rp~?~~c~Je~RAMAGE $ AUTOS ONLY -AUTOS ONLY $ B x UMBRELLA LIAB Fl OCCUR y y ZUP10P9038319NF 5/1/2019 5/1/2020 EACH OCCURRENCE $ 25,000,000 c ~ US00010498Ll19A 5/1/2019 5/1/2020 x EXCESS LIAB CLAIMS-MADE AGGREGATE $ 25,000,000 DED I I RETENTION$ Excess -1st Laver $ 25MM excess 25MM A WORKERS COMPENSATION y 22WNS44600 5/1/2019 5/1/2020 x I ~~~TUTE I I OTH-ER D AND EMPLOYERS' LIABILITY Y/N 22WBRS44601 5/1/2019 5/1/2020 ANYPROPRIETOR/PARTNER/EXECUTIVE ~ NIA E.L. EACH ACCIDENT $ 1,000,000 OFFICER/MEMBER EXCLUDED? (Mandatory In NH) E.L. DISEASE -EA EMPLOYEE $1,000,000 If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $1,000,000 E 2nd Layer Excess Umbrella y y SHX00032387136 5/1/2019 5/1/2020 50,000,00 Excess of 50MM F 3rd Layer Excess Umbrella 6024338871 5/1/2019 5/1/2020 25,000,000 Excess of 100MM DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space Is required) 22WNS44600 -Primary Workers Compensation (Various Writing Company Names within the Hartford Fire Insurance Group apply based on the state of employment) ; 22WBRS44601 -Workers Compensation for Wisconsin ONLY The City of College Station is listed as addtional insured, with exception to workers compensation, for the duration of the contract. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of College Station PO Box 9960 AUTHORIZED REPRESENTATIVE College Station TX 77845 ~cs.~~ I © 1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Page 88 of 471 EXHIBIT D CYBER SECURITY REQUIREMENTS 1. CITY IT CONTRACT REQUIREMENTS FOR CLOUD PROVIDERS l. l Security Policies and Procedures. The Contractor shall provide the City with copies of its information security policies and procedures within three (3) business days upon City's request covering: (a) Data classification and privacy; (b) Security training and awareness; (c) Systems administration, patching and configuration; ( d) Incident response; (e) Managing workstations, mobile devices and antivirus applications; (f) Backups, disaster recovery and business continuity; (g) Audit and testing schedules; (h) Requirements for third-party business partners and contractors; (i) Compliance with information security or privacy laws, rules, regulations or standards (j) Evidence of background checks that support security of sensitive or confidential information; (k) Disclosure of previous data breaches; and (I) Any other relevant information regarding security policies or procedures. 1.2 Industry Best Practices. Contractor must provide all services using the best commercially-available security technology and techniques according to industry best practices and standards; the City's security standards, policies and procedures including those relating to fraud prevention and detection and any other inappropriate system and network use or access, including: (a) Providing secure (SSL, HTTPS, or similar) access to all levels of users as defined by the City via the internet; (b) Having controls meeting applicable laws and the latest Framework for Improving Critical Infrastructure Cyber security from National Institute of Standards and Technology (NIST) or compatible industry security frameworks; (c) Completely testing and applying patches for hardware bios/firmware, bare metal operating systems (e.g. VMware ESXi), virtualized server operating systems, and software products before release; and (d) Having all servers providing services to the City solely physically located within the continental United States of America. Contractor must house all servers and equipment in an operational environment meeting industry standards including a climate- controlled room with a fire and security hazard detection system and a network and Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 89 of 471 electrical redundancy system, including backup Uninterruptable Power Supply (UPS) and automatic fail-over stand-by generators and physical security. 1.3 Data Breach. (a) Notice. Contractor must immediately notify the City by telephone and email no later than twenty-four (24) hours if there is a reasonable probability of a data security incident. Contractor must send a written letter following up on the data security incident within forty-eight ( 48) hours following a data breach. The Contractor must: 1. Cooperate with the City's request to investigate and resolve the incident in a timely manner; 2. Promptly implement necessary remedial measures; and 3. Document responsive actions taken related to the data breach, including any post- incident review and actions taken to make changes in business practices in providing the services, if necessary. (b) Contractor Agreement Breach. If a data breach results from Contractor's breach of the Agreement, Contractor must: l. Bear any costs associated with the investigation and resolution of the data breach 2. Notify individuals, regulators and all others required by Identity Theft Enforcement and Protection Act in the Texas Business and Commerce Code Chapter 521 Unauthorized Use ofldentifying Information; 3. Engage a credit monitoring service or identity protection service; 4. Publish a website or toll-free number and call center for affected individuals as required by state or federal law; 5. Complete all corrective actions as reasonably determined based on root cause; and 6. Send the City written findings and remedial measures from the data breach. 1.4 Preventive Security Procedures. Contractor must: (a) Provide on-going software updates as they become available complying with the defined maintenance windows. The Contractor must completely test updates; including any bug fixes, patches and other improvements; (b) Monitor system and error logs and perform preventive maintenance to minimize and predict system problems, including initiating and completing an appropriate response; (c) Conduct a third-party independent security/vulnerability assessment at its own expense at least annually and submit the results of such assessment to the City; (d) Agree to third-party application and vulnerability security scans and schedules; (e) Comply with the City's directions/resolutions to remediate security/vulnerability assessment results aligning with City Security Vulnerability Assessment Standards; Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 90 of 471 (f) Limit logical and physical access to all system components and provide access only to those individuals with a business need for services provided. Individuals who have access to systems and data must have a criminal background check; (g) Annually audit the data center through an independent third-party auditor. Audit results must form part of the Contractor's applicable SOC report. The audit results must comply with industry standard controls for data security and disaster recovery that the Contractor shall report to the City in writing; and (h) Take all necessary measures to protect the data and encryption keys including, but not limited to the off-site servers daily backup according to industry best practices and encryption techniques. 1.5 Disaster Recovery. Contractor must comply with any and all City disaster recovery and resiliency protocols to prevent system interruption. In the event of breached system breach, Contractor shall notify the City and restore the system within twenty-four (24) hours from discovery of breach. 1.6 Closeout. (a) Agreement Expiration. When the Agreement term expires or terminates, and at any other time at the City's written request, Contractor must promptly return to the City all intellectual and physical property subject to the Agreement including, but not limited to system configuration data and information in file or document formats in the Contractor's possession or control. (b) Access. The City will have access to export and retrieve its data for no less than ninety (90) days after the Agreement expiration or termination date. The City must be able to access its data at any time during the Agreement term in a readily readable, structured and documented format, such as CSV-format or some other standard format offered by the Contractor. The Contractor must provide the City transition services after Agreement expiration or termination at Contractor's then-current and generally- charged hourly rates. (c) Data Removal. At the City's request upon Agreement expiration or termination, the Contractor must remove, delete, purge, overwrite or otherwise render inaccessible within a reasonable time, all City data remaining on Contractor's servers to the extent possible based on the then-current technology available. Contractor must provide the City a written and signed statement confirming data has been deleted, purged, overwritten or otherwise rendered inaccessible. The Contractor will not otherwise delete the City's data without City's prior written consent. 2. CITY IT CONTRACT REQUIREMENTS FOR ON PREMISE SOLUTIONS 2.1 Requirements: Contractor must: (a) Provide the City with its security architecture. The security architecture must at a minimum meet applicable laws and the latest Cybersecurity Framework for Improving Critical Infrastructure from National Institute of Standards and Technology (NIST) or compatible industry security frameworks; Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 91 of 471 (b) Have data access limited to only required support service; (c) Evidence of background checks that support security of the City's sensitive or confidential information; (d) Notify the City within twenty-four (24) hours when any patches resulting from security vulnerability and threats become available; (e) Provide City with all applicable security assessments, audits and certifications related to system security annually; (t) Train City staff on security-related procedures regarding system operation and maintenance; and (g) Take all necessary measures to protect the City's data and data encryption when applicable. 2.2 Data Breach. (a) Notice. Contractor must immediately notify the City by telephone and email no later than twenty-four (24) hours if there is a reasonable probability of a data security incident. Contractor must send a written letter following up on the data security incident within fo1ty-eight ( 48) hours following a data breach. The Contractor must: 1. Cooperate with the City's request to investigate and resolve the incident in a timely manner; 2. Promptly implement necessary remedial measures; and 3. Document responsive actions taken related to the data breach, including any post- incident review and actions taken to change business practices in providing the services, if necessary. (b) Contractor Agreement Breach. If a data breach results from Contractor's breach of this Agreement, Contractor must: 1. Bear any costs associated with the investigation and resolution of the data breach; 2. Notify individuals, regulators and all others required by Identity Theft Enforcement and Protection Act in the Texas Business and Commerce Code Chapter 521 Unauthorized Use ofldentifying Information; 3. Engage a credit monitoring service; 4. Publish a website or a toll-free number and call center for affected individuals as required by state or federal law; 5. Complete all corrective actions as reasonably determined based on root cause; and 6. Send the City written findings and remedial measures from the data breach. 2.3 Data Removal. At the City's request upon Agreement expiration or termination, the Contractor must remove, delete, purge, overwrite or otherwise render inaccessible within a reasonable time, all City data remaining on Contractor's servers to the extent possible based on the then-current technology available. Contractor must provide the City a written Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Page 92 of 471 and signed statement confirming data has been deleted, purged, overwritten or othetwise rendered inaccessible. The Contractor will not otherwise delete the City's data without City's prior written consent. Contract No. 19300595 General Service Contract Benefits System RFP CRC 04-05-19 Contract No. 19300595 Page 1 of 2 Letter Amendment No. 1 May 19, 2020 ATTN: Douglas King, Executive Vice President McGriff Insurance, Inc. DBA Precept Insurance Solutions, LLC 130 Theory, Ste. 200 Irvine, CA 92617 RE: Contract No. 19300595 (“Contract”), Letter Amendment #1 City of College Station General Service Contract Dear Mr. King, The City of College Station (“City”) and you, acting on behalf of McGriff Insurance, Inc. DBA Precept Insurance Solutions, LLC (“Precept”), would like to amend the above-referenced Contract to formally correct the not to exceed contract amount for the initial two (2) year contract term. Both the City and Precept mutually agree that Section 1.1 of the Contract be amended to read in its entirety as follows: 1.1 Consideration. In consideration for the services performed in the Scope of Services and Contractor’s completion of work in conformity with this Contract, the City shall pay the Contractor an amount not to exceed One Hundred Forty Thousand and No Cents ($140,000.00). Both parties agree that all other terms and conditions as set forth in the Contract remain unchanged. By signature below the parties indicate their written mutual acceptance of this amendment in accordance with the terms of the Contract. In order to assist in processing, we ask that you electronically sign the following acceptance letter via DocuSign. Sincerely, Lisa D. Davis, CPM, APP Purchasing Manager Page 93 of 471 Contract No. 19300595 Page 2 of 2 Letter Amendment No. 1 LETTER AMENDMENT No. 1 ACCEPTANCE Contract No. 19300595 CITY OF COLLEGE STATION, TEXAS _____________________ Jeffrey Capps, Interim City Manager Date: _______________ ACCEPTED AND APPROVED: MCGRIFF INSURANCE, INC. DBA PRECEPT INSURANCE SOLUTIONS, LLC By: _________________________ Name: _________________________ Title: _________________________ Date: __________________________ Page 94 of 471 June 11, 2020 Item No. 3.5. Mowing and Landscape Contract Renewal Sponsor:Donald Harmon, Director of Public Works Reviewed By CBC:City Council Agenda Caption:Presentation, discussion, and possible action regarding the first renewal of a general service contract for city-wide mowing and landscape maintenance with Green Teams, Inc. in an amount not to exceed $1,108,394. Relationship to Strategic Goals: Core Services and Infrastructure Recommendation(s): Staff recommends renewal of contract 19300490-Renewal #1, and Change Order #2 to Green Teams, Inc. for city-wide mowing and landscape maintenance. Summary: In 2019 staff solicited proposals for all of the City’s mowing and landscape maintenance services (except regional parks and athletic fields). Request for Proposals solicited from contractors for mowing and landscape maintenance were divided into five (5) categories: 1) Facilities – city buildings and Northgate District 2) Electric – CSU electric substations and buildings 3) Water/Wastewater – CSU water and wastewater sites 4) Parks – includes neighborhood parks and cemeteries 5) Finish mowing – primarily street right of ways and medians Six vendors responded to RFP 19-021. Green Teams, Inc. was selected as the most responsible bidder to provide all city-wide mowing and landscape services. This is the first of two possible renewals. Budget & Financial Summary: Operation and maintenance funds are budgeted in the General Fund (Streets, Facilities and Parks), Electric Fund, and Water/Wastewater Funds for citywide mowing and landscape needs. Reviewed & Approved by Legal: No Attachments: 1.19300490R1 Signed Renewal Letter Page 95 of 471 Page 96 of 471., May 20, 2020 ATTN: Mr. Len Gallagher Green Teams Inc. 731 Industrial Blvd Bryan TX 77803 CJTY OF COLLEGE STATION Home of1i:xm !l6-M University" RE: Bid#l9-059 Contract #19300490-Renewal #1 and Change Order #2 City Wide Landscape Maintenance & Mowing Services Dear Mr. Gallagher, The City of College Station appreciates the services provided by Green Teams, Inc., this past year. We would like to exercise our option to renew the above referenced agreement for the term of June 15, 2020 through June 14, 2021 with a contract amount of One Million One Hundred Eight Thousand Three Hundred Ninety Four and 00/100 dollars ($1,108,394.00). This new contract amount reflects the addition of one recently completed City of College Station park that is being added to this Contract by Change Order #2. If this meets with your company's approval, please complete the following renewal agreement and return it no later than Wednesday, May 20, 2020 via e-mail to rforsyth(a),cstx.gov. A follow up Jetter for contractual purposes will be sent for electronic signature, via Docusign on or before the June 11th City Council Meeting. Sincerely. ~ ro -(}_/'-Robyu~ Buyer C. T.P.M. City of Col kg~ Station 110 I T i:~as A vcnu..: S College Sration, Tx 77840 ni>~ \ slh u .:c:;l . 1)\ 979~ 764-H37-Attachment Page 97 of 471••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• CONTRACT # 19300490 RENEW AL 1 ACCEPTANCE and CHANGE ORDER #2 As indicated by the signatures below, the Parties acknowledge and agree to RFP# 19-021, Renewal #1 Change Order No. 2, Mowing and Landscape Services for the City of College Station, in accordance with all terms and conditions previously agreed to and accepted and as revised in the new contract, for an amount not to exceed One Million One Hundred Eight Thousand Three Hundred Ninety Four and 00/l 00 dollars ($1, I 08,394.00). This total amount includes the issuance of Change Order No. 2 in the amount of One Thousand Four Hundred Fifty Eight Dollars and no cents ($1,458.00) for the mowing and landscape services of the new Sonoma Park. The Vendor contract renewal and pricing as proposed will become effective June 15, 2020, upon City Council review, approval and execution of this renewal and new contract. The Parties understand that this renewal term will be for the period beginning June 15, 2020 through June 14, 2021. This is the first renewal of two possible renewals for the new contract. GREEN TEAMS INC. :~~tedl!!t~ Title: CFO Date: 05-21-20 C#l9300490Rl Chg Order 2 CITY OF COLLEGE STATION By: ___________ _ City Manager Date: -------APPROVED: City Attorney Date: ------Asst. City Manager/CFO Date: ------2 Page 98 of 471CHANGE ORDER NO. DATE: June 15, 2020 Contract No. 19300490RJ P.O.# PROJECT: City Wide Landscape Contract OWNER' CONTRACTOR City of College Station Green Teams lnc P.O. Box 9960 302 S 4th St, Suite 500 Ph: 785-323-1544 Collee:e Station, Texas 77842 Manhattan, KS 66502 Fax: PURPOSE OF THIS CHANGE ORDER: To add Sonoma Park-TurfOpcrations to the Contract. Sonoma Park will be opened during the Contract Renewal term . . ITEM UNIT ORIGINAL REVISED ADDED NO UNIT DESCRIPTION PRICE QUANTITY QUANTITY COST 1 Finished I\fowin2 $40.00 0 28 $1,120.00 2 Hardscape Weed Control $9.00 28 $252.00 3 Ant Control $43.00 2 $86.00 Chanl!e Order #2 Sonoma Park TOTAL Sl,458.00 THE NET AFFECT OF THIS CHANGE ORDER IS o/o INCREASE/DECREASE. LINE I {acct./work order number) 0.00 LINE 2 (acct./work order number) 0.00 LINE 4 (acct./work order number) 1001-1140-5212) $1,458.00 TOTAL CHANGE ORDER 1,458.00 ORIGINAL CONTRACT AMOUNT Sl,058,252.00 CHANGE ORDER NO. I 548,684.00 0.046004165 °/., CHANGE CHANGE ORDER NO. 2 51,458.00 0.001377744 '}0 CHANGE REVISED CONTRACT AMOUNT 51,108,394.00 0.047381909 o/., TOTAL CHANGE ORIGINAL CONTRACT TIME Days Time Extension No. 1 Days Revised Contract Time 0 Days SUBSTANTlAL COI\'IPLETJON DATE REVISED SUBSTANTl~L COMPLETION DATE APPROVED A/E CONTRACTOR Date DEPARTMENT DIRECTOR Date NA CONSTRUCTION CONTRACTOR Date ASST CITY MGR -CFO Date PROJECT MANAGER Date CITY ATTORNEY Date __ NA CITY ENGINEER Date CITY l\'IANAGER Date Revised 2012 0719 C#l9300490Rl Chg Order 2 3 Page 99 of 471BAFO S/18/2020 CITY PARKS Turf Maintenance ty or College Station Turf Weed Control ~FO RFP#19-021 Primary Mow Secondary Mow Hardscape Weed Control (Pre/Post-Emergent) Ant Control c Minimum Possible Minimum Possible Minimum Possible Minimum Minimum 0 Cycles per Additional Cast per Cycles per Additional Cost per Cycles per Additional Cost per Cycles per Cost per Cydes per Cost per Total Annual ~e Address/Location: Year eve I es Cycle Year cvcles Cy de Year cvcles Cycle Year Cycle Year Cycle Cost ~RD Operations (1001-1140·5212)-Turf Maintenance !iQ.Jloma Park I 18 10 $ 40.00 18 10 $ 9.00 2 $ 43.00 $ 1,458.00 "' [ ~ N .. C:\Users\len\AppData\Local\Mkrosoft\Windows\JNetCache\Content.Outlook\FLZN2YCG\19-021 Change Order 2-Sonoma Park June 11, 2020 Item No. 3.6. Renewing the annual price agreement with Techline, Inc. for the purchase of wire and cable Sponsor:Mary Ellen Leonard, Director of Fiscal Services Reviewed By CBC:City Council Agenda Caption:Presentation, discussion, and possible action on renewing the annual price agreement with Techline, Inc. for the purchase of wire and cable which will be maintained in electrical inventory and expended as needed. The total recommended renewal is for an amount not to exceed $712,700. Relationship to Strategic Goals: Core Services and Infrastructure Recommendation(s): Staff recommends second and last renewal of the annual price agreement with Techline, Inc. for an amount not to exceed $712,700.00. Summary: After a competitive sealed bid process was conducted for the annual purchase of wire and cable, Electric staff evaluated the bids for specification compliance and recommended award to Techline, Inc. On June 14, 2018, City Council awarded the annual price agreement to Techline, Inc. for an amount not to exceed $712,700.00. This if the second and last of two possible one-year renewal options. Budget & Financial Summary: Funds are budgeted and available in the Electrical Fund. Various projects may be expensed as supplies are pulled from inventory and issued. Reviewed & Approved by Legal: No Attachments: 1.C18300591Renewal 2 Ltr Techline Inc Page 100 of 471 CONTRACT & AGREEMENT ROUTING FORM CONTRACT#: _______ PROJECT#: _________ BID/RFP/RFQ#: _______ Project Name / Contract Description: _____________________________________________________ ____________________________________________________________ Name of Contractor: ____________________________________________________________ CONTRACT TOTAL VALUE: $ _________________ Grant Funded Yes No If yes, what is the grant number: Debarment Check Yes No N/A Davis Bacon Wages Used Yes No N/A Section 3 Plan Incl. Yes No N/A Buy America Required Yes No N/A Transparency Report Yes No N/A NEW CONTRACT RENEWAL # _____ CHANGE ORDER # _____ OTHER ______________ BUDGETARY AND FINANCIAL INFORMATION (Include number of bids solicited, number of bids received, funding source, budget vs. actual cost, summary tabulation) ___________________________________________________________________________________________ ___________________________________________________________________________________________ (If required)* CRC Approval Date*: __________ Council Approval Date*: ____________ Agenda Item No*: ______ --Section to be completed by Risk, Purchasing or City Secretary’s Office Only— Insurance Certificates: ______ Performance Bond: ________ Payment Bond: ________ Info Tech: _______ SIGNATURES RECOMMENDING APPROVAL __________________________________________ _________________________________ DEPARTMENT DIRECTOR/ADMINISTERING CONTRACT DATE __________________________________________ _________________________________ LEGAL DEPARTMENT DATE __________________________________________ _________________________________ ASST CITY MGR – CFO DATE APPROVED & EXECUTED __________________________________________ _________________________________ CITY MANAGER DATE __________________________________________ _________________________________ MAYOR (if applicable) DATE __________________________________________ _________________________________ CITY SECRETARY (if applicable) DATE Page 101 of 471 PO Box 9960 1101 Texas Avenue College Station, TX 77842 www.cstx.gov May 13, 2020 ATTN: Mr. Gary Troxell Techline-Inc.com PO Box 674005 Dallas, TX 75267-4005 RE: Renewal #2 –Contract 18300591, Bid #18-074 Annual Purchase of Wire and Cable Dear Mr. Troxell, The City of College Station appreciates the products and services provided by Techline-Inc. this past year. We would like to exercise our option to renew the above referenced agreement for the term of July 1, 2020 through June 30, 2021, for an amount not to exceed Seven Hundred Twelve Thousand, Seven Hundred and 00/100 Dollars ($712,700). If this meets with your company's approval, please complete the attached contract renewal agreement and return it via e-mail to rforsyth@cstx.gov. A follow up letter for ‘contractual purposes’ will be sent for electronic signature, on or before the June 25 th, City Council Meeting. Attachment Page 102 of 471 CONTRACT #18300591 RENEWAL 2- ACCEPTANCE By signing herewith, I acknowledge and agree to renew Contract 18300591, Annual Purchase of Wire and Cable, as needed, in accordance with all terms and conditions previously agreed to and accepted for an amount not to exceed Seven Hundred Twelve Thousand, Seven Hundred and 00/100 Dollars ($712,700). Pricing will be structured as follows: Original Bid Pricing: Line item 1: Inventory# 280-080-00001 1/0 URD AL Primary Wire 15KV EPR Insulation EST Qty 100,000 ft. $2.25 per ft. Line item 2: Inventory#280-080-00016 1000 MCM AL URD Primary Cable EST Qty 50,000 ft. $8.93 per ft. Line item 3: Inventory#280-080-0002 2/0 URD AL Triplex Wire (1m Ft/RL) Converse EST Qty 40,000 ft. $1.03 per ft. I understand this renewal term will be for the period beginning July 1, 2020 through June 30, 2021. This is the second and last renewal of two possible renewals. TECHLINE-INC. CITY OF COLLEGE STATION By: By: Printed Name: City Manager Title: Date: ________________ Date: Assistant City Manager/CFO Date: _____________ Page 103 of 471 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. OTHER: (Per accident) (Ea accident) $ $ N / A SUBR WVD ADDL INSD THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED? (Mandatory in NH) DESCRIPTION OF OPERATIONS below If yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIRED AUTOS ONLY 5/20/2020 Higginbotham Insurance Agency,Inc. 1221 S.MoPac Expwy.#160 Austin TX 78746 Larry Sue Dunn 800-728-2374 512-472-8888 ldunn@higginbotham.net Great Northern Insurance Company 20303 TECHL5 Federal Insurance Company 20281Techline,Inc. 9609 Beck Circle Austin TX 78758 Chubb Indemnity Insurance Company 12777 1690977914 A X 1,000,000 X 1,000,000 10,000 1,000,000 2,000,000 X X 35990636 11/3/2019 11/3/2020 2,000,000 A 1,000,000 X X X 73578171 11/3/2019 11/3/2020 B X X 10,000,0007988858011/3/2019 11/3/2020 10,000,000 X 0 Follow Form C X7174851911/3/2019 11/3/2020 1,000,000 1,000,000 1,000,000 A Leased/Rented Equipment 35990636 11/3/2019 11/3/2020 Limit -$1,715,250 Ded:$5,000 The General Liability and Automobile Liability policy includes a blanket automatic additional insured endorsement that provides additional insured status and General Liability,Automobile Liability and Workers'Compensation policy includes a blanket waiver of subrogation endorsement to the certificate holder when written contract requires such status. The General Liability policy has a blanket Primary &Non Contributory endorsement that affords that coverage to certificate holders when written contract requires such status The General Liability,Automobile and Workers Compensation policies includes a blanket notice of cancellation to certificate holders endorsement,providing for See Attached... City of College Station Risk Management Department PO Box 9960 College Station TX 77842 Page 104 of 471 ACORD 101 (2008/01) The ACORD name and logo are registered marks of ACORD © 2008 ACORD CORPORATION. All rights reserved. THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER:FORM TITLE: ADDITIONAL REMARKS ADDITIONAL REMARKS SCHEDULE Page of AGENCY CUSTOMER ID: LOC #: AGENCY CARRIER NAIC CODE POLICY NUMBER NAMED INSURED EFFECTIVE DATE: TECHL5 1 1 Higginbotham Insurance Agency,Inc.Techline,Inc. 9609 Beck Circle Austin TX 78758 25 CERTIFICATE OF LIABILITY INSURANCE 30 days'advance notice if the policy is canceled by the company other than for nonpayment of premium,10 days'notice after the policy is canceled for nonpayment of premium.Notice is sent to certificate holders with mailing addresses on file with the agent or the company.The endorsement does not provide for notice of cancellation if the named insured requests cancellation. Umbrella is follow form over the General Liability,Automobile and Workers Compensation. Re:Renewal #2 –Contract 18300591,Bid #18-074 Thirty Day Notice of Cancellation Except Ten Day For Non Payment of Premium applies on the General Liability,Automobile and Workers Compensation. Page 105 of 471 June 11, 2020 Item No. 3.7. Experience Bryan/College Station Short-Term Budget Sponsor:Natalie Ruiz, Director of Economic Development Reviewed By CBC:N/A Agenda Caption:Presentation, discussion, and possible action to approve a short-term budget of probable expenditures for the remaining sixty day period between termination notification on May 29, 2020 and contract termination on August 1, 2020 as provided for in Article VI of the Tri-Party Agreement between the City of College Station, City of Bryan and Experience Bryan College Station. Relationship to Strategic Goals: Good Governance Financial Sustainability Recommendation(s): Staff recommends the City Council approve the short-term budget. Summary: On May 28, 2020 the City Council authorized the City Manager to prepare, sign and send on the City’s behalf, an advance written notice to Experience Bryan College Station (EBCS) notifying them of the City’s termination of its current funding agreements effective August 1, 2020. This written notice was delivered to EBCS on Friday, May 29, 2020. The existing Tri-Party Funding Agreement between the City of College Station, the City of Bryan and EBCS was scheduled to terminate October 31, 2020 with the fiscal year and program period ending on September 30, 2020. Article VI of the agreement provides for termination for convenience by either city by giving sixty days advance written notice. The funding agreement also provides that within ten days from the termination notification, EBCS shall submit a short-term budget of probable expenditures for the remaining sixty day period between termination notification and contract termination. This budget will be presented to Council for approval within ten business days after receipt. If formal approval is not given within ten business days and the budget does not contain any expenditures that would be prohibited by the Texas Tax Code, and is within the current contractual period approved budget; the budget will be considered approved. EBCS will submit the short-term budget prior to the City Council meeting. Upon receipt the budget will be forwarded to the Council. Budget & Financial Summary: Funding for the sixty day budget is available via the current Tri-Party Funding Agreement. Reviewed & Approved by Legal: No Attachments: 1.Budget will be available in the City Secretary’s Office Page 106 of 471 Budget will be available in the City Secretary’s Office Page 107 of 471 June 11, 2020 Item No. 4.1. Ordinance changing the zoning district boundaries from GC General Commercial and O Office to MF Multi-Family, NAP Natural Areas Protected and GC General Commercial on approximately 14 acres of land located at 2325 Harvey Mitchell Parkway South. Sponsor:Treston Rodriguez, Staff Planner Reviewed By CBC:Planning & Zoning Commission Agenda Caption:Public Hearing, presentation, discussion and possible action regarding an ordinance amending Appendix A, “Unified Development Ordinance,” Article 4, “Zoning Districts,” Section 4.2 “Official Zoning Map,” of the Code of Ordinances of the City of College Station, Texas by changing the zoning district boundaries from GC General Commercial and O Office to MF Multi- Family, NAP Natural Areas Protected and GC General Commercial on approximately 14 acres of land located at 2325 Harvey Mitchell Parkway South. Relationship to Strategic Goals: Diverse & Growing Economy Recommendation(s): The Planning & Zoning Commission will hear this item on June 4, 2020. A written Final Report of the Commission will be provided to the City Council. Staff recommends approval. Summary: The applicant is requesting to rezone approximately 14 acres of undeveloped land located near the intersection of Texas Avenue and Harvey Mitchell Parkway. Of the 14 acres, approximately 3.7 acres will be zoned MF Multi-Family, 4.8 will be GC General Commercial, and 5.6 will be NAP Natural Areas Protected. If approved, the change in the zoning district boundaries from GC General Commercial and O Office to MF Multi-Family, NAP Natural Areas Protected, and GC General Commercial would bring commercial and residential opportunities to a vacant piece of land which sits at a major intersection in town. REZONING REVIEW CRITERIA 1. Whether the proposal is consistent with the Comprehensive Plan: The subject property is currently zoned GC General Commercial and O Office, and is designated as General Commercial, Natural Areas - Reserved, and Urban on the Comprehensive Plan Future Land Use and Character Map. Properties with the Comprehensive Plan’s Future Land Use and Character Map designation of Natural Areas - Reserved generally represent a constraint to development and should be preserved for their natural function or open space qualities. The NAP Natural Areas Protected zoning designation is for areas that are relatively undeveloped and are often used for recreational or open space purposes or the conveyance of floodwaters. The area currently zoned O Office is located completely within FEMA-designated floodway. The applicant is proposing to rezone this area from O Office to NAP Natural Areas Protected, which is consistent with the future land use map. NAP Natural Area Protected is also proposed for land that is currently zoned GC General Commercial, but falls within the floodway or a modified 100-year floodplain. Page 108 of 471 The Urban land use designation allows for an intense level of residential development. These areas are appropriate for a range of high density multi-family and attached residential development in various forms including townhomes, apartment buildings, mixed-use buildings, and limited non- residential uses that are compatible with the surrounding area. The proposed MF Multi-Family zoning, which has frontage on Harvey Mitchell Parkway South, is consistent with the Comprehensive Plan Future Land Use and Character Map. GC General Commercial is intended to allow for an intense level of commercial activity intended to serve the surrounding and greater community. Being located along one of the most heavily trafficked rights-of-way within the City, and being a primary route to reaching Texas A&M University, it is appropriate for the zoning at this location to allow for uses geared toward commuter, visitor, and local patrons. The proposed rezoning of the GC General Commercial district is in line with the Future Land Use and Character Map. 2. Whether the uses permitted by the proposed zoning district will be appropriate in the context of the surrounding area: GC General Commercial is found along the majority of the Texas Avenue Corridor between Krenek Tap and Deacon. Land within a close proximity to the intersection of Texas Ave and Harvey Mitchell include, but are not limited to restaurants, bank, office, retail, gas station, and auto repair. A hotel and apartments are currently under construction across Harvey Mitchell. The proposed rezonings are compatible with the land uses in the area. 3. Whether the property to be rezoned is physically suitable for the proposed zoning district: Due to its location near the intersection of Harvey Mitchell and Texas Avenue, both currently or proposed six-lane Major Arterials, the subject property is appropriately placed for GC General Commercial and MF Multi-Family development. A portion of the subject property is located within a floodway and special flood hazard area. The proposal is for the floodway to be rezoned to NAP, along with property within a modified 100-year floodplain. The modified floodplain boundary/zoning boundary is based upon the property owner’s site plan proposal to add fill on the property while compensating with the creation of additional creek flood storage onsite. While the proposal does not include the entire natural floodplain, the rezoning proposal reflects a 5.6-acre reduction of the property that is currently entitled for commercial land use. 4. Whether there is available water, wastewater, stormwater, and transportation facilities: Water and sewer service will be provided by the City of College Station. There is an existing water line along both Texas Avenue and Harvey Mitchell Parkway. There is an existing 24” sewer line along the segment of Bee Creek on the subject property, as well as a current CIP project in design for a larger trunk line in this area. There is adequate capacity of both water and sewer for this development. Drainage and other public infrastructure required with site development shall be designed and constructed in accordance with the BCS Unified Design Guidelines. The subject property has frontage on Texas Avenue which is designated and constructed as a six- lane Major Arterial. It also has frontage to Harvey Mitchell Parkway which is designated as a 6-lane Major Arterial and currently constructed as a 4-lane Major Arterial. A traffic signal at the intersection of Harvey Mitchell Parkway and Dartmouth Street is currently under design by the City and is Page 109 of 471 planned to be installed in the latter part of 2021. A traffic impact analysis (TIA) was submitted and analyzed intersections in the area. The intersection of Texas Avenue and Harvey Mitchell Parkway is anticipated to have unacceptable levels of service (LOS) in the Background condition but the proposed development falls below the 5% threshold to require mitigation by the development. A driveway is proposed on Texas Avenue at the median break across from Valley View Drive, which currently operates in the PM peak with a LOS E at Texas Avenue. As a traffic signal at Valley View Drive does not meet appropriate signal spacing along Texas Avenue, the development will modify the existing full median break to become hooded lefts that allow left turns from Texas Avenue into the driveway and Valley View Drive but restrict left turns out of them onto Texas Avenue. A right-turn deceleration lane on northbound Texas Avenue will also be provided for the proposed driveway. These mitigation measures were developed in consultation with TxDOT. 5. The marketability of the property: The applicant states that they believe adding a mix of uses will make these properties and those surrounding it more marketable. Budget & Financial Summary: N/A Reviewed & Approved by Legal: No Attachments: 1.Ordinance 2.Background Information 3.Rezoning Exhibit 4.Vicinity Map, Aerial, and Small Area Map Page 110 of 471 Ordinance Form 08-27-19 ORDINANCE NO. _____ AN ORDINANCE AMENDING APPENDIX A “UNIFIED DEVELOPMENT ORDINANCE,” ARTICLE 4 “ZONING DISTRICTS,” SECTION 4.2, “OFFICIAL ZONING MAP” OF THE CODE OF ORDINANCES OF THE CITY OF COLLEGE STATION, TEXAS, BY CHANGING THE ZONING DISTRICT BOUNDARIES FROM GC GENERAL COMMERCIAL AND O OFFICE TO MF MULTI-FAMILY, NAP NATURAL AREAS PROTECTED AND GC GENERAL COMMERCIAL ON APPROXIMATELY 14 ACRES OF LAND LOCATED AT 2325 HARVEY MITCHELL PARKWAY SOUTH. AS DESCRIBED BELOW; PROVIDING A SEVERABILITY CLAUSE; DECLARING A PENALTY; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: PART 1:That Appendix A “Unified Development Ordinance,” Article 4 “Zoning Districts,” Section 4.2 “Official Zoning Map” of the Code of Ordinances of the City of College Station, Texas, be amended as set out in Exhibit “A” and Exhibit “B” attached hereto and made a part of this Ordinance for all purposes. PART 2:If any provision of this Ordinance or its application to any person or circumstances is held invalid or unconstitutional, the invalidity or unconstitutionality does not affect other provisions or application of this Ordinance or the Code of Ordinances of the City of College Station, Texas, that can be given effect without the invalid or unconstitutional provision or application, and to this end the provisions of this Ordinance are severable. PART 3:That any person, corporation, organization, government, governmental subdivision or agency, business trust, estate, trust, partnership, association and any other legal entity violating any of the provisions of this Ordinance shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not less than twenty five dollars ($25.00) and not more than five hundred dollars ($500.00) or more than two thousand dollars ($2,000) for a violation of fire safety, zoning, or public health and sanitation ordinances, other than the dumping of refuse. Each day such violation shall continue or be permitted to continue, shall be deemed a separate offense. PART 4:This Ordinance is a penal ordinance and becomes effective ten (10) days after its date of passage by the City Council, as provided by City of College Station Charter Section 35. Page 111 of 471 ORDINANCE NO. ____________Page 2 of 7 Ordinance Form 08-27-19 PASSED, ADOPTED, and APPROVED this ______ day of ______________________, 20__. ATTEST:APPROVED: __________________________________________________________ City Secretary Mayor APPROVED: _______________________________ City Attorney Page 112 of 471 ORDINANCE NO. ____________Page 3 of 7 Ordinance Form 08-27-19 Exhibit A That Appendix A “Unified Development Ordinance,” Article 4 “Zoning Districts,” Section 4.2, “Official Zoning Map” of the Code of Ordinances of the City of College Station, Texas, is hereby amended as follows: The following tract is being rezoned from GC General Commercial and O Office to NAP Natural Areas Protected (Tract 1): Page 113 of 471 ORDINANCE NO. ____________Page 4 of 7 Ordinance Form 08-27-19 The following tract is being rezoned from GC General Commercial to GC General Commercial with the following meets and bounds description (Tract 2): Page 114 of 471 ORDINANCE NO. ____________Page 5 of 7 Ordinance Form 08-27-19 The following tract is rezoned from GC General Commercial to MF Multi-Family (Tract 3): Page 115 of 471 ORDINANCE NO. ____________Page 6 of 7 Ordinance Form 08-27-19 Page 116 of 471 THENCE N 49°00'40" W 257.78 fe ec a lo ng lhe common line becween the herein desoibed cract of land and said Branch Banking & Trust to a 5/8 inch iro n rod with ''McCl ure " cap found marking the nonh corner of said B ranch Banking & Trust; '!HENCE S 42°29'44" W 241.37 feet along the comm on line between the herein described tract of land and said Branch Banking & Trust to a 5/8 inch iron rod with "McClure" cap found in the northeast line of said 0.837 acre O no cract; '!HENCE N 4 8°27'19" W 110.04 feet along the common line between the herein desoibed crac t of land and said 0.837 acre Otto rract to th e PLACE OF BEGINNING. r-10-2 o 2 of2 ORDINANCE NO. ____________Page 7 of 7 Ordinance Form 08-27-19 Exhibit B Page 117 of 471 BACKGROUND INFORMATION NOTIFICATIONS Advertised Commission Hearing Date: June 4, 2020 Advertised Council Hearing Date: June 11, 2020 The following neighborhood organizations that are registered with the City of College Station’s Neighborhood Services have received a courtesy letter of notification of this public hearing: None Property owner notices mailed: 12 Contacts in support: None at the time of this report Contacts in opposition:None at the time of this report Inquiry contacts:1 ADJACENT LAND USES Direction Comprehensive Plan Zoning Land Use North Natural Areas – Reserved General Suburban, General Commercial Public Facilities and Park South Natural Areas – Reserved, Suburban Commercial, 6-Lane Major Arterial General Commercial, General Suburban Bank and Auto Repair, Single Family Homes and Office, 4-Lane Major Arterial (Harvey Mitchell Parkway) East Natural Areas – Reserved General Suburban Single-Family Residence West 6-Lane Major Arterial N/A 6-Lane Major Arterial (Texas Avenue) DEVELOPMENT HISTORY Annexation: 1969 Zoning: R-1 Single-Family Residential upon annexation (1969) A-P Administrative Professional (1983) (Tract #1) C-1 General Commercial (1983) (Tract #2) C-1 General Commercial (1986) (Tract #3) C-1 General Commercial renamed GC General Commercial (2003) A-P Administrative Professional renamed O Office (2012) Final Plat:A portion is unplatted and others are part of Lot 1 and Lot 2 of the Lakeview Acres Revised Subdivision Site development:Undeveloped Page 118 of 471 VICINITY MAPSITETEXAS AVENUE S.H A R V E Y M I T C H E L L P A R KW A Y S . STATE HIGHWAY 6 V A L L E Y V I EW DR I V ECSTEXISTINGFLOODWAYEXISTING100-YRFLOODPLAINCITY O F CO L L EG E S T A T IONMONUM EN T C S 9 4 - 1 2 9 S 8 9 ° 1 0 ' 3 2 " E 3 1 6 7 . 3 5 'CST532.03' 555.89'S17° 22' 41.76"E 164.35'N76° 22' 22.34"E 44.67'N49° 11' 51.04"E 274.04'N63° 27' 17.46"E 30.90'N45° 41' 51.21"E 64.76'159.87'EXISTINGFLOODWAYMODIFIED100-YRFLOODPLAINMODIFIED100-YRFLOODPLAINS47° 51' 38" E 174.75'159.87'159.87'159.87'159.87'159.87'159.87'159.87'159.87'159.87'159.87'159.87'S42° 36' 40" W 258.68'S47° 51' 38" E 14.88'N42° 33' 03" E 107.54'S43° 39' 54" W 126.31'N88° 25' 20" W 73.40'S49° 04' 16" E 24.25'S49° 04' 16" E 465.75'C I T Y O F CO L L E G E S T A T IONMONUM EN T C S 9 4 - 1 2 9 S 8 9 ° 1 0 ' 3 2 " E 3 1 6 7 . 3 5 'N70° 08' 26.23" E 53.14'EXISTING ZONINGPROPOSED ZONINGPage 119 of 471 Page 120 of 471 0 1.25 I I , / ,/~~ ' \ \ \ ' ' ' ' 2 .5 Miles ' ' ' .... -... -- \ \ ' ~ \ .i -' .... '-.• t .--,,. I ..... :, I .. ,,. ~ ' ' \ \ \ \ \ ' I I \ \ \ \ ' I I I I I I I I I • NORTH Page 121 of 471 CJ.er City of College Station .~ 0 500 1,000 ----.. ========:::::i Feet THE CREEK PLACE I lease REZ2019-000017 REZONING I Page 122 of 471 CJ.er City of College Station COLLEGE STATION CEMETERY GS ZONING DISTRICTS (In Grayscale) Residential MF R Rural MU WE Wellborn Estate MHP E Estate WRS Wellborn Restricted Suburban RS Restricted Suburban GS General Suburban D Duplex T Town home IA 0 Multi-Family Mixed-Use Manufactured Home Pk . 500 1,000 ·Feet / Non-Residential Planned Districts Overlay Districts Retired Districts NAP Natural Area Protected P-MUD Planned Mixed-Use Dist. ov Corridor Ovr. R-1B Single Family Residential 0 Office POD Planned Develop . Dist. ROD Redevelopment District R-4 Multi-Family SC Suburban Commercial KO Krenek Tap Ovr. R-6 High Density Multi-Family WC Wellborn Commercial Design Districts NPO Nbrhd . Prevailing Ovr. C-3 Light Commercial GC General Commercial WPC Wolf Pen Creek Dev. Car. NCO Nbrhd . Conservation Ovr. RD Research and Dev. Cl Commercial Industrial NG-1 Core Northgate HP Historic Preservation Ovr. M-1 Light Industrial BP Business Park NG-2 Transitional Northgate M-2 Heavy Industrial BPI Business Park Industrial NG-3 Residential Northgate C-U College and University 11 THE CREEK PLACE I lease : : REZ2019-000017 REZONING I June 11, 2020 Item No. 4.2. Ordinance amending “Transitional Provisions,” Section 4.1 “Establishment of Districts,” Section 5.5 “Retired Districts,” Section 7.2.D “Required Yards (Setbacks),” and Section 8.3.H.2 “Platting and Replatting within Older Residential Subdivisions” of the Code of Ordinances Sponsor:Jade Broadnax Reviewed By CBC:City Council Agenda Caption:Public Hearing, presentation, discussion, and possible action regarding an ordinance amending Appendix A, “Unified Development Ordinance,” Section 1.10 “Transitional Provisions,” Section 4.1 “Establishment of Districts,” Section 5.5 “Retired Districts,” Section 7.2.D “Required Yards (Setbacks),” and Section 8.3.H.2 “Platting and Replatting within Older Residential Subdivisions” of the Code of Ordinances of the City of College Station, Texas, regarding the Neighborhood Prevailing Overlay (NPO). Relationship to Strategic Goals: Neighborhood Integrity Recommendation(s): The Planning & Zoning Commission heard this item on May 21, 2020 and voted (4-0) to recommend approval of the Neighborhood Prevailing Overlay ordinance amendment. Staff recommends approval. Summary: The proposed ordinance amendment establishes the one existing NPO as a retired district. The existing NPO remains intact as created with no changes, and no other NPO rezoning may be requested in the future. City Council approved the Neighborhood Conservation Overlay (NCO) ordinance amendments in March 2020, which removed all references to the Neighborhood Prevailing Overlay (NPO) in an effort to eliminate redundancy. One NPO remains in College Station in the Glenhaven Estates Subdivision Phase I Block 12 Lots 1-21 and Phase III Block 13 Lots 1-12, so the purpose of this amendment is to include the NPO language within the UDO as a retired zoning district. Budget & Financial Summary: N/A Reviewed & Approved by Legal: No Attachments: 1.NPO Ordinance 2.Sec._1.10.___Transitional_Provisions. Redlines 3.Sec._4.1.___Establishment_of_Districts. Redlines 4.Sec._5.5.___Retired_Districts. Redlines 5.Sec._7.2.___General_Provisions. Redlines 6.Sec._8.3.___General_Requirements_and_Minimum_Standards-Redlines Page 123 of 471 Ordinance Form 8-14-17 ORDINANCE NO. ____________ AN ORDINANCE AMENDING APPENDIX A, “UNIFIED DEVELOPMENT ORDINANCE,” ARTICLE 1, “GENERAL PROVISIONS,” SECTION 1-1-, “TRANSITIONAL PROVISIONS” ARTICLE 4, “ZONING DISTRICTS,” SECTION 4-1, “ESTABLISHMENT OF DISTRICTS,” ARTICLE 5, “DISTRICT PURPOSE STATEMENTS AND SUPPLEMENTAL STANDARDS,” SECTION 5-5, “RETIRED DISTRICTS,” ARTICLE 7, “GENERAL DEVELOPMENT STANDARDS,” SECTION 7- 2.D, “REQUIRED YARDS (SETBACKS),” AND ARTICLE 8, “SUBDIVISION DESIGN AND IMPROVEMENTS,” SECTION 8-3.H.2, “PLATTING AND REPLATTING WITHIN OLDER RESIDENTIAL SUBDIVISIONS,” OF THE CODE OF ORDINANCES OF THE CITY OF COLLEGE STATION, TEXAS, BY AMENDING CERTAIN SECTIONS RELATING TO NEIGHBORHOOD PREVAILING OVERLAY; PROVIDING A SEVERABILITY CLAUSE; DECLARING A PENALTY; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: PART 1:That Appendix A, “Unified Development Ordinance Article 1, “General Provisions,” Section 1-1-, “Transitional Provisions” Article 4, “Zoning Districts,” Section 4-1, “Establishment Of Districts,” Article 5, “District Purpose Statements and Supplemental Standards,” Section 5-5, “Retired Districts,” Article 7, “General Development Standards,” Section 7-2.D, “Required Yards (Setbacks),” and Article 8, “Subdivision Design and Improvements,” Section 8-3.H.2, “Platting and Replatting Within Older Residential Subdivisions,” of the Code of Ordinances of the City of College Station, Texas, be amended as set out in Exhibit “A” attached hereto and made a part of this Ordinance for all purposes. PART 2:If any provision of this Ordinance or its application to any person or circumstances is held invalid or unconstitutional, the invalidity or unconstitutionality does not affect other provisions or application of this Ordinance or the Code of Ordinances of the City of College Station, Texas, that can be given effect without the invalid or unconstitutional provision or application, and to this end the provisions of this Ordinance are severable. PART 3:That any person, corporation, organization, government, governmental subdivision or agency, business trust, estate, trust, partnership, association and any other legal entity violating any of the provisions of this Ordinance shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not less than twenty five dollars ($25.00) and not more than five hundred dollars ($500.00) or more than two thousand dollars ($2,000) for a violation of fire safety, zoning, or public health and sanitation ordinances, other than the dumping of refuse. Each day such violation shall continue or be permitted to continue, shall be deemed a separate offense. Page 124 of 471 ORDINANCE NO. ___________Page 2 of 12 Ordinance Form 8-14-17 PART 4:This Ordinance is a penal ordinance and becomes effective ten (10) days after its date of passage by the City Council, as provided by City of College Station Charter Section 35. Page 125 of 471 ORDINANCE NO. ___________Page 3 of 12 Ordinance Form 8-14-17 PASSED, ADOPTED and APPROVED this ________ day of _____________________, 20__. ATTEST:APPROVED: __________________________________________________________ City Secretary Mayor APPROVED: _______________________________ City Attorney Page 126 of 471 ORDINANCE NO. ___________Page 4 of 12 Ordinance Form 8-14-17 Exhibit A That Appendix A, “Unified Development Ordinance,” Article 1, “General Provisions,” Section 1- 1-, “Transitional Provisions” Article 4, “Zoning Districts,” Section 4-1, “Establishment Of Districts,” Article 5, “District Purpose Statements and Supplemental Standards,” Section 5-5, “Retired Districts,” Article 7, “General Development Standards,” Section 7-2.D, “Required Yards (Setbacks),” and Article 8, “Subdivision Design and Improvements,” Section 8-3.H.2, “Platting and Replatting Within Older Residential Subdivisions,” of the Code of Ordinances of the City of College Station, Texas, is hereby amended to read as follows: Sec. 1.10. - Transitional Provisions. …. B. Zoning Districts. …. 4.  Retired Districts. The following districts are no longer eligible for Zoning Map Amendment requests. Properties with the following designations at the time of this amendment retain all uses, regulations, and requirements associated with these districts. Retired District Name Effective Date R-1B Single-Family Residential September 22, 2013 Retired District Name Effective Date R-4 Multi-Family December 28, 2014 R-6 High Density Multi- Family December 28, 2014 C-3 Light Commercial October 7, 2012 R&D Research & Development October 7, 2012 M-1 Light Industrial October 7, 2012 Page 127 of 471 ORDINANCE NO. ___________Page 5 of 12 Ordinance Form 8-14-17 M-2 Heavy Industrial October 7, 2012 NPO Neighborhood Prevailing Overlay June 21, 2020 Page 128 of 471 ORDINANCE NO. ___________Page 6 of 12 Ordinance Form 8-14-17 Sec. 4.1. - Establishment of Districts. Residential Zoning Districts R Rural WE Wellborn Estate E Estate WRS Wellborn Restricted Suburban RS Restricted Suburban GS General Suburban D Duplex T Townhouse MF Multi-Family MU Mixed-Use MHP Manufactured Home Park Non-Residential Zoning Districts NAP Natural Areas Protected O Office SC Suburban Commercial WC Wellborn Commercial GC General Commercial CI Commercial Industrial BP Business Park Page 129 of 471 ORDINANCE NO. ___________Page 7 of 12 Ordinance Form 8-14-17 BPI Business Park Industrial CU College and University Planned Districts P-MUD Planned Mixed-Use District PDD Planned Development District Design Districts WPC Wolf Pen Creek Development Corridor Northgate NG-1 Core Northgate NG-2 Transitional Northgate NG-3 Residential Northgate Overlay Districts OV Corridor Overlay RDD Redevelopment District NCO Neighborhood Conservation Overlay HP Historic Preservation Overlay Retired Districts R-1B Single-Family Residential R-4 Multi-Family R-6 High Density Multi-Family C-3 Light Commercial R&D Research & Development Page 130 of 471 ORDINANCE NO. ___________Page 8 of 12 Ordinance Form 8-14-17 M-1 Light Industrial M-2 Heavy Industrial NPO Neighborhood Prevailing Overlay For the purpose of this UDO, portions of the City, as specified on the Official Zoning Map of the City, are hereby divided into the zoning, design, and overlay districts enumerated below. The intensity regulations applicable for such zoning districts are designated in Article 5 and the use regulations are designated in Article 6 of this UDO. Page 131 of 471 ORDINANCE NO. ___________Page 9 of 12 Ordinance Form 8-14-17 Sec. 5.5. - Retired Districts. Retired Districts include districts existing prior to the amendment of this UDO. Existing districts will continue to remain in effect but these districts are not available for any new Zoning Map Amendment proposals. …. H. Neighborhood Prevailing Overlay (NPO). This district is designed to provide standards that preserve single-family neighborhoods by imposing neighborhood-specific yard, lot, and open space regulations that reflect the character of the neighborhood. The Neighborhood Prevailing Overlay does not prevent construction of new single-family structures or the renovation, remodel, repair, or expansion of existing single- family structures, but, rather ensures that new single-family structures are compatible with existing single-family structures. The underlying zoning district establishes the permitted uses and shall remain in full force, and the requirements of the overlay district are to be applied in addition to the underlying use and site restrictions. All single-family and accessory structures within the NPO district are subject to the existing median pattern of development on the subject and opposing blockfaces for the following standards: 1.Minimum Front Setback. 2.Maximum Front Setback. The maximum front setback, or build-to line, is no more than ten (10) feet back from the minimum front setback. 3.Minimum Side Street Setback. 4.Minimum Lot Size. Minimum lot size is calculated as the median building plot size of all existing building plots on the subject and opposing blockface. 5.Building Height. Building height refers to the vertical distance measured from the finished grade, or the base flood elevation where applicable, and the following points: a)  The average height level between the eaves and ridge line of a gable, hip, or gambrel roof; b)  The highest point of a mansard roof; or c)  The highest point of the coping of a flat roof. 6.Maximum Lot Coverage. Lot coverage is calculated as the median existing lot coverage on all building plots on the subject and opposing blockface. The maximum lot coverage cannot exceed maximum impervious cover allowed in the underlying zoning district. Lot coverage includes all structures and impervious surface on a site, including but not limited to, patios, driveways - gravel or paved, accessory structures, and sidewalks 7.Garage Location and Orientation. Page 132 of 471 ORDINANCE NO. ___________Page 10 of 12 Ordinance Form 8-14-17 New garages must be placed in relation to the primary residential structure on the lot consistent with the most frequent pattern of placement on the subject and opposing blockface. New garages must also be oriented consistent with the most frequent direction of orientation on the subject and opposing blockface. 8.Tree Preservation. Any existing tree of eight-inch caliper or greater in good form and condition and reasonably free of damage by insects and/or disease located outside of the buildable area is required to be barricaded and preserved. A barricade detail must be provided on the site plan. Trees must be barricaded one (1) foot per caliper inch measure as a radius. Barricades must be in place prior to any development activity on the property including, but not limited to, grading. 9.Landscape Maintenance. Any existing canopy and non-canopy trees in good form and condition and reasonably free of damage by insects and/or disease located within the buildable area removed during construction must be replaced on site caliper for caliper, or as determined by the Administrator. Page 133 of 471 ORDINANCE NO. ___________Page 11 of 12 Ordinance Form 8-14-17 Sec. 7.2. - General Provisions. …. D.  Required Yards (Setbacks). 1.  Purpose and Intent. a.  Setbacks are measured from the property line; b.  On lots with approved rear access, the rear setback shall be measured from the nearest boundary of the access easement or alley; c.  No structure that is taller than eight (8) feet in height and that has a roof structure that completely or partially blocks the view to the sky shall be located within the required setback area unless specifically allowed herein; d.  No part of a yard or other open space required in connection with any building, building plot, or use for the purpose of complying with this UDO, shall be included for any other building, building plot, or use as part of a yard or open space; and e.  Where an existing lot was created by an approved plat prior to July 15, 1970 and the property is designated as Neighborhood Conservation in the Comprehensive Plan Future Land Use and Character Map a new (infill) single-family dwelling unit shall use the adjacent lots to determine the appropriate front yard setback. The new dwelling unit shall be set no closer to the street or farther back from the street than the nearest neighboring units. Areas zoned NPO, Neighborhood Prevailing Overlay District are exempt from this requirement. Setbacks for areas zoned NCO, Neighborhood Conservation Overlay are stated in the specific rezoning ordinance for the area. Page 134 of 471 ORDINANCE NO. ___________Page 12 of 12 Ordinance Form 8-14-17 Sec. 8.3. - General Requirements and Minimum Standards of Design for Subdivisions within the City Limits. …. H.  Lots. …. 2.  Platting and Replatting within Older Residential Subdivisions. a.  This section applies to a subdivision in which any portion of the proposed subdivision meets all of the following criteria: 1)  Such portion of the subdivision is currently zoned or developed for single-family detached residential uses as of January 1, 2002 with the exception of NG-1, NG-2, NG- 3, NPO, and NCO zoning districts; 2)  Such portion of the subdivision is part of a lot or building plot that was located within the City limits when it was created on or prior to July 15, 1970. This also includes lots that may have been vacated or replatted after July 15, 1970 but where the original plat predates July 15, 1970; and, 3)  Such portion of the subdivision is designated as Neighborhood Conservation in the Comprehensive Plan Future Land Use and Character Map. b.  In addition to the other provisions of this UDO, no plat or replat intended to provide for the resubdivision of an existing lot or lots in a residential subdivision which meets the above criteria may be approved unless: 1)  The plat does not create an additional lot or building plot; or 2)  For a proposed plat which does create an additional lot or lots, the lot(s) must meet or exceed the average width of the lots along the street frontage for all of the lots in the block, including the subject lot(s) and contain at least eight thousand five hundred (8,500) square feet of space for each dwelling unit. For the purpose of determining the average lot width, a lot shall be defined to include the lot, lots and/or portions of lots that have been combined and used as a residential plot or building plot, as of July 15, 1970. The Administrator may include the lots on the opposing blockface when calculating the average lot width if the lots are similar in character and the Administrator may exclude lots to the rear when said lots are part of another subdivision or dissimilar in character. c.  It is the applicant's responsibility to provide documentation during the application process regarding the original plat in which the lot was created and/or the configuration and ownership documentation of the properties since July 15, 1970. Page 135 of 471 Sec. 1.10. - Transitional Provisions. …. B. Zoning Districts. …. 4. Retired Districts. The following districts are no longer eligible for Zoning Map Amendment requests. Properties with the following designations at the time of this amendment retain all uses, regulations, and requirements associated with these districts. Retired District Name Effective Date R-1B Single-Family Residential September 22, 2013 Retired District Name Effective Date R-4 Multi-Family December 28, 2014 R-6 High Density Multi- Family December 28, 2014 C-3 Light Commercial October 7, 2012 R&D Research & Development October 7, 2012 M-1 Light Industrial October 7, 2012 M-2 Heavy Industrial October 7, 2012 NPO Neighborhood Prevailing Overlay June 21, 2020 Page 136 of 471 Sec. 4.1. - Establishment of Districts. Residential Zoning Districts R Rural WE Wellborn Estate E Estate WRS Wellborn Restricted Suburban RS Restricted Suburban GS General Suburban D Duplex T Townhouse MF Multi-Family MU Mixed-Use MHP Manufactured Home Park Non-Residential Zoning Districts NAP Natural Areas Protected O Office SC Suburban Commercial WC Wellborn Commercial GC General Commercial CI Commercial Industrial Page 137 of 471 BP Business Park BPI Business Park Industrial CU College and University Planned Districts P-MUD Planned Mixed-Use District PDD Planned Development District Design Districts WPC Wolf Pen Creek Development Corridor Northgate NG-1 Core Northgate NG-2 Transitional Northgate NG-3 Residential Northgate Overlay Districts OV Corridor Overlay RDD Redevelopment District NCO Neighborhood Conservation Overlay HP Historic Preservation Overlay Retired Districts R-1B Single-Family Residential R-4 Multi-Family R-6 High Density Multi-Family Page 138 of 471 C-3 Light Commercial R&D Research & Development M-1 Light Industrial M-2 Heavy Industrial NPO Neighborhood Prevailing Overlay For the purpose of this UDO, portions of the City, as specified on the Official Zoning Map of the City, are hereby divided into the zoning, design, and overlay districts enumerated below. The intensity regulations applicable for such zoning districts are designated in Article 5 and the use regulations are designated in Article 6 of this UDO. (Ord. No. 2012-3450 , Pt. 1(Exh. B), 9-27-2012; Ord. No. 2013-3521 , Pt. 1(Exh. C), 9-12-2013; Ord. No. 2014-3624 , Pt. 1(Exh. B), 12-18-2014; Ord. No. 2016-3792 , Pt. 1(Exh. B), 7-28-2016; Ord. No. 2018-4001 , Pt. 1(Exh. C), 4-12-2018; Ord. No. 2020-4161 , § 2(Exh. B), 3-9-2020) Page 139 of 471 Sec. 5.5. - Retired Districts. Retired Districts include districts existing prior to the amendment of this UDO. Existing districts will continue to remain in effect but these districts are not available for any new Zoning Map Amendment proposals. …. H. Neighborhood Prevailing Overlay (NPO). This district is designed to provide standards that preserve single-family neighborhoods by imposing neighborhood-specific yard, lot, and open space regulations that reflect the character of the neighborhood. The Neighborhood Prevailing Overlay does not prevent construction of new single-family structures or the renovation, remodel, repair, or expansion of existing single- family structures, but, rather ensures that new single-family structures are compatible with existing single-family structures. The underlying zoning district establishes the permitted uses and shall remain in full force, and the requirements of the overlay district are to be applied in addition to the underlying use and site restrictions. All single-family and accessory structures within the NPO district are subject to the existing median pattern of development on the subject and opposing blockfaces for the following standards: 1. Minimum Front Setback. 2. Maximum Front Setback. The maximum front setback, or build-to line, is no more than ten (10) feet back from the minimum front setback. 3. Minimum Side Street Setback. 4. Minimum Lot Size. Minimum lot size is calculated as the median building plot size of all existing building plots on the subject and opposing blockface. 5. Building Height. Building height refers to the vertical distance measured from the finished grade, or the base flood elevation where applicable, and the following points: a) The average height level between the eaves and ridge line of a gable, hip, or gambrel roof; b) The highest point of a mansard roof; or c) The highest point of the coping of a flat roof. 6. Maximum Lot Coverage. Lot coverage is calculated as the median existing lot coverage on all building plots on the subject and opposing blockface. The maximum lot coverage cannot exceed maximum impervious cover allowed in the underlying zoning district.Lot coverage includes all structures and impervious surface on a site, including but not limited to, patios, driveways - gravel or paved, accessory structures, and sidewalks 7. Garage Location and Orientation. Page 140 of 471 New garages must be placed in relation to the primary residential structure on the lot consistent with the most frequent pattern of placement on the subject and opposing blockface. New garages must also be oriented consistent with the most frequent direction of orientation on the subject and opposing blockface. 8. Tree Preservation. Any existing tree of eight-inch caliper or greater in good form and condition and reasonably free of damage by insects and/or disease located outside of the buildable area is required to be barricaded and preserved. A barricade detail must be provided on the site plan. Trees must be barricaded one (1) foot per caliper inch measure as a radius. Barricades must be in place prior to any development activity on the property including, but not limited to, grading. 9. Landscape Maintenance. Any existing canopy and non-canopy trees in good form and condition and reasonably free of damage by insects and/or disease located within the buildable area removed during construction must be replaced on site caliper for caliper, or as determined by the Administrator. Page 141 of 471 Sec. 7.2. - General Provisions. …. D. Required Yards (Setbacks). 1. Purpose and Intent. a. Setbacks are measured from the property line; b. On lots with approved rear access, the rear setback shall be measured from the nearest boundary of the access easement or alley; c. No structure that is taller than eight (8) feet in height and that has a roof structure that completely or partially blocks the view to the sky shall be located within the required setback area unless specifically allowed herein; d. No part of a yard or other open space required in connection with any building, building plot, or use for the purpose of complying with this UDO, shall be included for any other building, building plot, or use as part of a yard or open space; and e. Where an existing lot was created by an approved plat prior to July 15, 1970 and the property is designated as Neighborhood Conservation in the Comprehensive Plan Future Land Use and Character Map a new (infill) single-family dwelling unit shall use the adjacent lots to determine the appropriate front yard setback. The new dwelling unit shall be set no closer to the street or farther back from the street than the nearest neighboring units. Areas zoned NPO, Neighborhood Prevailing Overlay District are ex empt from this requirement. Setbacks for areas zoned NCO, Neighborhood Conservation Overlay are stated in the specific rezoning ordinance for the area. Page 142 of 471 Sec. 8.3. - General Requirements and Minimum Standards of Design for Subdivisions within the City Limits. …. H. Lots. …. 2. Platting and Replatting within Older Residential Subdivisions. a. This section applies to a subdivision in which any portion o f the proposed subdivision meets all of the following criteria: 1) Such portion of the subdivision is currently zoned or developed for single -family detached residential uses as of January 1, 2002 with the exception of NG -1, NG-2, NG-3, NPO, and NCO zoning districts; 2) Such portion of the subdivision is part of a lot or building plot that was located within the City limits when it was created on or prior to July 15, 1970. This also includes lots that may have been vacated or replatted after July 15, 1970 but where the original plat predates July 15, 1970; and, 3) Such portion of the subdivision is designated as Neighborhood Conservation in the Comprehensive Plan Future Land Use and Character Map. b. In addition to the other provisions of this UDO, no plat or replat intended to provide for the resubdivision of an existing lot or lots in a residential subdivision which meets the above criteria may be approved unless: 1) The plat does not create an additional lot or building plot; or 2) For a proposed plat which does create an additional lot or lots, the lot(s) must meet or exceed the average width of the lots along the street frontage for all of the lots in the block, including the subject lot(s) and contain at least eight thousand f ive hundred (8,500) square feet of space for each dwelling unit. For the purpose of determining the average lot width, a lot shall be defined to include the lot, lots and/or portions of lots that have been combined and used as a residential plot or building plot, as of July 15, 1970. The Administrator may include the lots on the opposing blockface when calculating the average lot width if the lots are similar in character and the Administrator may exclude lots to the rear when said lots are part of another subdivision or dissimilar in character. c. It is the applicant's responsibility to provide documentation during the application process regarding the original plat in which the lot was created and/or the configuration and ownership documentation of the properties since July 15, 1970. Page 143 of 471 June 11, 2020 Item No. 4.3. Issuance of up to $23,685,000 in principal amount of “City of College Station, Texas Certificates of Obligation, Series 2020 Sponsor:Mary Ellen Leonard, Director of Fiscal Services Reviewed By CBC:City Council Agenda Caption:Presentation, discussion, and possible action on an ordinance authorizing the issuance of up to $23,685,000 in principal amount of “City of College Station, Texas Certificates of Obligation, Series 2020”; delegating the authority to certain City Officials to execute certain documents relating to the sale of the certificates; approving and authorizing instruments and procedures relating to the certificates; and enacting other provisions relating to the subject. Relationship to Strategic Goals: Financially Sustainable City Core Services and Infrastructure Recommendation(s): Council move to approve the attached ordinance authorizing the issuance of Certificates of Obligation, Series 2020; delegating the authority to certain City Officials to execute certain documents relating to the sale of the certificates; approving and authorizing instruments and procedures relating to the certificates; and enacting other provisions relating to the subject. Summary: The City Council is authorized to approve the issuance of Certificates of Obligation (CO’s) after approving a resolution directing notice to be published of the intent to issue the CO’s. On April 9, 2020, Council approved a resolution directing staff to publish the City’s notice of intent to issue the CO’s, as required by law. On April 16th and April 23rd such notices were duly published. The City of College Station typically issues debt to fund various capital projects identified and approved as a part of the annual budget. The City primarily uses three types of debt instruments to fulfill those requirements: 1. General Obligation Bonds (GOB’s) are based on the full faith and credit of the City and are paid primarily through the debt service portion of the ad valorem tax rate. GOBs are authorized by the voters, and therefore the notice is provided in the election process. 2. Utility Revenue Bonds (URB’s) are backed by the revenues of the City's various utilities and are issued as a business activity. These are typically only issued for utility capital projects. 3. Certificates of Obligation (CO’s) normally include at least one additional revenue stream such as utility revenues, but are considered to be much like GOBs and therefore normally receive a rating similar to GOB’s. Our policy for issuing CO's allows more flexibility in their issue than GOB’s, particularly when other revenues are anticipated to assist in debt service. It is at the recommendation of the City’s Financial Advisor, Ms. Marti Shew with Hilltop Securities, Inc., that the City issue Certificates of Obligation for utility projects rather than Utility Revenue Page 144 of 471 Bonds. This particular issue will provide resources for street, police station construction, information technology, electric, and water improvements; and debt issuance costs. If this ordinance is approved, the City Council will be delegating to the Mayor, the Interim City Manager and the Assistant City Manager/CFO the authority to effect the sale of the certificates through June 21, 2021. Budget & Financial Summary: Staff reviewed the impact of the Certificates on the City’s ability to meet debt service requirements and the effect they may have on the ad valorem tax rate and on the utility rates and presented Council a workshop on May 28, 2020. Reviewed & Approved by Legal: No Attachments: 1.Ordinance (CO) (ver 1) 2.POS-College Station Series 2020 Page 145 of 471 CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION We, the undersigned officers of the City of College Station, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in a regular meeting on June 11, 2020, at the designated meeting place, and the roll was called of the duly constituted officers and members of said City Council, to wit: Mayor Karl Mooney City Council Place 1 - Bob Brick City Council Place 2 - John Crompton City Council Place 3 - Linda Harvell City Council Place 4 - Vacant City Council Place 5 - John Nichols City Council Place 6 - Dennis Maloney and all of said persons were present except __________________________ thus constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2020"; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE CERTIFICATES; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT was duly introduced for the consideration of said City Council. It was then duly moved and seconded that said Ordinance; and, after due discussion, said motion prevailed and carried by the following vote: AYES: NOES: Page 146 of 471 Certificate for Ordinance City of College Station, Texas Certificates of Obligation, Series 2020 2. That a true, full and correct copy of the aforesaid Ordinance described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. SIGNED AND SEALED ON JUNE 11, 2020. ________________________________ Tanya D. Smith City Secretary ________________________________ Karl P. Mooney Mayor (SEAL) Page 147 of 471 ORDINANCE NO. 2020-[_____________] AUTHORIZING THE ISSUANCE OF "CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2020"; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE CERTIFICATES; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT WHEREAS, on April 9, 2020, the City Council of the City of College Station (the "City") passed a resolution authorizing and directing notice of its intention to issue the Certificates of Obligation herein authorized, to be published in a newspaper as required by Section 271.049 of the Texas Local Government Code; WHEREAS, said notice was published in the Bryan-College Station Eagle, a "newspaper" of the type described in Section 2051.044, Texas Government Code, as required by said Section 271.049 of the Texas Local Government Code, on April 16, 2020 and April 23, 2020; WHEREAS, said notice provided that the ordinance authorizing the Certificates of Obligation may authorize an authorized officer of the City to effect the sale and delivery of the Certificates of Obligation on a date or dates subsequent to the adoption of the ordinance; WHEREAS, no petition, signed by at least 5% of the qualified electors of said City as permitted by said Section 271.049 of the Texas Local Government Code protesting the issuance of such Certificates of Obligation, has been filed; WHEREAS, the City is an "Issuer" within the meaning of Section 1371.001(4)(P), Texas Government Code, having (i) a principal amount of at least $100 million in outstanding long- term indebtedness, in long-term indebtedness proposed to be issued, or a combination of outstanding or proposed long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed to be issued that is rated in one of the four highest rating categories for long-term debt instruments by a nationally recognized rating agency for municipal securities, without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with the obligation; WHEREAS, the Certificates of Obligation hereinafter authorized are to be issued and delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code and Chapter 1371, Texas Government Code and the City's Home Rule Charter; WHEREAS, during the preceding three years, the City has not submitted a bond proposition to authorize the issuance of bonds for the same purpose for which the Certificates of Obligation are hereby being issued and which proposition was disapproved by voters; and WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered and acted upon at said meeting, including Page 148 of 471 2 this Ordinance, was given, all as required by the applicable provisions of Texas Government Code, Chapter 551; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: Section 1. DEFINITIONS; AUTHORIZATION OF CERTIFICATES OF OBLIGATION. (a) Definitions. Terms not otherwise defined herein shall have the following meanings. (i) The term "Authorized Denomination" shall mean a denomination of $5,000 of principal amount of a Certificate or any integral multiple thereof. (ii) The term "Business Day" means any day other than a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City are, authorized by law or executive order to close. (iii) The term "Certificates" and "Certificates of Obligation" shall mean the City of College Station, Texas Certificates of Obligation, Series 2020, authorized to be issued and delivered by this Ordinance. (iv) The term "Financial Obligation" means a: (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) a guarantee of the foregoing (a) and (b). The term Financial Obligation does not include any municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. (v) The term "MSRB" means the Municipal Securities Rulemaking Board. (vi) The term "Pricing Certificate" means a certificate of the Pricing Officer setting forth the terms of sale of the Certificates including the method of sale, principal amount, maturity dates, interest payment dates, dated date, interest rates, yields, redemption provisions, and other matters related to the sale of the Certificates. (vii) The term "Pricing Officer" means the Mayor, the City Manager and the Assistant City Manager/CFO of the City (each the "Pricing Officer") each of whom is independently authorized to finalize the terms of sale of the Certificates by execution of the Pricing Certificate. (viii) The term "Purchaser" means (i) if the Certificates are sold by negotiated sale, the underwriter or underwriting syndicate selected by the Pricing Officer, or (ii) if the Certificates are sold by competitive sale by soliciting public bids, the underwriter or underwriting syndicate awarded the Certificates by the Pricing Officer. (ix) The term "Rule" means SEC Rule 15c2-12 (17 C.F.R. § 240.15C2-12), as amended from time to time. Page 149 of 471 3 (x) The term "SEC" means the United States Securities and Exchange Commission. (xi) The term "Surplus Revenues" shall mean those revenues from the operation of the City's combined municipal electric light and power, waterworks and sewer system remaining after payment of all operation and maintenance expenses thereof and other obligations heretofore or hereafter incurred to which such revenues have been or shall be encumbered by a lien on and pledge of such revenues superior to the lien on and pledge of such revenues to the Certificates. (b) The City's Certificates of Obligation, to be designated the "City of College Station, Texas Certificates of Obligation, Series 2020", are hereby authorized to be issued and delivered in the principal amount not to exceed $23,685,000 for the following public purposes: (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) the payment of fiscal, engineering and legal fees incurred in connection therewith. Section 2. DELEGATION TO PRICING OFFICER. (a) As authorized by Section 1371.053, Texas Government Code, each Pricing Officer is hereby authorized to act individually and severally on behalf of the City in selling and delivering the Certificates, carrying out the other procedures specified in this Ordinance, including, determining the date of the Certificates, any additional or different designation or title by which the Certificates shall be known, whether the Certificate shall be sold and delivered in one or more series and the date and sale and delivery of each such series, the price at which the Certificates will be sold, the years in which the Certificates will mature, the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the interest payment and record dates, the price and terms upon and at which the Certificates shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund redemption provisions, and all other matters relating to the issuance, sale, and delivery of the Certificates and obtaining municipal insurance for all or any portion of the Certificates and providing for the terms and provisions thereof applicable to the Certificates, all of which shall be specified in the Pricing Certificate; provided that: (i) the aggregate principal amount of the Certificates shall not exceed $23,685,000; (ii) the true interest cost of the Certificates shall not exceed 4.000%; Page 150 of 471 4 (iii) the final maturity of the Certificates shall not exceed February 15, 2040; (iv) the delegation made hereby shall expire if not exercised by the Pricing Officer on or prior to June 11, 2021; and (v) on or prior to delivery, the Certificates shall be rated by a nationally recognized rating agency for municipal securities in one of the four highest categories for long-term obligations. (b) In establishing the aggregate principal amount of the Certificates, the Pricing Officer shall establish an amount that, when combined with premium used for purposes other than the payment of costs of issuance, does not exceed the amount authorized in Subsection (a) hereof, which shall be sufficient in amount to provide for the purposes for which the Certificates are authorized and to pay costs of issuing the Certificates. The Certificates shall be sold with and subject to such terms as set forth in the Pricing Certificate. (c) The Certificates may be sold by public offering (either through a negotiated or competitive offering) and the Pricing Certificate shall so state, and the Pricing Certificate may conform this Ordinance to such method of sale, including the provisions hereof that pertain to the undertaking of the Issuer in accordance with the Rule. (d) The City Council hereby determines that the delegation of the authority to the Pricing Officer to approve the final terms of the Certificates as set forth in this Ordinance is, and the decisions made by the Pricing Officer pursuant to such delegated authority and incorporated into the Pricing Certificate are required to be, in the Issuer's best interests, and the Pricing Officer is hereby authorized to make and include in the Pricing Certificate a finding to that effect. Section 3. CHARACTERISTICS OF THE CERTIFICATES. (a) The City shall keep or cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office") of The Bank of New York Mellon Trust Company, N.A., or such other bank, trust company, financial institution, or other agency named by the Pricing Officer or in accordance with the provisions of (g) below (the "Paying Agent/Registrar"), books or records for the registration and transfer of the Certificates (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such transfers and registrations under such reasonable regulations as the City and the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations as herein provided. It shall be the duty of the Paying Agent/Registrar to obtain from the registered owner and record in the Registration Books the address of the registered owner of each Certificate to which payments with respect to the Certificates shall be mailed, as herein provided. The City or its designee shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar at its Designated Trust Office, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. Registration of each Certificate may be transferred in the Registration Books only upon presentation and surrender thereof to the Paying Agent/Registrar at its Designated Trust Office for transfer of registration and cancellation, together with proper written instruments of assignment, in form and Page 151 of 471 5 with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing the assignment of such Certificate, or any portion thereof in any Authorized Denomination, to the assignee or assignees thereof, and the right of such assignee or assignees to have such Certificate or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Certificate or any portion thereof, a new substitute certificate or certificates shall be issued in exchange therefor in the manner herein provided. (b) The entity in whose name any Certificate shall be registered in the Registration Books at any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Certificate shall be overdue, and the City and the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any such certificate shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such certificate to the extent of the sum or sums so paid. (c) The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates, and to act as its agent to exchange or replace Certificates, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Certificates, and of all exchanges thereof, and all replacements thereof, as provided in this Ordinance. (d) Each Certificate may be exchanged for fully registered certificates in the manner set forth herein. Each Certificate issued and delivered pursuant to this Ordinance may, upon surrender thereof at the Designated Trust Office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, at the option of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully registered Certificates, without interest coupons, in the form prescribed in the FORM OF CERTIFICATE, in an Authorized Denomination (subject to the requirement hereinafter stated that each substitute Certificate shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the principal amount of any Certificate or Certificates so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be. If any Certificate or portion thereof is assigned and transferred, each Certificate issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate for which it is being exchanged. Each substitute Certificate shall bear a letter and/or number to distinguish it from each other Certificate. The Paying Agent/Registrar shall exchange or replace Certificates as provided herein, and each fully registered Certificate or Certificates delivered in exchange for or replacement of any Certificate or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may again be exchanged or replaced. It is specifically provided, however, that any Certificate delivered in exchange for or replacement of another Certificate prior to the first scheduled interest payment date on the Certificates (as stated on the face thereof) shall be dated the same date as such Certificate, but each substitute Certificate so delivered on or after such first scheduled interest payment date shall be dated as of the interest payment date preceding the date Page 152 of 471 6 on which such substitute Certificate is delivered, unless such substitute Certificate is delivered on an interest payment date, in which case it shall be dated as of such date of delivery; provided, however, that if at the time of delivery of any substitute Certificate the interest on the Certificate for which it is being exchanged has not been paid, then such substitute Certificate shall be dated as of the date to which such interest has been paid in full. On each substitute Certificate issued in exchange for or replacement of any Certificate or Certificates issued under this Ordinance there shall be printed thereon a Paying Agent/Registrar's Authentication Certificate, in the form hereinafter set forth in the FORM OF CERTIFICATE (the "Authentication Certificate"). An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such substitute Certificate, date such substitute Certificate in the manner set forth above, and manually sign and date the Authentication Certificate, and no such substitute Certificate shall be deemed to be issued or outstanding unless the Authentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Certificates surrendered for exchange or replacement. No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body or person so as to accomplish the foregoing exchange or replacement of any Certificates or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Certificate in the manner prescribed herein. Pursuant to Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Certificates as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of Authentication Certificate, the exchanged or replaced Certificate shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Certificates which originally were delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Certificate so selected for redemption, in whole or in part, within 45 calendar days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled principal of a Certificate. (e) All Certificates issued in exchange or replacement of any other Certificate or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Certificates to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be exchanged for other Certificates, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Certificates shall be payable, all as provided, and in the manner required or indicated, in the FORM OF CERTIFICATE. (f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees and charges for making transfers of Certificates, but the registered owner of any Certificate requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The registered owner of any Certificates requesting any exchange shall pay the Paying Agent/Registrar's reasonable and standard or customary fees and charges for exchanging any such certificate or portion thereof, together with any taxes or governmental charges required to be paid with respect thereto, all as a condition precedent to the exercise of such privilege of exchange, except, however, that in the case of the exchange of an assigned and transferred Certificate or Certificates or any portion or portions thereof in an Authorized Denomination, as provided in this Ordinance, such fees and charges will be paid by the City. In addition, the City hereby covenants with the registered owners of the Certificates that it will (i) Page 153 of 471 7 pay the reasonable and standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on Certificates, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer or registration of Certificates solely to the extent above provided, and with respect to the exchange of Certificates solely to the extent above provided. (g) The City covenants with the registered owners of the Certificates that at all times while the Certificates are outstanding the City will provide a competent and legally qualified bank, trust company, financial institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Certificates under this Ordinance, and that the Paying Agent/Registrar will be one entity. The City reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than sixty days written notice to the Paying Agent/Registrar. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that it will promptly appoint a competent and legally qualified national or state banking institution which shall be a corporation organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise trust powers, subject to supervision or examination by federal or state authority, and whose qualifications substantially are similar to the previous Paying Agent/Registrar to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Certificates, to the new Paying Agent/Registrar designated and appointed by the City. Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Certificates, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. Section 4. FORM OF CERTIFICATES. The form of the Certificates, including the form of the Authentication Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Certificates initially issued and delivered pursuant to this Ordinance, shall be in substantially the form as set forth in Exhibit A to this Ordinance, shall be numbered consecutively from R-1 upward, with the Initial Certificate being numbered T-1, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance and with the FORM OF CERTIFICATE to be modified pursuant to, and completed with information set forth in the Pricing Certificate. The FORM OF CERTIFICATE as it appears in Exhibit A shall be completed, amended and modified by Bond Counsel to incorporate the information set forth in the Pricing Certificate but it is not required for the FORM OF CERTIFICATE to reproduced as an exhibit to the Pricing Certificate. The printer of the Certificates is hereby authorized to print on the Certificates (i) the form of bond counsel's opinion relating to the Certificates, and (ii) an appropriate statement of insurance furnished by a municipal bond insurance company providing municipal bond insurance, if any, covering all or any part of the Certificates. Section 5. RESERVED. Page 154 of 471 8 Section 6. LEVY OF TAX; INTEREST AND SINKING FUND; REVENUE PLEDGE. (a) That a special fund or account, to be designated the "City of College Station, Texas Series 2020 Certificate of Obligation Interest and Sinking Fund" (the "Interest and Sinking Fund") is hereby created and shall be established and maintained by the City. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City, and shall be used only for paying the interest on and principal of the Certificates. All ad valorem taxes levied and collected for and on account of the Certificates shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates are outstanding and unpaid, the governing body of the City shall compute and ascertain the rate and amount of ad valorem tax, based on the latest approved tax rolls of the City, with full allowances being made for tax delinquencies and the cost of tax collections, which will be sufficient to raise and produce the money required to pay the interest on the Certificates as such interest comes due, and to provide a sinking fund to pay the principal (including mandatory sinking fund redemption payments, if any) of the Certificates as such principal matures or comes due through operation of the mandatory sinking fund redemption, if any, but never less than 2% of the original amount of the Certificates as a sinking fund each year. The rate and amount of ad valorem tax is hereby ordered to be levied against all taxable property in the City for each year while any of the Certificates is outstanding and unpaid, and the ad valorem tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Ad valorem taxes necessary to pay the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. (b) That the Certificates are additionally secured by and shall be payable from a limited pledge of Surplus Revenues (not to exceed $1,000). The Surplus Revenues are pledged by the City pursuant to authority of Chapter 1502, Texas Government Code, specifically Section 1502.058 thereof. The City shall promptly deposit the Surplus Revenues upon their receipt to the credit of the Interest and Sinking Fund created pursuant to Section 6, to pay the principal and interest on the Certificates. The amount of Surplus Revenues pledged to the payment of the Certificates shall not exceed $1,000. If Surplus Revenues or any other lawfully available revenues, income or resources of the City are deposited or budgeted to be deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that otherwise would have been required to be levied pursuant to Section 6 may be reduced to the extent and by the amount of the Surplus Revenues or other lawfully available revenues, income or resources then on deposit or budgeted to be deposited to the credit of the Interest and Sinking Fund. Section 7. TRANSFER. That the City shall do any and all things necessary to accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to pay such items of principal and interest due on the Certificates. Section 8. SECURITY FOR FUNDS. That the Interest and Sinking Fund created by this Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for the security of public funds, and such Interest and Sinking Fund shall be used only for the purposes and in the manner permitted or required by this Ordinance. Page 155 of 471 9 Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES. (a) Replacement Certificates. That in the event any outstanding Certificate is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new Certificate of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate in the manner hereinafter provided. (b) Application for Replacement Certificates. That application for replacement of damaged, mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate, the registered owner applying for a replacement Certificate shall furnish to the City and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Certificate, the registered owner shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate, as the case may be. In every case of damage or mutilation of a Certificate, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated. (c) No Default Occurred. That notwithstanding the foregoing provisions of this Section, in the event any such Certificate shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Certificate, the City may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Certificate) instead of issuing a replacement certificate, provided security or indemnity is furnished as above provided in this Section. (d) Charge for Issuing Replacement Certificates. That prior to the issuance of any replacement Certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate with all legal, printing, and other expenses in connection therewith. Every replacement Certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen, or destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Certificates duly issued under this Ordinance. (e) Authority for Issuing Replacement Certificates. That in accordance with Section 1201.067, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement Certificate without necessity of further action by the City or any other body or person, and the duty of the replacement of such Certificates is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates in the form and manner and with the effect, as provided in Section 5(d) of this Ordinance for Certificates issued in conversion and exchange of other Certificates. Page 156 of 471 10 Section 10. FEDERAL INCOME TAX MATTERS. The City covenants to refrain from any action which would adversely affect, or to take such action as to ensure, the treatment of the Certificates as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows: (a) to take any action to assure that no more than 10 percent of the proceeds of the Certificates (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds are so used, that amounts, whether or not received by the City, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Certificates, in contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds five percent of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used for a "private business use" which is "related" and not "disproportionate", within the meaning of section 141(b)(3) of the Code, to the governmental use; (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (d) to refrain from taking any action which would otherwise result in the Certificates being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (e) to refrain from taking any action that would result in the Certificates being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Certificates, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Certificates, other than investment property acquired with – (1) proceeds of the Certificates invested for a reasonable temporary period of three years or less until such proceeds are needed for the purpose for which the Certificates are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Certificates; (g) to otherwise restrict the use of the proceeds of the Certificates or amounts treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not otherwise Page 157 of 471 11 contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code; and (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Certificates) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Certificates have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. For purposes of the foregoing (a) and (b), the City understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Certificates. It is the understanding of the City that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Certificates, the City will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Certificates under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Certificates, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Certificates under section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the Mayor, the City Manager and any Assistant City Manager/CFO, severally, to execute any documents, certificates or reports required by the Code, and to make such elections on behalf of the City which may be permitted by the Code as are consistent with the purpose for the issuance of the Certificates. In order to facilitate compliance with clause (h) above, a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of America, and such Fund shall not be subject to the claim of any other person, including without limitation the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. Section 11. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT. That the City covenants to account for the expenditure of proceeds from the sale of the Certificates and any investment earnings thereon to be used for the purposes described in Section 1 of this Ordinance (such purpose referred to in this Section and Section 12 hereof as a "Project") on its books and records by allocating proceeds to expenditures within 18 months of the later of the date that (a) the expenditure on a Project is made or (b) such Project is completed. The foregoing notwithstanding, the City shall not expend such proceeds or investment earnings more than 60 days after the earlier of (a) the fifth anniversary of the date of delivery of the Certificates or (b) the date the Certificates are retired, unless the City obtains an opinion of nationally-recognized bond counsel substantially to the effect that such expenditure will not adversely affect the tax-exempt status of the Certificates. For purposes hereof, the City shall not Page 158 of 471 12 be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 12. DISPOSITION OF PROJECT. That the City covenants that the property constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless any action taken in connection with such disposition will not adversely affect the tax-exempt status of the Certificates. For purpose of the foregoing, the City may rely on an opinion of nationally-recognized bond counsel that the action taken in connection with such sale or other disposition will not adversely affect the tax- exempt status of the Certificates. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 13. PROCEDURES TO MONITOR COMPLIANCE WITH TAX COVENANTS. The City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring compliance with the federal tax covenants made by the City herein. Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES. That the Mayor of the City is hereby authorized to have control of the Certificates initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Certificates pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Certificates said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Certificates, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such certificate. The Certificates thus registered shall remain in the custody of the Mayor (or the designee thereof such as the City’s Bond Counsel) until delivered to the Purchaser (as defined in Section 18 of this Ordinance). Section 15. DTC REGISTRATION. That the Certificates initially shall be issued and delivered in such manner that no physical distribution of the Certificates will be made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Certificates. DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, 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 under Section 17A of the Securities Exchange Act of 1934, as amended, and the City accepts, but in no way verifies, such representations. The Certificates initially authorized by this Ordinance shall be delivered to and registered in the name of CEDE & CO., the nominee of DTC. It is expected that DTC will hold the Certificates on behalf of the Purchaser and its participants. So long as each Certificate is registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it were the actual and beneficial owner thereof. It is expected that DTC will maintain a book-entry system which will identify ownership of the Certificates in Authorized Denominations, with Page 159 of 471 13 transfers of ownership being effected on the records of DTC and its participants pursuant to rules and regulations established by them, and that the Certificates initially deposited with DTC shall be immobilized and not be further exchanged for substitute Certificates except as hereinafter provided. The City is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or its participants, or protecting any interests or rights of the beneficial owners of the Certificates. It shall be the duty of the DTC Participants, as defined in the Official Statement herein approved, to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Certificates, and the method of paying the fees and charges of DTC. The City does not represent, nor does it in any way covenant that the initial book-entry system established with DTC will be maintained in the future. Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any reason any of the originally delivered Certificates is duly filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there will be no assurance or representation that any book-entry system will be maintained for such Certificates. In connection with the initial establishment of the foregoing book-entry system with DTC, the City heretofore has executed a "Blanket Letter of Representations" prepared by DTC in order to implement the book-entry system described above. Section 16. CONTINUING DISCLOSURE OBLIGATION PURSUANT TO RULE 15C2-12 (17 C.F.R. § 240.15C2-12). (a) Annual Reports. (i) 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 the 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 2020. 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 2020. 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 of the Official Statement or such other accounting principles as the City may be required to employ from time to time pursuant to State law or regulation. (ii) 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 or filed with the SEC, as permitted by the Rule. If the City changes its fiscal year, it will notify the MSRB of Page 160 of 471 14 the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document that is available to the public on the MSRB's internet website or filed with the SEC. All documents provided to the MSRB pursuant to this Section shall be accompanied by identifying information as prescribed by the MSRB. (b) Event Notices. The City shall notify the MSRB in an electronic format as prescribed by the MSRB, in a timely manner (but not in excess of ten Business Days after the occurrence of the event) of any of the following events with respect to the Certificates: 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 or 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 Certificateholders, 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 an obligated person (which 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 Page 161 of 471 15 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); 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 15. Incurrence of a Financial Obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect Bondholders, if material. 16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with this Section by the time required by such subsection. (c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with this Ordinance or applicable law that causes Certificates no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City Page 162 of 471 16 does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. (iii) UNDER NO CIRCUMSTANCE SHALL THE CITY BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (iv) No default by the City in observing or performing its obligations under this Section shall comprise a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (v) Should the Rule be amended to obligate the City to make filings with or provide notices to entities other than the MSRB, the City hereby agrees to undertake such obligation with respect to the Certificates in accordance with the Rule as amended. The provisions of this Section may be amended by the City 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, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the registered owners of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Certificates consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determined that such amendment will not materially impair the interest of the registered owners and beneficial owners of the Certificates. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) of this Section an explanation, in narrative form, of the reason for the amendment and of the impact of any change in the type of financial information or operating data so provided. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Certificates in the primary offering of the Certificates. Page 163 of 471 17 (d) Procedures to Monitor Compliance with Continuing Disclosure Covenants. The City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring compliance with the continuing disclosure covenants made by the City herein. Section 17. DEFEASANCE. (a) Deemed Paid. Any Certificate and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the extent provided in subsection (e) of this Section, when payment of the principal of such Certificate, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the City with the Paying Agent/Registrar for the payment of its services until all Defeased Certificates shall have become due and payable. At such time as a Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged or the pledge of Surplus Revenues as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities. (b) Investments. Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the City be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Certificates and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing by the City. Any Future Escrow Agreement pursuant to which the money and/or Defeasance Securities are held for the payment of Defeased Certificates may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection (a)(i) or (ii) above. All income from such Defeasance Securities received by the Paying Agent/Registrar which is not required for the payment of the Defeased Securities, with respect to which such money has been so deposited, shall be remitted to the City or deposited as directed in writing by the City. (c) Selection of Defeased Certificates. In the event that the City elects to defease less than all of the principal amount of Certificates of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Certificates by such random method as it deems fair and appropriate. (d) Defeasance Securities. The term "Defeasance Securities" means (i) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an Page 164 of 471 18 agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent; (iii) 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, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iv) any securities and obligations now or hereafter authorized by State law that are eligible to refund, retire or otherwise discharge obligations such as the Certificates. (e) Continuing Duty of Paying Agent/Registrar. Until all Certificates defeased under this Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for such Certificates shall perform the services of Paying Agent/Registrar for such Certificates the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services. (f) The Pricing Officer is hereby authorized to modify the securities that are eligible as Defeasance Securities and any such modification shall described in the Pricing Certificate. Section 18. SALE OF CERTIFICATES; OFFICIAL STATEMENT. (a) The Certificates may be sold by public offering (either through a negotiated or competitive offering) and the terms and provisions of which are to be determined by the Pricing Officer in accordance with Section 2 hereof, and in which the purchasers of the Certificates are designated. The Certificates may be sold pursuant to a purchase agreement or notice of sale and bidding instructions (collectively, the "Purchase Agreement") which the Pricing Officer is hereby authorized to execute and deliver and in which the Purchaser of the Certificates shall be designated. The Certificates shall initially be registered in the name of the Purchaser thereof as set forth in the Pricing Certificate. (b) The City hereby approves the form and content of the draft preliminary official statement relating to the Certificates in the form attached hereto as Exhibit C and any addenda, supplement or amendment thereto, and deems final the preliminary official statement and approves the distribution of such preliminary official statement in the reoffering of the Certificates by the Purchaser, with such changes therein or additions thereto as the Pricing Officer executing the same may deem advisable or as are required by the Rule. The Pricing Officer is hereby authorized, in the name and on behalf of the City, to approve, distribute, and deliver a final preliminary official statement and a final official statement relating to the Certificates to be used by the Purchaser in the marketing of the Certificates. (c) The Pricing Officer is authorized, in connection with effecting the sale of the Certificates, to obtain from a municipal bond insurance company so designated in the Pricing Certificate (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of the Certificates. To that end, should the Pricing Officer exercise such authority and commit the City to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in Page 165 of 471 19 effect, the requirements of the Insurer relating to the issuance of the Insurance Policy are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall have the authority to execute any documents to effect the issuance of the Insurance Policy by the Insurer. (d) The Mayor and Mayor Pro Tem, the City Manager, the Assistant City Manager/CFO, Director of Finance and City Secretary, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the City a Paying Agent/Registrar Agreement, in the form presented at the meeting at which this Ordinance is adopted, with the Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Certificates, the sale of the Certificates, the Purchase Agreement and the Official Statement. In case any officer whose signature shall appear on any Certificate shall cease to be such officer before the delivery of such Certificate, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 19. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City Manager, the Assistant City Manager/CFO, and Director of Finance, shall be and they are hereby expressly authorized, empowered, and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal and on behalf of the City all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, and the sale and delivery of the Certificates and fixing all details in connection therewith. The City Council hereby authorizes the payment of the fee of the Office of the Attorney General of the State of Texas for the examination of the proceedings relating to the issuance of the Certificates, in the amount determined in accordance with the provisions of Section 1202.004, Texas Government Code. Section 20. CONSTRUCTION FUND; USE OF PROCEEDS. (a) The City hereby creates and establishes and shall maintain on the books of the City a separate fund to be entitled the "Series 2020 Certificates of Obligation Construction Fund" (the "Construction Fund") for use by the City for payment of all lawful costs associated with the acquisition and construction of the projects as provided in Section 1. (b) The proceeds from the sale of the Certificates shall be deposited, on the date of closing, in the manner described in a letter of instructions prepared by the City or on behalf of the City by the City's financial advisor. The foregoing notwithstanding, any proceeds representing accrued interest on the Certificates shall be deposited to the credit of the Interest and Sinking Fund. Section 21. INTEREST EARNINGS. That the interest earnings derived from the investment of proceeds from the sale of the Certificates may be used along with other proceeds for the construction of the permanent improvements set forth in Section 1 hereof for which the Page 166 of 471 20 Certificates are issued; provided that after completion of such permanent improvements, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on proceeds which are required to be rebated to the United States of America pursuant to this Ordinance hereof in order to prevent the Certificates from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this Section. Section 22. DEFAULT AND REMEDIES. (a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Certificates when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the City, the failure to perform which materially, adversely affects the rights of the registered owners of the Certificates, including, but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any registered owner to the City. (b) Remedies for Default. (i) Upon the happening of any Event of Default, then and in every case, any registered owner or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may proceed against the City, or any official, officer or employee of the City in their official capacity, for the purpose of protecting and enforcing the rights of the registered owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the registered owners hereunder or any combination of such remedies. (ii) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all registered owners of Certificates then outstanding. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates shall not be available as a remedy under this Ordinance. Page 167 of 471 21 (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. (iii) By accepting the delivery of a Certificate authorized under this Ordinance, such registered owner agrees that the certifications required to effectuate any covenants or representations contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or members of the City or the City Council. (iv) None of the members of the City Council, nor any other official or officer, agent, or employee of the City, shall be charged personally by the registered owners with any liability, or be held personally liable to the registered owners under any term or provision of this Ordinance, or because of any Event of Default or alleged Event of Default under this Ordinance. Section 23. MISCELLANEOUS PROVISIONS. (a) Preamble. The preamble to this Ordinance is incorporated by reference and made a part hereof for all purposes. (b) Titles Not Restrictive. That the titles assigned to the various sections of this Ordinance are for convenience only and shall not be considered restrictive of the subject matter of any section or of any part of this Ordinance. (c) Rules of Construction. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any particular section or other subdivision. Except where the context otherwise requires, terms defined in this Ordinance to impart the singular number shall be considered to include the plural number and vice versa. References to any named person means that party and its successors and assigns. References to any constitutional, statutory or regulatory provision means such provision as it exists on the date this Ordinance is adopted by the City and any future amendments thereto or successor provisions thereof. Any reference to "FORM OF CERTIFICATE" shall refer to the form of the Certificates set forth in Exhibit A to this Ordinance. Any reference to the payment of principal in this Ordinance shall be deemed to include the payment of any mandatory sinking fund redemption payments as may be described herein. (d) Inconsistent Provisions. All ordinances, orders and resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and declared to be inapplicable, and the provisions of this Ordinance shall be and remain controlling as to the matters prescribed herein. (e) Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or provision of this Ordinance or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Ordinance shall nevertheless be valid and the City hereby declares that this Ordinance would have been enacted without such invalid word, phrase, clause, paragraph, sentence, part, portion, or provisions. Page 168 of 471 22 (f) Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas. (g) Open Meeting. The City officially finds and determines that the meeting at which this Ordinance is adopted was open to the public; and that public notice of the time, place, and purpose of such meeting was given, all as required by Chapter 551, Texas Government Code. (h) Application of Chapter 1208, Government Code. Chapter 1208, Texas Government Code, applies to the issuance of the Certificates and the pledge of ad valorem taxes and the Surplus Revenues granted by the City under Section 6(b), and such pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while the Certificates are outstanding and unpaid such that the pledge of the ad valorem taxes and Surplus Revenues granted by the City is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the Registered Owners of the Certificates the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. (i) Immediate Effect. In accordance with the provisions of Section 1201.028, Texas Government Code, this Ordinance shall be effective immediately upon its adoption by the City Council. [Remainder of page intentionally left blank.] Page 169 of 471 Ordinance City of College Station, Texas Certificates of Obligation, Series 2020 PASSED, APPROVED AND EFFECTIVE THIS JUNE 11, 2020. City Secretary; City of College Station Mayor; City of College Station (CITY SEAL) APPROVED: McCall, Parkhurst & Horton L.L.P., Dallas, Texas Bond Counsel Page 170 of 471 A-1 EXHIBIT A FORM OF CERTIFICATE The form of the Certificates, including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached only to the Certificates initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance and with the Certificates to be completed with information set forth in the Pricing Certificate. The Form of Certificate as it appears in this Exhibit A shall be completed, amended and modified by Bond Counsel to incorporate the information set forth in the Pricing Certificate but it is not required for the Form of Certificate to be reproduced as an exhibit to the Pricing Certificate. NO. _____ UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF BRAZOS PRINCIPAL AMOUNT $[] CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF OBLIGATION SERIES 2020 MATURITY DATE INTEREST RATE DELIVERY DATE CUSIP NO. % [], 2020 REGISTERED OWNER: PRINCIPAL AMOUNT: ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE STATION, TEXAS, in Brazos County (the "City"), being a political subdivision of the State of Texas, hereby promises to pay to the Registered Owner specified above or to the registered assignee hereof (either being hereinafter called the "registered owner") the Principal Amount specified above, and to pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months), from the Delivery Date specified above, to the Maturity Date specified above, or the date of its redemption prior to scheduled maturity, at the interest rate per annum specified above, with said interest payable on [], and semiannually on each August 15 and February 15 thereafter until maturity or prior redemption; except that if this Certificate is required to be authenticated and the date of its authentication is later than [], such interest is payable semiannually on each August 15 and February 15 following such date. THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the United States of America, without exchange or collection charges. At maturity or redemption prior to maturity, the principal of this Certificate shall be paid to the registered owner hereof upon presentation and surrender of this Certificate at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office") of The Bank of New York Mellon Trust Page 171 of 471 A-2 Company, N.A., which is the "Paying Agent/Registrar" for this Certificate. The payment of interest on this Certificate shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by check, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required by the ordinance authorizing the issuance of this Certificate (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at its address as it appeared on the last business day of the month preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any accrued interest due at maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this Certificate for payment at the Designated Trust Office of the Paying Agent/Registrar. The City covenants with the registered owner of this Certificate that on or before each principal and interest payment date for this Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Certificates, when due. IN THE EVENT OF 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 ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each registered owner of a Certificate appearing on the Registration Books kept by the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Designated Trust Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS CERTIFICATE is one of a Series of Certificates dated as of [], 2020, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $[__], for the purpose of paying contractual obligations to be incurred by the City for the following public purposes: (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, Page 172 of 471 A-3 system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) the payment of fiscal, engineering and legal fees incurred in connection therewith. ON FEBRUARY 15, 20[], or on any date thereafter, the Certificates of this Series maturing on February 15, 20[] and thereafter may be redeemed prior to their scheduled maturities, at the option of the City, in whole, or in part, at par and accrued interest to the date fixed for redemption. The years of maturity of the Certificates called for redemption at the option of the City prior to their stated maturity shall be selected by the City. The Certificates or portions thereof redeemed within a maturity shall be selected by lot or other method by the Paying Agent/Registrar; provided, that during any period in which ownership of the Certificates is determined only by a book entry at a securities depository for the Certificates, if fewer than all of the Certificates of the same maturity and bearing the same interest rate are to be redeemed, the particular Certificates of such maturity and bearing such interest rate shall be selected in accordance with the arrangements between the City and the securities depository. AT LEAST THIRTY days prior to the date fixed for any such redemption, a written notice of such redemption shall be given to the registered owner of each Certificate or a portion thereof being called for redemption by depositing such notice in the United States mail, first- class postage prepaid, addressed to each such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar. By the date fixed for any such redemption due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for this Certificate or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Certificate, or the portion hereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of this Certificate or any portion hereof. If a portion of any Certificate shall be redeemed a substitute Certificate or Certificates having the same maturity date, bearing interest at the same rate, in Authorized Denominations, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance. IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds sufficient to redeem all the Certificates called for redemption, such notice must state that it is conditional, and is subject to the deposit of the redemption moneys with the Paying Agent/Registrar or legally authorized escrow agent at or prior to the redemption date, and such notice shall be of no effect unless such moneys are so deposited on or prior to the redemption date. If such redemption is not effectuated, the Paying Agent/Registrar shall, within five days thereafter, give notice in the manner in which the notice of redemption was given that such moneys were not so received and shall rescind the redemption. Page 173 of 471 A-4 ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates, without interest coupons, in Authorized Denominations. As provided in the Certificate Ordinance, this Certificate may, at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred, and exchanged for a like aggregate principal amount of fully registered certificates, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in Authorized Denominations as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon surrender of this Certificate to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance. Among other requirements for such assignment and transfer, this Certificate must be presented and surrendered to the Paying Agent/Registrar at its Designated Trust Office, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in an Authorized Denomination to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Certificate may be executed by the registered owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Certificate or any portion or portions hereof from time to time by the registered owner. The foregoing notwithstanding, in the case of the exchange of an assigned and transferred Certificate or Certificates or any portion or portions thereof, such fees and charges of the Paying Agent/Registrar will be paid by the City. The one requesting such exchange shall pay the Paying Agent/Registrar’s reasonable standard or customary fees and charges for exchanging any Certificate or portion thereof. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, or exchange as a condition precedent to the exercise of such privilege. In any circumstance, neither the City nor the Paying Agent/Registrar shall be required (1) to make any transfer or exchange during a period beginning at the opening of business 30 days before the day of the first mailing of a notice of redemption of Certificates and ending at the close of business on the day of such mailing, or (2) to transfer or exchange any Certificates so selected for redemption when such redemption is scheduled to occur within 45 calendar days. WHENEVER the beneficial ownership of this Certificate is determined by a book entry at a securities depository for the Certificates, the foregoing requirements of holding, delivering or transferring this Certificate shall be modified to require the appropriate person or entity to meet the requirements of the securities depository as to registering or transferring the book entry to produce the same effect. IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the City, resigns, or otherwise ceases to act as such, the City has covenanted in the Certificate Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owners of the Certificates. IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of Page 174 of 471 A-5 this Certificate have been performed, existed, and been done in accordance with law; that this Certificate is a direct obligation of said City, issued on the full faith and credit thereof; and that in accordance with the terms of the Certificate Ordinance, annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in said City, and have been pledged for such payment, within the limit prescribed by law; and that a limited pledge (not to exceed $1,000) of the Surplus Revenues from the operation of the City’s combined municipal electric light and power, waterworks and sewer system remaining after payment of all operation and maintenance expenses thereof and any other obligations heretofore or hereafter incurred to which such revenues have been or shall be encumbered by a lien on and pledge of such revenues superior to the lien on and pledge of such revenues to the Certificates, have been pledged as additional security for the Certificates. BY BECOMING the registered owner of this Certificate, the registered owner thereby acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for inspection in the official minutes and records of the City, and agrees that the terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between each registered owner hereof and the City. IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile signature of the Mayor of the City, attested by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly affixed to, or impressed, or placed in facsimile, on this Certificate. Xxxxx xxxxx City Secretary; City of College Station Mayor; City of College Station (SEAL) FORM OF PAYING AGENT/REGISTRAR’S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR’S AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate of Obligation has been issued under the provisions of the proceedings adopted by the City as described in the text of this Certificate of Obligation; and that this Certificate of Obligation has been issued in exchange for or replacement of a Certificate of Obligation of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: _______________ The Bank of New York Mellon Trust Company, N.A. Paying Agent/Registrar Page 175 of 471 A-6 By: Authorized Representative FORM OF COMPTROLLER’S CERTIFICATE ATTACHED TO THE CERTIFICATE (CERTIFICATE NO. T-1) UPON INITIAL DELIVERY THEREOF COMPTROLLER’S CERTIFICATE OFFICE OF COMPTROLLER § REGISTER NO. ________ STATE OF TEXAS § I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Certificate has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of College Station, Texas, payable in the manner provided by and in the ordinance authorizing same, and said Certificate has this day been registered by me. WITNESS MY HAND and seal of office at Austin, Texas this ___________________. __________________________________________ Comptroller of Public Accounts of the State of Texas (SEAL) FORM OF ASSIGNMENT ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto: Please insert Social Security or Taxpayer Identification Number of Transferee Please print or type name and address, including zip code of Transferee the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints: ____________________________________, attorney, to register the transfer of the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. Dated: __________________. Signature Guaranteed: Page 176 of 471 A-7 NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program. NOTICE: The signature above must correspond with the name of the registered owner as it appears upon the front of this Certificate in every particular, without alteration or enlargement or any change whatsoever. INSERTIONS FOR THE INITIAL CERTIFICATE. The initial Certificate shall be in the form set forth in paragraph (a) of this Form of Certificate, except that: i. immediately under the name of the Certificate, the headings “INTEREST RATE” and “MATURITY DATE” shall both be completed with the words “As shown below” and “CUSIP NO. _____” shall be deleted. ii. the first paragraph shall be deleted and the following will be inserted: THE CITY OF COLLEGE STATION, TEXAS, in Brazos County, Texas (the “City”), being a political subdivision of the State of Texas, hereby promises to pay to the Registered Owner specified above or to the registered assignee hereof (either being hereinafter called the “registered owner”) on the Maturity Dates, in the Principal Amounts and bearing interest at the per annum Interest Rates set forth in the following schedule: Maturity Date Principal Amount Interest Rate Information from Pricing Certificate to be Inserted in Initial Certificate The City promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-day months) from the Delivery Date above at the respective Interest Rate per annum specified above. Interest is payable on [] and on each August 15 and February 15 thereafter to the date of payment of the Principal Amounts specified above, or the date of redemption prior to maturity; except, that if this Certificate is required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such principal amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for which this Certificate is being exchanged is due but has not been paid, then this Certificate shall bear interest from the date to which such interest has been paid in full." iii. The initial Certificate shall be numbered "T-1." Page 177 of 471 B-1 EXHIBIT B PROCEDURES REGARDING COMPLIANCE WITH FEDERAL TAX AND CONTINUING DISCLOSURE COVENANTS This Exhibit is intended to assist the City of College Station (the "City") in complying with the federal income tax covenants and securities disclosure covenants as they apply to the issuance of tax-exempt debt securities such as the certificates of obligations (the "Obligations"). These procedures should be read together with any federal tax certifications, bond covenants, letters or memoranda from bond counsel and any attachments thereto (collectively, the "Closing Documents"). Failure to comply with federal guidelines could have serious consequences for investors, the City and its officials. These procedures shall apply to the Obligations, until they are superseded by a change in circumstances at which time the City's bond counsel will propose new procedures to be adopted. I. FEDERAL TAX LAW 1. Arbitrage Compliance. Arbitrage refers to the difference between the interest paid on tax-exempt Obligations and the interest earned by investing the proceeds of tax-exempt Obligations in higher-yielding investments. Such higher-yielding investments could take the form of loans, securities, real property, personal property, or other investments that could yield a profit to the City. Federal income tax laws generally restrict the ability to earn arbitrage utilizing the proceeds of tax- exempt Obligations. Generally, any profit from investing Obligation proceeds at a yield above the yield paid on the Obligations belongs to the federal government and must be rebated to the federal government. If the City fails to comply federal tax guidelines, Obligations could be deemed to be “arbitrage bonds” by the Internal Revenue Service (the “IRS”), which would expose the City to monetary liability from the City’s investors. The arbitrage yield on the Obligations is set forth on the IRS Form 8038-G. The Assistant City Manager/CFO and the City Treasurer (including such other employees of the City who report to such officers) (collectively, the "Responsible Person") will review the Closing Documents periodically (at least once a year) to ascertain if an exception to arbitrage compliance applies. a. Procedures applicable to the Obligation. The Responsible Person shall undertake the following procedures. Page 178 of 471 B-2 i. If the City plans to spend funds currently on hand for a future project with the intent to later repay such funds from a debt issue, the Responsible Person shall contact Bond Counsel to obtain advice regarding a reimbursement resolution. The Responsible Person shall maintain any official action of the City (such as a reimbursement resolution) stating the City's intent to reimburse with the proceeds of the Obligations any amount expended prior to the Issue Date for the acquisition, renovation or construction of the Project. ii. The Responsible Person shall ensure that the applicable information return (e.g., U.S. Internal Revenue Service ("IRS") Form 8038-G, 8038-GC, or any successor forms) is timely filed with the IRS. iii. If proceeds of the Obligations are to be invested in interest-earning investments, assure that, unless excepted from rebate and yield restriction under section 148(f) of the Code, excess investment earnings are computed and paid to the U.S. government at such time and in such manner as directed by the IRS (i) at least every 5 years after the Issue Date and (ii) within 30 days after the date the Obligations are retired. If proceeds of the Obligations are to be invested in interest-earning investments, the Responsible Person should contact the City's arbitrage consultant regarding such matters. iv. The Responsible Person shall monitor all amounts deposited into a sinking fund or funds pledged (directly or indirectly) to the payment of the Obligations, such as the Interest and Sinking Fund (the "I&S Fund"), to assure that the maximum amount invested within such applicable fund at a yield higher than the yield on the Obligations does not exceed an amount equal to the debt service on the Obligations in the succeeding 12 month period plus a carryover amount equal to one-twelfth of the principal and interest payable on the Obligations for the immediately preceding 12- month period. NOTE: the purpose of the I&S Fund is to achieve a proper matching of revenues with principal and interest payments within each fiscal year. The I&S Fund should be used a mechanism for payment of current debt service and not as a long-term investment fund for debt service many years in the future. v. The Responsible Person shall ensure that no more than 50% of the proceeds of the Obligations are invested in an investment with a guaranteed yield for 4 years or more. b. With respect to the investment and expenditure of the proceeds of the Obligations that are issued to finance public improvements or to acquire land or personal property, the Responsible Person shall undertake the following. Page 179 of 471 B-3 i. The Responsible Person shall instruct the persons who are primarily responsible for the construction, renovation or acquisition of the facilities financed with Obligations (the “Project”) that the Project must (i) proceed with due diligence toward completion and that (ii) binding contracts for the expenditure of at least 5% of the proceeds of the Obligations will be entered into within six (6) months of the date of closing of the Obligations (the “Issue Date”). The Responsible Person shall monitor that the above requirements are satisfied. ii. The Responsible Person shall monitor that at least 85% of the proceeds of the Obligations to be used for the construction, renovation or acquisition of the Project are expended within three years of the Issue Date. iii. The Responsible Person shall monitor investment of proceeds of the Obligations and restrict the yield of the investments to the yield on the Obligations after three years of the Issue Date. iv. To the extent that there are any unspent proceeds of the Obligations at the time the Obligations are later refunded, or if there are unspent proceeds of the Obligations that are being refunded by a new issuance of Obligations, the Responsible Person shall continue monitoring the expenditure of such unspent proceeds to ensure compliance with federal tax law with respect to both the refunded Obligations and any Obligations being issued for refunding purposes, and shall contact Bond Counsel as necessary. c. Procedures applicable to Escrow Accounts for the Obligations. In addition to the foregoing, with respect to the proceeds of the Obligations deposited to the escrow fund to be administered pursuant to the terms of an escrow agreement, the Responsible Person shall undertake the following. i. The Responsible Person shall review invoices, reports and other notifications from the escrow agent to ensure compliance with the applicable provisions of the escrow agreement, including with respect to reinvestment of cash balances. ii. The Responsible Person shall contact the escrow agent on the date of redemption of obligations being refunded to ensure that they were redeemed. iii. The Responsible Person shall monitor any unspent proceeds of the refunded obligations to ensure that the yield on any investments applicable to such proceeds are invested at the yield on the applicable obligations or otherwise applied (see Closing Documents). Page 180 of 471 B-4 B. Private Business Use. Generally, the proceeds of tax-exempt Obligations may not inure to the benefit of entities other than state or local governments (“private business use”). Private business use occurs whenever Obligation proceeds are used to benefit any entity other than a state or local government, including nonprofit corporations and the federal government. A series of Obligations may lose their tax-exempt status if: (i) more than 10% of the proceeds of the Obligations are to be used for any private business use and the payment of the principal or interest on more than 10% of the proceeds of the Obligations is secured by or payable from property used for a private business use, or (ii) the amount of proceeds of the Obligations used to make loans to borrowers other than state and local governments exceeds the lesser of 5% of the proceeds or $15 million. With respect to the use of the facilities financed or refinanced with the proceeds of the Obligations, the Responsible Person shall undertake the following to ensure the Obligations do not violate private business use tests. a. The Responsible Person shall develop procedures or a “tracking system” to identify, log and record all property financed with tax-exempt debt and identify the issue of Obligations used to finance such property. b. The Responsible Person shall monitor and record the date on which the Project is substantially complete and available to be used for the purpose intended. c. The Responsible Person shall monitor and record whether, at any time the Obligations are outstanding, any person, other than the City, the employees of the City, the agents of the City or members of the general public has any contractual right (such as a lease, research contract, naming rights agreement, purchase contract, management agreement or other service agreement) with respect to any portion of the Project. d. Before entering into any private business use arrangement that involves the use of the Project, the Responsible Person must obtain a description of the proposed private business use arrangement and determine whether such arrangement, if put into effect, will be consistent with the restrictions on private business use of the Project. In connection with the evaluation of any proposed private business use arrangement, the Responsible Person should consult with Bond Counsel to discuss whether such arrangement, if put into effect, will be consistent with the restrictions on private business use of the Project, and, if not, whether any “remedial action” permitted under federal guidelines may be taken as a means of enabling such private business use without adversely affecting the tax-exempt status of the Obligations. e. The Responsible Person shall monitor and record whether, at any time the Obligations are outstanding, any person, other than the City, the employees of the Page 181 of 471 B-5 City, the agents of the City or members of the general public has a right to use the output of the Project (e.g., water, gas, electricity, capacity) on any basis other than standard rates and charges. f. The Responsible Person shall monitor and record whether, at any time the Obligations are outstanding, any person, other than the City, has a naming right for the Project or any other contractual right granting an intangible benefit. g. Prior to any sale of property owned by the City (real or personal), the Responsible Person must confirm whether such property was financed with tax-exempt debt, and if so, determine whether the proposed disposition of the property could impact the tax-exempt status of the series of Obligations that financed the acquisition of such property. h. The Responsible Person shall take any action necessary to remediate any failure to maintain compliance with the covenants contained in the ordinance authorizing the issuance of the applicable series of Obligations. C. Record Retention. The Responsible Person will maintain or cause to be maintained all records relating to the investment and expenditure of the proceeds of the Obligations and the use of the Project financed or refinanced thereby for a period ending three (3) years after the complete extinguishment of the Obligations. If any portion of the Obligations is refunded with the proceeds of another series of Obligations, such records shall be maintained until the three (3) years after the refunding Obligations mature or are otherwise paid off. Such records can be maintained in paper or electronic format. For purposes of these procedures, the Memorandum of Bond Counsel dated December 1, 2011 styled "Certain Federal Income Tax Considerations for Record Retention – Record Management Program and Periodic Compliance Review" in incorporated herein and should be reviewed periodically, at least once per year, by the Responsible Person. D. Responsible Person & Continuity. Each Responsible Person shall receive appropriate training regarding the City’s accounting system, contract intake system, facilities management and other systems necessary to track the investment and expenditure of the proceeds and the use of the facilities financed with the proceeds of the Obligations. The foregoing notwithstanding, the Responsible Person is authorized and instructed to retain such experienced advisors and agents as may be necessary to carry out the purposes of these instructions. Prior to cessation of employment with the City, the Responsible Person should identify their successor to maintain compliance with these procedures. Page 182 of 471 B-6 II. FEDERAL SECURITIES LAW Obligations, whether taxable or tax-exempt, sold in a public offering in an amount of $1 million or more are subject to Rule 15c2-12 (the “Rule”) of the United States Securities and Exchange Commission (the “SEC”). Additionally, the City may have covenanted to comply with the Rule even with respect to Obligations that would otherwise be exempt from the Rule (e.g., Obligations sold in a private placement or Obligations sold in an amount less than $1 million). Pursuant to the Rule, the City is required to make annual filings of certain information, as well as make filings upon the occurrence of certain specified events. All filings must be made with the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access System (“EMMA”) at emma.msrb.org. A. Annual Filings. The City must file 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 EMMA. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in the City’s Official Statements under Tables numbered 1 through 6; 8 through 20 and in Appendix B. The City will update and provide the information in such tables within six months after the end of each fiscal year. 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. 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. The Responsible Person must compile, prepare and make such filings within the required time, or, alternatively, contract with a third-party, such as the City’s financial advisor, to make such filings on the City’s behalf. B. Notices of Specified Events. The City must provide notice of any of the following events with respect to the Obligations 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; Page 183 of 471 B-7 (6) Adverse tax opinions, the issuance by the IRS 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 Obligations, or other material events affecting the tax status of the Obligations; (7) Modifications to rights of Obligation holders, if material; (8) Obligations calls (includes redemptions and other early payments), if material, and tender offers; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the Obligations, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the City; (13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) Appointment of a successor or additional paying agent or the change of name of a paying agent, if material; (15) Incurrence of a Financial Obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect bondholders, if material; (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties; and (17) In a timely manner, notice of a failure of the City to make the required annual filings listed in Subsection II(A) above. The Responsible Person should review this list at regular intervals to determine whether any event has occurred that may require a filing with EMMA. Page 184 of 471 C-1 EXHIBIT C PRELIMINARY OFFICIAL STATEMENT Page 185 of 471 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, interest on the Bonds 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) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on inside cover Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Bond Ordinance”) adopted by the governing body of the City on April 9, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Bond Ordinance, the City Council of the City delegated authority to certain authorized officials of the City to finalize the pricing of the Bonds. The definitive Bonds 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 Bonds may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds 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 Bonds. See “THE OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Bonds are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Chapter 1207, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City as provided in the Bond Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations) and their redemption dates; and (ii) paying costs of issuance of the Bonds. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 2 SEPARATE ISSUES . . . The Bonds are being offered by the City concurrently with the issuance of the $49,995,000* City of College Station, Texas, Certificates of Obligation, Series 2020 (the “Certificates”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY . . . The Bonds 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 – Form Of Opinion 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. DELIVERY. . . It is expected that the Bonds will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 11, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 186 of 471 2 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $18,940,000* General Obligation Refunding Bonds, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 1,620,000$ 2022 1,665,000 2023 1,710,000 2024 1,770,000 2025 1,810,000 2026 1,855,000 2027 1,910,000 2028 1,960,000 2029 2,015,000 2030 2,075,000 2031 550,000 (1) CUSIP numbers have been assigned to the Bonds 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 Bonds. 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.  OPTIONAL REDEMPTION. . . The Bonds are not subject to redemption prior to maturity. * Preliminary, subject to change. Page 187 of 471 3 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., 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) $49,995,000* CERTIFICATES OF OBLIGATION, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on page 4 Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $49,995,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing February 15, 2021 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Certificates are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Certificate Ordinance”) adopted by the governing body of the City on June 11, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Certificate Ordinance, the City Council of the City delegates authority to certain authorized officials of the City to finalize the pricing of the Certificates. 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 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, 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 OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Certificates are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from a combination of (i) the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City, and (ii) subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric utility system, as provided in the Certificate Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Certificates will be used for (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 4 SEPARATE ISSUES . . . The Certificates are being offered by the City concurrently with the issuance of the $18,940,000* City of College Station, Texas, General Obligation Refunding Bonds, Series 2020 (the “Bonds”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY. . . 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 – Form Of Opinion 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 DELIVERY. . . It is expected that the Certificates will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 11, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 188 of 471 4 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $49,995,000* Certificates of Obligation, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 2,270,000$ 2022 2,390,000 2023 2,420,000 2024 2,450,000 2025 2,475,000 2026 2,515,000 2027 2,545,000 2028 2,230,000 2029 2,270,000 2030 2,300,000 2031 2,350,000 2032 2,400,000 2033 2,445,000 2034 2,500,000 2035 2,560,000 2036 2,630,000 2037 2,700,000 2038 2,775,000 2039 2,850,000 2040 2,920,000 (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. OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – Optional Redemption”). MANDATORY SINKING FUND 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 shown above (see “THE OBLIGATIONS - Mandatory Sinking Fund Redemption”). * Preliminary, subject to change. Page 189 of 471 5 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 Obligations 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 Obligations. Neither the City, the Financial Advisor nor the Initial Purchasers 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 Purchasers 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 Obligations are exempt from registration with the Securities and Exchange Commission and consequently have not been registered therewith. The registration, qualification, or exemption of the Obligations 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 PURCHASERS 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. 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. Page 190 of 471 6 TABLE OF CONTENTS MATURITY SCHEDULE ............................................... 2  MATURITY SCHEDULE ............................................... 4  OFFICIAL STATEMENT SUMMARY ......................... 7  SELECTED FINANCIAL INFORMATION ............................. 9  GENERAL FUND CONSOLIDATED STATEMENT SUMMARY .............................................................. 9  UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS .......................................................... 9  CITY OFFICIALS, STAFF AND CONSULTANTS ... 10  ELECTED OFFICIALS .................................................... 10  SELECTED ADMINISTRATIVE STAFF .............................. 10  CONSULTANTS AND ADVISORS ..................................... 11  INTRODUCTION .......................................................... 12  THE CERTIFICATES ................................................... 13  TAX INFORMATION ................................................... 17  TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT ............................................... 23  TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY ........................................................... 24  TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY ............................................................... 25  TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY .............................................................. 25  TABLE 5 - TEN LARGEST TAXPAYERS ......................... 25  TABLE 6 - TAX ADEQUACY ........................................ 26  TABLE 7 - ESTIMATED OVERLAPPING DEBT ................ 26  DEBT INFORMATION ................................................. 27  TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS ..................................................... 27  TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION ......................................................... 28  TABLE 10 – SELF-SUPPORTING DEBT .......................... 28  TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS . 28  ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT ................................................................... 28  OTHER OBLIGATIONS ................................................... 29  PENSION FUND ............................................................ 29  OTHER POST EMPLOYMENT BENEFITS .......................... 32  FINANCIAL INFORMATION ..................................... 37  TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY ........................................ 37  TABLE 13 - MUNICIPAL SALES TAX HISTORY ............. 38  FINANCIAL POLICIES .................................................... 38  THE COMBINED UTILITY SYSTEM ....................... 39  WATERWORKS SYSTEM ............................................... 39  WASTEWATER SYSTEM ............................................... 40  ELECTRIC SUPPLY SOURCE .......................................... 40  WIND WATT RATES .................................................... 41  TABLE 14 - HISTORICAL UTILITY USERS ...................... 41  TABLE 15 - TEN LARGEST UTILITY CUSTOMERS .......... 42  TABLE 16 - CONDENSED STATEMENT OF OPERATIONS . 42  TABLE 17 – VALUE OF THE SYSTEM ............................. 42  TABLE 18 – CITY’S EQUITY IN THE SYSTEM ................. 43  TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE43  INVESTMENTS ............................................................. 44  LEGAL INVESTMENTS .................................................. 44  INVESTMENT POLICIES ................................................ 45  ADDITIONAL PROVISIONS ............................................ 45  CITY’S INVESTMENT POLICY ....................................... 46  TABLE 20 - CURRENT INVESTMENTS ............................ 46  TAX MATTERS ............................................................. 46  CONTINUING DISCLOSURE OF INFORMATION 48  OTHER INFORMATION ............................................. 50  RATINGS ..................................................................... 50  LITIGATION ................................................................. 50  REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE ............................................................. 50  LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ................................................... 50  AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION ...................................................... 51  FINANCIAL ADVISOR ................................................... 51  CERTIFICATION OF THE OFFICIAL STATEMENT AND NO- LITIGATION CERTIFICATE ...................................... 51  FORWARD-LOOKING STATEMENTS .............................. 51  INITIAL PURCHASER .................................................... 52  MISCELLANEOUS ......................................................... 52  SCHEDULE OF REFUNDED OBLIGATIONS ...................................................... Schedule I 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. Page 191 of 471 7 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 Obligations 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 BONDS .......................... The Bonds are issued as $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020. The Bonds are issued as serial bonds maturing on February 15 in each of the years 2021-2031, inclusive (see “THE OBLIGATIONS - General Description”). If two or more serial maturities of the Bonds are grouped into a single maturity (the “Term Bonds”) by the Initial Purchaser, such Term Bonds will be subject to mandatory sinking fund redemption in accordance with applicable provisions of the Bond Ordinance. THE CERTIFICATES ............. The Certificates are issued as $49,995,000* City of College Station, Texas Certificates of Obligation, Series 2020. The Certificates are issued as serial certificates maturing on February 15 in each of the years 2021-2040, inclusive (see “THE OBLIGATIONS - 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 Certificate Ordinance. PAYMENT OF INTEREST ...... Interest on the Bonds will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basiss of a 360-day consisting of twelve 30-day months (see “THE OBLIGATIONS – General Description”). 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, 2021 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 OBLIGATIONS - General Description”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS .......... The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1207, Texas Government Code, as amended, and an ordinance passed by the City Council of the City. In the Bond Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Bonds (see “THE OBLIGATIONS - Authority for Issuance). The Certificates are issued pursuant to the general laws of the State, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended; Chapter 1371, Texas Government Code as amended, and an ordinance passed by the City Council of the City. In the Certificate Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Certificates (see “THE OBLIGATIONS - Authority for Issuance). The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. SECURITY FOR THE OBLIGATIONS ...................... The Bonds constitute direct obligations of the City, secured by and payable from 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 (see “THE OBLIGATIONS - Security and Source of Payment”). 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 water, wastewater and electric utility system (see “THE OBLIGATIONS - 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. * Preliminary, subject to change. Page 192 of 471 8 REDEMPTION ....................... The Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – 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; any aggregation of maturities into Term Certificates will be specified in the Official Statement. (See “THE OBLIGATIONS – Mandatory Sinking Fund Redemption”). TAX EXEMPTION .................. In the opinion of Bond Counsel, the interest on the Obligations 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 PROCEEDS ............... Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations and their redemption dates); (ii) paying the costs of issuance of the Bonds. Proceeds from the sale of the Certificates will be used for (i) (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. (see “THE OBLIGATIONS – Sources and Use of Proceeds”). RATINGS ............................. The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's Investors Service, Inc. (“Moody's”) and “AA+” 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”). Applications have been made to Moody’s, S&P and Fitch Ratings Services for contract ratings on the Obligations. BOOK-ENTRY-ONLY SYSTEM .............................. The definitive Obligations 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 Obligations may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates (see “THE OBLIGATIONS - Book-Entry-Only System”). PAYMENT RECORD .............. Other than a late payment on the City’s Certificates of Obligation, Series 2002 that occurred in 2003, the City has never defaulted in payment of its general obligation tax debt. (Remainder of page intentionally left blank) Page 193 of 471 9 SELECTED FINANCIAL INFORMATION Ratio Tax Fiscal Per Capita Per Capita Debt to Year Estimated Taxable Taxable Net Net Taxable Ended City Assessed Assessed Ad Valorem Ad Valorem Assessed 9/30 Population (1) Valuation(2)Valuation Tax Debt (3)Tax Debt Valuation 2016 109,859 7,162,738,280$ 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 75,543 175,400,000 1,488 1.97% 98.90% 2019 121,150 9,487,074,377 78,308 197,690,000 1,632 2.08% 99.47% 2020 122,949 9,979,431,357 (4)81,167 206,465,000 (5)1,679 (5)2.07%(5)88.24%(6) Collection Total Percent _______________ (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 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (5) Projected, includes the Obligations, excludes the Refunded Obligations. (6) Collections as of March 15, 2020. 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, 2020. GENERAL FUND CONSOLIDATED STATEMENT SUMMARY 2019 2018 2017 2016 2015 Beginning Balance 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ 20,244,248 $ Total Revenue 71,180,329 67,484,355 64,795,371 60,087,950 58,378,174 Total Expenditures 87,077,758 82,128,812 76,897,859 77,508,715 68,827,167 Other Financing Sources 17,467,427 16,214,241 15,483,809 14,130,903 12,627,809 Prior Period Adjustment - 2,706,262 - - - Ending Balance(1)28,360,567 $ 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ For Fiscal Year Ended September 30, UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, Page 194 of 471 10 CITY OFFICIALS, STAFF AND CONSULTANTS ELECTED OFFICIALS Term Name Position Expiration Occupation Karl P. Mooney Mayor 3 Years (1)November 2022 Texas A&M University Administrator Bob Brick Council Member 2 Years November 2020 Research Scientist John Crompton Council Member 6 Months November 2022 CEO Linda Harvell Council Member 3 Years November 2020 Business Owner Vacant (2)Council Member November 2021 John Nichols Council Member 2 Years (3)November 2020 Retired Professor Dennis Maloney Council Member 1 Year November 2021 Business Owner Length of Service ________________ (1) Elected November 2016 - Former City of College Station Council Member 2011-2016. (2) The vacancy was created when Councilwoman Elianor Vessali announced she would resign her seat in order to campaign for the Republican nomination for the U.S. Congressional District 17 seat. The unexpired term for Place-4 runs through November 2021, at which point the seat will be on the ballot for a full three-year term. (3) Prior Council Member for 4 years prior to his current term. SELECTED ADMINISTRATIVE STAFF Name Position Bryan Woods City Manager 1.5 Jeff Capps Deputy City Manager 27.0 (1) Jeff Kersten Assistant City Manager, CFO 29.0 (2) Carla Robinson City Attorney 18.5 Tanya D. Smith City Secretary 12.0 (3) Ty Elliott Internal Auditor 12.5 Mary Ellen Leonard Director of Finance 4.0 Gary Mechler Director of Water Services 1.0 (4) Timothy Crabb Director of Electric Utility 13.5 (5) Sindhu Menon Chief Information Officer 2.0 (6) David Schmitz Director of Parks and Recreation 12.0 (7) Jennifer Prochazka Director of Development Services 18.0 (8) Donald Harmon Director of Public Works and CIP 20.5 (9) Alison Pond Director of Human Resources 11.5 Jay Socol Public Communications Director 10.5 Length of Service to the City (in Years) ________________ (1) 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) Appointed City Secretary in July 2017. Previously served as Deputy City Secretary since 2008. (4) New Hire Director of Water Services August 2018. (5) Director of Electric Utility since December 2012; previously served as Assistant Director of Electric Utility. (6) New hire as Director of Information Technology in March 2018. (7) Director of Parks and Recreation since May 2011; previously served as Assistant Director of Parks and Recreation. (8) Named Director of Development Services September 2018; previously Manager of Economic Development. (9) Director of Public Works and CIP since January 2014; previously Assistant Director of Public Works and CIP. Page 195 of 471 11 CONSULTANTS AND ADVISORS Auditors ........................................................................................................................................................ BKD CPAs & Advisors Houston, Texas Bond Counsel ............................................................................................................................. McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor ............................................................................................................................................. Hilltop Securities Inc. Houston, Texas 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 W. Boyd London, Jr Marti Shew Hilltop Securities Inc. 1201 Elm Street, Suite 3500 Dallas, Texas 75270 (214) 953-4000 or Joe Morrow Hilltop Securities Inc. 700 Milam Street, Suite 500 Houston, Texas 77002 (713) 651-9850 Phone (Remainder of page intentionally left blank) Page 196 of 471 12 PRELIMINARY OFFICIAL STATEMENT RELATING TO CITY OF COLLEGE STATION, TEXAS (a Home-Rule City located in Brazos County, Texas) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 $49,995,000* CERTIFICATES OF OBLIGATION, SERIES 2020 INTRODUCTION This Official Statement, which includes the cover pages, Schedule I and Appendices hereto, provides certain information regarding the issuance of the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) and the $49,995,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates,” and together with the Bonds, herein collectively referred to as the “Obligations”). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the respective ordinances (the “Bond Ordinance” with respect to the Bonds and the “Certificate Ordinance” with respect to the Certificates), each to be adopted by the City Council of the City on June 11, 2020. The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. In the Ordinances, the City Council delegates to an authorized officer of the City (the “Pricing Officer” to finalize the pricing of the Obligations. There follows in this Official Statement descriptions of the Obligations 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 2018. 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 122,949. The City covers approximately 51.6 square miles. PLAN OF FINANCING PURPOSE . . . The Bonds are being issued for the purpose of (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings, and (ii) paying the costs of issuance of the Bonds. See Schedule I for a detailed listing of the Refunded Obligations and their redemption dates. The Certificates are being issued for the purpose of (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates.. REFUNDED OBLIGATIONS . . . The Refunded Obligations are being called for redemption on the redemption dates set forth in Schedule I. The principal and interest due on the Refunded Obligations are to be paid on the redemption date of such Refunded Obligations, from funds to be deposited pursuant to a certain Escrow Agreement (the “Escrow Agreement”) between the City and Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Escrow Agent”). The Bond Ordinance provides that from the proceeds of the sale of the Bonds received from the Initial Purchaser and other funds of the City, if any, the City will deposit with the Escrow Agent an amount which will be sufficient to accomplish the discharge and final payment of the Refunded Obligations on the redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the “Escrow Fund”) and used to pay principal and accrued interest on the Refunded Obligations on the redemption dates. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations. The funds on deposit in the Escrow Fund will not be available to pay debt service on the Bonds. * Preliminary, subject to change. Page 197 of 471 13 By the deposit of the proceeds of the Bonds and other funds of the City, if any are required, with the Escrow Agent pursuant to the Escrow Agreement, the City will have defeased of the Refunded Obligations in accordance with applicable State law and the ordinances authorizing the Refunded Obligations. As a result of such defeasance, the Refunded Obligations will be outstanding only for the purpose of receiving payments from the Escrow Fund held for such purpose by the Escrow Agent, and the Refunded Obligations will not be deemed as being outstanding obligations of the City payable from ad valorem taxes, nor for the purpose of applying any limitation on the issuance of debt, and the City will have no further responsibility with respect to amounts available in the Escrow Fund for the payment of the Refunded Obligations. SOURCES AND USES OF CERTIFICATE PROCEEDS . . . Proceeds from the sale of the Obligations, are expected to be expended as follows: Sources of Funds The Bonds The Certificates Par Amount -$ -$ Original Issue Premium Total Uses of Funds -$ -$ Use of Funds Deposit to Project Fund -$ -$ Deposit to the Escrow Fund Underwriters' Discount Costs of Issuance Total Uses of Funds -$ -$ THE CERTIFICATES GENERAL DESCRIPTION . . . The Obligations 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 pages 2 and 4 hereof. Interest on the Obligations will be calculated on the basis of a 360- day year consisting of twelve 30-day months and will be payable February 15 and August 15 of each year commencing August 15, 2020 with respect to the Bonds and February 15, 2021, with respect to the Certificates, until maturity or prior redemption. The definitive Obligations will be issued only in fully registered form in any integral multiple of $5,000 in principal amount 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 Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations 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 Obligations (see “Book- Entry-Only System”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS. . . The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas (the "State"), including particularly Chapter 1207, Texas Government Code, as amended, and the Bond Ordinance. The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended and the Certificate Ordinance. SECURITY AND SOURCE OF PAYMENT Tax Pledge . . . The Obligations constitute direct obligations of the City payable from an annual direct and continuing ad valorem tax levied against all taxable property within the City, within the limits prescribed by law Pledge of Surplus Water, Wastewater and Electric Utility System Net Revenues for Certificates . . . In addition to the pledge of ad valorem taxes described above, the Certificates are additionally secured by and payable from a subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric 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. Page 198 of 471 14 OPTIONAL REDEMPTION . . . The Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, 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 page 4 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. 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 Obligations is to be transferred and how the principal of and interest on the Obligations are to be paid to and credited by the DTC while the Obligations 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 Obligations, 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 Obligations), 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 Obligations. The Obligations 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 Obligations, 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 Page 199 of 471 15 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. Purchases of Obligations 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 Obligations (“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 Obligations 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 Obligations, except in the event that use of the book-entry system described herein is discontinued. To facilitate subsequent transfers, all Obligations 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 Obligations 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 Obligations; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Obligations 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 Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations 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 Obligations 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 Obligations 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 Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Obligations 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 Obligations 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, Obligations 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, Obligations 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 Obligations 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 Obligations, 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 Ordinances 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. Page 200 of 471 16 PAYING AGENT/REGISTRAR . . . The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In the Ordinances, 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 Obligations 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 Obligations. Upon any change in the Paying Agent/Registrar for the Obligations, the City will promptly cause a written notice thereof to be sent to each registered owner of the Obligations 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 Obligations 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. Obligations may be assigned by the execution of an assignment form on the respective Obligations 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 Obligations 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 Obligations issued in an exchange or transfer of Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. Neither the City nor the Paying Agent/Registrar will be required to transfer or exchange any Obligation 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 Obligation. RECORD DATE FOR INTEREST PAYMENT . . . The record date (“Record Date”) for determining the person to whom the interest is payable on the Obligations 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 Obligation 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 Ordinances provide for the defeasance of the Obligations when the payment of the principal of and premium, if any, on the Obligations, 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 Obligations. The Ordinances provide 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 Obligations. In the Ordinances, 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. REMEDIES OF HOLDERS OF OBLIGATIONS. . . The Ordinances establish specific events of default with respect to the Obligations. If the City defaults in the payment of the principal of or interest on the Obligations 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 Obligations including but not limited to, their prospect or ability to be repaid in accordance with the Ordinances, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, the Ordinances provide 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 Obligations or the Ordinances and the City's obligations are not uncertain or disputed. Chapter 1371, 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 bonds, but in connection with the issuance of the Obligations, the City has not waived sovereign immunity, and therefore, holders may not be able to bring such a suit against the City for breach of the of Ordinances covenants in the absence of City action. 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 Obligations in the event of default and, consequently, the remedy of mandamus Page 201 of 471 17 may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to represent the interest of the holders of the Obligations upon any failure of the City to perform in accordance with the terms of the Ordinances, 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 Obligations. 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 Obligations may not be able to bring such a suit against City for breach of the 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 Obligations. 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 Obligations 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 Obligations 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 The following is a summary of certain provisions of State law as it relates to ad valorem taxation and is not intended to be complete. Prospective investors are encouraged to review Title I of the Texas Tax Code, as amended (the “Property Tax Code”), for identification of property subject to ad valorem taxation, property exempt or which may be exempted from ad valorem taxation if claimed, the appraisal of property for ad valorem tax purposes, and the procedures and limitations applicable to the levy and collection of ad valorem taxes. VALUATION OF TAXABLE PROPERTY . . . The Property Tax Code provides for countywide appraisal and equalization of taxable property values and establishes in each county of the State an appraisal district and an appraisal review board (the “Appraisal Review Board”) responsible for appraising property for all taxing units within the county. The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District (the “Appraisal District”). Except as generally described below, the Appraisal District is required 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 market value of property, the Appraisal District is required to consider the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and use the method the chief appraiser of the Appraisal District considers most appropriate. The Property Tax Code requires appraisal districts to reappraise all property in its jurisdiction at least once every three (3) years. A taxing unit may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the taxing unit by petition filed with the Appraisal Review Board. State law requires the appraised value of an owner’s principal residence (“homestead” or “homesteads”) to be based solely on the property’s value as a homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further limits the appraised value of a homestead to the lesser of (1) the market value of the property or (2) 110% of the appraised value of the property for the preceding tax year plus the market value of all new improvements to the property. State law provides that eligible owners of both agricultural land and open-space land, 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 as both agricultural and open-space land. The appraisal values set by the Appraisal District are subject to review and change by the Appraisal Review Board. The appraisal rolls, as approved by the Appraisal Review Board, are used by taxing units, such as the City, in establishing their tax rolls and tax rates (see “Tax Information – City and Taxpayer Remedies”). STATE MANDATED HOMESTEAD EXEMPTIONS . . . State law grants, with respect to each city in the State, various exemptions for disabled veterans and their families, surviving spouses of members of the armed services killed in action, and surviving spouses of first responders killed or fatally wounded in the line of duty. LOCAL OPTION HOMESTEAD EXEMPTIONS . . . The governing body of a taxing unit, including a city, county, school district, or special district, at its option may grant: (1) an exemption of up to 20% of the appraised value of all homesteads (but not less than $5,000) and (2) an additional exemption of at least $3,000 of the appraised value of the homesteads of persons sixty-five (65) years of age or older and the disabled. Each taxing unit decides if it will offer the local option homestead exemptions and at what percentage or dollar amount, as applicable. The exemption described in (2), above, may be created, increased, decreased or repealed at an election called by the governing body of a taxing unit upon presentment of a petition for such creation, increase, decrease, or repeal of at least 20% of the number of qualified voters who voted in the preceding election of the taxing unit. Page 202 of 471 18 LOCAL OPTION FREEZE FOR THE ELDERLY AND DISABLED . . . The governing body of a county, municipality or junior college district may, at its option, provide for a freeze on the total amount of ad valorem taxes levied on the homesteads of persons 65 years of age or older or of disabled persons above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon voter initiative, an election may be held to determine by majority vote whether to establish such a freeze on ad valorem taxes. Once the freeze is established, the total amount of taxes imposed on such homesteads cannot be increased except for certain improvements, and such freeze cannot be repealed or rescinded. PERSONAL PROPERTY . . . Tangible personal property (furniture, machinery, supplies, inventories, etc.) used in the “production of income” is taxed based on the property’s market value. Taxable personal property includes income-producing equipment and inventory. Intangibles such as goodwill, accounts receivable, and proprietary processes are not taxable. Tangible personal property not held or used for production of income, such as household goods, automobiles or light trucks, and boats, is exempt from ad valorem taxation unless the governing body of a taxing unit elects to tax such property. FREEPORT AND GOODS-IN-TRANSIT EXEMPTIONS . . . Certain goods that are acquired in or imported into the State to be forwarded outside the State, and are detained in the State for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication (“Freeport Property”) are exempt from ad valorem taxation unless a taxing unit took official action to tax Freeport Property before April 1, 1990 and has not subsequently taken official action to exempt Freeport Property. Decisions to continue taxing Freeport Property may be reversed in the future; decisions to exempt Freeport Property are not subject to reversal. Certain goods that are acquired in or imported into the State to be forwarded to another location within or without the State, stored in a location that is not owned by the owner of the goods and are transported to another location within or without the State within 175 days (“Goods-in-Transit”), are generally exempt from ad valorem taxation; however, the Property Tax Code permits a taxing unit, on a local option basis, to tax Goods-in-Transit if the taxing unit takes official action after conducting a public hearing, before January 1 of the first tax year in which the taxing unit proposes to tax Goods-in-Transit. Goods-in-Transit and Freeport Property do not include oil, natural gas or petroleum products, and Goods-in-Transit does not include aircraft or special inventories such as manufactured housing inventory, or a dealer’s motor vehicle, boat, or heavy equipment inventory. A taxpayer may receive only one of the Goods-in-Transit or Freeport Property exemptions for items of personal property. OTHER EXEMPT PROPERTY . . . Other major categories of exempt property include property owned by the State or its political subdivisions if used for public purposes, property exempt by federal law, property used for pollution control, farm products owned by producers, property of nonprofit corporations used for scientific research or educational activities benefitting a college or university, designated historic sites, solar and wind-powered energy devices, and certain classes of intangible personal property. TAX INCREMENT REINVESTMENT ZONES . . . A city or county, by petition of the landowners or by action of its governing body, may create one or more tax increment reinvestment zones (“TIRZ”) within its boundaries. At the time of the creation of the TIRZ, a “base value” for the real property in the TIRZ is established and the difference between any increase in the assessed valuation of taxable real property in the TIRZ in excess of the base value is known as the “tax increment”. During the existence of the TIRZ, all or a portion of the taxes levied against the tax increment by a city or county, and all other overlapping taxing units that elected to participate, are restricted to paying only planned project and financing costs within the TIRZ and are not available for the payment of other obligations of such taxing units. TAX ABATEMENT AGREEMENTS . . . Taxing units may also enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The taxing unit, 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 Information – Tax Abatement Policy” for descriptions of the City’s tax abatement program. For a discussion of how the various exemptions described above are applied by the City, see “Tax Information – City Application of Property Tax Code” herein. CITY AND TAXPAYER REMEDIES . . . Under certain circumstances, taxpayers and taxing units, including the City, may appeal the determinations of the Appraisal District by timely initiating a protest with the Appraisal Review Board. Additionally, taxing units such as the City may bring suit against the Appraisal District to compel compliance with the Property Tax Code. Beginning in the 2020 tax year, owners of certain property with a taxable value in excess of the current year “minimum eligibility amount”, as determined by the State Comptroller, and situated in a county with a population of one million or more, may protest the determinations of an appraisal district directly to a three-member special panel of the appraisal review board, appointed by the chairman of the appraisal review board, consisting of highly qualified professionals in the field of property tax appraisal. The minimum eligibility amount is set at $50 million for the 2020 tax year, and is adjusted annually by the State Comptroller to reflect the inflation rate. The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the City and provides for taxpayer referenda that could result in the repeal of certain tax increases (see “Tax Information – Public Hearing and Maintenance and Operations Tax Rate Limitations”). The Property Tax Code also establishes a procedure for providing notice to property owners of reappraisals reflecting increased property value, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll. Page 203 of 471 19 LEVY AND COLLECTION OF TAXES . . . The City is responsible for the collection of its taxes, unless it elects to transfer such functions to another governmental entity. Taxes are due October 1, or when billed, whichever comes later, and become delinquent after January 31 of the following year. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty of up to twenty percent (20%) if imposed by the City. The delinquent tax also accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code also makes provision for the split payment of taxes, discounts for early payment and the postponement of the delinquency date of taxes for certain taxpayers. Furthermore, the City may provide, on a local option basis, for the split payment, partial payment, and discounts for early payment of taxes under certain circumstances. PUBLIC HEARING AND MAINTENANCE AND OPERATIONS TAX RATE LIMITATIONS . . . The following terms as used in this section have the meanings provided below: “adjusted” means lost values are not included in the calculation of the prior year’s taxes and new values are not included in the current year’s taxable values. “de minimis rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted), plus the rate that produces an additional $500,000 in tax revenue when applied to the current year’s taxable value, plus the debt service tax rate. “no-new-revenue tax rate” means the combined maintenance and operations tax rate and debt service tax rate that will produce the prior year’s total tax levy (adjusted) from the current year’s total taxable values (adjusted). “special taxing unit” means a city for which the maintenance and operations tax rate proposed for the current tax year is 2.5 cents or less per $100 of taxable value. “unused increment rate” means the cumulative difference between a city’s voter-approval tax rate and its actual tax rate for each of the tax years 2020 through 2022, which may be applied to a city’s tax rate in tax years 2021 through 2023 without impacting the voter-approval tax rate. “voter-approval tax rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted) multiplied by 1.035, plus the debt service tax rate, plus the “unused increment rate.” The City’s tax rate consists of two components: (1) a rate for funding of maintenance and operations expenditures in the current year (the “maintenance and operations tax rate”), and (2) a rate for funding debt service in the current year (the “debt service tax rate”). Under State law, the assessor for the City must submit an appraisal roll showing the total appraised, assessed, and taxable values of all property in the City to the City Council by August 1 or as soon as practicable thereafter. A city must annually calculate its “voter-approval tax rate” and “no-new-revenue tax rate” (as such terms are defined above) in accordance with forms prescribed by the State Comptroller and provide notice of such rates to each owner of taxable property within the city and the county tax assessor-collector for each county in which all or part of the city is located. A city must adopt a tax rate before the later of September 30 or the 60th day after receipt of the certified appraisal roll, except that a tax rate that exceeds the voter-approval tax rate must be adopted not later than the 71st day before the next occurring November uniform election date. If a city fails to timely adopt a tax rate, the tax rate is statutorily set as the lower of the no-new-revenue tax rate for the current tax year or the tax rate adopted by the city for the preceding tax year. As described below, the Property Tax Code provides that if a city adopts a tax rate that exceeds its voter-approval tax rate or, in certain cases, its “de minimis rate”, an election must be held to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. A city may not adopt a tax rate that exceeds the lower of the voter-approval tax rate or the no-new-revenue tax rate until each appraisal district in which such city participates has delivered notice to each taxpayer of the estimated total amount of property taxes owed and the city has held a public hearing on the proposed tax increase. For cities with a population of 30,000 or more as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the voter-approval tax rate, that city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. For cities with a population less than 30,000 as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the greater of (i) the voter-approval tax rate or (ii) the de minimis rate, the city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. However, for any tax year during which a city has a population of less than 30,000 as of the most recent federal decennial census and does not qualify as a special taxing unit, if a city’s adopted tax rate is equal to or less than the de minimis rate but greater than both (a) the no-new-revenue tax rate, multiplied by 1.08, plus the debt service tax rate or (b) the city’s voter-approval tax rate, then a valid petition signed by at least three percent of the registered voters in the city would require that an election be held to determine whether or not to reduce the adopted tax rate to the voter- approval tax rate. Page 204 of 471 20 Any city located at least partly within an area declared a disaster area by the Governor of the State or the President of the United States during the current year may calculate its “voter-approval tax rate” using a 1.08 multiplier, instead of 1.035, until the earlier of (i) the second tax year in which such city’s total taxable appraised value exceeds the taxable appraised value on January 1 of the year the disaster occurred, or (ii) the third tax year after the tax year in which the disaster occurred. State law provides cities and counties in the State the option of assessing a maximum one‐half percent (1/2%) sales and use tax on retail sales of taxable items for the purpose of reducing its ad valorem taxes, if approved by a majority of the voters in a local option election. If the additional sales and use tax for ad valorem tax reduction is approved and levied, the no-new-revenue tax rate and voter-approval tax rate must be reduced by the amount of the estimated sales tax revenues to be generated in the current tax year. The calculations of the no-new-revenue tax rate and voter-approval tax rate do not limit or impact the City’s ability to set a debt service tax rate in each year sufficient to pay debt service on all of the City’s tax-supported debt obligations, including the Obligations. 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. DEBT TAX RATE LIMITATIONS . . . 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 supported 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 of 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 on ad valorem tax-supported debt, as calculated at the time of issuance. THE CITY’S RIGHTS IN THE EVENT OF TAX DELINQUENCIES . . . Taxes levied by the City are a personal obligation of the owner of the property. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of each taxing unit, including the City, having power to tax the property. The City’s tax lien is on a parity with tax liens of such other taxing units. A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the City is determined by applicable federal law. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest. At any time after taxes on property become delinquent, the City may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the City must join other taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, adverse market conditions, taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of a taxpayer’s debt. Federal bankruptcy law provides that an automatic stay of actions 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 a 5% exemption to the market value of the residence homestead. It also grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000. Ad valorem taxes are not levied by the City against 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. 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. Page 205 of 471 21 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 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. Page 206 of 471 22 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) Page 207 of 471 23 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2019/2020 Market Valuation Established by Brazos Central Appraisal District 10,421,438,232 $ (excluding exempt property) Less Exemptions/Reductions at 100% Market Value: Productivity Loss 109,281,559 $ Over 65 Homestead Exemptions 100,307,942 Cap Loss 19,300,903 Pollution Control 289,050 Member Armed Service Surviving Spouse 655,750 Solar 91,200 Freeport 12,923,797 Disabled Veteran 42,115,293 Homestead 152,210,126 Abatements 4,831,255 442,006,875 2019/2020 Taxable Assessed Valuation 9,979,431,357 $ Debt Payable from Ad Valorem Taxes (as of 4/15/2020)(2) Certificates of Obligation, Series 2009 1,285,000 $ General Obligation Improvement Bonds, Series 2009 175,000 General Obligation Refunding Bonds, Series 2010 4,410,000 Certificates of Obligation, Series 2012 11,190,000 General Obligation Improvement and Refunding Bonds, Series 2012 8,325,000 Certificates of Obligation, Series 2013 7,485,000 General Improvement and Refunding Bonds, Series 2013 11,575,000 Certificates of Obligation, Series 2014 24,510,000 General Improvement and Refunding Bonds, Series 2014 21,315,000 Certificates of Obligation, Series 2016 20,425,000 General Improvement and Refunding Bonds, Series 2016 33,455,000 General Improvement and Refunding Bonds, Series 2017 28,120,000 Certificates of Obligation, Series 2017 50,065,000 Certificates of Obligation, Series 2018 32,755,000 Certificates of Obligation, Series 2019 71,990,000 The Bonds(3)18,940,000 The Certificates (4)49,995,000 396,015,000 Less: Self Supporting Debt (5)189,550,000 $ Less: Interest and Sinking Fund as of 2/1/2020 22,897,120 Net Debt Payable from Ad Valorem Taxes(4)183,567,880 $ Ratio of Net Debt Payable from Ad Valorem Taxes to Taxable Assessed Valuation(4)1.84% Per Capita Taxable Assessed Valuation - $81,167 Per Capita Net Funded Debt - $1,493 (4) 2020 Estimated Population - 122,949 (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year.  (2) Excludes the Refunded Obligations, preliminary, subject to change (3) Preliminary, subject to change.  (4) 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 $1,000. See “THE OBLIGATIONS- Security and Source of Payment.” There is no guarantee that payments from these enterprise funds will be made. If payments are not made from the enterprise funds, the City will be required to levy ad valorem taxes in amounts sufficient to make such payments. (5) In the past, the City has sold certificates of obligation to finance projects for the City’s water and sewer system, and electric system and has internally allocated portions of this debt as payable from the respective enterprise funds. The self-supporting amounts listed above are projections of debt that is expected to be retired by the City based on actual historical payments from these funds to pay for debt service the outstanding certificates of obligation. There is no guarantee that payments from these funds will continue in the future. Includes a portion of the Certificates. See “DEBT INFORMATION – TABLE 10 – Self Supporting Debt.” (6) Net of Interest and Sinking Fund as of February 1, 2020. Page 208 of 471 24 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY 2020 2019 2018 % of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single-Family 5,654,665,682$ 54.26% 5,420,353,263$ 54.67% 4,891,101,082$ 53.32% Real, Residential, Multi-Family 2,165,512,093 20.78% 2,014,388,746 20.32% 1,951,938,574 21.28% Real, Vacant Lots/Tracts 170,205,829 1.63% 181,379,036 1.83% 166,018,722 1.81% Real, Acreage (Land Only) 111,699,300 1.07% 107,486,185 1.08% 117,980,979 1.29% Real, Farm and Ranch Improvements 73,131,172 0.70% 92,572,477 0.93% 95,828,034 1.04% Real, Commercial/Industrial 1,722,395,856 16.53% 1,612,617,746 16.27% 1,497,083,484 16.32% Real, Oil, Gas & Other Mineral Reserves 7,641,206 0.07% 12,619,033 0.13% 4,375,082 0.05% Real and Tangible Personal, Utilities 41,354,350 0.40% 40,945,210 0.41% 40,806,430 0.44% Tangible Personal, Business 415,420,441 3.99% 389,192,346 3.93% 360,514,767 3.93% Tangible Personal, Other 2,384,330 0.02% 2,441,400 0.02% 2,449,980 0.03% Real Property Inventory 37,101,583 0.36% 23,400,278 0.24% 31,155,861 0.34% Special Inventory 19,926,390 0.19% 16,814,030 0.17% 13,855,490 0.15% Total Appraised Value Before Exemptions 10,421,438,232$ 100.00% 9,914,209,750$ 100.00% 9,173,108,485$ 100.00% Less: Total Exemptions/Reductions 442,006,875 427,135,373 271,017,930 Taxable Assessed Value 9,979,431,357$ 9,487,074,377$ 8,902,090,555$ 2017 % of % of Category Amount Total Amount Total Real, Residential, Single-Family 4,470,806,990$ 56.58% 3,942,774,761$ 53.35% Real, Residential, Multi-Family 1,275,467,653 16.14% 1,326,289,539 17.95% Real, Vacant Lots/Tracts 158,722,669 2.01% 142,089,823 1.92% Real, Acreage (Land Only) 87,626,228 1.11% 92,882,946 1.26% Real, Farm and Ranch Improvements 113,059,943 1.43% 108,202,479 1.46% Real, Commercial/Industrial 1,340,756,747 16.97% 1,330,864,915 18.01% Real, Oil, Gas & Other Mineral Reserves 5,036,746 0.06% 10,793,941 0.15% Real and Tangible Personal, Utilities 40,325,800 0.51% 30,944,850 0.42% Tangible Personal, Business 371,077,880 4.70% 369,625,180 5.00% Tangible Personal, Other 1,988,130 0.03% 2,024,340 0.03% Real Property Inventory 23,079,643 0.29% 17,672,671 0.24% Special Inventory 13,282,100 0.17% 15,787,080 0.21% Total Appraised Value Before Exemptions 7,901,230,529$ 100.00% 7,389,952,525 $ 100.00% Less: Total Exemptions/Reductions 277,266,358 227,214,245 Taxable Assessed Value 7,623,964,171$ 7,162,738,280 $ Taxable Appraised Value, Fiscal Year Ending September 30, Taxable Appraised Value, Fiscal Year Ending September 30, 2016 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. (Remainder of page intentionally left blank) Page 209 of 471 25 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY 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 Per Capita 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 75,543 175,400,000 1.97% 1,488 2019 121,150 9,487,074,377 78,308 197,690,000 2.08% 1,632 2020 122,949 9,979,431,357 81,167 206,465,000 (4)2.07%(4)1,679 (4) (1) Source: The City. (2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year. Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (3) Payable from ad valorem taxes. Does not include self-supporting debt. as shown on Table 8 and Table 10 (4) Projected, includes the Obligations, excludes the Refunded Obligations. Preliminary, subject to change. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY Fiscal Year General Interest and % Current % Total Ended 9/30 Tax Rate Fund Sinking Fund Tax Levy Collections Collections 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 43,300,209 98.90% 98.90% 2019 0.5058 0.2855 0.2203 46,985,167 99.22% 99.47% 2020 0.5346 0.3132 0.2214 51,722,744 88.50%(1)88.24%(1) (1) Collections as of March 15, 2019. 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, 2020. TABLE 5 - TEN LARGEST TAXPAYERS 2019/2020 % of Total Taxable Taxable Nature Assessed Assessed Name of Taxpayer of Property Valuation Valuation CPP College Station I LLC Real Estate 69,800,000$ 0.70% The Standard at College Station LLC Apartment Buildings 65,100,000 0.65% Sterling-A&M High Rise LLC Apartment Buildings 63,614,688 0.64% FujiFilm Diosynth Biotechnologies Texas LLC Technology 60,671,010 0.61% Woodridge College Station LLC Mall 55,470,994 0.56% Woodridge College Station Phase II LLC Mall 55,373,651 0.55% POM-College Station LLC Mall 54,570,040 0.55% SW Meadows Point LP Apartment Buildings 53,740,000 0.54% Culpepper Family LP Real Estate 53,642,459 0.54% Weinberg Israel Real Estate 52,829,451 0.53% 584,812,293$ 5.86% 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 OBLIGATIONS - Tax Rate Limitation”). Page 210 of 471 26 TABLE 6 - TAX ADEQUACY Net Maximum Tax Suppported Principal and Interest Requirements (2021)…………………………… 20,888,981 $ (1) $0.21144 Tax Rate at 99% Collection Produces ………………………………………………………20,889,505 $ Net Average Tax Supported Principal and Interest Requirements (2020-2040)………………………… 13,522,907 $ (1) $0.13688 Tax Rate at 99% Collection Produces ………………………………………………………13,523,247 $ (1) Includes the Obligations and excludes the Refunded Obligations and self-supporting debt. 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. City's Total Net Estimated Overlapping 2019/2020 Taxable 2019 Tax Debt as % Tax Debt as Assessed Value Tax Rate of 4/15/2020 Applicable of 4/15/2020 City of College Station 9,979,431,357 $ (1)0.5346 183,567,880 $ (2)100.00% 183,567,880 $ Brazos County 20,161,147,751 0.4980 715,050,000 49.98% 357,381,990 Bryan ISD 8,208,177,904 1.2700 191,485,000 2.55% 4,882,868 College Station ISD 9,913,411,361 1.2390 321,720,000 89.14% 286,781,208 Total Direct and Overlapping Funded Tax Debt 832,613,946 $ Ratio of Direct and Overlapping Funded Tax Debt to Taxable Assessed Valuation 8.343% Per Capita Overlapping Funded Tax Debt 6,772 $ Source: Municipal Advisory Council of Texas. (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal. This amount is subject to change during ensuing year. (2) Projected, includes the Obligations and excludes the Refunded Obligations and self-supporting debt. Preliminary, subject to change. (Remainder of page intentionally left blank) Page 211 of 471 27 DEBT INFORMATION TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS* Total NetYearLess: Tax Supported % ofEndSelf-Supporting Debt Service Principal9/30 Principal Interest Total Principal Interest Total Principal Interest Total Debt Service(4)Requirements Retired2020 26,275,000$ 14,896,796$ 41,171,796$ -$ 24,472$ 24,472$ -$ -$ -$ 20,703,952$ 20,492,316$ 2021 24,810,000 13,008,482 37,818,482 1,620,000 265,425 1,885,425 2,270,000 1,046,041 3,316,041 22,130,967 20,888,981 2022 23,370,000 11,928,482 35,298,482 1,665,000 245,136 1,910,136 2,390,000 930,735 3,320,735 20,031,142 20,498,212 2023 23,500,000 10,803,182 34,303,182 1,710,000 223,786 1,933,786 2,420,000 900,310 3,320,310 19,052,840 20,504,438 2024 23,930,000 9,637,095 33,567,095 1,770,000 201,249 1,971,249 2,450,000 868,774 3,318,774 18,722,859 20,134,258 32.72%2025 23,090,000 8,489,295 31,579,295 1,810,000 177,438 1,987,438 2,475,000 836,020 3,311,020 18,181,149 18,696,603 2026 22,920,000 7,369,632 30,289,632 1,855,000 152,142 2,007,142 2,515,000 801,583 3,316,583 17,562,072 18,051,286 2027 19,985,000 6,404,020 26,389,020 1,910,000 125,026 2,035,026 2,545,000 765,147 3,310,147 15,561,435 16,172,758 2028 18,710,000 5,631,570 24,341,570 1,960,000 95,896 2,055,896 2,230,000 729,270 2,959,270 14,266,485 15,090,251 2029 17,010,000 4,946,846 21,956,846 2,015,000 64,281 2,079,281 2,270,000 693,485 2,963,485 13,178,221 13,821,391 61.92%2030 15,650,000 4,319,658 19,969,658 2,075,000 29,186 2,104,186 2,300,000 654,286 2,954,286 11,471,380 13,556,750 2031 16,270,000 3,681,270 19,951,270 550,000 5,308 555,308 2,350,000 611,024 2,961,024 11,250,541 12,217,060 2032 16,930,000 3,018,248 19,948,248 - - - 2,400,000 563,506 2,963,506 10,659,883 12,251,870 2033 16,165,000 2,390,680 18,555,680 - - - 2,445,000 511,649 2,956,649 9,513,632 11,998,696 2034 15,405,000 1,815,239 17,220,239 - - - 2,500,000 455,257 2,955,257 8,756,046 11,419,449 84.43%2035 12,795,000 1,339,615 14,134,615 - - - 2,560,000 394,010 2,954,010 6,928,888 10,159,736 2036 13,205,000 939,190 14,144,190 - - - 2,630,000 328,868 2,958,868 6,938,753 10,164,305 2037 11,615,000 551,348 12,166,348 - - - 2,700,000 260,904 2,960,904 6,512,133 8,615,118 2038 6,985,000 254,609 7,239,609 - - - 2,775,000 189,995 2,964,995 5,632,989 4,571,615 2039 4,735,000 71,025 4,806,025 - - - 2,850,000 116,019 2,966,019 4,271,642 3,500,402 99.31%2040 - - - - - - 2,920,000 39,128 2,959,128 1,783,584 1,175,544 100.00%353,355,000$ 111,496,282$ 464,851,282$ 18,940,000$ 1,609,342$ 20,549,342$ 49,995,000$ 11,696,008$ 61,691,008$ 263,110,592$ 283,981,040$ The Certificates(3)Outstanding Debt Service(1)The Bonds(2) (1) Excludes the Refunded Obligations. Preliminary, subject to change. (2) Average life of the Bonds – 5.467 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (3) Average life of the Certificates – 10.409 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (4) 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. Page 212 of 471 28 TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION Total Net Tax Supported Debt Service Requirements, Fiscal Year Ending September 30, 2020(1)20,492,316$ Interest and Sinking Fund, September 30, 2019 5,583,524$ Budgeted Interest and Sinking Fund Tax Levy 21,346,328 Budgeted Investment Earnings 150,000 Budgeted Transfers 281,896 27,361,748 Estimated Balance, September 30, 2020 6,869,432$ (1) Excludes the Refunded Obligations and self-supporting debt. Includes the Obligations. Preliminary, subject to change. TABLE 10 – SELF-SUPPORTING DEBT(1) Year Total End Electric Wastewater Water Convention Parking Self-Supporting 9/30 Fund Fund Fund Center Landfill Garage Debt Service 2020 6,676,974$ 6,537,818$ 6,903,809$ 7,100$ 353,850$ 224,400$ 20,703,952$ 2021 6,657,059 7,757,897 7,355,061 6,900 354,050 - 22,130,967 2022 6,556,776 6,858,513 6,285,878 6,675 323,300 - 20,031,142 2023 6,330,371 6,516,077 5,878,417 6,425 321,550 - 19,052,840 2024 5,979,209 6,502,168 5,906,257 6,175 329,050 - 18,722,859 2025 5,667,188 6,243,634 5,933,728 5,925 330,675 - 18,181,149 2026 5,412,585 6,237,844 5,574,417 5,675 331,550 - 17,562,072 2027 4,208,547 6,026,433 4,989,355 5,425 331,675 - 15,561,435 2028 4,051,149 5,658,497 4,227,213 5,225 324,400 - 14,266,485 2029 3,590,288 5,503,517 3,749,466 5,075 329,875 - 13,178,221 2030 2,729,864 5,507,717 3,233,799 - - - 11,471,380 2031 2,536,439 5,480,779 3,233,323 - - - 11,250,541 2032 2,178,939 5,253,133 3,227,811 - - - 10,659,883 2033 1,631,830 4,849,336 3,032,467 - - - 9,513,632 2034 1,033,030 4,692,807 3,030,209 - - - 8,756,046 2035 430,653 3,914,330 2,583,906 - - - 6,928,888 2036 432,185 3,917,217 2,589,351 - - - 6,938,753 2037 432,893 3,915,841 2,163,399 - - - 6,512,133 2038 432,756 3,585,313 1,614,920 - - - 5,632,989 2039 - 2,903,815 1,367,827 - - - 4,271,642 2040 - 1,266,750 516,834 - - - 1,783,584 72,976,738 $ 112,754,239 $ 88,905,525 $ 72,988 $ 3,682,938 $ 446,875 $ 278,839,302 $ (1) 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. Includes a portion of the Obligations. Preliminary, subject to change. TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS 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. Date of Amount Issued Authorization Purpose Authorized To Date Unissued 11/4/2003 Municipal Complex Improvements 7,610,000$ 3,955,000$ 3,655,000$ 11/4/2008 Park Improvements 12,790,000 12,145,000 645,000 77,570,000$ 73,270,000$ 4,300,000$ Page 213 of 471 29 OTHER OBLIGATIONS Currently, the City has no outstanding capital leases or loans. PENSION FUND Plan Description The City accounts for pension cost under GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The City of College Station participates as one of over 880 plans in the multi-employer, nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and the city-financed monetary credits, with interest, were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven actuarially equivalent payment options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits and interest. Plan provisions for the City were as follows: Employees covered by benefit terms at the December 31, 2017 valuation and measurement date are as follows: Inactive employees or beneficiaries currently receiving benefits 481 Inactive employees entitled to but not yet receiving benefits 562 Active employees 908 Total 1,951 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the city. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City of College Station were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City of College Station were 13% and 13% in calendar years 2019 and 2018, respectively. The City’s contributions to TMRS for fiscal year 2019 were $7,750,052 and were greater than the required contributions of $7,483,465. Net Pension Liability The City’s Net Pension Liability (NPL) was measured as of December 31, 2018, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Employee deposit rate 7.00% Matching ratio (City to Employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years at any age; 5 years at age 60 and above Updated service credit 75% repeating transfers Annuity increase (to retirees) 50% of CPI repeating Page 214 of 471 30 Actuarial Assumptions The Total Pension Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions: Salary increases were based on service-related tables. Mortality rates for active members, retirees, and beneficiaries were based on the gender- distinct RP2000 Combined Mortality Table with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. Actuarial assumptions used in the December 31, 2018 valuation were based on the results of actuarial experience studies of TMRS over the four year period from December 31, 210 to December 31, 2014. Assumptions are reviewed annually. The long-term expected rate of return on pension plan investments is 6.75%. The pension plan’s policy with regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long- term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long Term Expected Target Real Rate Asset Class Allocation of Return Doemstic Equity 17.50% 4.30% International Equity 17.50% 6.10% Core Fixed Income 10.00% 1.00% Non-Core Fixed Income 20.00% 3.39% Real Return 10.00% 3.78% Real Estate 10.00% 4.44% Absolute Return 10.00% 3.56% Private Equity 5.00% 7.75% Total 100.00% (Remainder of page intentionally left blank) Inflation 2.5% per year Overall paytoll growth 3.00% Investment rate of return 6.75%, net of pension plan investment expense including inflation Page 215 of 471 31 Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee contributions will remain at the current 7.0% and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) Balance at 12/31/2017 284,444,058$ 257,348,143$ 27,095,915$ Changes for the year: Service Cost 8,830,945 - 8,830,945 Interest (on the Total Pension Liability) 19,084,918 - 19,084,918 Change of benefit terms - - - Differences between expected and actual experience (501,706) - (501,706) Changes of assumptions - - - Contributions - employer - 7,621,669 (7,621,669) Contributions - employee - 3,998,020 (3,998,020) Net investment income (loss) - (7,708,361) 7,708,361 Benefit payments, including refunds of - employee contributions; (12,240,008) (12,240,008) - Administrative expenses - (148,986) 148,986 Other - (7,785) 7,785 Net changes 15,174,149 (8,485,451) 23,659,600 Ending Balance at 12/31/2018 299,618,207$ 248,862,692$ 50,755,515$ Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City, as well as what the City’s net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage- point higher than the current rate: 1% Decrease 1% Increase in Discount Discount in Discount Rate (5.75%) Rate (6.75%) Rate (7.75%) City's net pension liability 95,361,560$ 50,755,515$ 14,497,791$ Pension Plan Fiduciary Net Position Detailed information about the pension plan’s Fiduciary Net Position is available in a separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. Pension Expense For the year ended September 30, 2019, the City recognized pension expense of $12,833,597. (Remainder of page intentionally left blank) Page 216 of 471 32 Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension At September 30, 2019, the City reported deferred outflows and inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 1,122,830$ 442,212$ Changes in assumptions 724,466 - Difference between projected and actual earnings 13,314,507 - Contributions subsequent to the measurement date 5,652,899 - Total ######### 442,212$ Deferred outflows of resources, of $5,652,899 related to pensions resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense in the following years indicated below: Net deferred Fiscal outflows Year Ended (inflows) of Sept. 30: resources 2020 5,799,734$ 2021 2,057,032 2022 1,942,418 2023 4,920,407 2024 - Thereafter - 14,719,591$ OTHER POST EMPLOYMENT BENEFITS Plan Description Plan administration: As required by state laws, in addition to the pension benefits described above, the City makes available certain postretirement benefits to employees who meet TMRS retirement qualifications, retire from City employment, and enroll in the plan before the effective date of their retirement. The City’s OPEB Plan is a single employer defined benefit plan, defined by City policy. The OPEB Plan does not issue a separate report that includes financial statements and required supplementary information for the OPEB Plan. Plan membership. At September 30, 2019 membership consisted of the following: Medical Life and/or Insurance Dental Benefits Benefits Retirees and Retiree Spouses 84 197 Active Employees 900 900 984 1,097 Benefits provided: The City’s defined benefit Other Post-Employment Benefits (OPEB) Plan offers medical, dental, vision, drug, and life insurance benefits to retired employees and their eligible dependents. The OPEB Plan is a single employer defined benefit OPEB plan administered by the City. The benefit levels offered to retired employees and eligible dependents are the same as those afforded to active employees as the City’s group health insurance plan covers both active and retired members. All medical, dental, vision and drug care benefits are provided through the City’s self-insured health plan. As long as monthly premium payments are made, the healthcare plan provides coverage until age 65 for retired employees and eligible dependents enrolled in the City’s OPEB Plan. The life insurance offered though the OPEB Plan provides a $10,000, fully insured death benefit coverage upon retirement, which ceases upon attainment of age 65. The Life insurance benefit for eligible retirees is paid entirely by the City. Page 217 of 471 33 Contributions: Benefit provisions, as well as retiree premium contributions, are established by City management. The City determines the employer and participant contribution rates annually, based on recommendations of City staff and the City’s benefit consultant. For the year ended September 30, 2019, the City’s average contribution rate was 3.1 percent of covered-employee payroll. Investments Investment policy: The goal of the Plan’s investment program is to generate adequate long-term returns that, when combined with contributions, will result in sufficient assets to pay the present and future obligations of the Plan. The Plan has a Balanced Risk Tolerance with a Strategic Asset Allocation of the following: Concentrations: Assets of the OPEB plan are held in Trust by PARS which is fully discussed in Note 24 in the City’s financial statements. Rate of return: For the year ended December 31, 2018, the annual money-weighted rate of return on investments, net of investment expense, was -4.51 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Receivables The OPEB plan has no receivables from long-term contracts with the City for contributions at September 30, 2019. Allocated Insurance Contracts The OPEB plan has no allocated insurance contracts excluded from OPEB plan assets at September 30, 2019. Reserves The OPEB plan has no reserves recorded at September 30, 2019. Net OPEB Liability The components of the net OPEB liability of the City at September 30, 2019 based on the December 31, 2018 measurement and actuarial valuation date, were as follows: Total OPEB liability - ending 7,290,606 $ Plan fiduciary net position - ending (2,430,218) Net OPEB liability - ending 4,860,388 Plan fiduciary net position as a percentage of total OPEB liability 33.33% Changes in the Net OPEB Liability For the year ended September 30, 2019, the City recognized reduction in the OPEB liability of $1,433,588. Effective January 1, 2018, the City has made the following changes to the benefits offered under its Other Post Employment Benefit Plan. To be eligible for premium pricing for medical, dental, vision, and drug benefits at the time of retirement, employees must:  Meet TMRS retirement qualifications,  Be 55 years of age or older,  Have five (5) years of employment at the City of College Station,  Be enrolled in the plan before the effective date of their retirement. Target Allocation Asset Class Allocation Range Cash 5.0% 0-20% Fixed Income 35.0% 30%-50% Equity 60.0% 50%-70% Total 100.0% Page 218 of 471 34 In addition, certain actuarial changes were made when enacting GASB 75 that affected the Net OPEB Liability. Those changes included:  The Entry Age Normal Actuarial Cost Method must be used to attribute the actuarial present value of benefits to service periods in determining the OPEB Liability. This differed from the Projected Unit Credit Cost Method previously used by the City.  Discount Rate changes were allowed under GASB 75. Those changes included that for the unfunded portion of the plan, the discount rate is based on yields of 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. For the funded portion, however, the City could continue to use an assumption similar to the current discount rate.  Instead of recording expense equal to the Annual Required Contribution (ARC), GASB No. 75 required expensing the change in Net OPEB Liability from one period to the next. Some sources of this change are expensed immediately, while others are amortized over a period of approximately ten to twenty years depending on plan demographics. Components of the change in the Net OPEB Liability is as follows: Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balances as of Decmeber 31, 2017 7,815,261 $ 1,521,285$ 6,293,976 $ Changes for the year: Service cost 102,176 - 102,176 Interest 526,551 - 526,551 Changes of benefit terms - - - Differences between expected and - actual experience 95,216 - 95,216 Changes of assumptions of other inputs (458,047) - (458,047) Contributions-employer - 1,864,123 (1,864,123) Net investment income - (164,639) 164,639 Administrative expenses - - - Benefit payments, including refunds of - employee contributions (790,551) (790,551) - Net changes (524,655) 908,933 (1,433,588) Balances as of December 31, 2018 7,290,606 $ 2,430,218 $ 4,860,388 $ Actuarial assumptions. The total OPEB liability for the year ended September 30, 2018 as measured as of December 31, 2017 was determined by an actuarial valuation as of that date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.0% Salary increases 4% to 11% including inflation Discount rate 7.00% Healthcare cost trend rates 8.00% in FY20 decreasing 0.50% per year to an unltimate rate of 4.75% for FY27 and later years Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period December 31, 2010 to December 31, 2014. (Remainder of page intentionally left blank) Page 219 of 471 35 The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation are summarized in the following table: Expected Real Target Rate of Weighted Asset Class Allocation Return Average Cash 5.00% 0.75% 0.04% Fixed Income 35.00% 3.56% 1.25% Equity 60.00% 5.75% 3.45% Total 100.00% N/A 4.74% Discount rate. The discount rate used to measure the total OPEB liability was 7.0 percent. The discount rate used to determine the total OPEB Liability as of the beginning of the measurement year prior to the establishment of the OPEB trust was 3.78%. The weighted average of the Expected Real Rate of Return is added to the Expected Long-Term Inflation assumption and reduced by expected investment expenses (4.74% + 3.00% - 0.75% = 6.99%). This result is then rounded to the nearest 25 basis points to obtain the Expected Long-Term Rate of Return of 7.00%. The projected cash flows into the plan are equal to projected benefit payments out of the plan plus prefunding contributions that have been approved by the City Council. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. The assumed rate of general inflation has been updated since the valuation used for the September 30, 2018 liability to reflect the actuary’s best expectation of future plan experience. The long-term expected rate of return for the plan is 7.0 percent. The plan operates on a pay as you go basis and accumulates assets in trust in addition to the pay as you go amount. Based on the discount rate assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.0 percent) or 1-percentage- point higher (8.0 percent) than the current discount rate: 1% Current 1% Decrease Discount Rate Increase (6.00%) (7.00%) (8.00%) Net OPEB liability 5,421,797 $ 4,860,388 $ 4,357,471 $ Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7.0 percent decreasing to 3.75 percent) or 1-percentage-point higher (9.0 percent decreasing to 5.75 percent) than the current healthcare cost trend rates: Current Healthcare 1% Decrease Cost Trend Rates 1% Increase (7.00% decreasing (8.00% decreasing (9.00% decreasing to 3.75%) to 4.75%) to 5.75%) Net OPEB liability 4,073,135 $ 4,860,388 $ 5,850,899 $ Page 220 of 471 36 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended September 30, 2019, the City recognized OPEB expense/(income) of $16,194. At September 30, 2019, the City reported changes to deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources as follows: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 82,155$ 511,580$ Changes in actual assumptions - 2,474,833 Difference between projected and actual investment earnings 230,358 - Contributions subsequent to the measurement date 1,530,951 - Total 1,843,464$ 2,986,413$ Deferred outflows of resources, of $1,530,951 related to OPEB resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net OPEB liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Deferred Year Ended inflows of Sept. 30: resources 2020 (487,729)$ 2021 (487,729) 2022 (487,728) 2023 (487,332) 2024 (545,219) Thereafter (178,163) (2,673,900)$ OPEB Trust 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 passed resolution 2017-0564 appropriating the funds. Effective September 27, 2017, the City entered into a section 115 Irrevocable Exclusive Benefit agent multiple-employer trust to fund its Other Postemployment Benefits Obligation. Trust and Investment Management Services are provided by Public Agency Retirement Services (PARS) and is administered by the City. The investment manager that executes investment transactions is Highmark Capital Management, Inc. and the custodian of the trust’s funds is US Bank. With the establishment of the trust, the City can pre-fund (make annual payments in advance of the obligation) and allocate funds for the express purpose of funding future OPEB costs. The investment returns can be used to reduce the actuarial contributions and can result in lower long-term costs of the plan. As of September 30, 2019 the trust’s balance was $3,865,554. (Remainder of page intentionally left blank) Page 221 of 471 37 FINANCIAL INFORMATION TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY 2019 2018 2017 2016 2015 Revenues: Taxes 59,745,768$ 56,329,528$ 53,749,315$ 48,737,894$ 46,750,120$ Licenses & Permits 1,633,241 1,772,959 2,127,142 2,132,802 1,500,777 Intergovernmental 585,506 910,169 828,510 1,373,950 355,083 Charges for Services 3,753,297 3,940,837 3,863,744 3,809,206 3,572,684 Fines, Forfeits and Penalties 3,544,994 3,211,536 2,917,735 3,255,051 2,693,647 Investment Income 757,250 449,880 241,880 148,302 116,074 Rents & Royalties 184,543 219,538 284,351 187,328 136,228 Contributions 17,905 7,361 7,580 8,880 1,251 Other 957,825 642,547 775,114 434,537 3,252,310 Total Revenues 71,180,329$ 67,484,355$ 64,795,371$ 60,087,950$ 58,378,174$ Expenditures: General Government 8,481,683$ 6,165,016$ 6,228,021$ 5,524,471$ 4,853,358$ Fiscal Services 3,993,584 3,954,488 3,815,223 3,733,550 3,314,990 Police Department 24,299,928 22,631,648 21,372,560 20,170,450 18,533,889 Fire Department 19,888,536 19,624,919 17,001,580 16,916,819 14,881,983 Planning & Development Services 4,180,089 3,740,969 3,741,263 3,243,768 3,106,143 Parks and Recreation 9,350,892 9,129,079 8,621,075 9,279,126 8,194,670 Information Technology 4,591,351 4,488,885 4,600,556 4,491,009 4,112,987 Public Works 9,348,645 9,575,300 8,151,055 11,162,508 9,156,069 Library Services 1,186,313 1,118,522 1,097,876 1,098,326 1,138,568 Contributions 1,467,695 1,380,580 1,280,215 1,220,251 1,187,500 Other - - - 863 217,114 Capital Improvement Projects 289,042 319,406 988,435 667,574 129,896 Total Expenditures 87,077,758$ 82,128,812$ 76,897,859$ 77,508,715$ 68,827,167$ Other Financing Sources (Uses): Sale of General Fixed Assets -$ -$ 47,478$ -$ 8,974,205$ Operating Transfers In 19,427,607 19,245,943 18,347,351 16,507,346 15,094,866 Operating Transfers Out (1,960,180) (3,031,702) (2,911,020) (2,376,443) (11,441,262) Total Other Financing Sources (Uses) 17,467,427$ 16,214,241$ 15,483,809$ 14,130,903$ 12,627,809$ Net Change in Fund Balance 1,569,998$ 1,569,784$ 3,381,321$ (3,289,862)$ 2,178,816$ Fund Balance, Beginning of Year 26,790,569 22,514,523 19,133,202 22,423,064 20,244,248 Prior Period Adjustment - 2,706,262 - - - Fund Balance, End of Year 28,360,567$ 26,790,569$ 22,514,523$ 19,133,202$ 22,423,064$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 222 of 471 38 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 Obligations. 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%. Fiscal Year % of Equivalent of Ended Total Ad Valorem Ad Valorem Per 9/30 Collected (1)Tax Levy Tax Rate Capita (2) 2016 27,163,480$ 84.71% 0.38$ 255$ 2017 28,561,762 77.18% 0.36 260 2018 28,799,040 66.51% 0.33 244 2019 28,432,571 60.51% 0.31 235 2020 13,222,913 (3)25.56% 0.14 108 (1) Provided by the City. (2) Based on population estimates provided by the City. (3) Collections as of February 29, 2020. The sales tax breakdown for the City is as follows: 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 2019-2020 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 18% 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. Brazos County Sales & Use Tax 1/2 % Property Tax Reduction 1/2 % City Sales & Use Tax 1 % State Sales & Use Tax 6 1/4 % Total 8 1/4 % Page 223 of 471 39 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 ten wells, with a combined capacity of 38 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 eight 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 recently completed the construction of another Simsboro well, Well #9 that will meet the city’s demands for water for many years into the future. Well #10 remains in the planning stages, and would be constructed in future years, depending upon the rate of growth of water demands. College Station is also investigating other water supply strategies for the future. The City has completed a Water Reclamation project, which pumps effluent from the wastewater treatment plant 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 the watering season. 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. 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 are established by ordinance, passed and approved by the City Council. The following rates became effective October 1, 2019. 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 12.40 per mo. 3/4” 15.60 per mo. 1” 23.20 per mo. 1 1/2” 36.65 per mo. 2” 115.60 per mo. 3” 171.75 per mo. 4” 209.10 per mo. 6” 209.10 per mo. 8” Residential $2.75 for usage from 0-10,000 gallons $3.60 for usage from 11,000-15,000 gallons $4.40 for usage from 16,000-20,000 gallons $5.20 for usage from 21,000-25,000 gallons $6.05 for usage from 26,000 gallons and more Commercial $3.05 per 1,000 gallons Commercial Irrigation Usage Charge Commercial Irrigation Multifamily 3+ units MUD #1 Residential and Commercial $3.25 per 1,000 gallons Rates as above with an added 50% surcharge (Remainder of page intentionally left blank) Page 224 of 471 40 WASTEWATER SYSTEM The City’s wastewater is treated by three City-owned wastewater treatment plants, Carter Creek Treatment Plant, Lick Creek Treatment Plant, and Carter Lake Treatment Plant located within the City limits. The three plants have a combined treatment capacity of 11.5 mgd. An expansion of the Lick Creek Treatment plant is currently underway and will increase the city’s combined treatment capacity to 14.5 mgd. Sewer rates were established by ordinance, passed and approved by the City Council, and became effective on October 1, 2017 Residential (metered water) .......................................................... $21.29 including 4,000 gallons of metered water Usage Charge ................................................................................ $4.26 per 1,000 gallons of additional metered water $46.87 maximum per month Residential (without meter to each unit)....................................... $27.09 per unit per month Commercial and Industrial ........................................................... $18.27 per month Usage Charge ................................................................................ ....................................................................................................... $5.07 per 1,000 gallons of metered water usage There are 2,217 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 $46.87 per month. After six months of documented 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 AEP Energy Partners (AEPEP) and Garland Power and Light (GP&L). With AEPEP, the City has a fixed block, around the clock (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 2027. 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 the City's advisement, 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, eight substations, and 510 miles of distribution lines. ERCOT serves as 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 September 27, 2018. 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. 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) ......................... $0.11869 per kWh kWh (November through April) .................... $0.11323 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 Page 225 of 471 41 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) .............. $0.0682 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 TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED) 2019 2018 2017 2016 2015 Water 42,787 44,995 43,199 41,709 41,540 Wastewater 46,171 46,031 42,840 40,866 40,806 Electric 39,155 39,435 39,300 40,141 43,471 Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 226 of 471 42 TABLE 15 - TEN LARGEST UTILITY CUSTOMERS Total Percent FY 2019 KWH of KWH Utility Customer Type of Business Consumption Consumed CSISD Schools 29,533,036 3.46% City of College Station Municipality 22,318,501 2.61% Scott & White Clinc/Hospital/Pharmacy 20,959,472 2.45% HEB Grocery Retail 12,397,420 1.45% Texas A&M University 12,025,041 1.41% Biotechnologies Texas LLC Medical 10,052,080 1.18% Wal-Mart Retail 8,710,000 1.02% CBL & Associates Retail Mall 8,097,220 0.95% College Station Medical Center Medical 8,009,755 0.94% Dealer Computer Services Inc Retail 6,174,000 0.72% 138,276,525 16.18% TABLE 16 - CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, TABLE 17 – VALUE OF THE SYSTEM 2019 2018 2017 2016 2015 Utility Systems 617,910,408$ 579,717,873$ 553,774,054$ 527,435,531$ 507,758,485$ Construction in Progress 45,129,947 46,447,061 30,240,705 23,520,025 13,213,020 663,040,355$ 626,164,934$ 584,014,759$ 550,955,556$ 520,971,505$ Less: Accumulated Depreciation 263,680,722 246,243,993 229,374,628 213,325,487 198,339,390 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 227 of 471 43 TABLE 18 – CITY’S EQUITY IN THE SYSTEM Resources 2019 2018 2017 2016 2015 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Current Assets 116,643,763 102,382,543 70,636,223 63,085,837 52,023,881 Restricted Assets 36,743,001 11,296,693 30,149,917 21,849,829 19,977,038 Other Resources - - - - - Deferred Charges 6,485,373 3,506,226 5,197,104 5,425,502 2,381,933 Total 559,231,770$ 497,106,403$ 460,623,375$ 427,991,237$ 397,014,967$ Obligations Current Liabilities 14,711,183$ 12,467,547$ 10,681,761$ 9,511,319$ 13,688,841$ Current Liabilities Payable from Restricted Assets 18,432,091 15,872,611 15,887,617 15,462,903 10,735,825 General Obligation Debt 45,850,605 52,738,157 59,325,710 55,626,759 43,175,000 Certificates of Obligation 126,583,979 91,642,717 77,282,370 78,814,496 83,445,000 Revenue Bond Debt - - - - 13,395,000 Other Debt (1)10,773,356 8,016,706 8,899,938 9,418,425 8,593,734 Total Liabilities 216,351,214$ 180,737,738$ 172,077,396$ 168,833,902$ 173,033,400$ City's Equity in System 342,880,556$ 316,368,665$ 288,545,979$ 259,157,335$ 223,981,567$ Percentage of Equity in System 61.31% 63.64% 62.64% 60.55% 56.42% Fiscal Year Ended September 30, (1) Includes OPEB Net Pension Obligations. TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE Original Outstanding Principal Principal Amount as of 9/30/2019 2008 (2)15,925,000 $ 820,000 $ 2009 (2)19,490,000 1,950,000 2010 (2)2,850,000 1,865,000 2010 (1)(3)25,905,000 6,920,000 2011 (2)7,920,000 5,540,000 2012 (2)16,415,000 11,930,000 2012 (1)(3)9,570,000 3,975,000 2013 (2)10,230,000 7,920,000 2013 (1)(3)6,255,000 3,195,000 2014 (2)23,555,000 19,270,000 2014 (1)(3)14,455,000 7,255,000 2016 (2)7,250,000 6,370,000 2016 (1)(3)18,710,000 16,335,000 2017 (2)12,140,000 11,440,000 2017 (1)(3)9,205,000 9,205,000 2018 (2)18,655,000 18,655,000 2019 (2)38,670,000 38,670,000 257,200,000 $ 171,315,000 $ Series (1) Represents refunding bonds. (2) Certificates of Obligation supported in whole or in part by Utility System revenues. (3) General Obligation Bonds supported in part by the Utility System revenues. Page 228 of 471 44 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 Authorized investments are summarized as follows: (1) obligations, including letters of credit, of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks; (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 and interest of 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) interest-bearing banking deposits that are guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or the National Credit Union Share Insurance Fund or its successor; (8) interest-bearing banking deposits other than those described by clause (7) if (A) the funds invested in the banking deposits are invested through: (i) a broker with a main office or branch office in this State that the City selects from a list the City Council or a designated investment committee of the City adopts as required by Section 2256.025, Texas Government Code; or (ii) a depository institution with a main office or branch office in the State that the City selects; (B) the broker or depository institution selected as described by (A) above arranges for the deposit of the funds in the banking deposits in one or more federally insured depository institutions, regardless of where located, for the City’s account; (C) the full amount of the principal and accrued interest of the banking deposits is insured by the United States or an instrumentality of the United States; and (D) the City appoints as the City’s custodian of the banking deposits issued for the City’s account: (i) the depository institution selected as described by (A) above; (ii) an entity described by Section 2257.041(d), Texas Government Code; or (iii) a clearing broker dealer registered with the SEC and operating under SEC Rule 15c3-3; (9) (i) certificates of deposit or share certificates meeting the requirements of Chapter 2256, Texas Government Code (the “Public Funds Investment Act”), that are issued by an institution that has its main office or a branch office in the State and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or their respective successors, and are secured as to principal by obligations described in clauses (1) through (8) or in any other manner and provided for by law for City deposits, or (ii) certificates of deposits where (a) the funds are invested by the City through (A) a broker that has its main office or a branch office in the State and is selected from a list adopted by the City as required by law, or (B) a depository institution that has its main office or branch office in the State 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), Texas Government Code, or a clearing brokerdealer registered with the SEC and operating pursuant to SEC Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with respect to the certificates of deposit; (10) fully collateralized repurchase agreements as defined in the Public Funds Investment Act, that have a defined termination date, are secured by a combination of cash and obligations described in clauses (1) or (13) in this paragraph , require the securities being purchased by the City or cash held by the City to be 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; (11) 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 (8) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than “A” or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) below, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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; (12) certain bankers’ acceptances with stated maturity of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated not less than “A-1” or “P-1” or the equivalent by at least one nationally recognized credit rating agency; (13) commercial paper with a stated maturity of 365 days or less that is rated not less than “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 United States or state bank; (14) no-load money market mutual funds registered with and regulated by the SEC that provide the City with a prospectus and other information required by the Securities Exchange Act of 1934 or the Investment Company Act of 1940 and that comply with federal SEC Rule 2a-7 (17 C.F.R. Section 270.2a- 7), promulgated under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); and (15) no-load mutual funds registered with the SEC that have an average weighted maturity of less than two years, and have either (a) a duration of one year or more and invest exclusively in obligations described in under this heading, or (b) a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities, other than the prohibited obligations described below, in an amount at least equal to the amount of bond proceeds invested under such contract. Page 229 of 471 45 A political subdivision such as the City may enter into 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 (8) above, other than the prohibited obligations described below, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) above, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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, if the City Council authorizes such investment in the particular pool by order, ordinance, or resolution and the investment pool complies with the requirements of Section 2256.016, Texas Government Code. The City may also contract with an investment management firm registered (x) under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), or (y) 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 ordinance, order or resolution. 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. 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. Page 230 of 471 46 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 29, 2020, 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 31,934,770 31,934,770 Money Market Mutual Fund 283,314,901 283,314,901 US Agencies and Securities 5,000,000 5,028,700 325,249,671$ 325,278,371$ TAX MATTERS OPINION . . . On the date of initial delivery of the Obligations, 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 Obligations for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Obligations 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 Obligations. See APPENDIX C - Form of Opinion of Bond Counsel. In rendering its opinion, 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 Obligations relating to certain matters, including arbitrage and the use of the proceeds of the Obligations and the property financed or refinanced therewith. Failure of the City to comply with these representations or covenants could cause the interest on the Obligations, 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 Obligations in order for interest on the Obligations 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 Obligations to be included in gross income retroactively to the date of issuance of the Obligations. 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 Obligations. 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 Obligations. A ruling was not sought from the Internal Revenue Service by the Issuer with respect to the Obligations or the property financed or refinanced with proceeds of the Obligations. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Obligations, 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 Obligation holders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Page 231 of 471 47 FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Obligations”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Obligation, and (ii) the initial offering price to the public of such Original Issue Discount Obligation would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the Obligations 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 Obligation 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 Obligation 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 Obligation prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Obligation 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 Obligation was held by such initial owner) is includable in gross income. Under Existing Law, the original issue discount on each Original Issue Discount Obligation 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 Obligation 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 Obligation. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Obligations 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 Obligations should consult their own tax advisors with respect to the determination 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 Obligations 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 Obligations. 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 Obligations. 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 OBLIGATIONS. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, 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 Obligations, 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 Obligations 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. Page 232 of 471 48 Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations 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 Obligations 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. 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 Obligations under federal or state law, and could affect the market price or marketability of the Obligations. 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 Obligations should consult their own tax advisors regarding the foregoing matters. CONTINUING DISCLOSURE OF INFORMATION In the Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of Obligations. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Obligations. 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 2020. 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 2020. 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 Tables 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 Obligations 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 Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of holders of the Obligations, if material; (8) Obligation calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Obligations, 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 Page 233 of 471 49 undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. 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.” Neither the Obligations nor the Ordinances provide for debt service reserves, liquidity enhancement, or credit enhancement. 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 the events listed in clause (15) and (16) above, the term “financial obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) a guarantee of either (A) or (B). The term “financial obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. 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. 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 Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. 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 . . . 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. (Remainder of page intentionally left blank) Page 234 of 471 50 OTHER INFORMATION RATINGS The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's and “AA+” by S&P, without regard to credit enhancement. Applications have been made to Moody’s, S& P and Fitch Ratings Services for contract ratings on the Obligations. 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 Obligations. 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 OBLIGATIONS FOR SALE The sale of the Obligations 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 Obligations have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Obligations been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Obligations under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations must not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. 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 Obligations 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 Obligations by municipalities or other political subdivisions or public agencies of the State of Texas, the PFIA requires that the Obligations 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 Obligations 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 Obligations 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 Obligations for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for such purposes. No review by the City has been made of the laws in other states to determine whether the Obligations are legal investments for various institutions in those states. LEGAL MATTERS The City will furnish to the Initial Purchaser a complete transcript of proceedings had incident to the authorization and issuance of the Obligations, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Obligation and to the effect that the Obligations are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Obligations or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Obligations will also be furnished. In its capacity as Bond Counsel, such firm has reviewed the information describing the Obligations in the Notice of Sales and Bidding Instructions, the Official Bid Forms and the Official Statement to verify that such information conforms to the provisions of the Ordinances. 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 legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations. The legal opinion will accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book-Entry-Only System. The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 the 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 from the transaction. Page 235 of 471 51 The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. 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 Obligations, 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 Obligations, 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 pertaining to the City contained in its Official Statement and any addenda, supplement or amendment thereto, for its Obligations on the date of such Official Statement, on the date of purchase of said Obligations, 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, 2019, 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 Obligations, in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Obligations; or which would affect the provisions made for their payment or security, or in any manner question the validity of the Obligations. 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. Page 236 of 471 52 INITIAL PURCHASER After requesting competitive bids for the Bonds, the City accepted the bid of ______________ (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the page 2 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Bonds. 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 page 4 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Certificates. MISCELLANEOUS The Ordinances authorizing the issuance of the Obligations will also approve the form and content of this Official Statement, and any addenda or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Initial Purchaser. Pricing Officer City of College Station, Texas Page 237 of 471 53 Schedule I SCHEDULE OF REFUNDED OBLIGATIONS* Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 140,000$ 8/13/2020 100.00 2022 3.000% 145,000 8/13/2020 100.00 2023 3.000% 155,000 8/13/2020 100.00 2024 3.000% 160,000 8/13/2020 100.00 2025 3.125% 170,000 8/13/2020 100.00 2026 3.250% 175,000 8/13/2020 100.00 2027 3.375% 185,000 8/13/2020 100.00 2028 3.500% 190,000 8/13/2020 100.00 2029 3.500% 200,000 8/13/2020 100.00 2030 3.500% 210,000 8/13/2020 100.00 1,730,000$ Certificates of Obligation, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 950,000$ 8/13/2020 100.00 2022 3.000% 995,000 8/13/2020 100.00 2023 3.000% 1,040,000 8/13/2020 100.00 2024 3.000% 1,090,000 8/13/2020 100.00 2025 3.125% 1,135,000 8/13/2020 100.00 2026 3.250% 1,190,000 8/13/2020 100.00 2027 3.250% 1,245,000 8/13/2020 100.00 2028 3.375% 1,300,000 8/13/2020 100.00 2029 3.500% 1,360,000 8/13/2020 100.00 2030 3.500% 1,425,000 8/13/2020 100.00 11,730,000$ General Obligation Improvement Bonds, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 2.200% 370,000$ 8/13/2020 100.00 2022 2.400% 390,000 8/13/2020 100.00 2023 2.600% 405,000 8/13/2020 100.00 2024 2.800% 430,000 8/13/2020 100.00 2025 3.000% 445,000 8/13/2020 100.00 2026 3.100% 465,000 8/13/2020 100.00 2027 3.200% 490,000 8/13/2020 100.00 2028 3.300% 510,000 8/13/2020 100.00 2029 3.400% 535,000 8/13/2020 100.00 2030 3.500% 560,000 8/13/2020 100.00 2031 3.600% 585,000 8/13/2020 100.00 5,185,000$ Certificates of Obligation, Series 2011 * Preliminary, subject to change. Page 238 of 471 APPENDIX A GENERAL INFORMATION REGARDING THE CITY Page 239 of 471 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 1,034.75 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 578 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 835 miles of wastewater and water lines. The City owns the electrical distribution system with approximately 490 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. The fire department consists of 158 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 18 educational campuses for pre-kindergarten through high school. The School District has a student enrollment in excess of 13,500 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 additional facilities. The bonds would fund a 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 approximately 69,000 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. In 2019, The Med was purchased by the CHI St. Joseph system and is now called CHI St. Joseph Health College Station Hospital. 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. Other area health care providers include: St. Joseph Regional Health Care Center, Baylor Scott and White Clinic, and The Physicians Centre. Page 240 of 471 A - 2 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 parks system encompasses 1,364 acres of parks and facilities spread throughout the city. This includes 4 dog parks, 1 skate park, 63 playgrounds, 4 recreation centers, 12 ponds, 2 pools, a splash pad, 34.5 miles of walking trails, 2 municipal cemeteries and the Ringer Library. 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 69,000 students, with more than 508,000 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 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. 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) Page 241 of 471 A - 3 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 sixth in the nation in average attendance for the 2019 season with average attendance of 97,459 for home games, according to figures released by the NCAA. The City’s premiere sport complexes, as well as the ease to get around, makes College Station attractive to a number of high profile organizations. Over the past several years, Texas Amateur Athletic Federation has chosen College Station to host state tournaments and events. In addition, the City facilitates four major softball tournaments, multiple soccer tournaments, two 7 on 7 football tournaments and baseball tournaments throughout the year. The City plans to add 4 synthetic infield & natural grass outfield baseball/softball fields at the new Texas Independence Ballpark. This is anticipated to allow additional tournaments to be held in this area. (Remainder of page intentionally left blank) Page 242 of 471 A - 4 MAJOR AREA EMPLOYERS Number of Firm Name Product Employees Texas A&M University and System Education/Research 27,000+ Bryan ISD Education 2000+ College Station ISD Education 2000+ Texas A&M Health Science Center Education 2000+ Reynolds & Reynolds Computer Hardware and Software 1800+ Blinn College - Bryan Campus Education 1000+ Sanderson Farms, Inc. Poultry Processing 1000+ CHI St. Joseph's Regional Hospital Health Service 1000+ Wal-Mart/Sam's Retail 1000+ HEB Grocery Retail 1000+ City of College Station Government 1000+ Brazos County Government 500-999 City of Bryan Government 500-999 College Station Medical Center Health Service 500-999 Ply Gem Windows Manufacturing 500-999 Baylor Scott & White Health Service 500-999 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. LABOR STATISTICS College Station Labor Total Force Employment Unemployment Rate 2016 56,997 55,062 1,935 3.4% 2017 58,042 56,261 1,781 3.1% 2018 60,167 58,454 1,713 2.8% 2019 61,507 59,812 1,695 2.8% 2020 (1)62,799 61,096 1,703 2.7% Year Brazos County Labor Total Force Employment Unemployment Rate 2016 111,251 107,409 3,842 3.5% 2017 113,040 109,558 3,482 3.1% 2018 116,493 113,189 3,304 2.8% 2019 119,010 115,819 3,191 2.7% 2020 (1)114,949 111,494 3,455 3.0% Year Source: Texas Workforce Commission. (1) Average as of February 2020. Page 243 of 471 A - 5 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 2019, the estimated population of College Station was 122,738. The following table sets forth the number and value of construction permits issued by the City over the past several years. Residential Construction Commercial Construction Other Construction* Total Calendar Number Number Number Number Year of Permits Value of Permits Value of Permits Value of Permits Value 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 1,190 257,998,990 208 170,405,189 - - 1,398 428,404,179 2018 1,953 177,627,344 461 103,143,722 - - 2,414 280,771,066 2019 553 100,803,824 102 80,992,499 1,911 98,242,242 2,566 280,038,565 Source: The City. * Starting in 2019 all new pools, remodels/renovations, new roofs, demolitions, slab only and other improvements are reported under “Other Construction”. These permits were previously reported under Residential and Commercial. 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] Page 244 of 471 APPENDIX B EXCERPTS FROM THE CITY OF COLLEGE STATION, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2019 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, 2019, 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. Page 245 of 471 APPENDIX C FORM OF OPINION OF BOND COUNSEL Page 246 of 471 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, interest on the Bonds 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) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on inside cover Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Bond Ordinance”) adopted by the governing body of the City on April 9, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Bond Ordinance, the City Council of the City delegated authority to certain authorized officials of the City to finalize the pricing of the Bonds. The definitive Bonds 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 Bonds may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds 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 Bonds. See “THE OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Bonds are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Chapter 1207, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City as provided in the Bond Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations) and their redemption dates; and (ii) paying costs of issuance of the Bonds. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 2 SEPARATE ISSUES . . . The Bonds are being offered by the City concurrently with the issuance of the $23,670,000* City of College Station, Texas, Certificates of Obligation, Series 2020 (the “Certificates”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY . . . The Bonds 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 – Form Of Opinion 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. DELIVERY. . . It is expected that the Bonds will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 16, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 247 of 471 2 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $18,940,000* General Obligation Refunding Bonds, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 1,620,000$ 2022 1,665,000 2023 1,710,000 2024 1,770,000 2025 1,810,000 2026 1,855,000 2027 1,910,000 2028 1,960,000 2029 2,015,000 2030 2,075,000 2031 550,000 (1) CUSIP numbers have been assigned to the Bonds 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 Bonds. 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.  OPTIONAL REDEMPTION. . . The Bonds are not subject to redemption prior to maturity. MANDATORY REDEMPTION . . . The Bonds may also be subject to mandatory sinking fund redemption in the event the Initial Purchaser elects to aggregate two or more maturities as a term bond. * Preliminary, subject to change. Page 248 of 471 3 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., 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) $23,670,000* CERTIFICATES OF OBLIGATION, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on page 4 Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $23,670,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing February 15, 2021 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Certificates are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Certificate Ordinance”) adopted by the governing body of the City on June 11, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Certificate Ordinance, the City Council of the City delegates authority to certain authorized officials of the City to finalize the pricing of the Certificates. 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 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, 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 OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Certificates are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from a combination of (i) the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City, and (ii) subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric utility system, as provided in the Certificate Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Certificates will be used for (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 4 SEPARATE ISSUES . . . The Certificates are being offered by the City concurrently with the issuance of the $18,940,000* City of College Station, Texas, General Obligation Refunding Bonds, Series 2020 (the “Bonds”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY. . . 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 – Form Of Opinion 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 DELIVERY. . . It is expected that the Certificates will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 16, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 249 of 471 4 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $23,670,000* Certificates of Obligation, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 1,150,000$ 2022 1,200,000 2023 1,215,000 2024 1,230,000 2025 1,245,000 2026 1,265,000 2027 1,285,000 2028 1,020,000 2029 1,040,000 2030 1,055,000 2031 1,080,000 2032 1,095,000 2033 1,120,000 2034 1,150,000 2035 1,170,000 2036 1,200,000 2037 1,235,000 2038 1,270,000 2039 1,305,000 2040 1,340,000 (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. OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – Optional Redemption”). MANDATORY SINKING FUND 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 shown above (see “THE OBLIGATIONS - Mandatory Sinking Fund Redemption”). * Preliminary, subject to change. Page 250 of 471 5 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 Obligations 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 Obligations. Neither the City, the Financial Advisor nor the Initial Purchasers 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 Purchasers 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 Obligations are exempt from registration with the Securities and Exchange Commission and consequently have not been registered therewith. The registration, qualification, or exemption of the Obligations 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 PURCHASERS 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. 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. Page 251 of 471 6 TABLE OF CONTENTS MATURITY SCHEDULE ............................................... 2  MATURITY SCHEDULE ............................................... 4  OFFICIAL STATEMENT SUMMARY ......................... 7  SELECTED FINANCIAL INFORMATION ............................. 9  GENERAL FUND CONSOLIDATED STATEMENT SUMMARY .............................................................. 9  UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS .......................................................... 9  CITY OFFICIALS, STAFF AND CONSULTANTS ... 10  ELECTED OFFICIALS .................................................... 10  SELECTED ADMINISTRATIVE STAFF .............................. 10  CONSULTANTS AND ADVISORS ..................................... 11  INTRODUCTION .......................................................... 12  THE CERTIFICATES ................................................... 13  TAX INFORMATION ................................................... 17  TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT ............................................... 23  TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY ........................................................... 24  TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY ............................................................... 25  TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY .............................................................. 25  TABLE 5 - TEN LARGEST TAXPAYERS ......................... 25  TABLE 6 - TAX ADEQUACY ........................................ 26  TABLE 7 - ESTIMATED OVERLAPPING DEBT ................ 26  DEBT INFORMATION ................................................. 27  TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS ..................................................... 27  TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION ......................................................... 28  TABLE 10 – SELF-SUPPORTING DEBT .......................... 28  TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS . 28  ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT ................................................................... 28  OTHER OBLIGATIONS ................................................... 29  PENSION FUND ............................................................ 29  OTHER POST EMPLOYMENT BENEFITS .......................... 32  FINANCIAL INFORMATION ..................................... 37  TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY ........................................ 37  TABLE 13 - MUNICIPAL SALES TAX HISTORY ............. 38  FINANCIAL POLICIES .................................................... 38  THE COMBINED UTILITY SYSTEM ....................... 39  WATERWORKS SYSTEM ............................................... 39  WASTEWATER SYSTEM ............................................... 40  ELECTRIC SUPPLY SOURCE .......................................... 40  WIND WATT RATES .................................................... 41  TABLE 14 - HISTORICAL UTILITY USERS ...................... 41  TABLE 15 - TEN LARGEST UTILITY CUSTOMERS .......... 42  TABLE 16 - CONDENSED STATEMENT OF OPERATIONS . 42  TABLE 17 – VALUE OF THE SYSTEM ............................. 42  TABLE 18 – CITY’S EQUITY IN THE SYSTEM ................. 43  TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE43  INVESTMENTS ............................................................. 44  LEGAL INVESTMENTS .................................................. 44  INVESTMENT POLICIES ................................................ 45  ADDITIONAL PROVISIONS ............................................ 45  CITY’S INVESTMENT POLICY ....................................... 46  TABLE 20 - CURRENT INVESTMENTS ............................ 46  TAX MATTERS ............................................................. 46  CONTINUING DISCLOSURE OF INFORMATION 48  OTHER INFORMATION ............................................. 50  RATINGS ..................................................................... 50  LITIGATION ................................................................. 50  REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE ............................................................. 50  LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ................................................... 50  AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION ...................................................... 51  FINANCIAL ADVISOR ................................................... 51  CERTIFICATION OF THE OFFICIAL STATEMENT AND NO- LITIGATION CERTIFICATE ...................................... 51  FORWARD-LOOKING STATEMENTS .............................. 51  INITIAL PURCHASER .................................................... 52  MISCELLANEOUS ......................................................... 52  SCHEDULE OF REFUNDED OBLIGATIONS ...................................................... Schedule I 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. Page 252 of 471 7 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 Obligations 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 BONDS .......................... The Bonds are issued as $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020. The Bonds are issued as serial bonds maturing on February 15 in each of the years 2021-2031, inclusive (see “THE OBLIGATIONS - General Description”). If two or more serial maturities of the Bonds are grouped into a single maturity (the “Term Bonds”) by the Initial Purchaser, such Term Bonds will be subject to mandatory sinking fund redemption in accordance with applicable provisions of the Bond Ordinance. THE CERTIFICATES ............. The Certificates are issued as $23,670,000* City of College Station, Texas Certificates of Obligation, Series 2020. The Certificates are issued as serial certificates maturing on February 15 in each of the years 2021-2040, inclusive (see “THE OBLIGATIONS - 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 Certificate Ordinance. PAYMENT OF INTEREST ...... Interest on the Bonds will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basiss of a 360-day consisting of twelve 30-day months (see “THE OBLIGATIONS – General Description”). 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, 2021 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 OBLIGATIONS - General Description”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS .......... The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1207, Texas Government Code, as amended, and an ordinance passed by the City Council of the City. In the Bond Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Bonds (see “THE OBLIGATIONS - Authority for Issuance). The Certificates are issued pursuant to the general laws of the State, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended; Chapter 1371, Texas Government Code as amended, and an ordinance passed by the City Council of the City. In the Certificate Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Certificates (see “THE OBLIGATIONS - Authority for Issuance). The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. SECURITY FOR THE OBLIGATIONS ...................... The Bonds constitute direct obligations of the City, secured by and payable from 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 (see “THE OBLIGATIONS - Security and Source of Payment”). 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 water, wastewater and electric utility system (see “THE OBLIGATIONS - 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. * Preliminary, subject to change. Page 253 of 471 8 REDEMPTION ....................... The Bonds are not subject to redemption prior to maturity. Additionally, the Bonds may be subject to mandatory sinking fund redemption in the event the Initial Purchaser elects to designate one or more maturities as Term Bonds. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – 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; any aggregation of maturities into Term Certificates will be specified in the Official Statement. (See “THE OBLIGATIONS – Mandatory Sinking Fund Redemption”). TAX EXEMPTION .................. In the opinion of Bond Counsel, the interest on the Obligations 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 PROCEEDS ............... Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations and their redemption dates); (ii) paying the costs of issuance of the Bonds. Proceeds from the sale of the Certificates will be used for (i) (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. (see “THE OBLIGATIONS – Sources and Use of Proceeds”). RATINGS ............................. The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's Investors Service, Inc. (“Moody's”) and “AA+” 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”). Applications have been made to Moody’s, S&P and Fitch Ratings Services for contract ratings on the Obligations. BOOK-ENTRY-ONLY SYSTEM .............................. The definitive Obligations 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 Obligations may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates (see “THE OBLIGATIONS - Book-Entry-Only System”). PAYMENT RECORD .............. Other than a late payment on the City’s Certificates of Obligation, Series 2002 that occurred in 2003, the City has never defaulted in payment of its general obligation tax debt. (Remainder of page intentionally left blank) Page 254 of 471 9 SELECTED FINANCIAL INFORMATION Ratio Tax Fiscal Per Capita Per Capita Debt to Year Estimated Taxable Taxable Net Net Taxable Ended City Assessed Assessed Ad Valorem Ad Valorem Assessed 9/30 Population (1) Valuation(2)Valuation Tax Debt (3)Tax Debt Valuation 2016 109,859 7,162,738,280$ 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 75,543 175,400,000 1,488 1.97% 98.90% 2019 121,150 9,487,074,377 78,308 197,690,000 1,632 2.08% 99.47% 2020 122,949 9,979,431,357 (4)81,167 187,425,000 (5)1,524 (5)1.88%(5)88.24%(6) Collection Total Percent _______________ (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 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (5) Projected, includes the Obligations, excludes the Refunded Obligations. (6) Collections as of March 15, 2020. 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, 2020. GENERAL FUND CONSOLIDATED STATEMENT SUMMARY 2019 2018 2017 2016 2015 Beginning Balance 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ 20,244,248 $ Total Revenue 71,180,329 67,484,355 64,795,371 60,087,950 58,378,174 Total Expenditures 87,077,758 82,128,812 76,897,859 77,508,715 68,827,167 Other Financing Sources 17,467,427 16,214,241 15,483,809 14,130,903 12,627,809 Prior Period Adjustment - 2,706,262 - - - Ending Balance(1)28,360,567 $ 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ For Fiscal Year Ended September 30, UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, Page 255 of 471 10 CITY OFFICIALS, STAFF AND CONSULTANTS ELECTED OFFICIALS Term Name Position Expiration Occupation Karl P. Mooney Mayor 3 Years (1)November 2022 Texas A&M University Administrator Bob Brick Council Member 2 Years November 2020 Research Scientist John Crompton Council Member 6 Months November 2022 CEO Linda Harvell Council Member 3 Years November 2020 Business Owner Vacant (2)Council Member November 2021 John Nichols Council Member 2 Years (3)November 2020 Retired Professor Dennis Maloney Council Member 1 Year November 2021 Business Owner Length of Service ________________ (1) Elected November 2016 - Former City of College Station Council Member 2011-2016. (2) The vacancy was created when Councilwoman Elianor Vessali announced she would resign her seat in order to campaign for the Republican nomination for the U.S. Congressional District 17 seat. The unexpired term for Place-4 runs through November 2021, at which point the seat will be on the ballot for a full three-year term. (3) Prior Council Member for 4 years prior to his current term. SELECTED ADMINISTRATIVE STAFF Name Position Bryan Woods City Manager 1.5 Jeff Capps Deputy City Manager 27.0 (1) Jeff Kersten Assistant City Manager, CFO 29.0 (2) Carla Robinson City Attorney 18.5 Tanya D. Smith City Secretary 12.0 (3) Ty Elliott Internal Auditor 12.5 Mary Ellen Leonard Director of Finance 4.0 Gary Mechler Director of Water Services 1.0 (4) Timothy Crabb Director of Electric Utility 13.5 (5) Sindhu Menon Chief Information Officer 2.0 (6) David Schmitz Director of Parks and Recreation 12.0 (7) Jennifer Prochazka Director of Development Services 18.0 (8) Donald Harmon Director of Public Works and CIP 20.5 (9) Alison Pond Director of Human Resources 11.5 Jay Socol Public Communications Director 10.5 Length of Service to the City (in Years) ________________ (1) 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) Appointed City Secretary in July 2017. Previously served as Deputy City Secretary since 2008. (4) New Hire Director of Water Services August 2018. (5) Director of Electric Utility since December 2012; previously served as Assistant Director of Electric Utility. (6) New hire as Director of Information Technology in March 2018. (7) Director of Parks and Recreation since May 2011; previously served as Assistant Director of Parks and Recreation. (8) Named Director of Development Services September 2018; previously Manager of Economic Development. (9) Director of Public Works and CIP since January 2014; previously Assistant Director of Public Works and CIP. Page 256 of 471 11 CONSULTANTS AND ADVISORS Auditors ........................................................................................................................................................ BKD CPAs & Advisors Houston, Texas Bond Counsel ............................................................................................................................. McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor ............................................................................................................................................. Hilltop Securities Inc. Houston, Texas 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 W. Boyd London, Jr Marti Shew Hilltop Securities Inc. 1201 Elm Street, Suite 3500 Dallas, Texas 75270 (214) 953-4000 or Joe Morrow Hilltop Securities Inc. 700 Milam Street, Suite 500 Houston, Texas 77002 (713) 651-9850 Phone (Remainder of page intentionally left blank) Page 257 of 471 12 PRELIMINARY OFFICIAL STATEMENT RELATING TO CITY OF COLLEGE STATION, TEXAS (a Home-Rule City located in Brazos County, Texas) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 $23,670,000* CERTIFICATES OF OBLIGATION, SERIES 2020 INTRODUCTION This Official Statement, which includes the cover pages, Schedule I and Appendices hereto, provides certain information regarding the issuance of the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) and the $23,670,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates,” and together with the Bonds, herein collectively referred to as the “Obligations”). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the respective ordinances (the “Bond Ordinance” with respect to the Bonds and the “Certificate Ordinance” with respect to the Certificates), each to be adopted by the City Council of the City on June 11, 2020. The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. In the Ordinances, the City Council delegates to an authorized officer of the City (the “Pricing Officer” to finalize the pricing of the Obligations. There follows in this Official Statement descriptions of the Obligations 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 2018. 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 122,949. The City covers approximately 51.6 square miles. PLAN OF FINANCING PURPOSE . . . The Bonds are being issued for the purpose of (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings, and (ii) paying the costs of issuance of the Bonds. See Schedule I for a detailed listing of the Refunded Obligations and their redemption dates. The Certificates are being issued for the purpose of (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates.. REFUNDED OBLIGATIONS . . . The Refunded Obligations are being called for redemption on the redemption dates set forth in Schedule I. The principal and interest due on the Refunded Obligations are to be paid on the redemption date of such Refunded Obligations, from funds to be deposited pursuant to a certain Escrow Agreement (the “Escrow Agreement”) between the City and Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Escrow Agent”). The Bond Ordinance provides that from the proceeds of the sale of the Bonds received from the Initial Purchaser and other funds of the City, if any, the City will deposit with the Escrow Agent an amount which will be sufficient to accomplish the discharge and final payment of the Refunded Obligations on the redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the “Escrow Fund”) and used to pay principal and accrued interest on the Refunded Obligations on the redemption dates. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations. The funds on deposit in the Escrow Fund will not be available to pay debt service on the Bonds. * Preliminary, subject to change. Page 258 of 471 13 By the deposit of the proceeds of the Bonds and other funds of the City, if any are required, with the Escrow Agent pursuant to the Escrow Agreement, the City will have defeased of the Refunded Obligations in accordance with applicable State law and the ordinances authorizing the Refunded Obligations. As a result of such defeasance, the Refunded Obligations will be outstanding only for the purpose of receiving payments from the Escrow Fund held for such purpose by the Escrow Agent, and the Refunded Obligations will not be deemed as being outstanding obligations of the City payable from ad valorem taxes, nor for the purpose of applying any limitation on the issuance of debt, and the City will have no further responsibility with respect to amounts available in the Escrow Fund for the payment of the Refunded Obligations. SOURCES AND USES OF CERTIFICATE PROCEEDS . . . Proceeds from the sale of the Obligations, are expected to be expended as follows: Sources of Funds The Bonds The Certificates Par Amount -$ -$ Original Issue Premium Total Uses of Funds -$ -$ Use of Funds Deposit to Project Fund -$ -$ Deposit to the Escrow Fund Underwriters' Discount Costs of Issuance Total Uses of Funds -$ -$ THE CERTIFICATES GENERAL DESCRIPTION . . . The Obligations 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 pages 2 and 4 hereof. Interest on the Obligations will be calculated on the basis of a 360- day year consisting of twelve 30-day months and will be payable February 15 and August 15 of each year commencing August 15, 2020 with respect to the Bonds and February 15, 2021, with respect to the Certificates, until maturity or prior redemption. The definitive Obligations will be issued only in fully registered form in any integral multiple of $5,000 in principal amount 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 Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations 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 Obligations (see “Book- Entry-Only System”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS. . . The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas (the "State"), including particularly Chapter 1207, Texas Government Code, as amended, and the Bond Ordinance. The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended and the Certificate Ordinance. SECURITY AND SOURCE OF PAYMENT Tax Pledge . . . The Obligations constitute direct obligations of the City payable from an annual direct and continuing ad valorem tax levied against all taxable property within the City, within the limits prescribed by law Pledge of Surplus Water, Wastewater and Electric Utility System Net Revenues for Certificates . . . In addition to the pledge of ad valorem taxes described above, the Certificates are additionally secured by and payable from a subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric 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. Page 259 of 471 14 OPTIONAL REDEMPTION . . . The Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, 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 page 4 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. 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 Obligations is to be transferred and how the principal of and interest on the Obligations are to be paid to and credited by the DTC while the Obligations 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 Obligations, 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 Obligations), 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 Obligations. The Obligations 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 Obligations, 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 Page 260 of 471 15 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. Purchases of Obligations 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 Obligations (“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 Obligations 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 Obligations, except in the event that use of the book-entry system described herein is discontinued. To facilitate subsequent transfers, all Obligations 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 Obligations 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 Obligations; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Obligations 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 Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations 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 Obligations 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 Obligations 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 Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Obligations 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 Obligations 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, Obligations 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, Obligations 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 Obligations 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 Obligations, 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 Ordinances 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. Page 261 of 471 16 PAYING AGENT/REGISTRAR . . . The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In the Ordinances, 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 Obligations 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 Obligations. Upon any change in the Paying Agent/Registrar for the Obligations, the City will promptly cause a written notice thereof to be sent to each registered owner of the Obligations 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 Obligations 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. Obligations may be assigned by the execution of an assignment form on the respective Obligations 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 Obligations 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 Obligations issued in an exchange or transfer of Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. Neither the City nor the Paying Agent/Registrar will be required to transfer or exchange any Obligation 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 Obligation. RECORD DATE FOR INTEREST PAYMENT . . . The record date (“Record Date”) for determining the person to whom the interest is payable on the Obligations 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 Obligation 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 Ordinances provide for the defeasance of the Obligations when the payment of the principal of and premium, if any, on the Obligations, 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 Obligations. The Ordinances provide 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 Obligations. In the Ordinances, 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. REMEDIES OF HOLDERS OF OBLIGATIONS. . . The Ordinances establish specific events of default with respect to the Obligations. If the City defaults in the payment of the principal of or interest on the Obligations 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 Obligations including but not limited to, their prospect or ability to be repaid in accordance with the Ordinances, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, the Ordinances provide 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 Obligations or the Ordinances and the City's obligations are not uncertain or disputed. Chapter 1371, 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 bonds, but in connection with the issuance of the Obligations, the City has not waived sovereign immunity, and therefore, holders may not be able to bring such a suit against the City for breach of the of Ordinances covenants in the absence of City action. 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 Obligations in the event of default and, consequently, the remedy of mandamus Page 262 of 471 17 may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to represent the interest of the holders of the Obligations upon any failure of the City to perform in accordance with the terms of the Ordinances, 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 Obligations. 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 Obligations may not be able to bring such a suit against City for breach of the 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 Obligations. 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 Obligations 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 Obligations 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 The following is a summary of certain provisions of State law as it relates to ad valorem taxation and is not intended to be complete. Prospective investors are encouraged to review Title I of the Texas Tax Code, as amended (the “Property Tax Code”), for identification of property subject to ad valorem taxation, property exempt or which may be exempted from ad valorem taxation if claimed, the appraisal of property for ad valorem tax purposes, and the procedures and limitations applicable to the levy and collection of ad valorem taxes. VALUATION OF TAXABLE PROPERTY . . . The Property Tax Code provides for countywide appraisal and equalization of taxable property values and establishes in each county of the State an appraisal district and an appraisal review board (the “Appraisal Review Board”) responsible for appraising property for all taxing units within the county. The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District (the “Appraisal District”). Except as generally described below, the Appraisal District is required 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 market value of property, the Appraisal District is required to consider the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and use the method the chief appraiser of the Appraisal District considers most appropriate. The Property Tax Code requires appraisal districts to reappraise all property in its jurisdiction at least once every three (3) years. A taxing unit may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the taxing unit by petition filed with the Appraisal Review Board. State law requires the appraised value of an owner’s principal residence (“homestead” or “homesteads”) to be based solely on the property’s value as a homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further limits the appraised value of a homestead to the lesser of (1) the market value of the property or (2) 110% of the appraised value of the property for the preceding tax year plus the market value of all new improvements to the property. State law provides that eligible owners of both agricultural land and open-space land, 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 as both agricultural and open-space land. The appraisal values set by the Appraisal District are subject to review and change by the Appraisal Review Board. The appraisal rolls, as approved by the Appraisal Review Board, are used by taxing units, such as the City, in establishing their tax rolls and tax rates (see “Tax Information – City and Taxpayer Remedies”). STATE MANDATED HOMESTEAD EXEMPTIONS . . . State law grants, with respect to each city in the State, various exemptions for disabled veterans and their families, surviving spouses of members of the armed services killed in action, and surviving spouses of first responders killed or fatally wounded in the line of duty. LOCAL OPTION HOMESTEAD EXEMPTIONS . . . The governing body of a taxing unit, including a city, county, school district, or special district, at its option may grant: (1) an exemption of up to 20% of the appraised value of all homesteads (but not less than $5,000) and (2) an additional exemption of at least $3,000 of the appraised value of the homesteads of persons sixty-five (65) years of age or older and the disabled. Each taxing unit decides if it will offer the local option homestead exemptions and at what percentage or dollar amount, as applicable. The exemption described in (2), above, may be created, increased, decreased or repealed at an election called by the governing body of a taxing unit upon presentment of a petition for such creation, increase, decrease, or repeal of at least 20% of the number of qualified voters who voted in the preceding election of the taxing unit. Page 263 of 471 18 LOCAL OPTION FREEZE FOR THE ELDERLY AND DISABLED . . . The governing body of a county, municipality or junior college district may, at its option, provide for a freeze on the total amount of ad valorem taxes levied on the homesteads of persons 65 years of age or older or of disabled persons above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon voter initiative, an election may be held to determine by majority vote whether to establish such a freeze on ad valorem taxes. Once the freeze is established, the total amount of taxes imposed on such homesteads cannot be increased except for certain improvements, and such freeze cannot be repealed or rescinded. PERSONAL PROPERTY . . . Tangible personal property (furniture, machinery, supplies, inventories, etc.) used in the “production of income” is taxed based on the property’s market value. Taxable personal property includes income-producing equipment and inventory. Intangibles such as goodwill, accounts receivable, and proprietary processes are not taxable. Tangible personal property not held or used for production of income, such as household goods, automobiles or light trucks, and boats, is exempt from ad valorem taxation unless the governing body of a taxing unit elects to tax such property. FREEPORT AND GOODS-IN-TRANSIT EXEMPTIONS . . . Certain goods that are acquired in or imported into the State to be forwarded outside the State, and are detained in the State for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication (“Freeport Property”) are exempt from ad valorem taxation unless a taxing unit took official action to tax Freeport Property before April 1, 1990 and has not subsequently taken official action to exempt Freeport Property. Decisions to continue taxing Freeport Property may be reversed in the future; decisions to exempt Freeport Property are not subject to reversal. Certain goods that are acquired in or imported into the State to be forwarded to another location within or without the State, stored in a location that is not owned by the owner of the goods and are transported to another location within or without the State within 175 days (“Goods-in-Transit”), are generally exempt from ad valorem taxation; however, the Property Tax Code permits a taxing unit, on a local option basis, to tax Goods-in-Transit if the taxing unit takes official action after conducting a public hearing, before January 1 of the first tax year in which the taxing unit proposes to tax Goods-in-Transit. Goods-in-Transit and Freeport Property do not include oil, natural gas or petroleum products, and Goods-in-Transit does not include aircraft or special inventories such as manufactured housing inventory, or a dealer’s motor vehicle, boat, or heavy equipment inventory. A taxpayer may receive only one of the Goods-in-Transit or Freeport Property exemptions for items of personal property. OTHER EXEMPT PROPERTY . . . Other major categories of exempt property include property owned by the State or its political subdivisions if used for public purposes, property exempt by federal law, property used for pollution control, farm products owned by producers, property of nonprofit corporations used for scientific research or educational activities benefitting a college or university, designated historic sites, solar and wind-powered energy devices, and certain classes of intangible personal property. TAX INCREMENT REINVESTMENT ZONES . . . A city or county, by petition of the landowners or by action of its governing body, may create one or more tax increment reinvestment zones (“TIRZ”) within its boundaries. At the time of the creation of the TIRZ, a “base value” for the real property in the TIRZ is established and the difference between any increase in the assessed valuation of taxable real property in the TIRZ in excess of the base value is known as the “tax increment”. During the existence of the TIRZ, all or a portion of the taxes levied against the tax increment by a city or county, and all other overlapping taxing units that elected to participate, are restricted to paying only planned project and financing costs within the TIRZ and are not available for the payment of other obligations of such taxing units. TAX ABATEMENT AGREEMENTS . . . Taxing units may also enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The taxing unit, 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 Information – Tax Abatement Policy” for descriptions of the City’s tax abatement program. For a discussion of how the various exemptions described above are applied by the City, see “Tax Information – City Application of Property Tax Code” herein. CITY AND TAXPAYER REMEDIES . . . Under certain circumstances, taxpayers and taxing units, including the City, may appeal the determinations of the Appraisal District by timely initiating a protest with the Appraisal Review Board. Additionally, taxing units such as the City may bring suit against the Appraisal District to compel compliance with the Property Tax Code. Beginning in the 2020 tax year, owners of certain property with a taxable value in excess of the current year “minimum eligibility amount”, as determined by the State Comptroller, and situated in a county with a population of one million or more, may protest the determinations of an appraisal district directly to a three-member special panel of the appraisal review board, appointed by the chairman of the appraisal review board, consisting of highly qualified professionals in the field of property tax appraisal. The minimum eligibility amount is set at $50 million for the 2020 tax year, and is adjusted annually by the State Comptroller to reflect the inflation rate. The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the City and provides for taxpayer referenda that could result in the repeal of certain tax increases (see “Tax Information – Public Hearing and Maintenance and Operations Tax Rate Limitations”). The Property Tax Code also establishes a procedure for providing notice to property owners of reappraisals reflecting increased property value, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll. Page 264 of 471 19 LEVY AND COLLECTION OF TAXES . . . The City is responsible for the collection of its taxes, unless it elects to transfer such functions to another governmental entity. Taxes are due October 1, or when billed, whichever comes later, and become delinquent after January 31 of the following year. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty of up to twenty percent (20%) if imposed by the City. The delinquent tax also accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code also makes provision for the split payment of taxes, discounts for early payment and the postponement of the delinquency date of taxes for certain taxpayers. Furthermore, the City may provide, on a local option basis, for the split payment, partial payment, and discounts for early payment of taxes under certain circumstances. PUBLIC HEARING AND MAINTENANCE AND OPERATIONS TAX RATE LIMITATIONS . . . The following terms as used in this section have the meanings provided below: “adjusted” means lost values are not included in the calculation of the prior year’s taxes and new values are not included in the current year’s taxable values. “de minimis rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted), plus the rate that produces an additional $500,000 in tax revenue when applied to the current year’s taxable value, plus the debt service tax rate. “no-new-revenue tax rate” means the combined maintenance and operations tax rate and debt service tax rate that will produce the prior year’s total tax levy (adjusted) from the current year’s total taxable values (adjusted). “special taxing unit” means a city for which the maintenance and operations tax rate proposed for the current tax year is 2.5 cents or less per $100 of taxable value. “unused increment rate” means the cumulative difference between a city’s voter-approval tax rate and its actual tax rate for each of the tax years 2020 through 2022, which may be applied to a city’s tax rate in tax years 2021 through 2023 without impacting the voter-approval tax rate. “voter-approval tax rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted) multiplied by 1.035, plus the debt service tax rate, plus the “unused increment rate.” The City’s tax rate consists of two components: (1) a rate for funding of maintenance and operations expenditures in the current year (the “maintenance and operations tax rate”), and (2) a rate for funding debt service in the current year (the “debt service tax rate”). Under State law, the assessor for the City must submit an appraisal roll showing the total appraised, assessed, and taxable values of all property in the City to the City Council by August 1 or as soon as practicable thereafter. A city must annually calculate its “voter-approval tax rate” and “no-new-revenue tax rate” (as such terms are defined above) in accordance with forms prescribed by the State Comptroller and provide notice of such rates to each owner of taxable property within the city and the county tax assessor-collector for each county in which all or part of the city is located. A city must adopt a tax rate before the later of September 30 or the 60th day after receipt of the certified appraisal roll, except that a tax rate that exceeds the voter-approval tax rate must be adopted not later than the 71st day before the next occurring November uniform election date. If a city fails to timely adopt a tax rate, the tax rate is statutorily set as the lower of the no-new-revenue tax rate for the current tax year or the tax rate adopted by the city for the preceding tax year. As described below, the Property Tax Code provides that if a city adopts a tax rate that exceeds its voter-approval tax rate or, in certain cases, its “de minimis rate”, an election must be held to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. A city may not adopt a tax rate that exceeds the lower of the voter-approval tax rate or the no-new-revenue tax rate until each appraisal district in which such city participates has delivered notice to each taxpayer of the estimated total amount of property taxes owed and the city has held a public hearing on the proposed tax increase. For cities with a population of 30,000 or more as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the voter-approval tax rate, that city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. For cities with a population less than 30,000 as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the greater of (i) the voter-approval tax rate or (ii) the de minimis rate, the city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. However, for any tax year during which a city has a population of less than 30,000 as of the most recent federal decennial census and does not qualify as a special taxing unit, if a city’s adopted tax rate is equal to or less than the de minimis rate but greater than both (a) the no-new-revenue tax rate, multiplied by 1.08, plus the debt service tax rate or (b) the city’s voter-approval tax rate, then a valid petition signed by at least three percent of the registered voters in the city would require that an election be held to determine whether or not to reduce the adopted tax rate to the voter- approval tax rate. Page 265 of 471 20 Any city located at least partly within an area declared a disaster area by the Governor of the State or the President of the United States during the current year may calculate its “voter-approval tax rate” using a 1.08 multiplier, instead of 1.035, until the earlier of (i) the second tax year in which such city’s total taxable appraised value exceeds the taxable appraised value on January 1 of the year the disaster occurred, or (ii) the third tax year after the tax year in which the disaster occurred. State law provides cities and counties in the State the option of assessing a maximum one‐half percent (1/2%) sales and use tax on retail sales of taxable items for the purpose of reducing its ad valorem taxes, if approved by a majority of the voters in a local option election. If the additional sales and use tax for ad valorem tax reduction is approved and levied, the no-new-revenue tax rate and voter-approval tax rate must be reduced by the amount of the estimated sales tax revenues to be generated in the current tax year. The calculations of the no-new-revenue tax rate and voter-approval tax rate do not limit or impact the City’s ability to set a debt service tax rate in each year sufficient to pay debt service on all of the City’s tax-supported debt obligations, including the Obligations. 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. DEBT TAX RATE LIMITATIONS . . . 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 supported 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 of 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 on ad valorem tax-supported debt, as calculated at the time of issuance. THE CITY’S RIGHTS IN THE EVENT OF TAX DELINQUENCIES . . . Taxes levied by the City are a personal obligation of the owner of the property. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of each taxing unit, including the City, having power to tax the property. The City’s tax lien is on a parity with tax liens of such other taxing units. A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the City is determined by applicable federal law. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest. At any time after taxes on property become delinquent, the City may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the City must join other taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, adverse market conditions, taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of a taxpayer’s debt. Federal bankruptcy law provides that an automatic stay of actions 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 a 5% exemption to the market value of the residence homestead. It also grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000. Ad valorem taxes are not levied by the City against 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. 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. Page 266 of 471 21 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 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. Page 267 of 471 22 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) Page 268 of 471 23 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2019/2020 Market Valuation Established by Brazos Central Appraisal District 10,421,438,232 $ (excluding exempt property) Less Exemptions/Reductions at 100% Market Value: Productivity Loss 109,281,559 $ Over 65 Homestead Exemptions 100,307,942 Cap Loss 19,300,903 Pollution Control 289,050 Member Armed Service Surviving Spouse 655,750 Solar 91,200 Freeport 12,923,797 Disabled Veteran 42,115,293 Homestead 152,210,126 Abatements 4,831,255 442,006,875 2019/2020 Taxable Assessed Valuation 9,979,431,357 $ Debt Payable from Ad Valorem Taxes (as of 4/15/2020)(2) Certificates of Obligation, Series 2009 1,285,000 $ General Obligation Improvement Bonds, Series 2009 175,000 General Obligation Refunding Bonds, Series 2010 4,410,000 Certificates of Obligation, Series 2012 11,190,000 General Obligation Improvement and Refunding Bonds, Series 2012 8,325,000 Certificates of Obligation, Series 2013 7,485,000 General Improvement and Refunding Bonds, Series 2013 11,575,000 Certificates of Obligation, Series 2014 24,510,000 General Improvement and Refunding Bonds, Series 2014 21,315,000 Certificates of Obligation, Series 2016 20,425,000 General Improvement and Refunding Bonds, Series 2016 33,455,000 General Improvement and Refunding Bonds, Series 2017 28,120,000 Certificates of Obligation, Series 2017 50,065,000 Certificates of Obligation, Series 2018 32,755,000 Certificates of Obligation, Series 2019 71,990,000 The Bonds(3)18,940,000 The Certificates (4)23,670,000 369,690,000 Less: Self Supporting Debt (5)182,265,000 $ Less: Interest and Sinking Fund as of 2/1/2020 22,897,120 Net Debt Payable from Ad Valorem Taxes(4)164,527,880 $ Ratio of Net Debt Payable from Ad Valorem Taxes to Taxable Assessed Valuation(4)1.65% Per Capita Taxable Assessed Valuation - $81,167 Per Capita Net Funded Debt - $1,338 (4) 2020 Estimated Population - 122,949 (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year.  (2) Excludes the Refunded Obligations, preliminary, subject to change (3) Preliminary, subject to change.  (4) 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 $1,000. See “THE OBLIGATIONS- Security and Source of Payment.” There is no guarantee that payments from these enterprise funds will be made. If payments are not made from the enterprise funds, the City will be required to levy ad valorem taxes in amounts sufficient to make such payments. (5) In the past, the City has sold certificates of obligation to finance projects for the City’s water and sewer system, and electric system and has internally allocated portions of this debt as payable from the respective enterprise funds. The self-supporting amounts listed above are projections of debt that is expected to be retired by the City based on actual historical payments from these funds to pay for debt service the outstanding certificates of obligation. There is no guarantee that payments from these funds will continue in the future. Includes a portion of the Certificates. See “DEBT INFORMATION – TABLE 10 – Self Supporting Debt.” (6) Net of Interest and Sinking Fund as of February 1, 2020. Page 269 of 471 24 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY 2020 2019 2018 % of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single-Family 5,654,665,682$ 54.26% 5,420,353,263$ 54.67% 4,891,101,082$ 53.32% Real, Residential, Multi-Family 2,165,512,093 20.78% 2,014,388,746 20.32% 1,951,938,574 21.28% Real, Vacant Lots/Tracts 170,205,829 1.63% 181,379,036 1.83% 166,018,722 1.81% Real, Acreage (Land Only) 111,699,300 1.07% 107,486,185 1.08% 117,980,979 1.29% Real, Farm and Ranch Improvements 73,131,172 0.70% 92,572,477 0.93% 95,828,034 1.04% Real, Commercial/Industrial 1,722,395,856 16.53% 1,612,617,746 16.27% 1,497,083,484 16.32% Real, Oil, Gas & Other Mineral Reserves 7,641,206 0.07% 12,619,033 0.13% 4,375,082 0.05% Real and Tangible Personal, Utilities 41,354,350 0.40% 40,945,210 0.41% 40,806,430 0.44% Tangible Personal, Business 415,420,441 3.99% 389,192,346 3.93% 360,514,767 3.93% Tangible Personal, Other 2,384,330 0.02% 2,441,400 0.02% 2,449,980 0.03% Real Property Inventory 37,101,583 0.36% 23,400,278 0.24% 31,155,861 0.34% Special Inventory 19,926,390 0.19% 16,814,030 0.17% 13,855,490 0.15% Total Appraised Value Before Exemptions 10,421,438,232$ 100.00% 9,914,209,750$ 100.00% 9,173,108,485$ 100.00% Less: Total Exemptions/Reductions 442,006,875 427,135,373 271,017,930 Taxable Assessed Value 9,979,431,357$ 9,487,074,377$ 8,902,090,555$ 2017 % of % of Category Amount Total Amount Total Real, Residential, Single-Family 4,470,806,990$ 56.58% 3,942,774,761$ 53.35% Real, Residential, Multi-Family 1,275,467,653 16.14% 1,326,289,539 17.95% Real, Vacant Lots/Tracts 158,722,669 2.01% 142,089,823 1.92% Real, Acreage (Land Only) 87,626,228 1.11% 92,882,946 1.26% Real, Farm and Ranch Improvements 113,059,943 1.43% 108,202,479 1.46% Real, Commercial/Industrial 1,340,756,747 16.97% 1,330,864,915 18.01% Real, Oil, Gas & Other Mineral Reserves 5,036,746 0.06% 10,793,941 0.15% Real and Tangible Personal, Utilities 40,325,800 0.51% 30,944,850 0.42% Tangible Personal, Business 371,077,880 4.70% 369,625,180 5.00% Tangible Personal, Other 1,988,130 0.03% 2,024,340 0.03% Real Property Inventory 23,079,643 0.29% 17,672,671 0.24% Special Inventory 13,282,100 0.17% 15,787,080 0.21% Total Appraised Value Before Exemptions 7,901,230,529$ 100.00% 7,389,952,525 $ 100.00% Less: Total Exemptions/Reductions 277,266,358 227,214,245 Taxable Assessed Value 7,623,964,171$ 7,162,738,280 $ Taxable Appraised Value, Fiscal Year Ending September 30, Taxable Appraised Value, Fiscal Year Ending September 30, 2016 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. (Remainder of page intentionally left blank) Page 270 of 471 25 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY 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 Per Capita 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 75,543 175,400,000 1.97% 1,488 2019 121,150 9,487,074,377 78,308 197,690,000 2.08% 1,632 2020 122,949 9,979,431,357 81,167 187,425,000 (4)1.88%(4)1,524 (4) (1) Source: The City. (2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year. Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (3) Payable from ad valorem taxes. Does not include self-supporting debt. as shown on Table 8 and Table 10 (4) Projected, includes the Obligations, excludes the Refunded Obligations. Preliminary, subject to change. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY Fiscal Year General Interest and % Current % Total Ended 9/30 Tax Rate Fund Sinking Fund Tax Levy Collections Collections 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 43,300,209 98.90% 98.90% 2019 0.5058 0.2855 0.2203 46,985,167 99.22% 99.47% 2020 0.5346 0.3132 0.2214 51,722,744 88.50%(1)88.24%(1) (1) Collections as of March 15, 2019. 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, 2020. TABLE 5 - TEN LARGEST TAXPAYERS 2019/2020 % of Total Taxable Taxable Nature Assessed Assessed Name of Taxpayer of Property Valuation Valuation CPP College Station I LLC Real Estate 69,800,000$ 0.70% The Standard at College Station LLC Apartment Buildings 65,100,000 0.65% Sterling-A&M High Rise LLC Apartment Buildings 63,614,688 0.64% FujiFilm Diosynth Biotechnologies Texas LLC Technology 60,671,010 0.61% Woodridge College Station LLC Mall 55,470,994 0.56% Woodridge College Station Phase II LLC Mall 55,373,651 0.55% POM-College Station LLC Mall 54,570,040 0.55% SW Meadows Point LP Apartment Buildings 53,740,000 0.54% Culpepper Family LP Real Estate 53,642,459 0.54% Weinberg Israel Real Estate 52,829,451 0.53% 584,812,293$ 5.86% 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 OBLIGATIONS - Tax Rate Limitation”). Page 271 of 471 26 TABLE 6 - TAX ADEQUACY Net Maximum Tax Suppported Principal and Interest Requirements (2020)…………………………… 20,492,316 $ (1) $0.20742 Tax Rate at 99% Collection Produces ………………………………………………………20,492,343 $ Net Average Tax Supported Principal and Interest Requirements (2020-2040)………………………… 12,400,411 $ (1) $0.12552 Tax Rate at 99% Collection Produces ………………………………………………………12,400,920 $ (1) Includes the Obligations and excludes the Refunded Obligations and self-supporting debt. 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. City's Total Net Estimated Overlapping 2019/2020 Taxable 2019 Tax Debt as % Tax Debt as Assessed Value Tax Rate of 4/15/2020 Applicable of 4/15/2020 City of College Station 9,979,431,357 $ (1)0.5346 164,527,880 $ (2)100.00% 164,527,880 $ Brazos County 20,161,147,751 0.4980 715,050,000 49.98% 357,381,990 Bryan ISD 8,208,177,904 1.2700 191,485,000 2.55% 4,882,868 College Station ISD 9,913,411,361 1.2390 321,720,000 89.14% 286,781,208 Total Direct and Overlapping Funded Tax Debt 813,573,946 $ Ratio of Direct and Overlapping Funded Tax Debt to Taxable Assessed Valuation 8.153% Per Capita Overlapping Funded Tax Debt 6,617 $ Source: Municipal Advisory Council of Texas. (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal. This amount is subject to change during ensuing year. (2) Projected, includes the Obligations and excludes the Refunded Obligations and self-supporting debt. Preliminary, subject to change. (Remainder of page intentionally left blank) Page 272 of 471 27 DEBT INFORMATION TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS* Total NetYearLess: Tax Supported % ofEndSelf-Supporting Debt Service Principal9/30 Principal Interest Total Principal Interest Total Principal Interest Total Debt Service(4)Requirements Retired2020 26,275,000$ 14,896,796$ 41,171,796$ -$ 24,472$ 24,472$ -$ -$ -$ 20,703,952$ 20,492,316$ 2021 24,810,000 13,008,482 37,818,482 1,620,000 265,425 1,885,425 1,150,000 489,560 1,639,560 21,680,962 19,662,505 2022 23,370,000 11,928,482 35,298,482 1,665,000 245,136 1,910,136 1,200,000 434,509 1,634,509 19,577,705 19,265,422 2023 23,500,000 10,803,182 34,303,182 1,710,000 223,786 1,933,786 1,215,000 419,233 1,634,233 18,598,420 19,272,781 2024 23,930,000 9,637,095 33,567,095 1,770,000 201,249 1,971,249 1,230,000 403,400 1,633,400 18,267,616 18,904,127 33.70%2025 23,090,000 8,489,295 31,579,295 1,810,000 177,438 1,987,438 1,245,000 386,940 1,631,940 17,725,262 17,473,410 2026 22,920,000 7,369,632 30,289,632 1,855,000 152,142 2,007,142 1,265,000 369,618 1,634,618 17,105,774 16,825,619 2027 19,985,000 6,404,020 26,389,020 1,910,000 125,026 2,035,026 1,285,000 351,255 1,636,255 15,109,961 14,950,339 2028 18,710,000 5,631,570 24,341,570 1,960,000 95,896 2,055,896 1,020,000 333,956 1,353,956 13,810,130 13,941,292 2029 17,010,000 4,946,846 21,956,846 2,015,000 64,281 2,079,281 1,040,000 317,574 1,357,574 12,727,351 12,666,349 63.28%2030 15,650,000 4,319,658 19,969,658 2,075,000 29,186 2,104,186 1,055,000 299,604 1,354,604 11,021,472 12,406,976 2031 16,270,000 3,681,270 19,951,270 550,000 5,308 555,308 1,080,000 279,740 1,359,740 10,802,191 11,064,126 2032 16,930,000 3,018,248 19,948,248 - - - 1,095,000 257,984 1,352,984 10,203,789 11,097,443 2033 16,165,000 2,390,680 18,555,680 - - - 1,120,000 234,275 1,354,275 9,060,511 10,849,444 2034 15,405,000 1,815,239 17,220,239 - - - 1,150,000 208,387 1,358,387 8,311,475 10,267,150 85.64%2035 12,795,000 1,339,615 14,134,615 - - - 1,170,000 180,308 1,350,308 6,473,641 9,011,281 2036 13,205,000 939,190 14,144,190 - - - 1,200,000 150,561 1,350,561 6,483,547 9,011,204 2037 11,615,000 551,348 12,166,348 - - - 1,235,000 119,511 1,354,511 6,062,318 7,458,541 2038 6,985,000 254,609 7,239,609 - - - 1,270,000 87,068 1,357,068 5,178,989 3,417,688 2039 4,735,000 71,025 4,806,025 - - - 1,305,000 53,203 1,358,203 3,818,952 2,345,276 99.66%2040 - - - - - - 1,340,000 17,956 1,357,956 1,332,621 25,335 100.00%353,355,000$ 111,496,282$ 464,851,282$ 18,940,000$ 1,609,342$ 20,549,342$ 23,670,000$ 5,394,640$ 29,064,640$ 254,056,639$ 260,408,625$ The Certificates(3)Outstanding Debt Service(1)The Bonds(2) (1) Excludes the Refunded Obligations. Preliminary, subject to change. (2) Average life of the Bonds – 5.467 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (3) Average life of the Certificates – 10.188 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (4) 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. Page 273 of 471 28 TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION Total Net Tax Supported Debt Service Requirements, Fiscal Year Ending September 30, 2020(1)20,492,316$ Interest and Sinking Fund, September 30, 2019 5,583,524$ Budgeted Interest and Sinking Fund Tax Levy 21,346,328 Budgeted Investment Earnings 150,000 Budgeted Transfers 281,896 27,361,748 Estimated Balance, September 30, 2020 6,869,432$ (1) Excludes the Refunded Obligations and self-supporting debt. Includes the Obligations. Preliminary, subject to change. TABLE 10 – SELF-SUPPORTING DEBT(1) Year Total End Electric Wastewater Water Convention Parking Self-Supporting 9/30 Fund Fund Fund Center Landfill Garage Debt Service 2020 6,676,974$ 6,537,818$ 6,903,809$ 7,100$ 353,850$ 224,400$ 20,703,952$ 2021 6,657,059 7,635,750 7,027,203 6,900 354,050 - 21,680,962 2022 6,556,776 6,735,866 5,955,088 6,675 323,300 - 19,577,705 2023 6,330,371 6,394,505 5,545,569 6,425 321,550 - 18,598,420 2024 5,979,209 6,376,730 5,576,453 6,175 329,050 - 18,267,616 2025 5,667,188 6,119,393 5,602,082 5,925 330,675 - 17,725,262 2026 5,412,585 6,114,845 5,241,119 5,675 331,550 - 17,105,774 2027 4,208,547 5,904,729 4,659,585 5,425 331,675 - 15,109,961 2028 4,051,149 5,533,187 3,896,169 5,225 324,400 - 13,810,130 2029 3,590,288 5,379,717 3,422,397 5,075 329,875 - 12,727,351 2030 2,729,864 5,385,546 2,906,062 - - - 11,021,472 2031 2,536,439 5,360,375 2,905,377 - - - 10,802,191 2032 2,178,939 5,129,681 2,895,169 - - - 10,203,789 2033 1,631,830 4,723,079 2,705,602 - - - 9,060,511 2034 1,033,030 4,573,886 2,704,559 - - - 8,311,475 2035 430,653 3,787,953 2,255,036 - - - 6,473,641 2036 432,185 3,793,601 2,257,761 - - - 6,483,547 2037 432,893 3,795,030 1,834,396 - - - 6,062,318 2038 432,756 3,462,416 1,283,817 - - - 5,178,989 2039 - 2,779,009 1,039,943 - - - 3,818,952 2040 - 1,145,142 187,479 - - - 1,332,621 72,976,738 $ 110,414,668 $ 82,642,106 $ 72,988 $ 3,682,938 $ 446,875 $ 270,236,312 $ (1) 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. Includes a portion of the Obligations. Preliminary, subject to change. TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS 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. Date of Amount Issued Authorization Purpose Authorized To Date Unissued 11/4/2003 Municipal Complex Improvements 7,610,000$ 3,955,000$ 3,655,000$ 11/4/2008 Park Improvements 12,790,000 12,145,000 645,000 77,570,000$ 73,270,000$ 4,300,000$ Page 274 of 471 29 OTHER OBLIGATIONS Currently, the City has no outstanding capital leases or loans. PENSION FUND Plan Description The City accounts for pension cost under GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The City of College Station participates as one of over 880 plans in the multi-employer, nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and the city-financed monetary credits, with interest, were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven actuarially equivalent payment options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits and interest. Plan provisions for the City were as follows: Employees covered by benefit terms at the December 31, 2017 valuation and measurement date are as follows: Inactive employees or beneficiaries currently receiving benefits 481 Inactive employees entitled to but not yet receiving benefits 562 Active employees 908 Total 1,951 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the city. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City of College Station were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City of College Station were 13% and 13% in calendar years 2019 and 2018, respectively. The City’s contributions to TMRS for fiscal year 2019 were $7,750,052 and were greater than the required contributions of $7,483,465. Net Pension Liability The City’s Net Pension Liability (NPL) was measured as of December 31, 2018, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Employee deposit rate 7.00% Matching ratio (City to Employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years at any age; 5 years at age 60 and above Updated service credit 75% repeating transfers Annuity increase (to retirees) 50% of CPI repeating Page 275 of 471 30 Actuarial Assumptions The Total Pension Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions: Salary increases were based on service-related tables. Mortality rates for active members, retirees, and beneficiaries were based on the gender- distinct RP2000 Combined Mortality Table with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. Actuarial assumptions used in the December 31, 2018 valuation were based on the results of actuarial experience studies of TMRS over the four year period from December 31, 210 to December 31, 2014. Assumptions are reviewed annually. The long-term expected rate of return on pension plan investments is 6.75%. The pension plan’s policy with regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long- term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long Term Expected Target Real Rate Asset Class Allocation of Return Doemstic Equity 17.50% 4.30% International Equity 17.50% 6.10% Core Fixed Income 10.00% 1.00% Non-Core Fixed Income 20.00% 3.39% Real Return 10.00% 3.78% Real Estate 10.00% 4.44% Absolute Return 10.00% 3.56% Private Equity 5.00% 7.75% Total 100.00% (Remainder of page intentionally left blank) Inflation 2.5% per year Overall paytoll growth 3.00% Investment rate of return 6.75%, net of pension plan investment expense including inflation Page 276 of 471 31 Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee contributions will remain at the current 7.0% and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) Balance at 12/31/2017 284,444,058$ 257,348,143$ 27,095,915$ Changes for the year: Service Cost 8,830,945 - 8,830,945 Interest (on the Total Pension Liability) 19,084,918 - 19,084,918 Change of benefit terms - - - Differences between expected and actual experience (501,706) - (501,706) Changes of assumptions - - - Contributions - employer - 7,621,669 (7,621,669) Contributions - employee - 3,998,020 (3,998,020) Net investment income (loss) - (7,708,361) 7,708,361 Benefit payments, including refunds of - employee contributions; (12,240,008) (12,240,008) - Administrative expenses - (148,986) 148,986 Other - (7,785) 7,785 Net changes 15,174,149 (8,485,451) 23,659,600 Ending Balance at 12/31/2018 299,618,207$ 248,862,692$ 50,755,515$ Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City, as well as what the City’s net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage- point higher than the current rate: 1% Decrease 1% Increase in Discount Discount in Discount Rate (5.75%) Rate (6.75%) Rate (7.75%) City's net pension liability 95,361,560$ 50,755,515$ 14,497,791$ Pension Plan Fiduciary Net Position Detailed information about the pension plan’s Fiduciary Net Position is available in a separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. Pension Expense For the year ended September 30, 2019, the City recognized pension expense of $12,833,597. (Remainder of page intentionally left blank) Page 277 of 471 32 Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension At September 30, 2019, the City reported deferred outflows and inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 1,122,830$ 442,212$ Changes in assumptions 724,466 - Difference between projected and actual earnings 13,314,507 - Contributions subsequent to the measurement date 5,652,899 - Total ######### 442,212$ Deferred outflows of resources, of $5,652,899 related to pensions resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense in the following years indicated below: Net deferred Fiscal outflows Year Ended (inflows) of Sept. 30: resources 2020 5,799,734$ 2021 2,057,032 2022 1,942,418 2023 4,920,407 2024 - Thereafter - 14,719,591$ OTHER POST EMPLOYMENT BENEFITS Plan Description Plan administration: As required by state laws, in addition to the pension benefits described above, the City makes available certain postretirement benefits to employees who meet TMRS retirement qualifications, retire from City employment, and enroll in the plan before the effective date of their retirement. The City’s OPEB Plan is a single employer defined benefit plan, defined by City policy. The OPEB Plan does not issue a separate report that includes financial statements and required supplementary information for the OPEB Plan. Plan membership. At September 30, 2019 membership consisted of the following: Medical Life and/or Insurance Dental Benefits Benefits Retirees and Retiree Spouses 84 197 Active Employees 900 900 984 1,097 Benefits provided: The City’s defined benefit Other Post-Employment Benefits (OPEB) Plan offers medical, dental, vision, drug, and life insurance benefits to retired employees and their eligible dependents. The OPEB Plan is a single employer defined benefit OPEB plan administered by the City. The benefit levels offered to retired employees and eligible dependents are the same as those afforded to active employees as the City’s group health insurance plan covers both active and retired members. All medical, dental, vision and drug care benefits are provided through the City’s self-insured health plan. As long as monthly premium payments are made, the healthcare plan provides coverage until age 65 for retired employees and eligible dependents enrolled in the City’s OPEB Plan. The life insurance offered though the OPEB Plan provides a $10,000, fully insured death benefit coverage upon retirement, which ceases upon attainment of age 65. The Life insurance benefit for eligible retirees is paid entirely by the City. Page 278 of 471 33 Contributions: Benefit provisions, as well as retiree premium contributions, are established by City management. The City determines the employer and participant contribution rates annually, based on recommendations of City staff and the City’s benefit consultant. For the year ended September 30, 2019, the City’s average contribution rate was 3.1 percent of covered-employee payroll. Investments Investment policy: The goal of the Plan’s investment program is to generate adequate long-term returns that, when combined with contributions, will result in sufficient assets to pay the present and future obligations of the Plan. The Plan has a Balanced Risk Tolerance with a Strategic Asset Allocation of the following: Concentrations: Assets of the OPEB plan are held in Trust by PARS which is fully discussed in Note 24 in the City’s financial statements. Rate of return: For the year ended December 31, 2018, the annual money-weighted rate of return on investments, net of investment expense, was -4.51 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Receivables The OPEB plan has no receivables from long-term contracts with the City for contributions at September 30, 2019. Allocated Insurance Contracts The OPEB plan has no allocated insurance contracts excluded from OPEB plan assets at September 30, 2019. Reserves The OPEB plan has no reserves recorded at September 30, 2019. Net OPEB Liability The components of the net OPEB liability of the City at September 30, 2019 based on the December 31, 2018 measurement and actuarial valuation date, were as follows: Total OPEB liability - ending 7,290,606 $ Plan fiduciary net position - ending (2,430,218) Net OPEB liability - ending 4,860,388 Plan fiduciary net position as a percentage of total OPEB liability 33.33% Changes in the Net OPEB Liability For the year ended September 30, 2019, the City recognized reduction in the OPEB liability of $1,433,588. Effective January 1, 2018, the City has made the following changes to the benefits offered under its Other Post Employment Benefit Plan. To be eligible for premium pricing for medical, dental, vision, and drug benefits at the time of retirement, employees must:  Meet TMRS retirement qualifications,  Be 55 years of age or older,  Have five (5) years of employment at the City of College Station,  Be enrolled in the plan before the effective date of their retirement. Target Allocation Asset Class Allocation Range Cash 5.0% 0-20% Fixed Income 35.0% 30%-50% Equity 60.0% 50%-70% Total 100.0% Page 279 of 471 34 In addition, certain actuarial changes were made when enacting GASB 75 that affected the Net OPEB Liability. Those changes included:  The Entry Age Normal Actuarial Cost Method must be used to attribute the actuarial present value of benefits to service periods in determining the OPEB Liability. This differed from the Projected Unit Credit Cost Method previously used by the City.  Discount Rate changes were allowed under GASB 75. Those changes included that for the unfunded portion of the plan, the discount rate is based on yields of 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. For the funded portion, however, the City could continue to use an assumption similar to the current discount rate.  Instead of recording expense equal to the Annual Required Contribution (ARC), GASB No. 75 required expensing the change in Net OPEB Liability from one period to the next. Some sources of this change are expensed immediately, while others are amortized over a period of approximately ten to twenty years depending on plan demographics. Components of the change in the Net OPEB Liability is as follows: Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balances as of Decmeber 31, 2017 7,815,261 $ 1,521,285$ 6,293,976 $ Changes for the year: Service cost 102,176 - 102,176 Interest 526,551 - 526,551 Changes of benefit terms - - - Differences between expected and - actual experience 95,216 - 95,216 Changes of assumptions of other inputs (458,047) - (458,047) Contributions-employer - 1,864,123 (1,864,123) Net investment income - (164,639) 164,639 Administrative expenses - - - Benefit payments, including refunds of - employee contributions (790,551) (790,551) - Net changes (524,655) 908,933 (1,433,588) Balances as of December 31, 2018 7,290,606 $ 2,430,218 $ 4,860,388 $ Actuarial assumptions. The total OPEB liability for the year ended September 30, 2018 as measured as of December 31, 2017 was determined by an actuarial valuation as of that date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.0% Salary increases 4% to 11% including inflation Discount rate 7.00% Healthcare cost trend rates 8.00% in FY20 decreasing 0.50% per year to an unltimate rate of 4.75% for FY27 and later years Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period December 31, 2010 to December 31, 2014. (Remainder of page intentionally left blank) Page 280 of 471 35 The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation are summarized in the following table: Expected Real Target Rate of Weighted Asset Class Allocation Return Average Cash 5.00% 0.75% 0.04% Fixed Income 35.00% 3.56% 1.25% Equity 60.00% 5.75% 3.45% Total 100.00% N/A 4.74% Discount rate. The discount rate used to measure the total OPEB liability was 7.0 percent. The discount rate used to determine the total OPEB Liability as of the beginning of the measurement year prior to the establishment of the OPEB trust was 3.78%. The weighted average of the Expected Real Rate of Return is added to the Expected Long-Term Inflation assumption and reduced by expected investment expenses (4.74% + 3.00% - 0.75% = 6.99%). This result is then rounded to the nearest 25 basis points to obtain the Expected Long-Term Rate of Return of 7.00%. The projected cash flows into the plan are equal to projected benefit payments out of the plan plus prefunding contributions that have been approved by the City Council. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. The assumed rate of general inflation has been updated since the valuation used for the September 30, 2018 liability to reflect the actuary’s best expectation of future plan experience. The long-term expected rate of return for the plan is 7.0 percent. The plan operates on a pay as you go basis and accumulates assets in trust in addition to the pay as you go amount. Based on the discount rate assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.0 percent) or 1-percentage- point higher (8.0 percent) than the current discount rate: 1% Current 1% Decrease Discount Rate Increase (6.00%) (7.00%) (8.00%) Net OPEB liability 5,421,797 $ 4,860,388 $ 4,357,471 $ Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7.0 percent decreasing to 3.75 percent) or 1-percentage-point higher (9.0 percent decreasing to 5.75 percent) than the current healthcare cost trend rates: Current Healthcare 1% Decrease Cost Trend Rates 1% Increase (7.00% decreasing (8.00% decreasing (9.00% decreasing to 3.75%) to 4.75%) to 5.75%) Net OPEB liability 4,073,135 $ 4,860,388 $ 5,850,899 $ Page 281 of 471 36 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended September 30, 2019, the City recognized OPEB expense/(income) of $16,194. At September 30, 2019, the City reported changes to deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources as follows: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 82,155$ 511,580$ Changes in actual assumptions - 2,474,833 Difference between projected and actual investment earnings 230,358 - Contributions subsequent to the measurement date 1,530,951 - Total 1,843,464$ 2,986,413$ Deferred outflows of resources, of $1,530,951 related to OPEB resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net OPEB liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Deferred Year Ended inflows of Sept. 30: resources 2020 (487,729)$ 2021 (487,729) 2022 (487,728) 2023 (487,332) 2024 (545,219) Thereafter (178,163) (2,673,900)$ OPEB Trust 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 passed resolution 2017-0564 appropriating the funds. Effective September 27, 2017, the City entered into a section 115 Irrevocable Exclusive Benefit agent multiple-employer trust to fund its Other Postemployment Benefits Obligation. Trust and Investment Management Services are provided by Public Agency Retirement Services (PARS) and is administered by the City. The investment manager that executes investment transactions is Highmark Capital Management, Inc. and the custodian of the trust’s funds is US Bank. With the establishment of the trust, the City can pre-fund (make annual payments in advance of the obligation) and allocate funds for the express purpose of funding future OPEB costs. The investment returns can be used to reduce the actuarial contributions and can result in lower long-term costs of the plan. As of September 30, 2019 the trust’s balance was $3,865,554. (Remainder of page intentionally left blank) Page 282 of 471 37 FINANCIAL INFORMATION TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY 2019 2018 2017 2016 2015 Revenues: Taxes 59,745,768$ 56,329,528$ 53,749,315$ 48,737,894$ 46,750,120$ Licenses & Permits 1,633,241 1,772,959 2,127,142 2,132,802 1,500,777 Intergovernmental 585,506 910,169 828,510 1,373,950 355,083 Charges for Services 3,753,297 3,940,837 3,863,744 3,809,206 3,572,684 Fines, Forfeits and Penalties 3,544,994 3,211,536 2,917,735 3,255,051 2,693,647 Investment Income 757,250 449,880 241,880 148,302 116,074 Rents & Royalties 184,543 219,538 284,351 187,328 136,228 Contributions 17,905 7,361 7,580 8,880 1,251 Other 957,825 642,547 775,114 434,537 3,252,310 Total Revenues 71,180,329$ 67,484,355$ 64,795,371$ 60,087,950$ 58,378,174$ Expenditures: General Government 8,481,683$ 6,165,016$ 6,228,021$ 5,524,471$ 4,853,358$ Fiscal Services 3,993,584 3,954,488 3,815,223 3,733,550 3,314,990 Police Department 24,299,928 22,631,648 21,372,560 20,170,450 18,533,889 Fire Department 19,888,536 19,624,919 17,001,580 16,916,819 14,881,983 Planning & Development Services 4,180,089 3,740,969 3,741,263 3,243,768 3,106,143 Parks and Recreation 9,350,892 9,129,079 8,621,075 9,279,126 8,194,670 Information Technology 4,591,351 4,488,885 4,600,556 4,491,009 4,112,987 Public Works 9,348,645 9,575,300 8,151,055 11,162,508 9,156,069 Library Services 1,186,313 1,118,522 1,097,876 1,098,326 1,138,568 Contributions 1,467,695 1,380,580 1,280,215 1,220,251 1,187,500 Other - - - 863 217,114 Capital Improvement Projects 289,042 319,406 988,435 667,574 129,896 Total Expenditures 87,077,758$ 82,128,812$ 76,897,859$ 77,508,715$ 68,827,167$ Other Financing Sources (Uses): Sale of General Fixed Assets -$ -$ 47,478$ -$ 8,974,205$ Operating Transfers In 19,427,607 19,245,943 18,347,351 16,507,346 15,094,866 Operating Transfers Out (1,960,180) (3,031,702) (2,911,020) (2,376,443) (11,441,262) Total Other Financing Sources (Uses) 17,467,427$ 16,214,241$ 15,483,809$ 14,130,903$ 12,627,809$ Net Change in Fund Balance 1,569,998$ 1,569,784$ 3,381,321$ (3,289,862)$ 2,178,816$ Fund Balance, Beginning of Year 26,790,569 22,514,523 19,133,202 22,423,064 20,244,248 Prior Period Adjustment - 2,706,262 - - - Fund Balance, End of Year 28,360,567$ 26,790,569$ 22,514,523$ 19,133,202$ 22,423,064$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 283 of 471 38 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 Obligations. 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%. Fiscal Year % of Equivalent of Ended Total Ad Valorem Ad Valorem Per 9/30 Collected (1)Tax Levy Tax Rate Capita (2) 2016 27,163,480$ 84.71% 0.38$ 255$ 2017 28,561,762 77.18% 0.36 260 2018 28,799,040 66.51% 0.33 244 2019 28,432,571 60.51% 0.31 235 2020 13,222,913 (3)25.56% 0.14 108 (1) Provided by the City. (2) Based on population estimates provided by the City. (3) Collections as of February 29, 2020. The sales tax breakdown for the City is as follows: 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 2019-2020 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 18% 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. Brazos County Sales & Use Tax 1/2 % Property Tax Reduction 1/2 % City Sales & Use Tax 1 % State Sales & Use Tax 6 1/4 % Total 8 1/4 % Page 284 of 471 39 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 ten wells, with a combined capacity of 38 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 eight 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 recently completed the construction of another Simsboro well, Well #9 that will meet the city’s demands for water for many years into the future. Well #10 remains in the planning stages, and would be constructed in future years, depending upon the rate of growth of water demands. College Station is also investigating other water supply strategies for the future. The City has completed a Water Reclamation project, which pumps effluent from the wastewater treatment plant 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 the watering season. 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. 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 are established by ordinance, passed and approved by the City Council. The following rates became effective October 1, 2019. 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 12.40 per mo. 3/4” 15.60 per mo. 1” 23.20 per mo. 1 1/2” 36.65 per mo. 2” 115.60 per mo. 3” 171.75 per mo. 4” 209.10 per mo. 6” 209.10 per mo. 8” Residential $2.75 for usage from 0-10,000 gallons $3.60 for usage from 11,000-15,000 gallons $4.40 for usage from 16,000-20,000 gallons $5.20 for usage from 21,000-25,000 gallons $6.05 for usage from 26,000 gallons and more Commercial $3.05 per 1,000 gallons Commercial Irrigation Usage Charge Commercial Irrigation Multifamily 3+ units MUD #1 Residential and Commercial $3.25 per 1,000 gallons Rates as above with an added 50% surcharge (Remainder of page intentionally left blank) Page 285 of 471 40 WASTEWATER SYSTEM The City’s wastewater is treated by three City-owned wastewater treatment plants, Carter Creek Treatment Plant, Lick Creek Treatment Plant, and Carter Lake Treatment Plant located within the City limits. The three plants have a combined treatment capacity of 11.5 mgd. An expansion of the Lick Creek Treatment plant is currently underway and will increase the city’s combined treatment capacity to 14.5 mgd. Sewer rates were established by ordinance, passed and approved by the City Council, and became effective on October 1, 2017 Residential (metered water) .......................................................... $21.29 including 4,000 gallons of metered water Usage Charge ................................................................................ $4.26 per 1,000 gallons of additional metered water $46.87 maximum per month Residential (without meter to each unit)....................................... $27.09 per unit per month Commercial and Industrial ........................................................... $18.27 per month Usage Charge ................................................................................ ....................................................................................................... $5.07 per 1,000 gallons of metered water usage There are 2,217 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 $46.87 per month. After six months of documented 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 AEP Energy Partners (AEPEP) and Garland Power and Light (GP&L). With AEPEP, the City has a fixed block, around the clock (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 2027. 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 the City's advisement, 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, eight substations, and 510 miles of distribution lines. ERCOT serves as 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 September 27, 2018. 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. 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) ......................... $0.11869 per kWh kWh (November through April) .................... $0.11323 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 Page 286 of 471 41 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) .............. $0.0682 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 TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED) 2019 2018 2017 2016 2015 Water 42,787 44,995 43,199 41,709 41,540 Wastewater 46,171 46,031 42,840 40,866 40,806 Electric 39,155 39,435 39,300 40,141 43,471 Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 287 of 471 42 TABLE 15 - TEN LARGEST UTILITY CUSTOMERS Total Percent FY 2019 KWH of KWH Utility Customer Type of Business Consumption Consumed CSISD Schools 29,533,036 3.46% City of College Station Municipality 22,318,501 2.61% Scott & White Clinc/Hospital/Pharmacy 20,959,472 2.45% HEB Grocery Retail 12,397,420 1.45% Texas A&M University 12,025,041 1.41% Biotechnologies Texas LLC Medical 10,052,080 1.18% Wal-Mart Retail 8,710,000 1.02% CBL & Associates Retail Mall 8,097,220 0.95% College Station Medical Center Medical 8,009,755 0.94% Dealer Computer Services Inc Retail 6,174,000 0.72% 138,276,525 16.18% TABLE 16 - CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, TABLE 17 – VALUE OF THE SYSTEM 2019 2018 2017 2016 2015 Utility Systems 617,910,408$ 579,717,873$ 553,774,054$ 527,435,531$ 507,758,485$ Construction in Progress 45,129,947 46,447,061 30,240,705 23,520,025 13,213,020 663,040,355$ 626,164,934$ 584,014,759$ 550,955,556$ 520,971,505$ Less: Accumulated Depreciation 263,680,722 246,243,993 229,374,628 213,325,487 198,339,390 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 288 of 471 43 TABLE 18 – CITY’S EQUITY IN THE SYSTEM Resources 2019 2018 2017 2016 2015 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Current Assets 116,643,763 102,382,543 70,636,223 63,085,837 52,023,881 Restricted Assets 36,743,001 11,296,693 30,149,917 21,849,829 19,977,038 Other Resources - - - - - Deferred Charges 6,485,373 3,506,226 5,197,104 5,425,502 2,381,933 Total 559,231,770$ 497,106,403$ 460,623,375$ 427,991,237$ 397,014,967$ Obligations Current Liabilities 14,711,183$ 12,467,547$ 10,681,761$ 9,511,319$ 13,688,841$ Current Liabilities Payable from Restricted Assets 18,432,091 15,872,611 15,887,617 15,462,903 10,735,825 General Obligation Debt 45,850,605 52,738,157 59,325,710 55,626,759 43,175,000 Certificates of Obligation 126,583,979 91,642,717 77,282,370 78,814,496 83,445,000 Revenue Bond Debt - - - - 13,395,000 Other Debt (1)10,773,356 8,016,706 8,899,938 9,418,425 8,593,734 Total Liabilities 216,351,214$ 180,737,738$ 172,077,396$ 168,833,902$ 173,033,400$ City's Equity in System 342,880,556$ 316,368,665$ 288,545,979$ 259,157,335$ 223,981,567$ Percentage of Equity in System 61.31% 63.64% 62.64% 60.55% 56.42% Fiscal Year Ended September 30, (1) Includes OPEB Net Pension Obligations. TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE Original Outstanding Principal Principal Amount as of 9/30/2019 2008 (2)15,925,000 $ 820,000 $ 2009 (2)19,490,000 1,950,000 2010 (2)2,850,000 1,865,000 2010 (1)(3)25,905,000 6,920,000 2011 (2)7,920,000 5,540,000 2012 (2)16,415,000 11,930,000 2012 (1)(3)9,570,000 3,975,000 2013 (2)10,230,000 7,920,000 2013 (1)(3)6,255,000 3,195,000 2014 (2)23,555,000 19,270,000 2014 (1)(3)14,455,000 7,255,000 2016 (2)7,250,000 6,370,000 2016 (1)(3)18,710,000 16,335,000 2017 (2)12,140,000 11,440,000 2017 (1)(3)9,205,000 9,205,000 2018 (2)18,655,000 18,655,000 2019 (2)38,670,000 38,670,000 257,200,000 $ 171,315,000 $ Series (1) Represents refunding bonds. (2) Certificates of Obligation supported in whole or in part by Utility System revenues. (3) General Obligation Bonds supported in part by the Utility System revenues. Page 289 of 471 44 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 Authorized investments are summarized as follows: (1) obligations, including letters of credit, of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks; (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 and interest of 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) interest-bearing banking deposits that are guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or the National Credit Union Share Insurance Fund or its successor; (8) interest-bearing banking deposits other than those described by clause (7) if (A) the funds invested in the banking deposits are invested through: (i) a broker with a main office or branch office in this State that the City selects from a list the City Council or a designated investment committee of the City adopts as required by Section 2256.025, Texas Government Code; or (ii) a depository institution with a main office or branch office in the State that the City selects; (B) the broker or depository institution selected as described by (A) above arranges for the deposit of the funds in the banking deposits in one or more federally insured depository institutions, regardless of where located, for the City’s account; (C) the full amount of the principal and accrued interest of the banking deposits is insured by the United States or an instrumentality of the United States; and (D) the City appoints as the City’s custodian of the banking deposits issued for the City’s account: (i) the depository institution selected as described by (A) above; (ii) an entity described by Section 2257.041(d), Texas Government Code; or (iii) a clearing broker dealer registered with the SEC and operating under SEC Rule 15c3-3; (9) (i) certificates of deposit or share certificates meeting the requirements of Chapter 2256, Texas Government Code (the “Public Funds Investment Act”), that are issued by an institution that has its main office or a branch office in the State and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or their respective successors, and are secured as to principal by obligations described in clauses (1) through (8) or in any other manner and provided for by law for City deposits, or (ii) certificates of deposits where (a) the funds are invested by the City through (A) a broker that has its main office or a branch office in the State and is selected from a list adopted by the City as required by law, or (B) a depository institution that has its main office or branch office in the State 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), Texas Government Code, or a clearing brokerdealer registered with the SEC and operating pursuant to SEC Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with respect to the certificates of deposit; (10) fully collateralized repurchase agreements as defined in the Public Funds Investment Act, that have a defined termination date, are secured by a combination of cash and obligations described in clauses (1) or (13) in this paragraph , require the securities being purchased by the City or cash held by the City to be 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; (11) 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 (8) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than “A” or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) below, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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; (12) certain bankers’ acceptances with stated maturity of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated not less than “A-1” or “P-1” or the equivalent by at least one nationally recognized credit rating agency; (13) commercial paper with a stated maturity of 365 days or less that is rated not less than “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 United States or state bank; (14) no-load money market mutual funds registered with and regulated by the SEC that provide the City with a prospectus and other information required by the Securities Exchange Act of 1934 or the Investment Company Act of 1940 and that comply with federal SEC Rule 2a-7 (17 C.F.R. Section 270.2a- 7), promulgated under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); and (15) no-load mutual funds registered with the SEC that have an average weighted maturity of less than two years, and have either (a) a duration of one year or more and invest exclusively in obligations described in under this heading, or (b) a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities, other than the prohibited obligations described below, in an amount at least equal to the amount of bond proceeds invested under such contract. Page 290 of 471 45 A political subdivision such as the City may enter into 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 (8) above, other than the prohibited obligations described below, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) above, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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, if the City Council authorizes such investment in the particular pool by order, ordinance, or resolution and the investment pool complies with the requirements of Section 2256.016, Texas Government Code. The City may also contract with an investment management firm registered (x) under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), or (y) 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 ordinance, order or resolution. 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. 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. Page 291 of 471 46 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 29, 2020, 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 31,934,770 31,934,770 Money Market Mutual Fund 283,314,901 283,314,901 US Agencies and Securities 5,000,000 5,028,700 325,249,671$ 325,278,371$ TAX MATTERS OPINION . . . On the date of initial delivery of the Obligations, 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 Obligations for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Obligations 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 Obligations. See APPENDIX C - Form of Opinion of Bond Counsel. In rendering its opinion, 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 Obligations relating to certain matters, including arbitrage and the use of the proceeds of the Obligations and the property financed or refinanced therewith. Failure of the City to comply with these representations or covenants could cause the interest on the Obligations, 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 Obligations in order for interest on the Obligations 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 Obligations to be included in gross income retroactively to the date of issuance of the Obligations. 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 Obligations. 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 Obligations. A ruling was not sought from the Internal Revenue Service by the Issuer with respect to the Obligations or the property financed or refinanced with proceeds of the Obligations. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Obligations, 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 Obligation holders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Page 292 of 471 47 FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Obligations”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Obligation, and (ii) the initial offering price to the public of such Original Issue Discount Obligation would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the Obligations 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 Obligation 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 Obligation 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 Obligation prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Obligation 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 Obligation was held by such initial owner) is includable in gross income. Under Existing Law, the original issue discount on each Original Issue Discount Obligation 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 Obligation 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 Obligation. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Obligations 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 Obligations should consult their own tax advisors with respect to the determination 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 Obligations 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 Obligations. 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 Obligations. 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 OBLIGATIONS. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, 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 Obligations, 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 Obligations 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. Page 293 of 471 48 Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations 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 Obligations 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. 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 Obligations under federal or state law, and could affect the market price or marketability of the Obligations. 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 Obligations should consult their own tax advisors regarding the foregoing matters. CONTINUING DISCLOSURE OF INFORMATION In the Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of Obligations. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Obligations. 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 2020. 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 2020. 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 Tables 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 Obligations 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 Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of holders of the Obligations, if material; (8) Obligation calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Obligations, 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 Page 294 of 471 49 undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. 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.” Neither the Obligations nor the Ordinances provide for debt service reserves, liquidity enhancement, or credit enhancement. 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 the events listed in clause (15) and (16) above, the term “financial obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) a guarantee of either (A) or (B). The term “financial obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. 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. 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 Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. 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 . . . 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. (Remainder of page intentionally left blank) Page 295 of 471 50 OTHER INFORMATION RATINGS The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's and “AA+” by S&P, without regard to credit enhancement. Applications have been made to Moody’s, S& P and Fitch Ratings Services for contract ratings on the Obligations. 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 Obligations. 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 OBLIGATIONS FOR SALE The sale of the Obligations 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 Obligations have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Obligations been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Obligations under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations must not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. 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 Obligations 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 Obligations by municipalities or other political subdivisions or public agencies of the State of Texas, the PFIA requires that the Obligations 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 Obligations 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 Obligations 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 Obligations for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for such purposes. No review by the City has been made of the laws in other states to determine whether the Obligations are legal investments for various institutions in those states. LEGAL MATTERS The City will furnish to the Initial Purchaser a complete transcript of proceedings had incident to the authorization and issuance of the Obligations, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Obligation and to the effect that the Obligations are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Obligations or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Obligations will also be furnished. In its capacity as Bond Counsel, such firm has reviewed the information describing the Obligations in the Notice of Sales and Bidding Instructions, the Official Bid Forms and the Official Statement to verify that such information conforms to the provisions of the Ordinances. 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 legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations. The legal opinion will accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book-Entry-Only System. The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 the 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 from the transaction. Page 296 of 471 51 The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. 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 Obligations, 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 Obligations, 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 pertaining to the City contained in its Official Statement and any addenda, supplement or amendment thereto, for its Obligations on the date of such Official Statement, on the date of purchase of said Obligations, 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, 2019, 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 Obligations, in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Obligations; or which would affect the provisions made for their payment or security, or in any manner question the validity of the Obligations. 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. Page 297 of 471 52 INITIAL PURCHASER After requesting competitive bids for the Bonds, the City accepted the bid of ______________ (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the page 2 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Bonds. 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 page 4 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Certificates. MISCELLANEOUS The Ordinances authorizing the issuance of the Obligations will also approve the form and content of this Official Statement, and any addenda or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Initial Purchaser. Pricing Officer City of College Station, Texas Page 298 of 471 53 Schedule I SCHEDULE OF REFUNDED OBLIGATIONS* Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 140,000$ 8/13/2020 100.00 2022 3.000% 145,000 8/13/2020 100.00 2023 3.000% 155,000 8/13/2020 100.00 2024 3.000% 160,000 8/13/2020 100.00 2025 3.125% 170,000 8/13/2020 100.00 2026 3.250% 175,000 8/13/2020 100.00 2027 3.375% 185,000 8/13/2020 100.00 2028 3.500% 190,000 8/13/2020 100.00 2029 3.500% 200,000 8/13/2020 100.00 2030 3.500% 210,000 8/13/2020 100.00 1,730,000$ Certificates of Obligation, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 950,000$ 8/13/2020 100.00 2022 3.000% 995,000 8/13/2020 100.00 2023 3.000% 1,040,000 8/13/2020 100.00 2024 3.000% 1,090,000 8/13/2020 100.00 2025 3.125% 1,135,000 8/13/2020 100.00 2026 3.250% 1,190,000 8/13/2020 100.00 2027 3.250% 1,245,000 8/13/2020 100.00 2028 3.375% 1,300,000 8/13/2020 100.00 2029 3.500% 1,360,000 8/13/2020 100.00 2030 3.500% 1,425,000 8/13/2020 100.00 11,730,000$ General Obligation Improvement Bonds, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 2.200% 370,000$ 8/13/2020 100.00 2022 2.400% 390,000 8/13/2020 100.00 2023 2.600% 405,000 8/13/2020 100.00 2024 2.800% 430,000 8/13/2020 100.00 2025 3.000% 445,000 8/13/2020 100.00 2026 3.100% 465,000 8/13/2020 100.00 2027 3.200% 490,000 8/13/2020 100.00 2028 3.300% 510,000 8/13/2020 100.00 2029 3.400% 535,000 8/13/2020 100.00 2030 3.500% 560,000 8/13/2020 100.00 2031 3.600% 585,000 8/13/2020 100.00 5,185,000$ Certificates of Obligation, Series 2011 * Preliminary, subject to change. Page 299 of 471 APPENDIX A GENERAL INFORMATION REGARDING THE CITY Page 300 of 471 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 1,034.75 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 578 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 835 miles of wastewater and water lines. The City owns the electrical distribution system with approximately 490 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. The fire department consists of 158 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 18 educational campuses for pre-kindergarten through high school. The School District has a student enrollment in excess of 13,500 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 additional facilities. The bonds would fund a 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 approximately 69,000 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. In 2019, The Med was purchased by the CHI St. Joseph system and is now called CHI St. Joseph Health College Station Hospital. 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. Other area health care providers include: St. Joseph Regional Health Care Center, Baylor Scott and White Clinic, and The Physicians Centre. Page 301 of 471 A - 2 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 parks system encompasses 1,364 acres of parks and facilities spread throughout the city. This includes 4 dog parks, 1 skate park, 63 playgrounds, 4 recreation centers, 12 ponds, 2 pools, a splash pad, 34.5 miles of walking trails, 2 municipal cemeteries and the Ringer Library. 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 69,000 students, with more than 508,000 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 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. 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) Page 302 of 471 A - 3 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 sixth in the nation in average attendance for the 2019 season with average attendance of 97,459 for home games, according to figures released by the NCAA. The City’s premiere sport complexes, as well as the ease to get around, makes College Station attractive to a number of high profile organizations. Over the past several years, Texas Amateur Athletic Federation has chosen College Station to host state tournaments and events. In addition, the City facilitates four major softball tournaments, multiple soccer tournaments, two 7 on 7 football tournaments and baseball tournaments throughout the year. The City plans to add 4 synthetic infield & natural grass outfield baseball/softball fields at the new Texas Independence Ballpark. This is anticipated to allow additional tournaments to be held in this area. (Remainder of page intentionally left blank) Page 303 of 471 A - 4 MAJOR AREA EMPLOYERS Number of Firm Name Product Employees Texas A&M University and System Education/Research 27,000+ Bryan ISD Education 2000+ College Station ISD Education 2000+ Texas A&M Health Science Center Education 2000+ Reynolds & Reynolds Computer Hardware and Software 1800+ Blinn College - Bryan Campus Education 1000+ Sanderson Farms, Inc. Poultry Processing 1000+ CHI St. Joseph's Regional Hospital Health Service 1000+ Wal-Mart/Sam's Retail 1000+ HEB Grocery Retail 1000+ City of College Station Government 1000+ Brazos County Government 500-999 City of Bryan Government 500-999 College Station Medical Center Health Service 500-999 Ply Gem Windows Manufacturing 500-999 Baylor Scott & White Health Service 500-999 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. LABOR STATISTICS College Station Labor Total Force Employment Unemployment Rate 2016 56,997 55,062 1,935 3.4% 2017 58,042 56,261 1,781 3.1% 2018 60,167 58,454 1,713 2.8% 2019 61,507 59,812 1,695 2.8% 2020 (1)62,799 61,096 1,703 2.7% Year Brazos County Labor Total Force Employment Unemployment Rate 2016 111,251 107,409 3,842 3.5% 2017 113,040 109,558 3,482 3.1% 2018 116,493 113,189 3,304 2.8% 2019 119,010 115,819 3,191 2.7% 2020 (1)114,949 111,494 3,455 3.0% Year Source: Texas Workforce Commission. (1) Average as of February 2020. Page 304 of 471 A - 5 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 2019, the estimated population of College Station was 122,738. The following table sets forth the number and value of construction permits issued by the City over the past several years. Residential Construction Commercial Construction Other Construction* Total Calendar Number Number Number Number Year of Permits Value of Permits Value of Permits Value of Permits Value 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 1,190 257,998,990 208 170,405,189 - - 1,398 428,404,179 2018 1,953 177,627,344 461 103,143,722 - - 2,414 280,771,066 2019 553 100,803,824 102 80,992,499 1,911 98,242,242 2,566 280,038,565 Source: The City. * Starting in 2019 all new pools, remodels/renovations, new roofs, demolitions, slab only and other improvements are reported under “Other Construction”. These permits were previously reported under Residential and Commercial. 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] Page 305 of 471 APPENDIX B EXCERPTS FROM THE CITY OF COLLEGE STATION, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2019 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, 2019, 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. Page 306 of 471 APPENDIX C FORM OF OPINION OF BOND COUNSEL Page 307 of 471 June 11, 2020 Item No. 4.4. Presentation, discussion, and possible action on an ordinance authorizing the issuance of up to $19,300,000 in principal amount of “City of College Station, Texas General Obligation Refunding Bonds, Series 2020”; delegating the authority to certain City Officials to execute certain documents relating to the sale of the Bonds; approving and authorizing instruments and other procedures relating to said bonds; and enacting other provisions relating to the subject. Sponsor:Mary Ellen Leonard, Director of Fiscal Services Reviewed By CBC:City Council Agenda Caption:Presentation, discussion, and possible action on an ordinance authorizing the issuance of up to $19,300,000 in principal amount of “City of College Station, Texas General Obligation Refunding Bonds, Series 2020”; delegating the authority to certain City Officials to execute certain documents relating to the sale of the Bonds; approving and authorizing instruments and other procedures relating to said bonds; and enacting other provisions relating to the subject. Relationship to Strategic Goals: Financially Sustainable City Core Services and Infrastructure Recommendation(s): Council move to approve the ordinance authorizing the issuance and sale of up to $19,300,000 in “General Obligation Refunding Bonds, Series 2020”; delegating the authority to certain City Officials to execute certain documents relating to the sale of the Bonds; approving and authorizing instruments and other procedures relating to said bonds; and enacting other provisions relating to the subject. Summary: The aggregate original principal amount of the Bonds shall not exceed $19,300,000. The City also has the opportunity to refund no more than $19,300,000 of its Certificates of Obligation, Series 2010; General Obligation Improvement Bonds, Series 2010 and Certificates of Obligation, Series 2011 in order to achieve savings due to lower interest rates that are currently available. The City's Financial Advisor, Ms. Marti Shew with Hilltop Securities, Inc. has presented the City with this opportunity. Refunding is issuing new debt to replace and pay off existing debt. Refunding can be done for a number of reasons; however, most often is used to accrue a savings against the current debt. Refundings are typically done as negotiated sales rather than our normal bidding process. However, our financial advisor has recommended a competitive sale process this year. The City Council's Finance and Budgetary Policies allow for the City to "refund" debt when there is a net present value savings of at least 5%. The opportunity that is currently before the City Council will save the City approximately 7.4814% over the remaining life of the issues. The net present value savings includes the debt issuance costs. If this ordinance is approved, the City Council will be delegating to the Mayor, the Interim City Manager and the Assistant City Manager/CFO the authority to effect the refunding and the bond sale when the net present value savings on the refunding achieves at least the 5% threshold through June 21, 2021. Currently, the net present value savings is above the 5% threshold. However, if the net present value savings should fall below the 5%, this Page 308 of 471 will provide an opportunity to reach the 5% threshold over the next 6 months in order to generate as much savings as possible for the City. Budget & Financial Summary: Based on current estimates, the refunding will reduce the overall cost of the refunded bonds by at least 7.4814% over the remaining life of the existing bonds. Total net present value savings will be at least $1,394,901. The average annual savings will range between $40,222.50 and $152,269.02 per year. The savings will help the City by providing an additional margin that Council may choose to use for projects not currently funded by an identified source. Staff reviewed the impact of the refunding on the City’s ability to meet debt service requirements and the effect they may have on the ad valorem tax rate and on the utility rates and presented Council a workshop on May 28, 2020. Reviewed & Approved by Legal: No Attachments: 1.Ordinance (GO Ref) (ver 1) 2.POS-College Station Series 2020 Page 309 of 471 CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION We, the undersigned officers of the City of College Station, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in a regular meeting on June 11, 2020, at the designated meeting place, and the roll was called of the duly constituted officers and members of said City Council, to wit: Mayor Karl Mooney City Council Place 1 - Bob Brick City Council Place 2 - John Crompton City Council Place 3 - Linda Harvell City Council Place 4 - Vacant City Council Place 5 - John Nichols City Council Place 6 - Dennis Maloney and all of said persons were present except __________________________ thus constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF COLLEGE STATION, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020"; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT was duly introduced for the consideration of said City Council. It was then duly moved and seconded that said Ordinance; and, after due discussion, said motion prevailed and carried by the following vote: AYES: NOES: Page 310 of 471 Certificate for Ordinance City of College Station, Texas General Obligation Refunding Bonds, Series 2020 2. That a true, full and correct copy of the aforesaid Ordinance described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. SIGNED AND SEALED ON JUNE 11, 2020. ________________________________ Tanya D. Smith City Secretary ________________________________ Karl P. Mooney Mayor (SEAL) Page 311 of 471 ORDINANCE NO. 2020-[__] AUTHORIZING THE ISSUANCE OF "CITY OF COLLEGE STATION, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020"; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT WHEREAS, the City of College Station, Texas (the “City”) has previously issued, and there are presently outstanding general obligation bonds and certificates of obligation which are secured by the full faith and credit of the City; WHEREAS, the City now desires to refund all or part of the outstanding revenue bonds, general obligation bonds and certificates of obligation described in Schedule I attached hereto and incorporated herein, which may be selected and designated to be refunded by the Pricing Officer in the Pricing Certificate (the "Refunded Obligations"); WHEREAS, Chapter 1207, Texas Government Code, authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof, together with any other available funds or resources, directly with a paying agent for the Refunded Obligations or a trust company or commercial bank that does not act as a depository for the City and is named in these proceedings, and such deposit, if made before the payment dates of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; WHEREAS, Chapter 1207, Texas Government Code, further authorizes the City to enter into an escrow or similar agreement with such paying agent for the Refunded Obligations or trust company or commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms and conditions as the City and such paying agent or trust company or commercial bank may agree; WHEREAS, the City is an "Issuer" within the meaning of Section 1371.001(4)(P), Texas Government Code, having (i) a principal amount of at least $100 million in outstanding long-term indebtedness, in long-term indebtedness proposed to be issued, or a combination of outstanding or proposed long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed to be issued that is rated in one of the four highest rating categories for long-term debt instruments by a nationally recognized rating agency for municipal securities, without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with the obligation; WHEREAS, the City Council hereby finds and declares a public purpose and it is in the best interests of the City to refund the Refunded Obligations in order to achieve a debt service savings, with such savings, among other information and terms to be included in the Pricing Certificate to be executed by the Pricing Officer (hereinafter designated), all in accordance with the provisions of Section 1207.007, Texas Government Code and; Page 312 of 471 2 WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity within 20 years of the date of the bonds hereinafter authorized; WHEREAS, the bonds are to be issued, sold and delivered pursuant to the general laws of the State of Texas, including Texas Government Code Chapter 1207, as amended, and Chapter 1371, Texas Government Code, as amended, and the City's Home Rule Charter; and WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required by the applicable provisions of Texas Government Code Chapter 551; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: Section 1. DEFINITIONS; AUTHORIZATION OF BONDS. (a) Definitions. Terms not otherwise defined herein shall have the following meanings. (i) The term "Authorized Denomination" shall mean a denomination of $5,000 of principal amount of a Bond or any integral multiple thereof. (ii) The term "Bonds" shall mean the City of College Station, Texas General Obligation Refunding Bonds, Series 2020. (iii) The term "Business Day" means any day other than a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City are authorized by law or executive order to close. (iv) The term "Financial Obligation" means a: (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) a guarantee of the foregoing (a) and (b). The term Financial Obligation does not include any municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. (v) The term "MSRB" means the Municipal Securities Rulemaking Board. (vi) The term "Pricing Certificate" means a certificate of the Pricing Officer setting forth the terms of sale of the Bonds including the method of sale, principal amount, maturity dates, interest payment dates, dated date, interest rates, yields, redemption provisions, and other matters related to the sale of the Bonds. (vii) The term "Pricing Officer" means the Mayor, the City Manager and the Assistant City Manager/CFO of the City (each the "Pricing Officer") each of whom is independently authorized to finalize the terms of sale of the Bonds by execution of the Pricing Certificate. Page 313 of 471 3 (viii) The term "Purchaser" means (i) if the Bonds are sold by negotiated sale, the underwriter or underwriting syndicate selected by the Pricing Officer, or (ii) if the Bonds are sold by competitive sale by soliciting public bids, the underwriter or underwriting syndicate awarded the Bonds by the Pricing Officer. (ix) The term "Rule" means SEC Rule 15c2-12 (17 C.F.R. § 240.15C2-12), as amended from time to time. (x) The term "SEC" means the United States Securities and Exchange Commission (b) That said City's General Obligation Refunding Bonds, to be designated the "City of College Station, Texas General Obligation Refunding Bonds, Series 2020", are hereby authorized to be issued and delivered in the principal amount not to exceed $19,300,000 for the public purpose of (i) refunding the Refunded Obligations and (ii) paying the costs incurred in connection with the issuance of the Bonds (collectively, the "Projects"). Section 2. DELEGATION TO PRICING OFFICER. (a) As authorized by Sections 1371.053 and 1207.007, Texas Government Code, each Pricing Officer is each hereby authorized to act individually and severally on behalf of the City in selling and delivering the Bonds, carrying out the other procedures specified in this Ordinance, including, determining the date of the Bonds, any additional or different designation or title by which the Bonds shall be known, whether the Bond shall be sold and delivered in one or more series and the date and sale and delivery of each such series, the price at which the Bonds will be sold, the years in which the Bonds will mature, the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the interest payment and record dates, the price and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund redemption provisions, and all other matters relating to the issuance, sale, and delivery of the Bonds and obtaining municipal insurance for all or any portion of the Bonds and providing for the terms and provisions thereof applicable to the Bonds, all of which shall be specified in the Pricing Certificate; provided that: (i) the aggregate original principal amount of the Bonds shall not exceed $19,300,000; (ii) the true interest cost of the Bonds shall not exceed 4.000% per annum; (iii) the refunding must produce present value debt service savings of at least 5.000%; (iv) the final maturity of the Bonds shall not exceed February 15, 2031; (v) the delegation made hereby shall expire if not exercised by the Pricing Officer on or prior to June 11, 2021; and Page 314 of 471 4 (vi) on or prior to delivery, the Bonds shall be rated by a nationally recognized rating agency for municipal securities in one of the four highest categories for long-term obligations. (b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer shall establish an amount that, when combined with premium used for purposes other than the payment of costs of issuance, does not exceed the amount authorized in Subsection (a) hereof, which shall be sufficient in amount to provide for the purposes for which the Bonds are authorized and to pay costs of issuing the Bonds. The Bonds shall be sold with and subject to such terms as set forth in the Pricing Certificate. (c) The Bonds may be sold by public offering (either through a negotiated or competitive offering) and the Pricing Certificate shall so state, and the Pricing Certificate may conform this Ordinance to such method of sale, including the provisions hereof that pertain to the undertaking of the Issuer in accordance with the Rule. (c) The City Council hereby determines that the delegation of the authority to the Pricing Officer to approve the final terms of the Bonds as set forth in this Ordinance is, and the decisions made by the Pricing Officer pursuant to such delegated authority and incorporated into the Pricing Certificate are required to be, in the Issuer's best interests, and the Pricing Officer is hereby authorized to make and include in the Pricing Certificate a finding to that effect. Section 3. CHARACTERISTICS OF THE BONDS. (a) The City shall keep or cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office") of The Bank of New York Mellon Trust Company, N.A., or such other bank, trust company, financial institution, or other agency named in accordance with the provisions of (g) below (the "Paying Agent/Registrar"), books or records for the registration and transfer of the Bonds (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such transfers and registrations under such reasonable regulations as the City and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations as herein provided. It shall be the duty of the Paying Agent/Registrar to obtain from the registered owner and record in the Registration Books the address of the registered owner of each Bond to which payments with respect to the Bonds shall be mailed, as herein provided. The City or its designee shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar at its Designated Trust Office, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. Registration of each Bond may be transferred in the Registration Books only upon presentation and surrender thereof to the Paying Agent/Registrar at its Designated Trust Office for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing the assignment of such Bond, or any portion thereof in any Authorized Denomination, to the assignee or assignees thereof, and the right of such assignee or assignees to have such Bond or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Bond or any portion thereof, a new substitute Bond or Bonds shall be issued in exchange therefor in the manner herein provided. Page 315 of 471 5 (b) The entity in whose name any Bond shall be registered in the Registration Books at any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Bond shall be overdue, and the City and the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any such Bond shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (c) The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, and to act as its agent to exchange or replace Bonds, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Bonds, and of all exchanges thereof, and all replacements thereof, as provided in this Ordinance. (d) Each Bond may be exchanged for fully registered Bonds in the manner set forth herein. Each Bond issued and delivered pursuant to this Ordinance may, upon surrender thereof at the Designated Trust Office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, at the option of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully registered Bonds, without interest coupons, in the form prescribed in the FORM OF BOND, in an Authorized Denomination (subject to the requirement hereinafter stated that each substitute Bond shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the principal amount of any Bond or Bonds so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be. If any Bond or portion thereof is assigned and transferred, each Bond issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Bond for which it is being exchanged. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. The Paying Agent/Registrar shall exchange or replace Bonds as provided herein, and each fully registered Bond or Bonds delivered in exchange for or replacement of any Bond or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Bonds for all purposes of this Ordinance, and may again be exchanged or replaced. It is specifically provided, however, that any Bond delivered in exchange for or replacement of another Bond prior to the first scheduled interest payment date on the Bonds (as stated on the face thereof) shall be dated the same date as such Bond, but each substitute Bond so delivered on or after such first scheduled interest payment date shall be dated as of the interest payment date preceding the date on which such substitute Bond is delivered, unless such substitute Bond is delivered on an interest payment date, in which case it shall be dated as of such date of delivery; provided, however, that if at the time of delivery of any substitute Bond the interest on the Bond for which it is being exchanged has not been paid, then such substitute Bond shall be dated as of the date to which such interest has been paid in full. On each substitute Bond issued in exchange for or replacement of any Bond or Bonds issued under this Ordinance there shall be printed thereon a Paying Agent/Registrar's Authentication Certificate, in the form hereinafter set forth in the FORM OF BOND (the "Authentication Certificate"). An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such substitute Bond, date such substitute Bond in the manner set forth Page 316 of 471 6 above, and manually sign and date the Authentication Certificate, and no such substitute Bond shall be deemed to be issued or outstanding unless the Authentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for exchange or replacement. No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body or person so as to accomplish the foregoing exchange or replacement of any Bonds or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Bond in the manner prescribed herein. Pursuant to Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of Authentication Certificate, the exchanged or replaced Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds which originally were delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond so selected for redemption, in whole or in part, within 45 calendar days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled principal of a Bond. (e) All Bonds issued in exchange or replacement of any other Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM OF BOND. (f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees and charges for making transfers of Bonds, but the registered owner of any Bond requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The registered owner of any Bonds requesting any exchange shall pay the Paying Agent/Registrar's reasonable and standard or customary fees and charges for exchanging any such Bond or portion thereof, together with any taxes or governmental charges required to be paid with respect thereto, all as a condition precedent to the exercise of such privilege of exchange, except, however, that in the case of the exchange of an assigned and transferred Bond or Bonds or any portion or portions thereof in an Authorized Denomination, as provided in this Ordinance, such fees and charges will be paid by the City. In addition, the City hereby covenants with the registered owners of the Bonds that it will (i) pay the reasonable and standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer or registration of Bonds solely to the extent above provided, and with respect to the exchange of Bonds solely to the extent above provided. (g) The City covenants with the registered owners of the Bonds that at all times while the Bonds are outstanding the City will provide a competent and legally qualified bank, trust company, financial institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be one entity. The City reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than sixty days written notice to the Paying Agent/Registrar. In the event that the Page 317 of 471 7 entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that it will promptly appoint a competent and legally qualified national or state banking institution which shall be a corporation organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise trust powers, subject to supervision or examination by federal or state authority, and whose qualifications substantially are similar to the previous Paying Agent/Registrar to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by the City. Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. Section 4. FORM OF BONDS. The form of the Bonds, including the form of the Authentication Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bonds initially issued and delivered pursuant to this Ordinance, shall be in substantially the form as set forth in Exhibit A to this Ordinance, shall be numbered consecutively from R-1 upward, with the Initial Bond being numbered T-1, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance, and with the FORM OF BOND to be modified pursuant to, and completed with information set forth in the Pricing Certificate. The FORM OF BOND as it appears in Exhibit A shall be completed, amended and modified by Bond Counsel to incorporate the information set forth in the Pricing Certificate but it is not required for the FORM OF BOND to reproduced as an exhibit to the Pricing Certificate. The printer of the Bonds is hereby authorized to print on the Bonds (i) the form of bond counsel's opinion relating to the Bonds, and (ii) an appropriate statement of insurance furnished by a municipal bond insurance company providing municipal bond insurance, if any, covering all or any part of the Bonds. Section 5. RESERVED. Section 6. LEVY OF TAX; INTEREST AND SINKING FUND. (a) That a special fund or account, to be designated the "City of College Station, Texas Series 2020 Refunding Bond Interest and Sinking Fund" (the "Interest and Sinking Fund") is hereby created and shall be established and maintained by the City. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City, and shall be used only for paying the interest on and principal of the Bonds. All ad valorem taxes levied and collected for and on account of the Bonds shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Bonds are outstanding and unpaid, the governing body of the City shall compute and ascertain the rate and amount of ad valorem tax, based on the latest approved tax rolls of the City, with full allowances being made for tax delinquencies and the cost of tax collections, which will be sufficient to raise and produce the money required to pay the interest on the Bonds as such interest comes due, and to provide a Page 318 of 471 8 sinking fund to pay the principal (including mandatory sinking fund redemption payments, if any) of the Bonds as such principal matures or comes due through operation of the mandatory sinking fund redemption, if any, but never less than 2% of the original amount of the Bonds as a sinking fund each year. The rate and amount of ad valorem tax is hereby ordered to be levied against all taxable property in the City for each year while any of the Bonds is outstanding and unpaid, and the ad valorem tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Ad valorem taxes necessary to pay the interest on and principal of the Bonds, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Section 7. TRANSFER. That the City shall do any and all things necessary to accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to pay such items of principal and interest due on the Bonds. Section 8. SECURITY FOR FUNDS. That the Interest and Sinking Fund created by this Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for the security of public funds, and such Interest and Sinking Fund shall be used only for the purposes and in the manner permitted or required by this Ordinance. Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a) Replacement Bonds. That in the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new Bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafter provided. (b) Application for Replacement Bonds. That application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement Bond shall furnish to the City and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) No Default Occurred. That notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Bond, the City may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided in this Section. (d) Charge for Issuing Replacement Bonds. That prior to the issuance of any replacement Bond, the Paying Agent/Registrar shall charge the registered owner of such Bond Page 319 of 471 9 with all legal, printing, and other expenses in connection therewith. Every replacement Bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued under this Ordinance. (e) Authority for Issuing Replacement Bonds. That in accordance with Section 1201.067, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement Bond without necessity of further action by the City or any other body or person, and the duty of the replacement of such Bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with the effect, as provided in Section 5(d) of this Ordinance for Bonds issued in conversion and exchange of other Bonds. Section 10. FEDERAL INCOME TAX MATTERS. The City covenants to refrain from any action which would adversely affect, or to take such action as to ensure, the treatment of the Bonds as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows: (a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds are so used, that amounts, whether or not received by the City, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used for a "private business use" which is "related" and not "disproportionate", within the meaning of section 141(b)(3) of the Code, to the governmental use; (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (d) to refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (e) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, Page 320 of 471 10 to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with – (1) proceeds of the Bonds invested for a reasonable temporary period of three years or less until such proceeds are needed for the purpose for which the Bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds; (g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code; and (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. For purposes of the foregoing (a) and (b), the City understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of the City that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the City will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the Mayor, the City Manager and any Assistant City Manager/CFO, severally, to execute any documents, certificates or reports required by the Code, and to make such elections on behalf of the City which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. In order to facilitate compliance with clause (h) above, a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of America, and such Fund shall Page 321 of 471 11 not be subject to the claim of any other person, including without limitation the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. Section 11. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT. That the City covenants to account for the expenditure of proceeds from the sale of the Bonds and any investment earnings thereon to be used for the purposes described in Section 1 of this Ordinance (such purpose referred to in this Section and Section 12 as a "Project") on its books and records by allocating proceeds to expenditures within 18 months of the later of the date that (a) the expenditure on a Project is made or (b) such Project is completed. The foregoing notwithstanding, the City shall not expend such proceeds or investment earnings more than 60 days after the earlier of (a) the fifth anniversary of the date of delivery of the Bonds or (b) the date the Bonds are retired, unless the City obtains an opinion of nationally-recognized bond counsel substantially to the effect that such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 12. DISPOSITION OF PROJECT. That the City covenants that the property constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless any action taken in connection with such disposition will not adversely affect the tax-exempt status of the Bonds. For purpose of the foregoing, the City may rely on an opinion of nationally-recognized bond counsel that any action taken in connection with such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 13. PROCEDURES TO MONITOR COMPLIANCE WITH TAX COVENANTS. The City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring compliance with the federal tax covenants made by the City herein. Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS. That the Mayor of the City is hereby authorized to have control of the Bonds initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Bonds pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Bonds said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such certificate. The Bonds thus registered shall remain in the custody of the Mayor (or the designee thereof such as the City’s Bond Counsel) until delivered to the Purchaser (as defined in Section 18 of this Ordinance). Section 15. DTC REGISTRATION. That the Bonds initially shall be issued and delivered in such manner that no physical distribution of the Bonds will be made to the public, and The Page 322 of 471 12 Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Bonds. DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, 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 under Section 17A of the Securities Exchange Act of 1934, as amended, and the City accepts, but in no way verifies, such representations. The Bonds initially authorized by this Ordinance shall be delivered to and registered in the name of CEDE & CO., the nominee of DTC. It is expected that DTC will hold the Bonds on behalf of the Purchaser and its participants. So long as each Bond is registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it were the actual and beneficial owner thereof. It is expected that DTC will maintain a book-entry system which will identify ownership of the Bonds in Authorized Denominations, with transfers of ownership being effected on the records of DTC and its participants pursuant to rules and regulations established by them, and that the Bonds initially deposited with DTC shall be immobilized and not be further exchanged for substitute Bonds except as hereinafter provided. The City is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or its participants, or protecting any interests or rights of the beneficial owners of the Bonds. It shall be the duty of the DTC Participants, as defined in the Official Statement herein approved, to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Bonds, and the method of paying the fees and charges of DTC. The City does not represent, nor does it in any way covenant that the initial book-entry system established with DTC will be maintained in the future. Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any reason any of the originally delivered Bonds is duly filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this Ordinance, substitute Bonds will be duly delivered as provided in this Ordinance, and there will be no assurance or representation that any book-entry system will be maintained for such Bonds. In connection with the initial establishment of the foregoing book-entry system with DTC, the City heretofore has executed a "Blanket Letter of Representations" prepared by DTC in order to implement the book-entry system described above. Section 16. CONTINUING DISCLOSURE OBLIGATION PURSUANT TO RULE 15C2-12 (17 C.F.R. § 240.15C2-12). (a) Annual Reports. (i) 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 the 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 2020. 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 2020. If the audit of such financial statements is not complete within 12 months after any such fiscal year end, Page 323 of 471 13 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 of the Official Statement or such other accounting principles as the City may be required to employ from time to time pursuant to State law or regulation. (ii) 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 or filed with the SEC, as permitted by the Rule. If the City changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document that is available to the public on the MSRB's internet website or filed with the SEC. All documents provided to the MSRB pursuant to this Section shall be accompanied by identifying information as prescribed by the MSRB. (b) Event Notices. The City shall notify the MSRB in an electronic format as prescribed by the MSRB, in a timely manner (but not in excess of ten Business Days after the occurrence of the event) of any of the following events with respect to the Bonds: 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 or 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 Bonds, or other material events affecting the tax status of the Bonds; 7. Modifications to rights of Bondholders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds, if material; Page 324 of 471 14 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of an obligated person (which 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); 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 15. Incurrence of a Financial Obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect Bondholders, if material. 16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with this Section by the time required by such subsection. (c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with this Ordinance or applicable law that causes Bonds no longer to be outstanding. Page 325 of 471 15 (ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. (iii) UNDER NO CIRCUMSTANCE SHALL THE CITY BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (iv) No default by the City in observing or performing its obligations under this Section shall comprise a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (v) Should the Rule be amended to obligate the City to make filings with or provide notices to entities other than the MSRB, the City hereby agrees to undertake such obligation with respect to the Bonds in accordance with the Rule as amended. The provisions of this Section may be amended by the City 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, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the registered owners of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determined that such amendment will not materially impair the interest of the registered owners and beneficial owners of the Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) of this Section an explanation, in narrative form, of the reason for the amendment and of the impact of any change in the type of financial information or operating data so provided. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the Page 326 of 471 16 applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. (d) Procedures to Monitor Compliance with Continuing Disclosure Covenants. The City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring compliance with the continuing disclosure covenants made by the City herein. Section 17. DEFEASANCE. (a) Deemed Paid. Any Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (e) of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the City with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities. (b) Investments. Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the City be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing by the City. Any Future Escrow Agreement pursuant to which the money and/or Defeasance Securities are held for the payment of Defeased Bonds may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection (a)(i) or (ii) above. All income from such Defeasance Securities received by the Paying Agent/Registrar which is not required for the payment of the Defeased Securities, with respect to which such money has been so deposited, shall be remitted to the City or deposited as directed in writing by the City. (c) Selection of Defeased Bonds. In the event that the City elects to defease less than all of the principal amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds by such random method as it deems fair and appropriate. (d) Defeasance Securities. The term "Defeasance Securities" means (i) direct, noncallable obligations of the United States of America, including obligations that are Page 327 of 471 17 unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent; (iii) 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, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iv) any securities and obligations now or hereafter authorized by State law that are eligible to refund, retire or otherwise discharge obligations such as the Bonds. (e) Continuing Duty of Paying Agent/Registrar. Until all Bonds defeased under this Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for such Bonds shall perform the services of Paying Agent/Registrar for such Bonds the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services. (f) The Pricing Officer is hereby authorized to modify the securities that are eligible as Defeasance Securities and any such modification shall described in the Pricing Certificate. Section 18. SALE OF BONDS; OFFICIAL STATEMENT. (a) The Bonds may be sold by public offering (either through a negotiated or competitive offering) and the terms and provisions of which are to be determined by the Pricing Officer in accordance with Section 2 hereof, and in which the purchasers of the Bonds are designated. The Bonds may be sold pursuant to a purchase agreement or notice of sale and bidding instructions (collectively, the "Purchase Agreement") which the Pricing Officer is hereby authorized to execute and deliver and in which the Purchaser of the Bonds shall be designated. The Bonds shall initially be registered in the name of the Purchaser thereof as set forth in the Pricing Certificate. (b) The City hereby approves the form and content of the draft preliminary official statement relating to the Bonds in the form attached hereto as Exhibit C and any addenda, supplement or amendment thereto, and approves the distribution of such preliminary official statement in the reoffering of the Bonds by the Purchaser in final form, with such changes therein or additions thereto as the Pricing Officer executing the same may deem advisable. The Pricing Officer is hereby authorized, in the name and on behalf of the City, to approve, distribute, and deliver a final preliminary official statement and a final official statement relating to the Bonds to be used by the Purchaser in the marketing of the Bonds. (c) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to obtain from a municipal bond insurance company so designated in the Pricing Certificate (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of the Bonds. To that end, should the Pricing Officer exercise such authority and commit the City to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in effect, the requirements of the Insurer relating to the issuance of the Insurance Policy are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall have the authority to execute any documents Page 328 of 471 18 to effect the issuance of the Insurance Policy by the Insurer. (d) The Mayor and Mayor Pro Tem, the City Manager, the Assistant City Manager/CFO, Director of Finance and City Secretary, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the City a Paying Agent/Registrar Agreement, in the form presented at the meeting at which this Ordinance is adopted, with the Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bonds, the sale of the Bonds, the Purchase Agreement and the Official Statement. In case any officer whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 19. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City Manager, the Assistant City Manager/CFO, and Director of Finance, shall be and they are hereby expressly authorized, empowered, and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal and on behalf of the City all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, and the sale and delivery of the Bonds and fixing all details in connection therewith. The City Council hereby authorizes the payment of the fee of the Office of the Attorney General of the State of Texas for the examination of the proceedings relating to the issuance of the Bonds, in the amount determined in accordance with the provisions of Section 1202.004, Texas Government Code. Section 20. USE OF PROCEEDS. (a) The proceeds from the sale of the Bonds shall be deposited, on the date of closing, in the manner described in a letter of instructions prepared by the City or on behalf of the City by the City's financial advisor. The foregoing notwithstanding, any proceeds representing accrued interest on the Bonds shall be deposited to the credit of the Interest and Sinking Fund. Section 21. INTEREST EARNINGS. That the interest earnings derived from the investment of proceeds from the sale of the Bonds may be used along with other proceeds for the construction of the permanent improvements set forth in Section 1 hereof for which the Bonds are issued; provided that after completion of such permanent improvements, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on proceeds which are required to be rebated to the United States of America pursuant to this Ordinance hereof in order to prevent the Bonds from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this Section. Section 22. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. In furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Pricing Officer is further authorized to enter into and execute on behalf of the City with the escrow agent named therein, an escrow or similar agreement, which agreement will provide for the payment in full of the Refunded Obligations. In addition, the Pricing Officer is authorized to purchase such Page 329 of 471 19 securities, to execute such subscriptions for the purchase of the Escrowed Securities, (as defined in the agreement), if any, and to authorize such contributions to the escrow fund as provided in the agreement. Section 23. REDEMPTION OF REFUNDED OBLIGATIONS. (a) The City hereby directs that certain of the Refunded Obligations be called for redemption on the dates and as set forth in the Escrow Agreement. Each of such Refunded Obligations shall be redeemed at the redemption price of par plus accrued interest. The paying agents for the Refunded Obligations are hereby authorized and directed to issue or cause to be issued the Notices of Redemption of the Refunded Obligations. (b) In addition, the paying agent/registrars for the Refunded Obligations are hereby directed to provide the appropriate notices of redemption and defeasance as specified by the ordinances authorizing the issuance of the Refunded Obligations and are hereby directed to make appropriate arrangements so that the Refunded Obligations may be redeemed on their redemption dates. The Refunded Obligations shall be presented for redemption at the paying agent/registrars therefore, and shall not bear interest after the date fixed for redemption. (c) The source of funds for payment of the principal of and interest on the Refunded Obligations on their redemption date shall be from the funds placed in escrow with the Escrow Agent, pursuant to the Escrow Agreement approved in Section 22 of this Ordinance. Section 24. DEFAULT AND REMEDIES. (a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the City, the failure to perform which materially, adversely affects the rights of the registered owners of the Bonds, including, but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any registered owner to the City. (b) Remedies for Default. (i) Upon the happening of any Event of Default, then and in every case, any registered owner or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may proceed against the City, or any official, officer or employee of the City in their official capacity, for the purpose of protecting and enforcing the rights of the registered owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the registered owners hereunder or any combination of such remedies. Page 330 of 471 20 (ii) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all registered owners of Bonds then outstanding. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. (iii) By accepting the delivery of a Bond authorized under this Ordinance, such registered owner agrees that the certifications required to effectuate any covenants or representations contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or members of the City or the City Council. (iv) None of the members of the City Council, nor any other official or officer, agent, or employee of the City, shall be charged personally by the registered owners with any liability, or be held personally liable to the registered owners under any term or provision of this Ordinance, or because of any Event of Default or alleged Event of Default under this Ordinance. Section 25. MISCELLANEOUS PROVISIONS. (a) Preamble. The preamble to this Ordinance is incorporated by reference and made a part hereof for all purposes. (b) Titles Not Restrictive. That the titles assigned to the various sections of this Ordinance are for convenience only and shall not be considered restrictive of the subject matter of any section or of any part of this Ordinance. (c) Rules of Construction. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any particular Section or other subdivision. Except where the context otherwise requires, terms defined in this Ordinance to impart the singular number shall be considered to include the plural number and vice versa. References to any named person means that party and its successors and assigns. References to any constitutional, statutory or regulatory provision means such provision as it exists on the date this Ordinance is adopted by the City and any future amendments thereto or successor provisions thereof. Any reference to "FORM OF BOND" shall refer to the form of the Bonds set forth in Exhibit A to this Ordinance. Any reference to the payment of principal in this Ordinance shall be deemed to include the payment of any mandatory sinking fund redemption payments as may be described herein. (d) Inconsistent Provisions. All ordinances, orders and resolutions, or parts thereof, Page 331 of 471 21 which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and declared to be inapplicable, and the provisions of this Ordinance shall be and remain controlling as to the matters prescribed herein. (e) Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or provision of this Ordinance or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Ordinance shall nevertheless be valid and the City hereby declares that this Ordinance would have been enacted without such invalid word, phrase, clause, paragraph, sentence, part, portion, or provisions. (f) Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas. (g) Open Meeting. The City officially finds and determines that the meeting at which this Ordinance is adopted was open to the public; and that public notice of the time, place, and purpose of such meeting was given, all as required by Chapter 551, Texas Government Code. (h) Application of Chapter 1208, Government Code. Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the pledge of ad valorem taxes granted by the City under Section 6, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of the ad valorem taxes granted by the City is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the Registered Owners of the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. (i) Immediate Effect. In accordance with the provisions of Section 1201.028, Texas Government Code, this Ordinance shall be effective immediately upon its adoption by the City Council. [Remainder of page intentionally left blank.] Page 332 of 471 Ordinance City of College Station, Texas General Obligation Refunding Bonds, Series 2020 SIGNATURE PAGE PASSED, APPROVED AND EFFECTIVE THIS JUNE 11, 2020. City Secretary; City of College Station Mayor; City of College Station (CITY SEAL) APPROVED: McCall, Parkhurst & Horton L.L.P., Dallas, Texas Bond Counsel Page 333 of 471 Schedule I-1 SCHEDULE I REFUNDED OBLIGATIONS City of College Station, Texas Certificates of Obligation, Series 2010 City of College Station, Texas General Obligation Improvement Bonds, Series 2010 City of College Station, Texas Certificates of Obligation, Series 2011 Page 334 of 471 A-1 EXHIBIT A FORM OF BOND The form of the Bonds, including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached only to the Bonds initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance and with the Bonds to be completed with information set forth in the Pricing Certificate. The Form of Bond as it appears in this Exhibit A shall be completed, amended and modified by Bond Counsel to incorporate the information set forth in the Pricing Certificate but it is not required for the Form of Bond to reproduced as an exhibit to the Pricing Certificate. NO. _____ UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020 Principal Amount $[] MATURITY DATE INTEREST RATE DELIVERY DATE CUSIP NO. % [], 2020 REGISTERED OWNER: PRINCIPAL AMOUNT: ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE STATION, TEXAS, in Brazos County (the "City"), being a political subdivision of the State of Texas, hereby promises to pay to the Registered Owner specified above or to the registered assignee hereof (either being hereinafter called the "registered owner") the Principal Amount specified above, and to pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months), from the Delivery Date specified above, to the Maturity Date specified above, or the date of its redemption prior to scheduled maturity, at the interest rate per annum specified above, with said interest payable on [], and semiannually on each August 15 and February 15 thereafter until maturity or prior redemption; except that if this Bond is required to be authenticated and the date of its authentication is later than [], such interest is payable semiannually on each August 15 and February 15 following such date. Page 335 of 471 A-2 THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United States of America, without exchange or collection charges. At maturity or redemption prior to maturity, the principal of this Bond shall be paid to the registered owner hereof upon presentation and surrender of this Bond at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office") of The Bank of New York Mellon Trust Company, N.A., which is the "Paying Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by check, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at its address as it appeared on the last business day of the month preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any accrued interest due at maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this Bond for payment at the Designated Trust Office of the Paying Agent/Registrar. The City covenants with the registered owner of this Bond that on or before each principal and interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bonds, when due. IN THE EVENT OF 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 ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each registered owner of a Bond appearing on the Registration Books kept by the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Designated Trust Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS BOND is one of a Series of Bonds dated as of [], 2020, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $[_], for the public purpose of (i) refunding the Refunded Obligations and (ii) paying the costs incurred in connection with the issuance of the Bonds (collectively, the "Projects"). ON FEBRUARY 15, [], or on any date thereafter, the Bonds of this Series maturing on February 15, [] and thereafter may be redeemed prior to their scheduled maturities, at the option Page 336 of 471 A-3 of the City, in whole, or in part, at par and accrued interest to the date fixed for redemption. The years of maturity of the Bonds called for redemption at the option of the City prior to their stated maturity shall be selected by the City. The Bonds or portions thereof redeemed within a maturity shall be selected by lot or other method by the Paying Agent/Registrar; provided, that during any period in which ownership of the Bonds is determined only by a book entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity and bearing such interest rate shall be selected in accordance with the arrangements between the City and the securities depository. AT LEAST THIRTY days prior to the date fixed for any such redemption, a written notice of such redemption shall be given to the registered owner of each Bond or a portion thereof being called for redemption by depositing such notice in the United States mail, first-class postage prepaid, addressed to each such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar. By the date fixed for any such redemption due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion hereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of this Bond or any portion hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in Authorized Denominations, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance. IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds sufficient to redeem all the Bonds called for redemption, such notice must state that it is conditional, and is subject to the deposit of the redemption moneys with the Paying Agent/Registrar or legally authorized escrow agent at or prior to the redemption date, and such notice shall be of no effect unless such moneys are so deposited on or prior to the redemption date. If such redemption is not effectuated, the Paying Agent/Registrar shall, within five days thereafter, give notice in the manner in which the notice of redemption was given that such moneys were not so received and shall rescind the redemption. ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without interest coupons, in Authorized Denominations. As provided in the Bond Ordinance, this Bond may, at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred, and exchanged for a like aggregate principal amount of fully registered Bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in Authorized Page 337 of 471 A-4 Denominations as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar at its Designated Trust Office, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in an Authorized Denomination to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Bond may be executed by the registered owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Bond or any portion or portions hereof from time to time by the registered owner. The foregoing notwithstanding, in the case of the exchange of an assigned and transferred Bond or Bonds or any portion or portions thereof, such fees and charges of the Paying Agent/Registrar will be paid by the City. The one requesting such exchange shall pay the Paying Agent/Registrar’s reasonable standard or customary fees and charges for exchanging any Bond or portion thereof. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, or exchange as a condition precedent to the exercise of such privilege. In any circumstance, neither the City nor the Paying Agent/Registrar shall be required (1) to make any transfer or exchange during a period beginning at the opening of business 30 days before the day of the first mailing of a notice of redemption of Bonds and ending at the close of business on the day of such mailing, or (2) to transfer or exchange any Bonds so selected for redemption when such redemption is scheduled to occur within 45 calendar days. WHENEVER the beneficial ownership of this Bond is determined by a book entry at a securities depository for the Bonds, the foregoing requirements of holding, delivering or transferring this Bond shall be modified to require the appropriate person or entity to meet the requirements of the securities depository as to registering or transferring the book entry to produce the same effect. IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns, or otherwise ceases to act as such, the City has covenanted in the Bond Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owners of the Bonds. IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond have been performed, existed, and been done in accordance with law; that this Bond is a direct obligation of said City, issued on the full faith and credit thereof; and that in accordance with the terms of the Bond Ordinance, annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in said City, and have been pledged for such payment, within the limit prescribed by law. Page 338 of 471 A-5 BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes and records of the City, and agrees that the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each registered owner hereof and the City. IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature of the Mayor of the City, attested by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly affixed to, or impressed, or placed in facsimile, on this Bond. Xxxxx xxxxx City Secretary; City of College Station Mayor; City of College Station (SEAL) FORM OF PAYING AGENT/REGISTRAR’S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR’S AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been issued under the provisions of the proceedings adopted by the City as described in the text of this Bond; and that this Bond has been issued in exchange for or replacement of a Bond of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: _______________ The Bank of New York Mellon Trust Company, N.A. Paying Agent/Registrar By: Authorized Representative [FORM OF COMPTROLLER’S CERTIFICATE ATTACHED TO THE BOND (BOND NO. T-1) UPON INITIAL DELIVERY THEREOF] COMPTROLLER’S CERTIFICATE OFFICE OF COMPTROLLER § REGISTER NO. ________ STATE OF TEXAS § Page 339 of 471 A-6 I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of College Station, Texas, payable in the manner provided by and in the ordinance authorizing same, and said Bond has this day been registered by me. WITNESS MY HAND and seal of office at Austin, Texas this ___________________. __________________________________________ Comptroller of Public Accounts of the State of Texas (SEAL) FORM OF ASSIGNMENT ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto: Please insert Social Security or Taxpayer Identification Number of Transferee Please print or type name and address, including zip code of Transferee the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints: ____________________________________, attorney, to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: __________________. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program. NOTICE: The signature above must correspond with the name of the registered owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever. Page 340 of 471 A-7 INSERTIONS FOR THE INITIAL BOND. The initial Bond shall be in the form set forth in paragraph (a) of this Form of Bond, except that: i. immediately under the name of the Bond, the headings “INTEREST RATE” and “MATURITY DATE” shall both be completed with the words “As shown below” and “CUSIP NO. _____” shall be deleted. ii. the first paragraph shall be deleted and the following will be inserted: THE CITY OF COLLEGE STATION, TEXAS, in Brazos County, Texas (the “City”), being a political subdivision of the State of Texas, hereby promises to pay to the Registered Owner specified above or to the registered assignee hereof (either being hereinafter called the “registered owner”) on the Maturity Dates, in the Principal Amounts and bearing interest at the per annum Interest Rates set forth in the following schedule: Maturity Date Principal Amount Interest Rate Information from the Pricing Certificate to be Inserted in Initial Bond The City promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-day months) from the Delivery Date above at the respective Interest Rate per annum specified above. Interest is payable on [] and on each August 15 and February 15 thereafter to the date of payment of the Principal Amounts specified above, or the date of redemption prior to maturity; except, that if this Bond is required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such principal amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then this Bond shall bear interest from the date to which such interest has been paid in full." iii. The initial Bond shall be numbered "T-1." Page 341 of 471 B-1 EXHIBIT B . PROCEDURES REGARDING COMPLIANCE WITH FEDERAL TAX AND CONTINUING DISCLOSURE COVENANTS This Exhibit is intended to assist the City of College Station (the "City") in complying with the federal income tax covenants and securities disclosure covenants as they apply to the issuance of tax-exempt debt securities such as the General Obligation Refunding Bonds (the "Obligations"). These procedures should be read together with any federal tax certifications, bond covenants, letters or memoranda from bond counsel and any attachments thereto (collectively, the "Closing Documents"). Failure to comply with federal guidelines could have serious consequences for investors, the City and its officials. These procedures shall apply to the Obligations, until they are superseded by a change in circumstances at which time the City's bond counsel will propose new procedures to be adopted. I. FEDERAL TAX LAW 1. Arbitrage Compliance. Arbitrage refers to the difference between the interest paid on tax-exempt Obligations and the interest earned by investing the proceeds of tax-exempt Obligations in higher-yielding investments. Such higher-yielding investments could take the form of loans, securities, real property, personal property, or other investments that could yield a profit to the City. Federal income tax laws generally restrict the ability to earn arbitrage utilizing the proceeds of tax-exempt Obligations. Generally, any profit from investing Obligation proceeds at a yield above the yield paid on the Obligations belongs to the federal government and must be rebated to the federal government. If the City fails to comply federal tax guidelines, Obligations could be deemed to be “arbitrage bonds” by the Internal Revenue Service (the “IRS”), which would expose the City to monetary liability from the City’s investors. The arbitrage yield on the Obligations is set forth on the IRS Form 8038-G. The Assistant City Manager/CFO and the City Treasurer (including such other employees of the City who report to such officers) (collectively, the "Responsible Person") will review the Closing Documents periodically (at least once a year) to ascertain if an exception to arbitrage compliance applies. a. Procedures applicable to the Obligation. The Responsible Person shall undertake the following procedures. Page 342 of 471 B-2 i. If the City plans to spend funds currently on hand for a future project with the intent to later repay such funds from a debt issue, the Responsible Person shall contact Bond Counsel to obtain advice regarding a reimbursement resolution. The Responsible Person shall maintain any official action of the City (such as a reimbursement resolution) stating the City's intent to reimburse with the proceeds of the Obligations any amount expended prior to the Issue Date for the acquisition, renovation or construction of the Project. ii. The Responsible Person shall ensure that the applicable information return (e.g., U.S. Internal Revenue Service ("IRS") Form 8038-G, 8038-GC, or any successor forms) is timely filed with the IRS. iii. If proceeds of the Obligations are to be invested in interest-earning investments, assure that, unless excepted from rebate and yield restriction under section 148(f) of the Code, excess investment earnings are computed and paid to the U.S. government at such time and in such manner as directed by the IRS (i) at least every 5 years after the Issue Date and (ii) within 30 days after the date the Obligations are retired. If proceeds of the Obligations are to be invested in interest-earning investments, the Responsible Person should contact the City's arbitrage consultant regarding such matters. iv. The Responsible Person shall monitor all amounts deposited into a sinking fund or funds pledged (directly or indirectly) to the payment of the Obligations, such as the Interest and Sinking Fund (the "I&S Fund"), to assure that the maximum amount invested within such applicable fund at a yield higher than the yield on the Obligations does not exceed an amount equal to the debt service on the Obligations in the succeeding 12 month period plus a carryover amount equal to one-twelfth of the principal and interest payable on the Obligations for the immediately preceding 12-month period. NOTE: the purpose of the I&S Fund is to achieve a proper matching of revenues with principal and interest payments within each fiscal year. The I&S Fund should be used a mechanism for payment of current debt service and not as a long-term investment fund for debt service many years in the future. v. The Responsible Person shall ensure that no more than 50% of the proceeds of the Obligations are invested in an investment with a guaranteed yield for 4 years or more. b. With respect to the investment and expenditure of the proceeds of the Obligations that are issued to finance public improvements or to acquire land or personal property, the Responsible Person shall undertake the following. Page 343 of 471 B-3 i. The Responsible Person shall instruct the persons who are primarily responsible for the construction, renovation or acquisition of the facilities financed with Obligations (the “Project”) that the Project must (i) proceed with due diligence toward completion and that (ii) binding contracts for the expenditure of at least 5% of the proceeds of the Obligations will be entered into within six (6) months of the date of closing of the Obligations (the “Issue Date”). The Responsible Person shall monitor that the above requirements are satisfied. ii. The Responsible Person shall monitor that at least 85% of the proceeds of the Obligations to be used for the construction, renovation or acquisition of the Project are expended within three years of the Issue Date. iii. The Responsible Person shall monitor investment of proceeds of the Obligations and restrict the yield of the investments to the yield on the Obligations after three years of the Issue Date. iv. To the extent that there are any unspent proceeds of the Obligations at the time the Obligations are later refunded, or if there are unspent proceeds of the Obligations that are being refunded by a new issuance of Obligations, the Responsible Person shall continue monitoring the expenditure of such unspent proceeds to ensure compliance with federal tax law with respect to both the refunded Obligations and any Obligations being issued for refunding purposes, and shall contact Bond Counsel as necessary. c. Procedures applicable to Escrow Accounts for the Obligations. In addition to the foregoing, with respect to the proceeds of the Obligations deposited to the escrow fund to be administered pursuant to the terms of an escrow agreement, the Responsible Person shall undertake the following. i. The Responsible Person shall review invoices, reports and other notifications from the escrow agent to ensure compliance with the applicable provisions of the escrow agreement, including with respect to reinvestment of cash balances. ii. The Responsible Person shall contact the escrow agent on the date of redemption of obligations being refunded to ensure that they were redeemed. iii. The Responsible Person shall monitor any unspent proceeds of the refunded obligations to ensure that the yield on any investments applicable to such proceeds are invested at the yield on the applicable obligations or otherwise applied (see Closing Documents). Page 344 of 471 B-4 B. Private Business Use. Generally, the proceeds of tax-exempt Obligations may not inure to the benefit of entities other than state or local governments (“private business use”). Private business use occurs whenever Obligation proceeds are used to benefit any entity other than a state or local government, including nonprofit corporations and the federal government. A series of Obligations may lose their tax-exempt status if: (i) more than 10% of the proceeds of the Obligations are to be used for any private business use and the payment of the principal or interest on more than 10% of the proceeds of the Obligations is secured by or payable from property used for a private business use, or (ii) the amount of proceeds of the Obligations used to make loans to borrowers other than state and local governments exceeds the lesser of 5% of the proceeds or $15 million. With respect to the use of the facilities financed or refinanced with the proceeds of the Obligations, the Responsible Person shall undertake the following to ensure the Obligations do not violate private business use tests. a. The Responsible Person shall develop procedures or a “tracking system” to identify, log and record all property financed with tax-exempt debt and identify the issue of Obligations used to finance such property. b. The Responsible Person shall monitor and record the date on which the Project is substantially complete and available to be used for the purpose intended. c. The Responsible Person shall monitor and record whether, at any time the Obligations are outstanding, any person, other than the City, the employees of the City, the agents of the City or members of the general public has any contractual right (such as a lease, research contract, naming rights agreement, purchase contract, management agreement or other service agreement) with respect to any portion of the Project. d. Before entering into any private business use arrangement that involves the use of the Project, the Responsible Person must obtain a description of the proposed private business use arrangement and determine whether such arrangement, if put into effect, will be consistent with the restrictions on private business use of the Project. In connection with the evaluation of any proposed private business use arrangement, the Responsible Person should consult with Bond Counsel to discuss whether such arrangement, if put into effect, will be consistent with the restrictions on private business use of the Project, and, if not, whether any “remedial action” permitted under federal guidelines may be taken as a means of enabling such private business use without adversely affecting the tax-exempt status of the Obligations. e. The Responsible Person shall monitor and record whether, at any time the Obligations are outstanding, any person, other than the City, the employees of the City, the agents of the City or members of the general public has a right to use the Page 345 of 471 B-5 output of the Project (e.g., water, gas, electricity, capacity) on any basis other than standard rates and charges. f. The Responsible Person shall monitor and record whether, at any time the Obligations are outstanding, any person, other than the City, has a naming right for the Project or any other contractual right granting an intangible benefit. g. Prior to any sale of property owned by the City (real or personal), the Responsible Person must confirm whether such property was financed with tax-exempt debt, and if so, determine whether the proposed disposition of the property could impact the tax-exempt status of the series of Obligations that financed the acquisition of such property. h. The Responsible Person shall take any action necessary to remediate any failure to maintain compliance with the covenants contained in the ordinance authorizing the issuance of the applicable series of Obligations. C. Record Retention. The Responsible Person will maintain or cause to be maintained all records relating to the investment and expenditure of the proceeds of the Obligations and the use of the Project financed or refinanced thereby for a period ending three (3) years after the complete extinguishment of the Obligations. If any portion of the Obligations is refunded with the proceeds of another series of Obligations, such records shall be maintained until the three (3) years after the refunding Obligations mature or are otherwise paid off. Such records can be maintained in paper or electronic format. For purposes of these procedures, the Memorandum of Bond Counsel dated December 1, 2011 styled "Certain Federal Income Tax Considerations for Record Retention – Record Management Program and Periodic Compliance Review" in incorporated herein and should be reviewed periodically, at least once per year, by the Responsible Person. D. Responsible Person & Continuity. Each Responsible Person shall receive appropriate training regarding the City’s accounting system, contract intake system, facilities management and other systems necessary to track the investment and expenditure of the proceeds and the use of the facilities financed with the proceeds of the Obligations. The foregoing notwithstanding, the Responsible Person is authorized and instructed to retain such experienced advisors and agents as may be necessary to carry out the purposes of these instructions. Prior to cessation of employment with the City, the Responsible Person should identify their successor to maintain compliance with these procedures. Page 346 of 471 B-6 II. FEDERAL SECURITIES LAW Obligations, whether taxable or tax-exempt, sold in a public offering in an amount of $1 million or more are subject to Rule 15c2-12 (the “Rule”) of the United States Securities and Exchange Commission (the “SEC”). Additionally, the City may have covenanted to comply with the Rule even with respect to Obligations that would otherwise be exempt from the Rule (e.g., Obligations sold in a private placement or Obligations sold in an amount less than $1 million). Pursuant to the Rule, the City is required to make annual filings of certain information, as well as make filings upon the occurrence of certain specified events. All filings must be made with the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access System (“EMMA”) at emma.msrb.org. A. Annual Filings. The City must file 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 EMMA. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in the City’s Official Statements under Tables numbered 1 through 6; 8 through 20 and in Appendix B. The City will update and provide the information in such tables within six months after the end of each fiscal year. 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. 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. The Responsible Person must compile, prepare and make such filings within the required time, or, alternatively, contract with a third-party, such as the City’s financial advisor, to make such filings on the City’s behalf. B. Notices of Specified Events. The City must provide notice of any of the following events with respect to the Obligations 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; Page 347 of 471 B-7 (6) Adverse tax opinions, the issuance by the IRS 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 Obligations, or other material events affecting the tax status of the Obligations; (7) Modifications to rights of Obligation holders, if material; (8) Obligations calls (includes redemptions and other early payments), if material, and tender offers; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the Obligations, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the City; (13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) Appointment of a successor or additional paying agent or the change of name of a paying agent, if material; (15) Incurrence of a Financial Obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect bondholders, if material; (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties; and (17) In a timely manner, notice of a failure of the City to make the required annual filings listed in Subsection II(A) above. The Responsible Person should review this list at regular intervals to determine whether any event has occurred that may require a filing with EMMA. Page 348 of 471 C-1 EXHIBIT C PRELIMINARY OFFICIAL STATEMENT Page 349 of 471 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, interest on the Bonds 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) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on inside cover Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Bond Ordinance”) adopted by the governing body of the City on April 9, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Bond Ordinance, the City Council of the City delegated authority to certain authorized officials of the City to finalize the pricing of the Bonds. The definitive Bonds 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 Bonds may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds 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 Bonds. See “THE OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Bonds are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Chapter 1207, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City as provided in the Bond Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations) and their redemption dates; and (ii) paying costs of issuance of the Bonds. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 2 SEPARATE ISSUES . . . The Bonds are being offered by the City concurrently with the issuance of the $49,995,000* City of College Station, Texas, Certificates of Obligation, Series 2020 (the “Certificates”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY . . . The Bonds 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 – Form Of Opinion 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. DELIVERY. . . It is expected that the Bonds will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 11, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 350 of 471 2 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $18,940,000* General Obligation Refunding Bonds, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 1,620,000$ 2022 1,665,000 2023 1,710,000 2024 1,770,000 2025 1,810,000 2026 1,855,000 2027 1,910,000 2028 1,960,000 2029 2,015,000 2030 2,075,000 2031 550,000 (1) CUSIP numbers have been assigned to the Bonds 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 Bonds. 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.  OPTIONAL REDEMPTION. . . The Bonds are not subject to redemption prior to maturity. * Preliminary, subject to change. Page 351 of 471 3 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., 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) $49,995,000* CERTIFICATES OF OBLIGATION, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on page 4 Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $49,995,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing February 15, 2021 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Certificates are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Certificate Ordinance”) adopted by the governing body of the City on June 11, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Certificate Ordinance, the City Council of the City delegates authority to certain authorized officials of the City to finalize the pricing of the Certificates. 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 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, 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 OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Certificates are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from a combination of (i) the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City, and (ii) subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric utility system, as provided in the Certificate Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Certificates will be used for (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 4 SEPARATE ISSUES . . . The Certificates are being offered by the City concurrently with the issuance of the $18,940,000* City of College Station, Texas, General Obligation Refunding Bonds, Series 2020 (the “Bonds”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY. . . 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 – Form Of Opinion 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 DELIVERY. . . It is expected that the Certificates will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 11, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 352 of 471 4 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $49,995,000* Certificates of Obligation, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 2,270,000$ 2022 2,390,000 2023 2,420,000 2024 2,450,000 2025 2,475,000 2026 2,515,000 2027 2,545,000 2028 2,230,000 2029 2,270,000 2030 2,300,000 2031 2,350,000 2032 2,400,000 2033 2,445,000 2034 2,500,000 2035 2,560,000 2036 2,630,000 2037 2,700,000 2038 2,775,000 2039 2,850,000 2040 2,920,000 (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. OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – Optional Redemption”). MANDATORY SINKING FUND 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 shown above (see “THE OBLIGATIONS - Mandatory Sinking Fund Redemption”). * Preliminary, subject to change. Page 353 of 471 5 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 Obligations 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 Obligations. Neither the City, the Financial Advisor nor the Initial Purchasers 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 Purchasers 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 Obligations are exempt from registration with the Securities and Exchange Commission and consequently have not been registered therewith. The registration, qualification, or exemption of the Obligations 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 PURCHASERS 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. 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. Page 354 of 471 6 TABLE OF CONTENTS MATURITY SCHEDULE ............................................... 2  MATURITY SCHEDULE ............................................... 4  OFFICIAL STATEMENT SUMMARY ......................... 7  SELECTED FINANCIAL INFORMATION ............................. 9  GENERAL FUND CONSOLIDATED STATEMENT SUMMARY .............................................................. 9  UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS .......................................................... 9  CITY OFFICIALS, STAFF AND CONSULTANTS ... 10  ELECTED OFFICIALS .................................................... 10  SELECTED ADMINISTRATIVE STAFF .............................. 10  CONSULTANTS AND ADVISORS ..................................... 11  INTRODUCTION .......................................................... 12  THE CERTIFICATES ................................................... 13  TAX INFORMATION ................................................... 17  TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT ............................................... 23  TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY ........................................................... 24  TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY ............................................................... 25  TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY .............................................................. 25  TABLE 5 - TEN LARGEST TAXPAYERS ......................... 25  TABLE 6 - TAX ADEQUACY ........................................ 26  TABLE 7 - ESTIMATED OVERLAPPING DEBT ................ 26  DEBT INFORMATION ................................................. 27  TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS ..................................................... 27  TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION ......................................................... 28  TABLE 10 – SELF-SUPPORTING DEBT .......................... 28  TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS . 28  ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT ................................................................... 28  OTHER OBLIGATIONS ................................................... 29  PENSION FUND ............................................................ 29  OTHER POST EMPLOYMENT BENEFITS .......................... 32  FINANCIAL INFORMATION ..................................... 37  TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY ........................................ 37  TABLE 13 - MUNICIPAL SALES TAX HISTORY ............. 38  FINANCIAL POLICIES .................................................... 38  THE COMBINED UTILITY SYSTEM ....................... 39  WATERWORKS SYSTEM ............................................... 39  WASTEWATER SYSTEM ............................................... 40  ELECTRIC SUPPLY SOURCE .......................................... 40  WIND WATT RATES .................................................... 41  TABLE 14 - HISTORICAL UTILITY USERS ...................... 41  TABLE 15 - TEN LARGEST UTILITY CUSTOMERS .......... 42  TABLE 16 - CONDENSED STATEMENT OF OPERATIONS . 42  TABLE 17 – VALUE OF THE SYSTEM ............................. 42  TABLE 18 – CITY’S EQUITY IN THE SYSTEM ................. 43  TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE43  INVESTMENTS ............................................................. 44  LEGAL INVESTMENTS .................................................. 44  INVESTMENT POLICIES ................................................ 45  ADDITIONAL PROVISIONS ............................................ 45  CITY’S INVESTMENT POLICY ....................................... 46  TABLE 20 - CURRENT INVESTMENTS ............................ 46  TAX MATTERS ............................................................. 46  CONTINUING DISCLOSURE OF INFORMATION 48  OTHER INFORMATION ............................................. 50  RATINGS ..................................................................... 50  LITIGATION ................................................................. 50  REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE ............................................................. 50  LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ................................................... 50  AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION ...................................................... 51  FINANCIAL ADVISOR ................................................... 51  CERTIFICATION OF THE OFFICIAL STATEMENT AND NO- LITIGATION CERTIFICATE ...................................... 51  FORWARD-LOOKING STATEMENTS .............................. 51  INITIAL PURCHASER .................................................... 52  MISCELLANEOUS ......................................................... 52  SCHEDULE OF REFUNDED OBLIGATIONS ...................................................... Schedule I 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. Page 355 of 471 7 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 Obligations 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 BONDS .......................... The Bonds are issued as $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020. The Bonds are issued as serial bonds maturing on February 15 in each of the years 2021-2031, inclusive (see “THE OBLIGATIONS - General Description”). If two or more serial maturities of the Bonds are grouped into a single maturity (the “Term Bonds”) by the Initial Purchaser, such Term Bonds will be subject to mandatory sinking fund redemption in accordance with applicable provisions of the Bond Ordinance. THE CERTIFICATES ............. The Certificates are issued as $49,995,000* City of College Station, Texas Certificates of Obligation, Series 2020. The Certificates are issued as serial certificates maturing on February 15 in each of the years 2021-2040, inclusive (see “THE OBLIGATIONS - 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 Certificate Ordinance. PAYMENT OF INTEREST ...... Interest on the Bonds will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basiss of a 360-day consisting of twelve 30-day months (see “THE OBLIGATIONS – General Description”). 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, 2021 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 OBLIGATIONS - General Description”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS .......... The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1207, Texas Government Code, as amended, and an ordinance passed by the City Council of the City. In the Bond Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Bonds (see “THE OBLIGATIONS - Authority for Issuance). The Certificates are issued pursuant to the general laws of the State, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended; Chapter 1371, Texas Government Code as amended, and an ordinance passed by the City Council of the City. In the Certificate Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Certificates (see “THE OBLIGATIONS - Authority for Issuance). The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. SECURITY FOR THE OBLIGATIONS ...................... The Bonds constitute direct obligations of the City, secured by and payable from 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 (see “THE OBLIGATIONS - Security and Source of Payment”). 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 water, wastewater and electric utility system (see “THE OBLIGATIONS - 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. * Preliminary, subject to change. Page 356 of 471 8 REDEMPTION ....................... The Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – 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; any aggregation of maturities into Term Certificates will be specified in the Official Statement. (See “THE OBLIGATIONS – Mandatory Sinking Fund Redemption”). TAX EXEMPTION .................. In the opinion of Bond Counsel, the interest on the Obligations 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 PROCEEDS ............... Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations and their redemption dates); (ii) paying the costs of issuance of the Bonds. Proceeds from the sale of the Certificates will be used for (i) (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. (see “THE OBLIGATIONS – Sources and Use of Proceeds”). RATINGS ............................. The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's Investors Service, Inc. (“Moody's”) and “AA+” 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”). Applications have been made to Moody’s, S&P and Fitch Ratings Services for contract ratings on the Obligations. BOOK-ENTRY-ONLY SYSTEM .............................. The definitive Obligations 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 Obligations may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates (see “THE OBLIGATIONS - Book-Entry-Only System”). PAYMENT RECORD .............. Other than a late payment on the City’s Certificates of Obligation, Series 2002 that occurred in 2003, the City has never defaulted in payment of its general obligation tax debt. (Remainder of page intentionally left blank) Page 357 of 471 9 SELECTED FINANCIAL INFORMATION Ratio Tax Fiscal Per Capita Per Capita Debt to Year Estimated Taxable Taxable Net Net Taxable Ended City Assessed Assessed Ad Valorem Ad Valorem Assessed 9/30 Population (1) Valuation(2)Valuation Tax Debt (3)Tax Debt Valuation 2016 109,859 7,162,738,280$ 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 75,543 175,400,000 1,488 1.97% 98.90% 2019 121,150 9,487,074,377 78,308 197,690,000 1,632 2.08% 99.47% 2020 122,949 9,979,431,357 (4)81,167 206,465,000 (5)1,679 (5)2.07%(5)88.24%(6) Collection Total Percent _______________ (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 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (5) Projected, includes the Obligations, excludes the Refunded Obligations. (6) Collections as of March 15, 2020. 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, 2020. GENERAL FUND CONSOLIDATED STATEMENT SUMMARY 2019 2018 2017 2016 2015 Beginning Balance 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ 20,244,248 $ Total Revenue 71,180,329 67,484,355 64,795,371 60,087,950 58,378,174 Total Expenditures 87,077,758 82,128,812 76,897,859 77,508,715 68,827,167 Other Financing Sources 17,467,427 16,214,241 15,483,809 14,130,903 12,627,809 Prior Period Adjustment - 2,706,262 - - - Ending Balance(1)28,360,567 $ 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ For Fiscal Year Ended September 30, UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, Page 358 of 471 10 CITY OFFICIALS, STAFF AND CONSULTANTS ELECTED OFFICIALS Term Name Position Expiration Occupation Karl P. Mooney Mayor 3 Years (1)November 2022 Texas A&M University Administrator Bob Brick Council Member 2 Years November 2020 Research Scientist John Crompton Council Member 6 Months November 2022 CEO Linda Harvell Council Member 3 Years November 2020 Business Owner Vacant (2)Council Member November 2021 John Nichols Council Member 2 Years (3)November 2020 Retired Professor Dennis Maloney Council Member 1 Year November 2021 Business Owner Length of Service ________________ (1) Elected November 2016 - Former City of College Station Council Member 2011-2016. (2) The vacancy was created when Councilwoman Elianor Vessali announced she would resign her seat in order to campaign for the Republican nomination for the U.S. Congressional District 17 seat. The unexpired term for Place-4 runs through November 2021, at which point the seat will be on the ballot for a full three-year term. (3) Prior Council Member for 4 years prior to his current term. SELECTED ADMINISTRATIVE STAFF Name Position Bryan Woods City Manager 1.5 Jeff Capps Deputy City Manager 27.0 (1) Jeff Kersten Assistant City Manager, CFO 29.0 (2) Carla Robinson City Attorney 18.5 Tanya D. Smith City Secretary 12.0 (3) Ty Elliott Internal Auditor 12.5 Mary Ellen Leonard Director of Finance 4.0 Gary Mechler Director of Water Services 1.0 (4) Timothy Crabb Director of Electric Utility 13.5 (5) Sindhu Menon Chief Information Officer 2.0 (6) David Schmitz Director of Parks and Recreation 12.0 (7) Jennifer Prochazka Director of Development Services 18.0 (8) Donald Harmon Director of Public Works and CIP 20.5 (9) Alison Pond Director of Human Resources 11.5 Jay Socol Public Communications Director 10.5 Length of Service to the City (in Years) ________________ (1) 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) Appointed City Secretary in July 2017. Previously served as Deputy City Secretary since 2008. (4) New Hire Director of Water Services August 2018. (5) Director of Electric Utility since December 2012; previously served as Assistant Director of Electric Utility. (6) New hire as Director of Information Technology in March 2018. (7) Director of Parks and Recreation since May 2011; previously served as Assistant Director of Parks and Recreation. (8) Named Director of Development Services September 2018; previously Manager of Economic Development. (9) Director of Public Works and CIP since January 2014; previously Assistant Director of Public Works and CIP. Page 359 of 471 11 CONSULTANTS AND ADVISORS Auditors ........................................................................................................................................................ BKD CPAs & Advisors Houston, Texas Bond Counsel ............................................................................................................................. McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor ............................................................................................................................................. Hilltop Securities Inc. Houston, Texas 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 W. Boyd London, Jr Marti Shew Hilltop Securities Inc. 1201 Elm Street, Suite 3500 Dallas, Texas 75270 (214) 953-4000 or Joe Morrow Hilltop Securities Inc. 700 Milam Street, Suite 500 Houston, Texas 77002 (713) 651-9850 Phone (Remainder of page intentionally left blank) Page 360 of 471 12 PRELIMINARY OFFICIAL STATEMENT RELATING TO CITY OF COLLEGE STATION, TEXAS (a Home-Rule City located in Brazos County, Texas) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 $49,995,000* CERTIFICATES OF OBLIGATION, SERIES 2020 INTRODUCTION This Official Statement, which includes the cover pages, Schedule I and Appendices hereto, provides certain information regarding the issuance of the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) and the $49,995,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates,” and together with the Bonds, herein collectively referred to as the “Obligations”). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the respective ordinances (the “Bond Ordinance” with respect to the Bonds and the “Certificate Ordinance” with respect to the Certificates), each to be adopted by the City Council of the City on June 11, 2020. The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. In the Ordinances, the City Council delegates to an authorized officer of the City (the “Pricing Officer” to finalize the pricing of the Obligations. There follows in this Official Statement descriptions of the Obligations 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 2018. 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 122,949. The City covers approximately 51.6 square miles. PLAN OF FINANCING PURPOSE . . . The Bonds are being issued for the purpose of (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings, and (ii) paying the costs of issuance of the Bonds. See Schedule I for a detailed listing of the Refunded Obligations and their redemption dates. The Certificates are being issued for the purpose of (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates.. REFUNDED OBLIGATIONS . . . The Refunded Obligations are being called for redemption on the redemption dates set forth in Schedule I. The principal and interest due on the Refunded Obligations are to be paid on the redemption date of such Refunded Obligations, from funds to be deposited pursuant to a certain Escrow Agreement (the “Escrow Agreement”) between the City and Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Escrow Agent”). The Bond Ordinance provides that from the proceeds of the sale of the Bonds received from the Initial Purchaser and other funds of the City, if any, the City will deposit with the Escrow Agent an amount which will be sufficient to accomplish the discharge and final payment of the Refunded Obligations on the redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the “Escrow Fund”) and used to pay principal and accrued interest on the Refunded Obligations on the redemption dates. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations. The funds on deposit in the Escrow Fund will not be available to pay debt service on the Bonds. * Preliminary, subject to change. Page 361 of 471 13 By the deposit of the proceeds of the Bonds and other funds of the City, if any are required, with the Escrow Agent pursuant to the Escrow Agreement, the City will have defeased of the Refunded Obligations in accordance with applicable State law and the ordinances authorizing the Refunded Obligations. As a result of such defeasance, the Refunded Obligations will be outstanding only for the purpose of receiving payments from the Escrow Fund held for such purpose by the Escrow Agent, and the Refunded Obligations will not be deemed as being outstanding obligations of the City payable from ad valorem taxes, nor for the purpose of applying any limitation on the issuance of debt, and the City will have no further responsibility with respect to amounts available in the Escrow Fund for the payment of the Refunded Obligations. SOURCES AND USES OF CERTIFICATE PROCEEDS . . . Proceeds from the sale of the Obligations, are expected to be expended as follows: Sources of Funds The Bonds The Certificates Par Amount -$ -$ Original Issue Premium Total Uses of Funds -$ -$ Use of Funds Deposit to Project Fund -$ -$ Deposit to the Escrow Fund Underwriters' Discount Costs of Issuance Total Uses of Funds -$ -$ THE CERTIFICATES GENERAL DESCRIPTION . . . The Obligations 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 pages 2 and 4 hereof. Interest on the Obligations will be calculated on the basis of a 360- day year consisting of twelve 30-day months and will be payable February 15 and August 15 of each year commencing August 15, 2020 with respect to the Bonds and February 15, 2021, with respect to the Certificates, until maturity or prior redemption. The definitive Obligations will be issued only in fully registered form in any integral multiple of $5,000 in principal amount 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 Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations 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 Obligations (see “Book- Entry-Only System”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS. . . The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas (the "State"), including particularly Chapter 1207, Texas Government Code, as amended, and the Bond Ordinance. The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended and the Certificate Ordinance. SECURITY AND SOURCE OF PAYMENT Tax Pledge . . . The Obligations constitute direct obligations of the City payable from an annual direct and continuing ad valorem tax levied against all taxable property within the City, within the limits prescribed by law Pledge of Surplus Water, Wastewater and Electric Utility System Net Revenues for Certificates . . . In addition to the pledge of ad valorem taxes described above, the Certificates are additionally secured by and payable from a subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric 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. Page 362 of 471 14 OPTIONAL REDEMPTION . . . The Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, 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 page 4 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. 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 Obligations is to be transferred and how the principal of and interest on the Obligations are to be paid to and credited by the DTC while the Obligations 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 Obligations, 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 Obligations), 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 Obligations. The Obligations 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 Obligations, 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 Page 363 of 471 15 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. Purchases of Obligations 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 Obligations (“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 Obligations 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 Obligations, except in the event that use of the book-entry system described herein is discontinued. To facilitate subsequent transfers, all Obligations 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 Obligations 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 Obligations; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Obligations 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 Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations 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 Obligations 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 Obligations 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 Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Obligations 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 Obligations 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, Obligations 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, Obligations 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 Obligations 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 Obligations, 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 Ordinances 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. Page 364 of 471 16 PAYING AGENT/REGISTRAR . . . The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In the Ordinances, 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 Obligations 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 Obligations. Upon any change in the Paying Agent/Registrar for the Obligations, the City will promptly cause a written notice thereof to be sent to each registered owner of the Obligations 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 Obligations 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. Obligations may be assigned by the execution of an assignment form on the respective Obligations 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 Obligations 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 Obligations issued in an exchange or transfer of Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. Neither the City nor the Paying Agent/Registrar will be required to transfer or exchange any Obligation 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 Obligation. RECORD DATE FOR INTEREST PAYMENT . . . The record date (“Record Date”) for determining the person to whom the interest is payable on the Obligations 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 Obligation 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 Ordinances provide for the defeasance of the Obligations when the payment of the principal of and premium, if any, on the Obligations, 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 Obligations. The Ordinances provide 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 Obligations. In the Ordinances, 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. REMEDIES OF HOLDERS OF OBLIGATIONS. . . The Ordinances establish specific events of default with respect to the Obligations. If the City defaults in the payment of the principal of or interest on the Obligations 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 Obligations including but not limited to, their prospect or ability to be repaid in accordance with the Ordinances, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, the Ordinances provide 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 Obligations or the Ordinances and the City's obligations are not uncertain or disputed. Chapter 1371, 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 bonds, but in connection with the issuance of the Obligations, the City has not waived sovereign immunity, and therefore, holders may not be able to bring such a suit against the City for breach of the of Ordinances covenants in the absence of City action. 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 Obligations in the event of default and, consequently, the remedy of mandamus Page 365 of 471 17 may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to represent the interest of the holders of the Obligations upon any failure of the City to perform in accordance with the terms of the Ordinances, 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 Obligations. 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 Obligations may not be able to bring such a suit against City for breach of the 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 Obligations. 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 Obligations 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 Obligations 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 The following is a summary of certain provisions of State law as it relates to ad valorem taxation and is not intended to be complete. Prospective investors are encouraged to review Title I of the Texas Tax Code, as amended (the “Property Tax Code”), for identification of property subject to ad valorem taxation, property exempt or which may be exempted from ad valorem taxation if claimed, the appraisal of property for ad valorem tax purposes, and the procedures and limitations applicable to the levy and collection of ad valorem taxes. VALUATION OF TAXABLE PROPERTY . . . The Property Tax Code provides for countywide appraisal and equalization of taxable property values and establishes in each county of the State an appraisal district and an appraisal review board (the “Appraisal Review Board”) responsible for appraising property for all taxing units within the county. The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District (the “Appraisal District”). Except as generally described below, the Appraisal District is required 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 market value of property, the Appraisal District is required to consider the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and use the method the chief appraiser of the Appraisal District considers most appropriate. The Property Tax Code requires appraisal districts to reappraise all property in its jurisdiction at least once every three (3) years. A taxing unit may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the taxing unit by petition filed with the Appraisal Review Board. State law requires the appraised value of an owner’s principal residence (“homestead” or “homesteads”) to be based solely on the property’s value as a homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further limits the appraised value of a homestead to the lesser of (1) the market value of the property or (2) 110% of the appraised value of the property for the preceding tax year plus the market value of all new improvements to the property. State law provides that eligible owners of both agricultural land and open-space land, 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 as both agricultural and open-space land. The appraisal values set by the Appraisal District are subject to review and change by the Appraisal Review Board. The appraisal rolls, as approved by the Appraisal Review Board, are used by taxing units, such as the City, in establishing their tax rolls and tax rates (see “Tax Information – City and Taxpayer Remedies”). STATE MANDATED HOMESTEAD EXEMPTIONS . . . State law grants, with respect to each city in the State, various exemptions for disabled veterans and their families, surviving spouses of members of the armed services killed in action, and surviving spouses of first responders killed or fatally wounded in the line of duty. LOCAL OPTION HOMESTEAD EXEMPTIONS . . . The governing body of a taxing unit, including a city, county, school district, or special district, at its option may grant: (1) an exemption of up to 20% of the appraised value of all homesteads (but not less than $5,000) and (2) an additional exemption of at least $3,000 of the appraised value of the homesteads of persons sixty-five (65) years of age or older and the disabled. Each taxing unit decides if it will offer the local option homestead exemptions and at what percentage or dollar amount, as applicable. The exemption described in (2), above, may be created, increased, decreased or repealed at an election called by the governing body of a taxing unit upon presentment of a petition for such creation, increase, decrease, or repeal of at least 20% of the number of qualified voters who voted in the preceding election of the taxing unit. Page 366 of 471 18 LOCAL OPTION FREEZE FOR THE ELDERLY AND DISABLED . . . The governing body of a county, municipality or junior college district may, at its option, provide for a freeze on the total amount of ad valorem taxes levied on the homesteads of persons 65 years of age or older or of disabled persons above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon voter initiative, an election may be held to determine by majority vote whether to establish such a freeze on ad valorem taxes. Once the freeze is established, the total amount of taxes imposed on such homesteads cannot be increased except for certain improvements, and such freeze cannot be repealed or rescinded. PERSONAL PROPERTY . . . Tangible personal property (furniture, machinery, supplies, inventories, etc.) used in the “production of income” is taxed based on the property’s market value. Taxable personal property includes income-producing equipment and inventory. Intangibles such as goodwill, accounts receivable, and proprietary processes are not taxable. Tangible personal property not held or used for production of income, such as household goods, automobiles or light trucks, and boats, is exempt from ad valorem taxation unless the governing body of a taxing unit elects to tax such property. FREEPORT AND GOODS-IN-TRANSIT EXEMPTIONS . . . Certain goods that are acquired in or imported into the State to be forwarded outside the State, and are detained in the State for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication (“Freeport Property”) are exempt from ad valorem taxation unless a taxing unit took official action to tax Freeport Property before April 1, 1990 and has not subsequently taken official action to exempt Freeport Property. Decisions to continue taxing Freeport Property may be reversed in the future; decisions to exempt Freeport Property are not subject to reversal. Certain goods that are acquired in or imported into the State to be forwarded to another location within or without the State, stored in a location that is not owned by the owner of the goods and are transported to another location within or without the State within 175 days (“Goods-in-Transit”), are generally exempt from ad valorem taxation; however, the Property Tax Code permits a taxing unit, on a local option basis, to tax Goods-in-Transit if the taxing unit takes official action after conducting a public hearing, before January 1 of the first tax year in which the taxing unit proposes to tax Goods-in-Transit. Goods-in-Transit and Freeport Property do not include oil, natural gas or petroleum products, and Goods-in-Transit does not include aircraft or special inventories such as manufactured housing inventory, or a dealer’s motor vehicle, boat, or heavy equipment inventory. A taxpayer may receive only one of the Goods-in-Transit or Freeport Property exemptions for items of personal property. OTHER EXEMPT PROPERTY . . . Other major categories of exempt property include property owned by the State or its political subdivisions if used for public purposes, property exempt by federal law, property used for pollution control, farm products owned by producers, property of nonprofit corporations used for scientific research or educational activities benefitting a college or university, designated historic sites, solar and wind-powered energy devices, and certain classes of intangible personal property. TAX INCREMENT REINVESTMENT ZONES . . . A city or county, by petition of the landowners or by action of its governing body, may create one or more tax increment reinvestment zones (“TIRZ”) within its boundaries. At the time of the creation of the TIRZ, a “base value” for the real property in the TIRZ is established and the difference between any increase in the assessed valuation of taxable real property in the TIRZ in excess of the base value is known as the “tax increment”. During the existence of the TIRZ, all or a portion of the taxes levied against the tax increment by a city or county, and all other overlapping taxing units that elected to participate, are restricted to paying only planned project and financing costs within the TIRZ and are not available for the payment of other obligations of such taxing units. TAX ABATEMENT AGREEMENTS . . . Taxing units may also enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The taxing unit, 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 Information – Tax Abatement Policy” for descriptions of the City’s tax abatement program. For a discussion of how the various exemptions described above are applied by the City, see “Tax Information – City Application of Property Tax Code” herein. CITY AND TAXPAYER REMEDIES . . . Under certain circumstances, taxpayers and taxing units, including the City, may appeal the determinations of the Appraisal District by timely initiating a protest with the Appraisal Review Board. Additionally, taxing units such as the City may bring suit against the Appraisal District to compel compliance with the Property Tax Code. Beginning in the 2020 tax year, owners of certain property with a taxable value in excess of the current year “minimum eligibility amount”, as determined by the State Comptroller, and situated in a county with a population of one million or more, may protest the determinations of an appraisal district directly to a three-member special panel of the appraisal review board, appointed by the chairman of the appraisal review board, consisting of highly qualified professionals in the field of property tax appraisal. The minimum eligibility amount is set at $50 million for the 2020 tax year, and is adjusted annually by the State Comptroller to reflect the inflation rate. The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the City and provides for taxpayer referenda that could result in the repeal of certain tax increases (see “Tax Information – Public Hearing and Maintenance and Operations Tax Rate Limitations”). The Property Tax Code also establishes a procedure for providing notice to property owners of reappraisals reflecting increased property value, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll. Page 367 of 471 19 LEVY AND COLLECTION OF TAXES . . . The City is responsible for the collection of its taxes, unless it elects to transfer such functions to another governmental entity. Taxes are due October 1, or when billed, whichever comes later, and become delinquent after January 31 of the following year. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty of up to twenty percent (20%) if imposed by the City. The delinquent tax also accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code also makes provision for the split payment of taxes, discounts for early payment and the postponement of the delinquency date of taxes for certain taxpayers. Furthermore, the City may provide, on a local option basis, for the split payment, partial payment, and discounts for early payment of taxes under certain circumstances. PUBLIC HEARING AND MAINTENANCE AND OPERATIONS TAX RATE LIMITATIONS . . . The following terms as used in this section have the meanings provided below: “adjusted” means lost values are not included in the calculation of the prior year’s taxes and new values are not included in the current year’s taxable values. “de minimis rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted), plus the rate that produces an additional $500,000 in tax revenue when applied to the current year’s taxable value, plus the debt service tax rate. “no-new-revenue tax rate” means the combined maintenance and operations tax rate and debt service tax rate that will produce the prior year’s total tax levy (adjusted) from the current year’s total taxable values (adjusted). “special taxing unit” means a city for which the maintenance and operations tax rate proposed for the current tax year is 2.5 cents or less per $100 of taxable value. “unused increment rate” means the cumulative difference between a city’s voter-approval tax rate and its actual tax rate for each of the tax years 2020 through 2022, which may be applied to a city’s tax rate in tax years 2021 through 2023 without impacting the voter-approval tax rate. “voter-approval tax rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted) multiplied by 1.035, plus the debt service tax rate, plus the “unused increment rate.” The City’s tax rate consists of two components: (1) a rate for funding of maintenance and operations expenditures in the current year (the “maintenance and operations tax rate”), and (2) a rate for funding debt service in the current year (the “debt service tax rate”). Under State law, the assessor for the City must submit an appraisal roll showing the total appraised, assessed, and taxable values of all property in the City to the City Council by August 1 or as soon as practicable thereafter. A city must annually calculate its “voter-approval tax rate” and “no-new-revenue tax rate” (as such terms are defined above) in accordance with forms prescribed by the State Comptroller and provide notice of such rates to each owner of taxable property within the city and the county tax assessor-collector for each county in which all or part of the city is located. A city must adopt a tax rate before the later of September 30 or the 60th day after receipt of the certified appraisal roll, except that a tax rate that exceeds the voter-approval tax rate must be adopted not later than the 71st day before the next occurring November uniform election date. If a city fails to timely adopt a tax rate, the tax rate is statutorily set as the lower of the no-new-revenue tax rate for the current tax year or the tax rate adopted by the city for the preceding tax year. As described below, the Property Tax Code provides that if a city adopts a tax rate that exceeds its voter-approval tax rate or, in certain cases, its “de minimis rate”, an election must be held to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. A city may not adopt a tax rate that exceeds the lower of the voter-approval tax rate or the no-new-revenue tax rate until each appraisal district in which such city participates has delivered notice to each taxpayer of the estimated total amount of property taxes owed and the city has held a public hearing on the proposed tax increase. For cities with a population of 30,000 or more as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the voter-approval tax rate, that city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. For cities with a population less than 30,000 as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the greater of (i) the voter-approval tax rate or (ii) the de minimis rate, the city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. However, for any tax year during which a city has a population of less than 30,000 as of the most recent federal decennial census and does not qualify as a special taxing unit, if a city’s adopted tax rate is equal to or less than the de minimis rate but greater than both (a) the no-new-revenue tax rate, multiplied by 1.08, plus the debt service tax rate or (b) the city’s voter-approval tax rate, then a valid petition signed by at least three percent of the registered voters in the city would require that an election be held to determine whether or not to reduce the adopted tax rate to the voter- approval tax rate. Page 368 of 471 20 Any city located at least partly within an area declared a disaster area by the Governor of the State or the President of the United States during the current year may calculate its “voter-approval tax rate” using a 1.08 multiplier, instead of 1.035, until the earlier of (i) the second tax year in which such city’s total taxable appraised value exceeds the taxable appraised value on January 1 of the year the disaster occurred, or (ii) the third tax year after the tax year in which the disaster occurred. State law provides cities and counties in the State the option of assessing a maximum one‐half percent (1/2%) sales and use tax on retail sales of taxable items for the purpose of reducing its ad valorem taxes, if approved by a majority of the voters in a local option election. If the additional sales and use tax for ad valorem tax reduction is approved and levied, the no-new-revenue tax rate and voter-approval tax rate must be reduced by the amount of the estimated sales tax revenues to be generated in the current tax year. The calculations of the no-new-revenue tax rate and voter-approval tax rate do not limit or impact the City’s ability to set a debt service tax rate in each year sufficient to pay debt service on all of the City’s tax-supported debt obligations, including the Obligations. 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. DEBT TAX RATE LIMITATIONS . . . 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 supported 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 of 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 on ad valorem tax-supported debt, as calculated at the time of issuance. THE CITY’S RIGHTS IN THE EVENT OF TAX DELINQUENCIES . . . Taxes levied by the City are a personal obligation of the owner of the property. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of each taxing unit, including the City, having power to tax the property. The City’s tax lien is on a parity with tax liens of such other taxing units. A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the City is determined by applicable federal law. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest. At any time after taxes on property become delinquent, the City may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the City must join other taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, adverse market conditions, taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of a taxpayer’s debt. Federal bankruptcy law provides that an automatic stay of actions 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 a 5% exemption to the market value of the residence homestead. It also grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000. Ad valorem taxes are not levied by the City against 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. 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. Page 369 of 471 21 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 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. Page 370 of 471 22 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) Page 371 of 471 23 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2019/2020 Market Valuation Established by Brazos Central Appraisal District 10,421,438,232 $ (excluding exempt property) Less Exemptions/Reductions at 100% Market Value: Productivity Loss 109,281,559 $ Over 65 Homestead Exemptions 100,307,942 Cap Loss 19,300,903 Pollution Control 289,050 Member Armed Service Surviving Spouse 655,750 Solar 91,200 Freeport 12,923,797 Disabled Veteran 42,115,293 Homestead 152,210,126 Abatements 4,831,255 442,006,875 2019/2020 Taxable Assessed Valuation 9,979,431,357 $ Debt Payable from Ad Valorem Taxes (as of 4/15/2020)(2) Certificates of Obligation, Series 2009 1,285,000 $ General Obligation Improvement Bonds, Series 2009 175,000 General Obligation Refunding Bonds, Series 2010 4,410,000 Certificates of Obligation, Series 2012 11,190,000 General Obligation Improvement and Refunding Bonds, Series 2012 8,325,000 Certificates of Obligation, Series 2013 7,485,000 General Improvement and Refunding Bonds, Series 2013 11,575,000 Certificates of Obligation, Series 2014 24,510,000 General Improvement and Refunding Bonds, Series 2014 21,315,000 Certificates of Obligation, Series 2016 20,425,000 General Improvement and Refunding Bonds, Series 2016 33,455,000 General Improvement and Refunding Bonds, Series 2017 28,120,000 Certificates of Obligation, Series 2017 50,065,000 Certificates of Obligation, Series 2018 32,755,000 Certificates of Obligation, Series 2019 71,990,000 The Bonds(3)18,940,000 The Certificates (4)49,995,000 396,015,000 Less: Self Supporting Debt (5)189,550,000 $ Less: Interest and Sinking Fund as of 2/1/2020 22,897,120 Net Debt Payable from Ad Valorem Taxes(4)183,567,880 $ Ratio of Net Debt Payable from Ad Valorem Taxes to Taxable Assessed Valuation(4)1.84% Per Capita Taxable Assessed Valuation - $81,167 Per Capita Net Funded Debt - $1,493 (4) 2020 Estimated Population - 122,949 (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year.  (2) Excludes the Refunded Obligations, preliminary, subject to change (3) Preliminary, subject to change.  (4) 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 $1,000. See “THE OBLIGATIONS- Security and Source of Payment.” There is no guarantee that payments from these enterprise funds will be made. If payments are not made from the enterprise funds, the City will be required to levy ad valorem taxes in amounts sufficient to make such payments. (5) In the past, the City has sold certificates of obligation to finance projects for the City’s water and sewer system, and electric system and has internally allocated portions of this debt as payable from the respective enterprise funds. The self-supporting amounts listed above are projections of debt that is expected to be retired by the City based on actual historical payments from these funds to pay for debt service the outstanding certificates of obligation. There is no guarantee that payments from these funds will continue in the future. Includes a portion of the Certificates. See “DEBT INFORMATION – TABLE 10 – Self Supporting Debt.” (6) Net of Interest and Sinking Fund as of February 1, 2020. Page 372 of 471 24 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY 2020 2019 2018 % of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single-Family 5,654,665,682$ 54.26% 5,420,353,263$ 54.67% 4,891,101,082$ 53.32% Real, Residential, Multi-Family 2,165,512,093 20.78% 2,014,388,746 20.32% 1,951,938,574 21.28% Real, Vacant Lots/Tracts 170,205,829 1.63% 181,379,036 1.83% 166,018,722 1.81% Real, Acreage (Land Only) 111,699,300 1.07% 107,486,185 1.08% 117,980,979 1.29% Real, Farm and Ranch Improvements 73,131,172 0.70% 92,572,477 0.93% 95,828,034 1.04% Real, Commercial/Industrial 1,722,395,856 16.53% 1,612,617,746 16.27% 1,497,083,484 16.32% Real, Oil, Gas & Other Mineral Reserves 7,641,206 0.07% 12,619,033 0.13% 4,375,082 0.05% Real and Tangible Personal, Utilities 41,354,350 0.40% 40,945,210 0.41% 40,806,430 0.44% Tangible Personal, Business 415,420,441 3.99% 389,192,346 3.93% 360,514,767 3.93% Tangible Personal, Other 2,384,330 0.02% 2,441,400 0.02% 2,449,980 0.03% Real Property Inventory 37,101,583 0.36% 23,400,278 0.24% 31,155,861 0.34% Special Inventory 19,926,390 0.19% 16,814,030 0.17% 13,855,490 0.15% Total Appraised Value Before Exemptions 10,421,438,232$ 100.00% 9,914,209,750$ 100.00% 9,173,108,485$ 100.00% Less: Total Exemptions/Reductions 442,006,875 427,135,373 271,017,930 Taxable Assessed Value 9,979,431,357$ 9,487,074,377$ 8,902,090,555$ 2017 % of % of Category Amount Total Amount Total Real, Residential, Single-Family 4,470,806,990$ 56.58% 3,942,774,761$ 53.35% Real, Residential, Multi-Family 1,275,467,653 16.14% 1,326,289,539 17.95% Real, Vacant Lots/Tracts 158,722,669 2.01% 142,089,823 1.92% Real, Acreage (Land Only) 87,626,228 1.11% 92,882,946 1.26% Real, Farm and Ranch Improvements 113,059,943 1.43% 108,202,479 1.46% Real, Commercial/Industrial 1,340,756,747 16.97% 1,330,864,915 18.01% Real, Oil, Gas & Other Mineral Reserves 5,036,746 0.06% 10,793,941 0.15% Real and Tangible Personal, Utilities 40,325,800 0.51% 30,944,850 0.42% Tangible Personal, Business 371,077,880 4.70% 369,625,180 5.00% Tangible Personal, Other 1,988,130 0.03% 2,024,340 0.03% Real Property Inventory 23,079,643 0.29% 17,672,671 0.24% Special Inventory 13,282,100 0.17% 15,787,080 0.21% Total Appraised Value Before Exemptions 7,901,230,529$ 100.00% 7,389,952,525 $ 100.00% Less: Total Exemptions/Reductions 277,266,358 227,214,245 Taxable Assessed Value 7,623,964,171$ 7,162,738,280 $ Taxable Appraised Value, Fiscal Year Ending September 30, Taxable Appraised Value, Fiscal Year Ending September 30, 2016 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. (Remainder of page intentionally left blank) Page 373 of 471 25 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY 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 Per Capita 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 75,543 175,400,000 1.97% 1,488 2019 121,150 9,487,074,377 78,308 197,690,000 2.08% 1,632 2020 122,949 9,979,431,357 81,167 206,465,000 (4)2.07%(4)1,679 (4) (1) Source: The City. (2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year. Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (3) Payable from ad valorem taxes. Does not include self-supporting debt. as shown on Table 8 and Table 10 (4) Projected, includes the Obligations, excludes the Refunded Obligations. Preliminary, subject to change. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY Fiscal Year General Interest and % Current % Total Ended 9/30 Tax Rate Fund Sinking Fund Tax Levy Collections Collections 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 43,300,209 98.90% 98.90% 2019 0.5058 0.2855 0.2203 46,985,167 99.22% 99.47% 2020 0.5346 0.3132 0.2214 51,722,744 88.50%(1)88.24%(1) (1) Collections as of March 15, 2019. 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, 2020. TABLE 5 - TEN LARGEST TAXPAYERS 2019/2020 % of Total Taxable Taxable Nature Assessed Assessed Name of Taxpayer of Property Valuation Valuation CPP College Station I LLC Real Estate 69,800,000$ 0.70% The Standard at College Station LLC Apartment Buildings 65,100,000 0.65% Sterling-A&M High Rise LLC Apartment Buildings 63,614,688 0.64% FujiFilm Diosynth Biotechnologies Texas LLC Technology 60,671,010 0.61% Woodridge College Station LLC Mall 55,470,994 0.56% Woodridge College Station Phase II LLC Mall 55,373,651 0.55% POM-College Station LLC Mall 54,570,040 0.55% SW Meadows Point LP Apartment Buildings 53,740,000 0.54% Culpepper Family LP Real Estate 53,642,459 0.54% Weinberg Israel Real Estate 52,829,451 0.53% 584,812,293$ 5.86% 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 OBLIGATIONS - Tax Rate Limitation”). Page 374 of 471 26 TABLE 6 - TAX ADEQUACY Net Maximum Tax Suppported Principal and Interest Requirements (2021)…………………………… 20,888,981 $ (1) $0.21144 Tax Rate at 99% Collection Produces ………………………………………………………20,889,505 $ Net Average Tax Supported Principal and Interest Requirements (2020-2040)………………………… 13,522,907 $ (1) $0.13688 Tax Rate at 99% Collection Produces ………………………………………………………13,523,247 $ (1) Includes the Obligations and excludes the Refunded Obligations and self-supporting debt. 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. City's Total Net Estimated Overlapping 2019/2020 Taxable 2019 Tax Debt as % Tax Debt as Assessed Value Tax Rate of 4/15/2020 Applicable of 4/15/2020 City of College Station 9,979,431,357 $ (1)0.5346 183,567,880 $ (2)100.00% 183,567,880 $ Brazos County 20,161,147,751 0.4980 715,050,000 49.98% 357,381,990 Bryan ISD 8,208,177,904 1.2700 191,485,000 2.55% 4,882,868 College Station ISD 9,913,411,361 1.2390 321,720,000 89.14% 286,781,208 Total Direct and Overlapping Funded Tax Debt 832,613,946 $ Ratio of Direct and Overlapping Funded Tax Debt to Taxable Assessed Valuation 8.343% Per Capita Overlapping Funded Tax Debt 6,772 $ Source: Municipal Advisory Council of Texas. (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal. This amount is subject to change during ensuing year. (2) Projected, includes the Obligations and excludes the Refunded Obligations and self-supporting debt. Preliminary, subject to change. (Remainder of page intentionally left blank) Page 375 of 471 27 DEBT INFORMATION TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS* Total NetYearLess: Tax Supported % ofEndSelf-Supporting Debt Service Principal9/30 Principal Interest Total Principal Interest Total Principal Interest Total Debt Service(4)Requirements Retired2020 26,275,000$ 14,896,796$ 41,171,796$ -$ 24,472$ 24,472$ -$ -$ -$ 20,703,952$ 20,492,316$ 2021 24,810,000 13,008,482 37,818,482 1,620,000 265,425 1,885,425 2,270,000 1,046,041 3,316,041 22,130,967 20,888,981 2022 23,370,000 11,928,482 35,298,482 1,665,000 245,136 1,910,136 2,390,000 930,735 3,320,735 20,031,142 20,498,212 2023 23,500,000 10,803,182 34,303,182 1,710,000 223,786 1,933,786 2,420,000 900,310 3,320,310 19,052,840 20,504,438 2024 23,930,000 9,637,095 33,567,095 1,770,000 201,249 1,971,249 2,450,000 868,774 3,318,774 18,722,859 20,134,258 32.72%2025 23,090,000 8,489,295 31,579,295 1,810,000 177,438 1,987,438 2,475,000 836,020 3,311,020 18,181,149 18,696,603 2026 22,920,000 7,369,632 30,289,632 1,855,000 152,142 2,007,142 2,515,000 801,583 3,316,583 17,562,072 18,051,286 2027 19,985,000 6,404,020 26,389,020 1,910,000 125,026 2,035,026 2,545,000 765,147 3,310,147 15,561,435 16,172,758 2028 18,710,000 5,631,570 24,341,570 1,960,000 95,896 2,055,896 2,230,000 729,270 2,959,270 14,266,485 15,090,251 2029 17,010,000 4,946,846 21,956,846 2,015,000 64,281 2,079,281 2,270,000 693,485 2,963,485 13,178,221 13,821,391 61.92%2030 15,650,000 4,319,658 19,969,658 2,075,000 29,186 2,104,186 2,300,000 654,286 2,954,286 11,471,380 13,556,750 2031 16,270,000 3,681,270 19,951,270 550,000 5,308 555,308 2,350,000 611,024 2,961,024 11,250,541 12,217,060 2032 16,930,000 3,018,248 19,948,248 - - - 2,400,000 563,506 2,963,506 10,659,883 12,251,870 2033 16,165,000 2,390,680 18,555,680 - - - 2,445,000 511,649 2,956,649 9,513,632 11,998,696 2034 15,405,000 1,815,239 17,220,239 - - - 2,500,000 455,257 2,955,257 8,756,046 11,419,449 84.43%2035 12,795,000 1,339,615 14,134,615 - - - 2,560,000 394,010 2,954,010 6,928,888 10,159,736 2036 13,205,000 939,190 14,144,190 - - - 2,630,000 328,868 2,958,868 6,938,753 10,164,305 2037 11,615,000 551,348 12,166,348 - - - 2,700,000 260,904 2,960,904 6,512,133 8,615,118 2038 6,985,000 254,609 7,239,609 - - - 2,775,000 189,995 2,964,995 5,632,989 4,571,615 2039 4,735,000 71,025 4,806,025 - - - 2,850,000 116,019 2,966,019 4,271,642 3,500,402 99.31%2040 - - - - - - 2,920,000 39,128 2,959,128 1,783,584 1,175,544 100.00%353,355,000$ 111,496,282$ 464,851,282$ 18,940,000$ 1,609,342$ 20,549,342$ 49,995,000$ 11,696,008$ 61,691,008$ 263,110,592$ 283,981,040$ The Certificates(3)Outstanding Debt Service(1)The Bonds(2) (1) Excludes the Refunded Obligations. Preliminary, subject to change. (2) Average life of the Bonds – 5.467 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (3) Average life of the Certificates – 10.409 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (4) 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. Page 376 of 471 28 TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION Total Net Tax Supported Debt Service Requirements, Fiscal Year Ending September 30, 2020(1)20,492,316$ Interest and Sinking Fund, September 30, 2019 5,583,524$ Budgeted Interest and Sinking Fund Tax Levy 21,346,328 Budgeted Investment Earnings 150,000 Budgeted Transfers 281,896 27,361,748 Estimated Balance, September 30, 2020 6,869,432$ (1) Excludes the Refunded Obligations and self-supporting debt. Includes the Obligations. Preliminary, subject to change. TABLE 10 – SELF-SUPPORTING DEBT(1) Year Total End Electric Wastewater Water Convention Parking Self-Supporting 9/30 Fund Fund Fund Center Landfill Garage Debt Service 2020 6,676,974$ 6,537,818$ 6,903,809$ 7,100$ 353,850$ 224,400$ 20,703,952$ 2021 6,657,059 7,757,897 7,355,061 6,900 354,050 - 22,130,967 2022 6,556,776 6,858,513 6,285,878 6,675 323,300 - 20,031,142 2023 6,330,371 6,516,077 5,878,417 6,425 321,550 - 19,052,840 2024 5,979,209 6,502,168 5,906,257 6,175 329,050 - 18,722,859 2025 5,667,188 6,243,634 5,933,728 5,925 330,675 - 18,181,149 2026 5,412,585 6,237,844 5,574,417 5,675 331,550 - 17,562,072 2027 4,208,547 6,026,433 4,989,355 5,425 331,675 - 15,561,435 2028 4,051,149 5,658,497 4,227,213 5,225 324,400 - 14,266,485 2029 3,590,288 5,503,517 3,749,466 5,075 329,875 - 13,178,221 2030 2,729,864 5,507,717 3,233,799 - - - 11,471,380 2031 2,536,439 5,480,779 3,233,323 - - - 11,250,541 2032 2,178,939 5,253,133 3,227,811 - - - 10,659,883 2033 1,631,830 4,849,336 3,032,467 - - - 9,513,632 2034 1,033,030 4,692,807 3,030,209 - - - 8,756,046 2035 430,653 3,914,330 2,583,906 - - - 6,928,888 2036 432,185 3,917,217 2,589,351 - - - 6,938,753 2037 432,893 3,915,841 2,163,399 - - - 6,512,133 2038 432,756 3,585,313 1,614,920 - - - 5,632,989 2039 - 2,903,815 1,367,827 - - - 4,271,642 2040 - 1,266,750 516,834 - - - 1,783,584 72,976,738 $ 112,754,239 $ 88,905,525 $ 72,988 $ 3,682,938 $ 446,875 $ 278,839,302 $ (1) 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. Includes a portion of the Obligations. Preliminary, subject to change. TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS 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. Date of Amount Issued Authorization Purpose Authorized To Date Unissued 11/4/2003 Municipal Complex Improvements 7,610,000$ 3,955,000$ 3,655,000$ 11/4/2008 Park Improvements 12,790,000 12,145,000 645,000 77,570,000$ 73,270,000$ 4,300,000$ Page 377 of 471 29 OTHER OBLIGATIONS Currently, the City has no outstanding capital leases or loans. PENSION FUND Plan Description The City accounts for pension cost under GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The City of College Station participates as one of over 880 plans in the multi-employer, nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and the city-financed monetary credits, with interest, were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven actuarially equivalent payment options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits and interest. Plan provisions for the City were as follows: Employees covered by benefit terms at the December 31, 2017 valuation and measurement date are as follows: Inactive employees or beneficiaries currently receiving benefits 481 Inactive employees entitled to but not yet receiving benefits 562 Active employees 908 Total 1,951 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the city. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City of College Station were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City of College Station were 13% and 13% in calendar years 2019 and 2018, respectively. The City’s contributions to TMRS for fiscal year 2019 were $7,750,052 and were greater than the required contributions of $7,483,465. Net Pension Liability The City’s Net Pension Liability (NPL) was measured as of December 31, 2018, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Employee deposit rate 7.00% Matching ratio (City to Employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years at any age; 5 years at age 60 and above Updated service credit 75% repeating transfers Annuity increase (to retirees) 50% of CPI repeating Page 378 of 471 30 Actuarial Assumptions The Total Pension Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions: Salary increases were based on service-related tables. Mortality rates for active members, retirees, and beneficiaries were based on the gender- distinct RP2000 Combined Mortality Table with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. Actuarial assumptions used in the December 31, 2018 valuation were based on the results of actuarial experience studies of TMRS over the four year period from December 31, 210 to December 31, 2014. Assumptions are reviewed annually. The long-term expected rate of return on pension plan investments is 6.75%. The pension plan’s policy with regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long- term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long Term Expected Target Real Rate Asset Class Allocation of Return Doemstic Equity 17.50% 4.30% International Equity 17.50% 6.10% Core Fixed Income 10.00% 1.00% Non-Core Fixed Income 20.00% 3.39% Real Return 10.00% 3.78% Real Estate 10.00% 4.44% Absolute Return 10.00% 3.56% Private Equity 5.00% 7.75% Total 100.00% (Remainder of page intentionally left blank) Inflation 2.5% per year Overall paytoll growth 3.00% Investment rate of return 6.75%, net of pension plan investment expense including inflation Page 379 of 471 31 Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee contributions will remain at the current 7.0% and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) Balance at 12/31/2017 284,444,058$ 257,348,143$ 27,095,915$ Changes for the year: Service Cost 8,830,945 - 8,830,945 Interest (on the Total Pension Liability) 19,084,918 - 19,084,918 Change of benefit terms - - - Differences between expected and actual experience (501,706) - (501,706) Changes of assumptions - - - Contributions - employer - 7,621,669 (7,621,669) Contributions - employee - 3,998,020 (3,998,020) Net investment income (loss) - (7,708,361) 7,708,361 Benefit payments, including refunds of - employee contributions; (12,240,008) (12,240,008) - Administrative expenses - (148,986) 148,986 Other - (7,785) 7,785 Net changes 15,174,149 (8,485,451) 23,659,600 Ending Balance at 12/31/2018 299,618,207$ 248,862,692$ 50,755,515$ Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City, as well as what the City’s net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage- point higher than the current rate: 1% Decrease 1% Increase in Discount Discount in Discount Rate (5.75%) Rate (6.75%) Rate (7.75%) City's net pension liability 95,361,560$ 50,755,515$ 14,497,791$ Pension Plan Fiduciary Net Position Detailed information about the pension plan’s Fiduciary Net Position is available in a separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. Pension Expense For the year ended September 30, 2019, the City recognized pension expense of $12,833,597. (Remainder of page intentionally left blank) Page 380 of 471 32 Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension At September 30, 2019, the City reported deferred outflows and inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 1,122,830$ 442,212$ Changes in assumptions 724,466 - Difference between projected and actual earnings 13,314,507 - Contributions subsequent to the measurement date 5,652,899 - Total ######### 442,212$ Deferred outflows of resources, of $5,652,899 related to pensions resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense in the following years indicated below: Net deferred Fiscal outflows Year Ended (inflows) of Sept. 30: resources 2020 5,799,734$ 2021 2,057,032 2022 1,942,418 2023 4,920,407 2024 - Thereafter - 14,719,591$ OTHER POST EMPLOYMENT BENEFITS Plan Description Plan administration: As required by state laws, in addition to the pension benefits described above, the City makes available certain postretirement benefits to employees who meet TMRS retirement qualifications, retire from City employment, and enroll in the plan before the effective date of their retirement. The City’s OPEB Plan is a single employer defined benefit plan, defined by City policy. The OPEB Plan does not issue a separate report that includes financial statements and required supplementary information for the OPEB Plan. Plan membership. At September 30, 2019 membership consisted of the following: Medical Life and/or Insurance Dental Benefits Benefits Retirees and Retiree Spouses 84 197 Active Employees 900 900 984 1,097 Benefits provided: The City’s defined benefit Other Post-Employment Benefits (OPEB) Plan offers medical, dental, vision, drug, and life insurance benefits to retired employees and their eligible dependents. The OPEB Plan is a single employer defined benefit OPEB plan administered by the City. The benefit levels offered to retired employees and eligible dependents are the same as those afforded to active employees as the City’s group health insurance plan covers both active and retired members. All medical, dental, vision and drug care benefits are provided through the City’s self-insured health plan. As long as monthly premium payments are made, the healthcare plan provides coverage until age 65 for retired employees and eligible dependents enrolled in the City’s OPEB Plan. The life insurance offered though the OPEB Plan provides a $10,000, fully insured death benefit coverage upon retirement, which ceases upon attainment of age 65. The Life insurance benefit for eligible retirees is paid entirely by the City. Page 381 of 471 33 Contributions: Benefit provisions, as well as retiree premium contributions, are established by City management. The City determines the employer and participant contribution rates annually, based on recommendations of City staff and the City’s benefit consultant. For the year ended September 30, 2019, the City’s average contribution rate was 3.1 percent of covered-employee payroll. Investments Investment policy: The goal of the Plan’s investment program is to generate adequate long-term returns that, when combined with contributions, will result in sufficient assets to pay the present and future obligations of the Plan. The Plan has a Balanced Risk Tolerance with a Strategic Asset Allocation of the following: Concentrations: Assets of the OPEB plan are held in Trust by PARS which is fully discussed in Note 24 in the City’s financial statements. Rate of return: For the year ended December 31, 2018, the annual money-weighted rate of return on investments, net of investment expense, was -4.51 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Receivables The OPEB plan has no receivables from long-term contracts with the City for contributions at September 30, 2019. Allocated Insurance Contracts The OPEB plan has no allocated insurance contracts excluded from OPEB plan assets at September 30, 2019. Reserves The OPEB plan has no reserves recorded at September 30, 2019. Net OPEB Liability The components of the net OPEB liability of the City at September 30, 2019 based on the December 31, 2018 measurement and actuarial valuation date, were as follows: Total OPEB liability - ending 7,290,606 $ Plan fiduciary net position - ending (2,430,218) Net OPEB liability - ending 4,860,388 Plan fiduciary net position as a percentage of total OPEB liability 33.33% Changes in the Net OPEB Liability For the year ended September 30, 2019, the City recognized reduction in the OPEB liability of $1,433,588. Effective January 1, 2018, the City has made the following changes to the benefits offered under its Other Post Employment Benefit Plan. To be eligible for premium pricing for medical, dental, vision, and drug benefits at the time of retirement, employees must:  Meet TMRS retirement qualifications,  Be 55 years of age or older,  Have five (5) years of employment at the City of College Station,  Be enrolled in the plan before the effective date of their retirement. Target Allocation Asset Class Allocation Range Cash 5.0% 0-20% Fixed Income 35.0% 30%-50% Equity 60.0% 50%-70% Total 100.0% Page 382 of 471 34 In addition, certain actuarial changes were made when enacting GASB 75 that affected the Net OPEB Liability. Those changes included:  The Entry Age Normal Actuarial Cost Method must be used to attribute the actuarial present value of benefits to service periods in determining the OPEB Liability. This differed from the Projected Unit Credit Cost Method previously used by the City.  Discount Rate changes were allowed under GASB 75. Those changes included that for the unfunded portion of the plan, the discount rate is based on yields of 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. For the funded portion, however, the City could continue to use an assumption similar to the current discount rate.  Instead of recording expense equal to the Annual Required Contribution (ARC), GASB No. 75 required expensing the change in Net OPEB Liability from one period to the next. Some sources of this change are expensed immediately, while others are amortized over a period of approximately ten to twenty years depending on plan demographics. Components of the change in the Net OPEB Liability is as follows: Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balances as of Decmeber 31, 2017 7,815,261 $ 1,521,285$ 6,293,976 $ Changes for the year: Service cost 102,176 - 102,176 Interest 526,551 - 526,551 Changes of benefit terms - - - Differences between expected and - actual experience 95,216 - 95,216 Changes of assumptions of other inputs (458,047) - (458,047) Contributions-employer - 1,864,123 (1,864,123) Net investment income - (164,639) 164,639 Administrative expenses - - - Benefit payments, including refunds of - employee contributions (790,551) (790,551) - Net changes (524,655) 908,933 (1,433,588) Balances as of December 31, 2018 7,290,606 $ 2,430,218 $ 4,860,388 $ Actuarial assumptions. The total OPEB liability for the year ended September 30, 2018 as measured as of December 31, 2017 was determined by an actuarial valuation as of that date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.0% Salary increases 4% to 11% including inflation Discount rate 7.00% Healthcare cost trend rates 8.00% in FY20 decreasing 0.50% per year to an unltimate rate of 4.75% for FY27 and later years Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period December 31, 2010 to December 31, 2014. (Remainder of page intentionally left blank) Page 383 of 471 35 The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation are summarized in the following table: Expected Real Target Rate of Weighted Asset Class Allocation Return Average Cash 5.00% 0.75% 0.04% Fixed Income 35.00% 3.56% 1.25% Equity 60.00% 5.75% 3.45% Total 100.00% N/A 4.74% Discount rate. The discount rate used to measure the total OPEB liability was 7.0 percent. The discount rate used to determine the total OPEB Liability as of the beginning of the measurement year prior to the establishment of the OPEB trust was 3.78%. The weighted average of the Expected Real Rate of Return is added to the Expected Long-Term Inflation assumption and reduced by expected investment expenses (4.74% + 3.00% - 0.75% = 6.99%). This result is then rounded to the nearest 25 basis points to obtain the Expected Long-Term Rate of Return of 7.00%. The projected cash flows into the plan are equal to projected benefit payments out of the plan plus prefunding contributions that have been approved by the City Council. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. The assumed rate of general inflation has been updated since the valuation used for the September 30, 2018 liability to reflect the actuary’s best expectation of future plan experience. The long-term expected rate of return for the plan is 7.0 percent. The plan operates on a pay as you go basis and accumulates assets in trust in addition to the pay as you go amount. Based on the discount rate assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.0 percent) or 1-percentage- point higher (8.0 percent) than the current discount rate: 1% Current 1% Decrease Discount Rate Increase (6.00%) (7.00%) (8.00%) Net OPEB liability 5,421,797 $ 4,860,388 $ 4,357,471 $ Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7.0 percent decreasing to 3.75 percent) or 1-percentage-point higher (9.0 percent decreasing to 5.75 percent) than the current healthcare cost trend rates: Current Healthcare 1% Decrease Cost Trend Rates 1% Increase (7.00% decreasing (8.00% decreasing (9.00% decreasing to 3.75%) to 4.75%) to 5.75%) Net OPEB liability 4,073,135 $ 4,860,388 $ 5,850,899 $ Page 384 of 471 36 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended September 30, 2019, the City recognized OPEB expense/(income) of $16,194. At September 30, 2019, the City reported changes to deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources as follows: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 82,155$ 511,580$ Changes in actual assumptions - 2,474,833 Difference between projected and actual investment earnings 230,358 - Contributions subsequent to the measurement date 1,530,951 - Total 1,843,464$ 2,986,413$ Deferred outflows of resources, of $1,530,951 related to OPEB resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net OPEB liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Deferred Year Ended inflows of Sept. 30: resources 2020 (487,729)$ 2021 (487,729) 2022 (487,728) 2023 (487,332) 2024 (545,219) Thereafter (178,163) (2,673,900)$ OPEB Trust 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 passed resolution 2017-0564 appropriating the funds. Effective September 27, 2017, the City entered into a section 115 Irrevocable Exclusive Benefit agent multiple-employer trust to fund its Other Postemployment Benefits Obligation. Trust and Investment Management Services are provided by Public Agency Retirement Services (PARS) and is administered by the City. The investment manager that executes investment transactions is Highmark Capital Management, Inc. and the custodian of the trust’s funds is US Bank. With the establishment of the trust, the City can pre-fund (make annual payments in advance of the obligation) and allocate funds for the express purpose of funding future OPEB costs. The investment returns can be used to reduce the actuarial contributions and can result in lower long-term costs of the plan. As of September 30, 2019 the trust’s balance was $3,865,554. (Remainder of page intentionally left blank) Page 385 of 471 37 FINANCIAL INFORMATION TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY 2019 2018 2017 2016 2015 Revenues: Taxes 59,745,768$ 56,329,528$ 53,749,315$ 48,737,894$ 46,750,120$ Licenses & Permits 1,633,241 1,772,959 2,127,142 2,132,802 1,500,777 Intergovernmental 585,506 910,169 828,510 1,373,950 355,083 Charges for Services 3,753,297 3,940,837 3,863,744 3,809,206 3,572,684 Fines, Forfeits and Penalties 3,544,994 3,211,536 2,917,735 3,255,051 2,693,647 Investment Income 757,250 449,880 241,880 148,302 116,074 Rents & Royalties 184,543 219,538 284,351 187,328 136,228 Contributions 17,905 7,361 7,580 8,880 1,251 Other 957,825 642,547 775,114 434,537 3,252,310 Total Revenues 71,180,329$ 67,484,355$ 64,795,371$ 60,087,950$ 58,378,174$ Expenditures: General Government 8,481,683$ 6,165,016$ 6,228,021$ 5,524,471$ 4,853,358$ Fiscal Services 3,993,584 3,954,488 3,815,223 3,733,550 3,314,990 Police Department 24,299,928 22,631,648 21,372,560 20,170,450 18,533,889 Fire Department 19,888,536 19,624,919 17,001,580 16,916,819 14,881,983 Planning & Development Services 4,180,089 3,740,969 3,741,263 3,243,768 3,106,143 Parks and Recreation 9,350,892 9,129,079 8,621,075 9,279,126 8,194,670 Information Technology 4,591,351 4,488,885 4,600,556 4,491,009 4,112,987 Public Works 9,348,645 9,575,300 8,151,055 11,162,508 9,156,069 Library Services 1,186,313 1,118,522 1,097,876 1,098,326 1,138,568 Contributions 1,467,695 1,380,580 1,280,215 1,220,251 1,187,500 Other - - - 863 217,114 Capital Improvement Projects 289,042 319,406 988,435 667,574 129,896 Total Expenditures 87,077,758$ 82,128,812$ 76,897,859$ 77,508,715$ 68,827,167$ Other Financing Sources (Uses): Sale of General Fixed Assets -$ -$ 47,478$ -$ 8,974,205$ Operating Transfers In 19,427,607 19,245,943 18,347,351 16,507,346 15,094,866 Operating Transfers Out (1,960,180) (3,031,702) (2,911,020) (2,376,443) (11,441,262) Total Other Financing Sources (Uses) 17,467,427$ 16,214,241$ 15,483,809$ 14,130,903$ 12,627,809$ Net Change in Fund Balance 1,569,998$ 1,569,784$ 3,381,321$ (3,289,862)$ 2,178,816$ Fund Balance, Beginning of Year 26,790,569 22,514,523 19,133,202 22,423,064 20,244,248 Prior Period Adjustment - 2,706,262 - - - Fund Balance, End of Year 28,360,567$ 26,790,569$ 22,514,523$ 19,133,202$ 22,423,064$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 386 of 471 38 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 Obligations. 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%. Fiscal Year % of Equivalent of Ended Total Ad Valorem Ad Valorem Per 9/30 Collected (1)Tax Levy Tax Rate Capita (2) 2016 27,163,480$ 84.71% 0.38$ 255$ 2017 28,561,762 77.18% 0.36 260 2018 28,799,040 66.51% 0.33 244 2019 28,432,571 60.51% 0.31 235 2020 13,222,913 (3)25.56% 0.14 108 (1) Provided by the City. (2) Based on population estimates provided by the City. (3) Collections as of February 29, 2020. The sales tax breakdown for the City is as follows: 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 2019-2020 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 18% 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. Brazos County Sales & Use Tax 1/2 % Property Tax Reduction 1/2 % City Sales & Use Tax 1 % State Sales & Use Tax 6 1/4 % Total 8 1/4 % Page 387 of 471 39 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 ten wells, with a combined capacity of 38 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 eight 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 recently completed the construction of another Simsboro well, Well #9 that will meet the city’s demands for water for many years into the future. Well #10 remains in the planning stages, and would be constructed in future years, depending upon the rate of growth of water demands. College Station is also investigating other water supply strategies for the future. The City has completed a Water Reclamation project, which pumps effluent from the wastewater treatment plant 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 the watering season. 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. 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 are established by ordinance, passed and approved by the City Council. The following rates became effective October 1, 2019. 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 12.40 per mo. 3/4” 15.60 per mo. 1” 23.20 per mo. 1 1/2” 36.65 per mo. 2” 115.60 per mo. 3” 171.75 per mo. 4” 209.10 per mo. 6” 209.10 per mo. 8” Residential $2.75 for usage from 0-10,000 gallons $3.60 for usage from 11,000-15,000 gallons $4.40 for usage from 16,000-20,000 gallons $5.20 for usage from 21,000-25,000 gallons $6.05 for usage from 26,000 gallons and more Commercial $3.05 per 1,000 gallons Commercial Irrigation Usage Charge Commercial Irrigation Multifamily 3+ units MUD #1 Residential and Commercial $3.25 per 1,000 gallons Rates as above with an added 50% surcharge (Remainder of page intentionally left blank) Page 388 of 471 40 WASTEWATER SYSTEM The City’s wastewater is treated by three City-owned wastewater treatment plants, Carter Creek Treatment Plant, Lick Creek Treatment Plant, and Carter Lake Treatment Plant located within the City limits. The three plants have a combined treatment capacity of 11.5 mgd. An expansion of the Lick Creek Treatment plant is currently underway and will increase the city’s combined treatment capacity to 14.5 mgd. Sewer rates were established by ordinance, passed and approved by the City Council, and became effective on October 1, 2017 Residential (metered water) .......................................................... $21.29 including 4,000 gallons of metered water Usage Charge ................................................................................ $4.26 per 1,000 gallons of additional metered water $46.87 maximum per month Residential (without meter to each unit)....................................... $27.09 per unit per month Commercial and Industrial ........................................................... $18.27 per month Usage Charge ................................................................................ ....................................................................................................... $5.07 per 1,000 gallons of metered water usage There are 2,217 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 $46.87 per month. After six months of documented 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 AEP Energy Partners (AEPEP) and Garland Power and Light (GP&L). With AEPEP, the City has a fixed block, around the clock (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 2027. 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 the City's advisement, 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, eight substations, and 510 miles of distribution lines. ERCOT serves as 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 September 27, 2018. 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. 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) ......................... $0.11869 per kWh kWh (November through April) .................... $0.11323 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 Page 389 of 471 41 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) .............. $0.0682 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 TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED) 2019 2018 2017 2016 2015 Water 42,787 44,995 43,199 41,709 41,540 Wastewater 46,171 46,031 42,840 40,866 40,806 Electric 39,155 39,435 39,300 40,141 43,471 Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 390 of 471 42 TABLE 15 - TEN LARGEST UTILITY CUSTOMERS Total Percent FY 2019 KWH of KWH Utility Customer Type of Business Consumption Consumed CSISD Schools 29,533,036 3.46% City of College Station Municipality 22,318,501 2.61% Scott & White Clinc/Hospital/Pharmacy 20,959,472 2.45% HEB Grocery Retail 12,397,420 1.45% Texas A&M University 12,025,041 1.41% Biotechnologies Texas LLC Medical 10,052,080 1.18% Wal-Mart Retail 8,710,000 1.02% CBL & Associates Retail Mall 8,097,220 0.95% College Station Medical Center Medical 8,009,755 0.94% Dealer Computer Services Inc Retail 6,174,000 0.72% 138,276,525 16.18% TABLE 16 - CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, TABLE 17 – VALUE OF THE SYSTEM 2019 2018 2017 2016 2015 Utility Systems 617,910,408$ 579,717,873$ 553,774,054$ 527,435,531$ 507,758,485$ Construction in Progress 45,129,947 46,447,061 30,240,705 23,520,025 13,213,020 663,040,355$ 626,164,934$ 584,014,759$ 550,955,556$ 520,971,505$ Less: Accumulated Depreciation 263,680,722 246,243,993 229,374,628 213,325,487 198,339,390 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 391 of 471 43 TABLE 18 – CITY’S EQUITY IN THE SYSTEM Resources 2019 2018 2017 2016 2015 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Current Assets 116,643,763 102,382,543 70,636,223 63,085,837 52,023,881 Restricted Assets 36,743,001 11,296,693 30,149,917 21,849,829 19,977,038 Other Resources - - - - - Deferred Charges 6,485,373 3,506,226 5,197,104 5,425,502 2,381,933 Total 559,231,770$ 497,106,403$ 460,623,375$ 427,991,237$ 397,014,967$ Obligations Current Liabilities 14,711,183$ 12,467,547$ 10,681,761$ 9,511,319$ 13,688,841$ Current Liabilities Payable from Restricted Assets 18,432,091 15,872,611 15,887,617 15,462,903 10,735,825 General Obligation Debt 45,850,605 52,738,157 59,325,710 55,626,759 43,175,000 Certificates of Obligation 126,583,979 91,642,717 77,282,370 78,814,496 83,445,000 Revenue Bond Debt - - - - 13,395,000 Other Debt (1)10,773,356 8,016,706 8,899,938 9,418,425 8,593,734 Total Liabilities 216,351,214$ 180,737,738$ 172,077,396$ 168,833,902$ 173,033,400$ City's Equity in System 342,880,556$ 316,368,665$ 288,545,979$ 259,157,335$ 223,981,567$ Percentage of Equity in System 61.31% 63.64% 62.64% 60.55% 56.42% Fiscal Year Ended September 30, (1) Includes OPEB Net Pension Obligations. TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE Original Outstanding Principal Principal Amount as of 9/30/2019 2008 (2)15,925,000 $ 820,000 $ 2009 (2)19,490,000 1,950,000 2010 (2)2,850,000 1,865,000 2010 (1)(3)25,905,000 6,920,000 2011 (2)7,920,000 5,540,000 2012 (2)16,415,000 11,930,000 2012 (1)(3)9,570,000 3,975,000 2013 (2)10,230,000 7,920,000 2013 (1)(3)6,255,000 3,195,000 2014 (2)23,555,000 19,270,000 2014 (1)(3)14,455,000 7,255,000 2016 (2)7,250,000 6,370,000 2016 (1)(3)18,710,000 16,335,000 2017 (2)12,140,000 11,440,000 2017 (1)(3)9,205,000 9,205,000 2018 (2)18,655,000 18,655,000 2019 (2)38,670,000 38,670,000 257,200,000 $ 171,315,000 $ Series (1) Represents refunding bonds. (2) Certificates of Obligation supported in whole or in part by Utility System revenues. (3) General Obligation Bonds supported in part by the Utility System revenues. Page 392 of 471 44 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 Authorized investments are summarized as follows: (1) obligations, including letters of credit, of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks; (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 and interest of 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) interest-bearing banking deposits that are guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or the National Credit Union Share Insurance Fund or its successor; (8) interest-bearing banking deposits other than those described by clause (7) if (A) the funds invested in the banking deposits are invested through: (i) a broker with a main office or branch office in this State that the City selects from a list the City Council or a designated investment committee of the City adopts as required by Section 2256.025, Texas Government Code; or (ii) a depository institution with a main office or branch office in the State that the City selects; (B) the broker or depository institution selected as described by (A) above arranges for the deposit of the funds in the banking deposits in one or more federally insured depository institutions, regardless of where located, for the City’s account; (C) the full amount of the principal and accrued interest of the banking deposits is insured by the United States or an instrumentality of the United States; and (D) the City appoints as the City’s custodian of the banking deposits issued for the City’s account: (i) the depository institution selected as described by (A) above; (ii) an entity described by Section 2257.041(d), Texas Government Code; or (iii) a clearing broker dealer registered with the SEC and operating under SEC Rule 15c3-3; (9) (i) certificates of deposit or share certificates meeting the requirements of Chapter 2256, Texas Government Code (the “Public Funds Investment Act”), that are issued by an institution that has its main office or a branch office in the State and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or their respective successors, and are secured as to principal by obligations described in clauses (1) through (8) or in any other manner and provided for by law for City deposits, or (ii) certificates of deposits where (a) the funds are invested by the City through (A) a broker that has its main office or a branch office in the State and is selected from a list adopted by the City as required by law, or (B) a depository institution that has its main office or branch office in the State 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), Texas Government Code, or a clearing brokerdealer registered with the SEC and operating pursuant to SEC Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with respect to the certificates of deposit; (10) fully collateralized repurchase agreements as defined in the Public Funds Investment Act, that have a defined termination date, are secured by a combination of cash and obligations described in clauses (1) or (13) in this paragraph , require the securities being purchased by the City or cash held by the City to be 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; (11) 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 (8) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than “A” or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) below, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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; (12) certain bankers’ acceptances with stated maturity of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated not less than “A-1” or “P-1” or the equivalent by at least one nationally recognized credit rating agency; (13) commercial paper with a stated maturity of 365 days or less that is rated not less than “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 United States or state bank; (14) no-load money market mutual funds registered with and regulated by the SEC that provide the City with a prospectus and other information required by the Securities Exchange Act of 1934 or the Investment Company Act of 1940 and that comply with federal SEC Rule 2a-7 (17 C.F.R. Section 270.2a- 7), promulgated under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); and (15) no-load mutual funds registered with the SEC that have an average weighted maturity of less than two years, and have either (a) a duration of one year or more and invest exclusively in obligations described in under this heading, or (b) a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities, other than the prohibited obligations described below, in an amount at least equal to the amount of bond proceeds invested under such contract. Page 393 of 471 45 A political subdivision such as the City may enter into 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 (8) above, other than the prohibited obligations described below, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) above, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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, if the City Council authorizes such investment in the particular pool by order, ordinance, or resolution and the investment pool complies with the requirements of Section 2256.016, Texas Government Code. The City may also contract with an investment management firm registered (x) under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), or (y) 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 ordinance, order or resolution. 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. 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. Page 394 of 471 46 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 29, 2020, 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 31,934,770 31,934,770 Money Market Mutual Fund 283,314,901 283,314,901 US Agencies and Securities 5,000,000 5,028,700 325,249,671$ 325,278,371$ TAX MATTERS OPINION . . . On the date of initial delivery of the Obligations, 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 Obligations for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Obligations 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 Obligations. See APPENDIX C - Form of Opinion of Bond Counsel. In rendering its opinion, 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 Obligations relating to certain matters, including arbitrage and the use of the proceeds of the Obligations and the property financed or refinanced therewith. Failure of the City to comply with these representations or covenants could cause the interest on the Obligations, 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 Obligations in order for interest on the Obligations 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 Obligations to be included in gross income retroactively to the date of issuance of the Obligations. 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 Obligations. 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 Obligations. A ruling was not sought from the Internal Revenue Service by the Issuer with respect to the Obligations or the property financed or refinanced with proceeds of the Obligations. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Obligations, 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 Obligation holders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Page 395 of 471 47 FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Obligations”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Obligation, and (ii) the initial offering price to the public of such Original Issue Discount Obligation would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the Obligations 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 Obligation 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 Obligation 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 Obligation prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Obligation 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 Obligation was held by such initial owner) is includable in gross income. Under Existing Law, the original issue discount on each Original Issue Discount Obligation 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 Obligation 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 Obligation. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Obligations 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 Obligations should consult their own tax advisors with respect to the determination 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 Obligations 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 Obligations. 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 Obligations. 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 OBLIGATIONS. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, 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 Obligations, 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 Obligations 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. Page 396 of 471 48 Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations 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 Obligations 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. 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 Obligations under federal or state law, and could affect the market price or marketability of the Obligations. 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 Obligations should consult their own tax advisors regarding the foregoing matters. CONTINUING DISCLOSURE OF INFORMATION In the Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of Obligations. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Obligations. 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 2020. 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 2020. 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 Tables 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 Obligations 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 Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of holders of the Obligations, if material; (8) Obligation calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Obligations, 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 Page 397 of 471 49 undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. 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.” Neither the Obligations nor the Ordinances provide for debt service reserves, liquidity enhancement, or credit enhancement. 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 the events listed in clause (15) and (16) above, the term “financial obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) a guarantee of either (A) or (B). The term “financial obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. 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. 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 Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. 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 . . . 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. (Remainder of page intentionally left blank) Page 398 of 471 50 OTHER INFORMATION RATINGS The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's and “AA+” by S&P, without regard to credit enhancement. Applications have been made to Moody’s, S& P and Fitch Ratings Services for contract ratings on the Obligations. 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 Obligations. 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 OBLIGATIONS FOR SALE The sale of the Obligations 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 Obligations have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Obligations been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Obligations under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations must not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. 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 Obligations 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 Obligations by municipalities or other political subdivisions or public agencies of the State of Texas, the PFIA requires that the Obligations 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 Obligations 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 Obligations 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 Obligations for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for such purposes. No review by the City has been made of the laws in other states to determine whether the Obligations are legal investments for various institutions in those states. LEGAL MATTERS The City will furnish to the Initial Purchaser a complete transcript of proceedings had incident to the authorization and issuance of the Obligations, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Obligation and to the effect that the Obligations are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Obligations or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Obligations will also be furnished. In its capacity as Bond Counsel, such firm has reviewed the information describing the Obligations in the Notice of Sales and Bidding Instructions, the Official Bid Forms and the Official Statement to verify that such information conforms to the provisions of the Ordinances. 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 legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations. The legal opinion will accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book-Entry-Only System. The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 the 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 from the transaction. Page 399 of 471 51 The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. 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 Obligations, 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 Obligations, 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 pertaining to the City contained in its Official Statement and any addenda, supplement or amendment thereto, for its Obligations on the date of such Official Statement, on the date of purchase of said Obligations, 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, 2019, 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 Obligations, in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Obligations; or which would affect the provisions made for their payment or security, or in any manner question the validity of the Obligations. 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. Page 400 of 471 52 INITIAL PURCHASER After requesting competitive bids for the Bonds, the City accepted the bid of ______________ (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the page 2 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Bonds. 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 page 4 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Certificates. MISCELLANEOUS The Ordinances authorizing the issuance of the Obligations will also approve the form and content of this Official Statement, and any addenda or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Initial Purchaser. Pricing Officer City of College Station, Texas Page 401 of 471 53 Schedule I SCHEDULE OF REFUNDED OBLIGATIONS* Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 140,000$ 8/13/2020 100.00 2022 3.000% 145,000 8/13/2020 100.00 2023 3.000% 155,000 8/13/2020 100.00 2024 3.000% 160,000 8/13/2020 100.00 2025 3.125% 170,000 8/13/2020 100.00 2026 3.250% 175,000 8/13/2020 100.00 2027 3.375% 185,000 8/13/2020 100.00 2028 3.500% 190,000 8/13/2020 100.00 2029 3.500% 200,000 8/13/2020 100.00 2030 3.500% 210,000 8/13/2020 100.00 1,730,000$ Certificates of Obligation, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 950,000$ 8/13/2020 100.00 2022 3.000% 995,000 8/13/2020 100.00 2023 3.000% 1,040,000 8/13/2020 100.00 2024 3.000% 1,090,000 8/13/2020 100.00 2025 3.125% 1,135,000 8/13/2020 100.00 2026 3.250% 1,190,000 8/13/2020 100.00 2027 3.250% 1,245,000 8/13/2020 100.00 2028 3.375% 1,300,000 8/13/2020 100.00 2029 3.500% 1,360,000 8/13/2020 100.00 2030 3.500% 1,425,000 8/13/2020 100.00 11,730,000$ General Obligation Improvement Bonds, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 2.200% 370,000$ 8/13/2020 100.00 2022 2.400% 390,000 8/13/2020 100.00 2023 2.600% 405,000 8/13/2020 100.00 2024 2.800% 430,000 8/13/2020 100.00 2025 3.000% 445,000 8/13/2020 100.00 2026 3.100% 465,000 8/13/2020 100.00 2027 3.200% 490,000 8/13/2020 100.00 2028 3.300% 510,000 8/13/2020 100.00 2029 3.400% 535,000 8/13/2020 100.00 2030 3.500% 560,000 8/13/2020 100.00 2031 3.600% 585,000 8/13/2020 100.00 5,185,000$ Certificates of Obligation, Series 2011 * Preliminary, subject to change. Page 402 of 471 APPENDIX A GENERAL INFORMATION REGARDING THE CITY Page 403 of 471 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 1,034.75 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 578 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 835 miles of wastewater and water lines. The City owns the electrical distribution system with approximately 490 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. The fire department consists of 158 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 18 educational campuses for pre-kindergarten through high school. The School District has a student enrollment in excess of 13,500 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 additional facilities. The bonds would fund a 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 approximately 69,000 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. In 2019, The Med was purchased by the CHI St. Joseph system and is now called CHI St. Joseph Health College Station Hospital. 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. Other area health care providers include: St. Joseph Regional Health Care Center, Baylor Scott and White Clinic, and The Physicians Centre. Page 404 of 471 A - 2 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 parks system encompasses 1,364 acres of parks and facilities spread throughout the city. This includes 4 dog parks, 1 skate park, 63 playgrounds, 4 recreation centers, 12 ponds, 2 pools, a splash pad, 34.5 miles of walking trails, 2 municipal cemeteries and the Ringer Library. 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 69,000 students, with more than 508,000 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 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. 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) Page 405 of 471 A - 3 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 sixth in the nation in average attendance for the 2019 season with average attendance of 97,459 for home games, according to figures released by the NCAA. The City’s premiere sport complexes, as well as the ease to get around, makes College Station attractive to a number of high profile organizations. Over the past several years, Texas Amateur Athletic Federation has chosen College Station to host state tournaments and events. In addition, the City facilitates four major softball tournaments, multiple soccer tournaments, two 7 on 7 football tournaments and baseball tournaments throughout the year. The City plans to add 4 synthetic infield & natural grass outfield baseball/softball fields at the new Texas Independence Ballpark. This is anticipated to allow additional tournaments to be held in this area. (Remainder of page intentionally left blank) Page 406 of 471 A - 4 MAJOR AREA EMPLOYERS Number of Firm Name Product Employees Texas A&M University and System Education/Research 27,000+ Bryan ISD Education 2000+ College Station ISD Education 2000+ Texas A&M Health Science Center Education 2000+ Reynolds & Reynolds Computer Hardware and Software 1800+ Blinn College - Bryan Campus Education 1000+ Sanderson Farms, Inc. Poultry Processing 1000+ CHI St. Joseph's Regional Hospital Health Service 1000+ Wal-Mart/Sam's Retail 1000+ HEB Grocery Retail 1000+ City of College Station Government 1000+ Brazos County Government 500-999 City of Bryan Government 500-999 College Station Medical Center Health Service 500-999 Ply Gem Windows Manufacturing 500-999 Baylor Scott & White Health Service 500-999 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. LABOR STATISTICS College Station Labor Total Force Employment Unemployment Rate 2016 56,997 55,062 1,935 3.4% 2017 58,042 56,261 1,781 3.1% 2018 60,167 58,454 1,713 2.8% 2019 61,507 59,812 1,695 2.8% 2020 (1)62,799 61,096 1,703 2.7% Year Brazos County Labor Total Force Employment Unemployment Rate 2016 111,251 107,409 3,842 3.5% 2017 113,040 109,558 3,482 3.1% 2018 116,493 113,189 3,304 2.8% 2019 119,010 115,819 3,191 2.7% 2020 (1)114,949 111,494 3,455 3.0% Year Source: Texas Workforce Commission. (1) Average as of February 2020. Page 407 of 471 A - 5 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 2019, the estimated population of College Station was 122,738. The following table sets forth the number and value of construction permits issued by the City over the past several years. Residential Construction Commercial Construction Other Construction* Total Calendar Number Number Number Number Year of Permits Value of Permits Value of Permits Value of Permits Value 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 1,190 257,998,990 208 170,405,189 - - 1,398 428,404,179 2018 1,953 177,627,344 461 103,143,722 - - 2,414 280,771,066 2019 553 100,803,824 102 80,992,499 1,911 98,242,242 2,566 280,038,565 Source: The City. * Starting in 2019 all new pools, remodels/renovations, new roofs, demolitions, slab only and other improvements are reported under “Other Construction”. These permits were previously reported under Residential and Commercial. 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] Page 408 of 471 APPENDIX B EXCERPTS FROM THE CITY OF COLLEGE STATION, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2019 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, 2019, 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. Page 409 of 471 APPENDIX C FORM OF OPINION OF BOND COUNSEL Page 410 of 471 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, interest on the Bonds 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) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on inside cover Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Bond Ordinance”) adopted by the governing body of the City on April 9, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Bond Ordinance, the City Council of the City delegated authority to certain authorized officials of the City to finalize the pricing of the Bonds. The definitive Bonds 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 Bonds may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds 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 Bonds. See “THE OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Bonds are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Chapter 1207, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City as provided in the Bond Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations) and their redemption dates; and (ii) paying costs of issuance of the Bonds. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 2 SEPARATE ISSUES . . . The Bonds are being offered by the City concurrently with the issuance of the $23,670,000* City of College Station, Texas, Certificates of Obligation, Series 2020 (the “Certificates”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY . . . The Bonds 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 – Form Of Opinion 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. DELIVERY. . . It is expected that the Bonds will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 16, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 411 of 471 2 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $18,940,000* General Obligation Refunding Bonds, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 1,620,000$ 2022 1,665,000 2023 1,710,000 2024 1,770,000 2025 1,810,000 2026 1,855,000 2027 1,910,000 2028 1,960,000 2029 2,015,000 2030 2,075,000 2031 550,000 (1) CUSIP numbers have been assigned to the Bonds 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 Bonds. 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.  OPTIONAL REDEMPTION. . . The Bonds are not subject to redemption prior to maturity. MANDATORY REDEMPTION . . . The Bonds may also be subject to mandatory sinking fund redemption in the event the Initial Purchaser elects to aggregate two or more maturities as a term bond. * Preliminary, subject to change. Page 412 of 471 3 (See “Continuing Disclosure of Information” herein) PRELIMINARY OFFICIAL STATEMENT Dated ___________, 2020 NEW ISSUE - Book-Entry-Only In the opinion of McCall, Parkhurst & Horton L.L.P., 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) $23,670,000* CERTIFICATES OF OBLIGATION, SERIES 2020 Dated Date: Date of Delivery Due: February 15, as shown on page 4 Interest Accrual Date: Date of Delivery PAYMENT TERMS. . . Interest on the $23,670,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates”) will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing February 15, 2021 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Certificates are being issued by the City of College Station, Texas (the “City”) pursuant to the terms of an ordinance (the “Certificate Ordinance”) adopted by the governing body of the City on June 11, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. In the Certificate Ordinance, the City Council of the City delegates authority to certain authorized officials of the City to finalize the pricing of the Certificates. 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 of principal amount or any integral multiples thereof within a maturity. No physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, 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 OBLIGATIONS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (see “THE OBLIGATIONS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE. . . The Certificates are issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended, and constitute direct obligations of the City of College Station, Texas (the “City”), payable from a combination of (i) the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City, and (ii) subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric utility system, as provided in the Certificate Ordinance (see “THE OBLIGATIONS - Authority for Issuance of the Obligations” and “THE OBLIGATIONS - Security and Source of Payment”). PURPOSE. . . Proceeds from the sale of the Certificates will be used for (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. CUSIP PREFIX: 194469 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on page 4 SEPARATE ISSUES . . . The Certificates are being offered by the City concurrently with the issuance of the $18,940,000* City of College Station, Texas, General Obligation Refunding Bonds, Series 2020 (the “Bonds”) under a common Official Statement. The Bonds and the Certificates are separate and distinct securities offerings being issued and sold independently except for this Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the “Obligations.” While the Bonds and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the type of obligation being offered, its terms of payment, the rights of the City to redeem the Obligations of either series, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY. . . 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 – Form Of Opinion 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 DELIVERY. . . It is expected that the Certificates will be available for delivery through the services of DTC on or about July 13, 2020. BIDS DUE THURSDAY, JUNE 16, 2020, AT 10:00 A.M., CDT * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Ratings: Moody’s: Applied for S&P: Applied for Fitch: Applied for See “OTHER INFORMATION – Ratings” herein Page 413 of 471 4 CUSIP Prefix: 194469(1) MATURITY SCHEDULE* $23,670,000* Certificates of Obligation, Series 2020 Due Interest Feb. 15 Principal Rate Yield CUSIP (1) 2021 1,150,000$ 2022 1,200,000 2023 1,215,000 2024 1,230,000 2025 1,245,000 2026 1,265,000 2027 1,285,000 2028 1,020,000 2029 1,040,000 2030 1,055,000 2031 1,080,000 2032 1,095,000 2033 1,120,000 2034 1,150,000 2035 1,170,000 2036 1,200,000 2037 1,235,000 2038 1,270,000 2039 1,305,000 2040 1,340,000 (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. OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – Optional Redemption”). MANDATORY SINKING FUND 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 shown above (see “THE OBLIGATIONS - Mandatory Sinking Fund Redemption”). * Preliminary, subject to change. Page 414 of 471 5 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 Obligations 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 Obligations. Neither the City, the Financial Advisor nor the Initial Purchasers 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 Purchasers 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 Obligations are exempt from registration with the Securities and Exchange Commission and consequently have not been registered therewith. The registration, qualification, or exemption of the Obligations 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 PURCHASERS 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. 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. Page 415 of 471 6 TABLE OF CONTENTS MATURITY SCHEDULE ............................................... 2  MATURITY SCHEDULE ............................................... 4  OFFICIAL STATEMENT SUMMARY ......................... 7  SELECTED FINANCIAL INFORMATION ............................. 9  GENERAL FUND CONSOLIDATED STATEMENT SUMMARY .............................................................. 9  UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS .......................................................... 9  CITY OFFICIALS, STAFF AND CONSULTANTS ... 10  ELECTED OFFICIALS .................................................... 10  SELECTED ADMINISTRATIVE STAFF .............................. 10  CONSULTANTS AND ADVISORS ..................................... 11  INTRODUCTION .......................................................... 12  THE CERTIFICATES ................................................... 13  TAX INFORMATION ................................................... 17  TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT ............................................... 23  TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY ........................................................... 24  TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY ............................................................... 25  TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY .............................................................. 25  TABLE 5 - TEN LARGEST TAXPAYERS ......................... 25  TABLE 6 - TAX ADEQUACY ........................................ 26  TABLE 7 - ESTIMATED OVERLAPPING DEBT ................ 26  DEBT INFORMATION ................................................. 27  TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS ..................................................... 27  TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION ......................................................... 28  TABLE 10 – SELF-SUPPORTING DEBT .......................... 28  TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS . 28  ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT ................................................................... 28  OTHER OBLIGATIONS ................................................... 29  PENSION FUND ............................................................ 29  OTHER POST EMPLOYMENT BENEFITS .......................... 32  FINANCIAL INFORMATION ..................................... 37  TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY ........................................ 37  TABLE 13 - MUNICIPAL SALES TAX HISTORY ............. 38  FINANCIAL POLICIES .................................................... 38  THE COMBINED UTILITY SYSTEM ....................... 39  WATERWORKS SYSTEM ............................................... 39  WASTEWATER SYSTEM ............................................... 40  ELECTRIC SUPPLY SOURCE .......................................... 40  WIND WATT RATES .................................................... 41  TABLE 14 - HISTORICAL UTILITY USERS ...................... 41  TABLE 15 - TEN LARGEST UTILITY CUSTOMERS .......... 42  TABLE 16 - CONDENSED STATEMENT OF OPERATIONS . 42  TABLE 17 – VALUE OF THE SYSTEM ............................. 42  TABLE 18 – CITY’S EQUITY IN THE SYSTEM ................. 43  TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE43  INVESTMENTS ............................................................. 44  LEGAL INVESTMENTS .................................................. 44  INVESTMENT POLICIES ................................................ 45  ADDITIONAL PROVISIONS ............................................ 45  CITY’S INVESTMENT POLICY ....................................... 46  TABLE 20 - CURRENT INVESTMENTS ............................ 46  TAX MATTERS ............................................................. 46  CONTINUING DISCLOSURE OF INFORMATION 48  OTHER INFORMATION ............................................. 50  RATINGS ..................................................................... 50  LITIGATION ................................................................. 50  REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE ............................................................. 50  LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ................................................... 50  AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION ...................................................... 51  FINANCIAL ADVISOR ................................................... 51  CERTIFICATION OF THE OFFICIAL STATEMENT AND NO- LITIGATION CERTIFICATE ...................................... 51  FORWARD-LOOKING STATEMENTS .............................. 51  INITIAL PURCHASER .................................................... 52  MISCELLANEOUS ......................................................... 52  SCHEDULE OF REFUNDED OBLIGATIONS ...................................................... Schedule I 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. Page 416 of 471 7 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 Obligations 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 BONDS .......................... The Bonds are issued as $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020. The Bonds are issued as serial bonds maturing on February 15 in each of the years 2021-2031, inclusive (see “THE OBLIGATIONS - General Description”). If two or more serial maturities of the Bonds are grouped into a single maturity (the “Term Bonds”) by the Initial Purchaser, such Term Bonds will be subject to mandatory sinking fund redemption in accordance with applicable provisions of the Bond Ordinance. THE CERTIFICATES ............. The Certificates are issued as $23,670,000* City of College Station, Texas Certificates of Obligation, Series 2020. The Certificates are issued as serial certificates maturing on February 15 in each of the years 2021-2040, inclusive (see “THE OBLIGATIONS - 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 Certificate Ordinance. PAYMENT OF INTEREST ...... Interest on the Bonds will accrue from the date of delivery, and will be payable February 15 and August 15 of each year commencing August 15, 2020 until maturity or prior redemption and will be calculated on the basiss of a 360-day consisting of twelve 30-day months (see “THE OBLIGATIONS – General Description”). 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, 2021 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 OBLIGATIONS - General Description”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS .......... The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1207, Texas Government Code, as amended, and an ordinance passed by the City Council of the City. In the Bond Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Bonds (see “THE OBLIGATIONS - Authority for Issuance). The Certificates are issued pursuant to the general laws of the State, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended; Chapter 1371, Texas Government Code as amended, and an ordinance passed by the City Council of the City. In the Certificate Ordinance the City Council delegated pricing of the Certificates to a “Pricing Officer” who will approve the terms of sale of the Certificates (see “THE OBLIGATIONS - Authority for Issuance). The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. SECURITY FOR THE OBLIGATIONS ...................... The Bonds constitute direct obligations of the City, secured by and payable from 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 (see “THE OBLIGATIONS - Security and Source of Payment”). 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 water, wastewater and electric utility system (see “THE OBLIGATIONS - 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. * Preliminary, subject to change. Page 417 of 471 8 REDEMPTION ....................... The Bonds are not subject to redemption prior to maturity. Additionally, the Bonds may be subject to mandatory sinking fund redemption in the event the Initial Purchaser elects to designate one or more maturities as Term Bonds. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see “THE OBLIGATIONS – 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; any aggregation of maturities into Term Certificates will be specified in the Official Statement. (See “THE OBLIGATIONS – Mandatory Sinking Fund Redemption”). TAX EXEMPTION .................. In the opinion of Bond Counsel, the interest on the Obligations 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 PROCEEDS ............... Proceeds from the sale of the Bonds will be used for (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings (see “Plan of Financing”; also see Schedule I attached hereto for a detailed description of the Refunded Obligations and their redemption dates); (ii) paying the costs of issuance of the Bonds. Proceeds from the sale of the Certificates will be used for (i) (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates. (see “THE OBLIGATIONS – Sources and Use of Proceeds”). RATINGS ............................. The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's Investors Service, Inc. (“Moody's”) and “AA+” 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”). Applications have been made to Moody’s, S&P and Fitch Ratings Services for contract ratings on the Obligations. BOOK-ENTRY-ONLY SYSTEM .............................. The definitive Obligations 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 Obligations may be acquired in denominations of $5,000 of principal amount or any integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates (see “THE OBLIGATIONS - Book-Entry-Only System”). PAYMENT RECORD .............. Other than a late payment on the City’s Certificates of Obligation, Series 2002 that occurred in 2003, the City has never defaulted in payment of its general obligation tax debt. (Remainder of page intentionally left blank) Page 418 of 471 9 SELECTED FINANCIAL INFORMATION Ratio Tax Fiscal Per Capita Per Capita Debt to Year Estimated Taxable Taxable Net Net Taxable Ended City Assessed Assessed Ad Valorem Ad Valorem Assessed 9/30 Population (1) Valuation(2)Valuation Tax Debt (3)Tax Debt Valuation 2016 109,859 7,162,738,280$ 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 75,543 175,400,000 1,488 1.97% 98.90% 2019 121,150 9,487,074,377 78,308 197,690,000 1,632 2.08% 99.47% 2020 122,949 9,979,431,357 (4)81,167 187,425,000 (5)1,524 (5)1.88%(5)88.24%(6) Collection Total Percent _______________ (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 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (5) Projected, includes the Obligations, excludes the Refunded Obligations. (6) Collections as of March 15, 2020. 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, 2020. GENERAL FUND CONSOLIDATED STATEMENT SUMMARY 2019 2018 2017 2016 2015 Beginning Balance 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ 20,244,248 $ Total Revenue 71,180,329 67,484,355 64,795,371 60,087,950 58,378,174 Total Expenditures 87,077,758 82,128,812 76,897,859 77,508,715 68,827,167 Other Financing Sources 17,467,427 16,214,241 15,483,809 14,130,903 12,627,809 Prior Period Adjustment - 2,706,262 - - - Ending Balance(1)28,360,567 $ 26,790,569 $ 22,514,523 $ 19,133,202 $ 22,423,064 $ For Fiscal Year Ended September 30, UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, Page 419 of 471 10 CITY OFFICIALS, STAFF AND CONSULTANTS ELECTED OFFICIALS Term Name Position Expiration Occupation Karl P. Mooney Mayor 3 Years (1)November 2022 Texas A&M University Administrator Bob Brick Council Member 2 Years November 2020 Research Scientist John Crompton Council Member 6 Months November 2022 CEO Linda Harvell Council Member 3 Years November 2020 Business Owner Vacant (2)Council Member November 2021 John Nichols Council Member 2 Years (3)November 2020 Retired Professor Dennis Maloney Council Member 1 Year November 2021 Business Owner Length of Service ________________ (1) Elected November 2016 - Former City of College Station Council Member 2011-2016. (2) The vacancy was created when Councilwoman Elianor Vessali announced she would resign her seat in order to campaign for the Republican nomination for the U.S. Congressional District 17 seat. The unexpired term for Place-4 runs through November 2021, at which point the seat will be on the ballot for a full three-year term. (3) Prior Council Member for 4 years prior to his current term. SELECTED ADMINISTRATIVE STAFF Name Position Bryan Woods City Manager 1.5 Jeff Capps Deputy City Manager 27.0 (1) Jeff Kersten Assistant City Manager, CFO 29.0 (2) Carla Robinson City Attorney 18.5 Tanya D. Smith City Secretary 12.0 (3) Ty Elliott Internal Auditor 12.5 Mary Ellen Leonard Director of Finance 4.0 Gary Mechler Director of Water Services 1.0 (4) Timothy Crabb Director of Electric Utility 13.5 (5) Sindhu Menon Chief Information Officer 2.0 (6) David Schmitz Director of Parks and Recreation 12.0 (7) Jennifer Prochazka Director of Development Services 18.0 (8) Donald Harmon Director of Public Works and CIP 20.5 (9) Alison Pond Director of Human Resources 11.5 Jay Socol Public Communications Director 10.5 Length of Service to the City (in Years) ________________ (1) 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) Appointed City Secretary in July 2017. Previously served as Deputy City Secretary since 2008. (4) New Hire Director of Water Services August 2018. (5) Director of Electric Utility since December 2012; previously served as Assistant Director of Electric Utility. (6) New hire as Director of Information Technology in March 2018. (7) Director of Parks and Recreation since May 2011; previously served as Assistant Director of Parks and Recreation. (8) Named Director of Development Services September 2018; previously Manager of Economic Development. (9) Director of Public Works and CIP since January 2014; previously Assistant Director of Public Works and CIP. Page 420 of 471 11 CONSULTANTS AND ADVISORS Auditors ........................................................................................................................................................ BKD CPAs & Advisors Houston, Texas Bond Counsel ............................................................................................................................. McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor ............................................................................................................................................. Hilltop Securities Inc. Houston, Texas 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 W. Boyd London, Jr Marti Shew Hilltop Securities Inc. 1201 Elm Street, Suite 3500 Dallas, Texas 75270 (214) 953-4000 or Joe Morrow Hilltop Securities Inc. 700 Milam Street, Suite 500 Houston, Texas 77002 (713) 651-9850 Phone (Remainder of page intentionally left blank) Page 421 of 471 12 PRELIMINARY OFFICIAL STATEMENT RELATING TO CITY OF COLLEGE STATION, TEXAS (a Home-Rule City located in Brazos County, Texas) $18,940,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 $23,670,000* CERTIFICATES OF OBLIGATION, SERIES 2020 INTRODUCTION This Official Statement, which includes the cover pages, Schedule I and Appendices hereto, provides certain information regarding the issuance of the $18,940,000* City of College Station, Texas General Obligation Refunding Bonds, Series 2020 (the “Bonds”) and the $23,670,000* City of College Station, Texas Certificates of Obligation, Series 2020 (the “Certificates,” and together with the Bonds, herein collectively referred to as the “Obligations”). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the respective ordinances (the “Bond Ordinance” with respect to the Bonds and the “Certificate Ordinance” with respect to the Certificates), each to be adopted by the City Council of the City on June 11, 2020. The Bond Ordinance and the Certificates Ordinance are herein collectively referred to as the “Ordinances”. In the Ordinances, the City Council delegates to an authorized officer of the City (the “Pricing Officer” to finalize the pricing of the Obligations. There follows in this Official Statement descriptions of the Obligations 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 2018. 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 122,949. The City covers approximately 51.6 square miles. PLAN OF FINANCING PURPOSE . . . The Bonds are being issued for the purpose of (i) refunding a portion of the City’s outstanding debt (the “Refunded Obligations”) for debt service savings, and (ii) paying the costs of issuance of the Bonds. See Schedule I for a detailed listing of the Refunded Obligations and their redemption dates. The Certificates are being issued for the purpose of (i) constructing and improving streets and roads including related drainage, landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing, constructing, equipping and installing parks and recreation equipment and improvements including park infrastructure improvements and park rehabilitation, lighting, fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure and communication equipment; (iv) constructing improvements and extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for such purposes; and (v) professional services rendered in relation to such projects and the issuance costs of the Certificates.. REFUNDED OBLIGATIONS . . . The Refunded Obligations are being called for redemption on the redemption dates set forth in Schedule I. The principal and interest due on the Refunded Obligations are to be paid on the redemption date of such Refunded Obligations, from funds to be deposited pursuant to a certain Escrow Agreement (the “Escrow Agreement”) between the City and Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Escrow Agent”). The Bond Ordinance provides that from the proceeds of the sale of the Bonds received from the Initial Purchaser and other funds of the City, if any, the City will deposit with the Escrow Agent an amount which will be sufficient to accomplish the discharge and final payment of the Refunded Obligations on the redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the “Escrow Fund”) and used to pay principal and accrued interest on the Refunded Obligations on the redemption dates. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations. The funds on deposit in the Escrow Fund will not be available to pay debt service on the Bonds. * Preliminary, subject to change. Page 422 of 471 13 By the deposit of the proceeds of the Bonds and other funds of the City, if any are required, with the Escrow Agent pursuant to the Escrow Agreement, the City will have defeased of the Refunded Obligations in accordance with applicable State law and the ordinances authorizing the Refunded Obligations. As a result of such defeasance, the Refunded Obligations will be outstanding only for the purpose of receiving payments from the Escrow Fund held for such purpose by the Escrow Agent, and the Refunded Obligations will not be deemed as being outstanding obligations of the City payable from ad valorem taxes, nor for the purpose of applying any limitation on the issuance of debt, and the City will have no further responsibility with respect to amounts available in the Escrow Fund for the payment of the Refunded Obligations. SOURCES AND USES OF CERTIFICATE PROCEEDS . . . Proceeds from the sale of the Obligations, are expected to be expended as follows: Sources of Funds The Bonds The Certificates Par Amount -$ -$ Original Issue Premium Total Uses of Funds -$ -$ Use of Funds Deposit to Project Fund -$ -$ Deposit to the Escrow Fund Underwriters' Discount Costs of Issuance Total Uses of Funds -$ -$ THE CERTIFICATES GENERAL DESCRIPTION . . . The Obligations 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 pages 2 and 4 hereof. Interest on the Obligations will be calculated on the basis of a 360- day year consisting of twelve 30-day months and will be payable February 15 and August 15 of each year commencing August 15, 2020 with respect to the Bonds and February 15, 2021, with respect to the Certificates, until maturity or prior redemption. The definitive Obligations will be issued only in fully registered form in any integral multiple of $5,000 in principal amount 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 Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations 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 Obligations (see “Book- Entry-Only System”). AUTHORITY FOR ISSUANCE OF THE OBLIGATIONS. . . The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas (the "State"), including particularly Chapter 1207, Texas Government Code, as amended, and the Bond Ordinance. The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, Chapter 1371, Texas Government Code, as amended and the Certificate Ordinance. SECURITY AND SOURCE OF PAYMENT Tax Pledge . . . The Obligations constitute direct obligations of the City payable from an annual direct and continuing ad valorem tax levied against all taxable property within the City, within the limits prescribed by law Pledge of Surplus Water, Wastewater and Electric Utility System Net Revenues for Certificates . . . In addition to the pledge of ad valorem taxes described above, the Certificates are additionally secured by and payable from a subordinate lien on and pledge of $1,000 of the surplus revenues of the City’s combined water, wastewater and electric 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. Page 423 of 471 14 OPTIONAL REDEMPTION . . . The Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2029, 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 page 4 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. 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 Obligations is to be transferred and how the principal of and interest on the Obligations are to be paid to and credited by the DTC while the Obligations 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 Obligations, 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 Obligations), 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 Obligations. The Obligations 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 Obligations, 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 Page 424 of 471 15 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. Purchases of Obligations 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 Obligations (“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 Obligations 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 Obligations, except in the event that use of the book-entry system described herein is discontinued. To facilitate subsequent transfers, all Obligations 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 Obligations 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 Obligations; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Obligations 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 Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations 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 Obligations 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 Obligations 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 Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Obligations 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 Obligations 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, Obligations 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, Obligations 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 Obligations 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 Obligations, 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 Ordinances 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. Page 425 of 471 16 PAYING AGENT/REGISTRAR . . . The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In the Ordinances, 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 Obligations 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 Obligations. Upon any change in the Paying Agent/Registrar for the Obligations, the City will promptly cause a written notice thereof to be sent to each registered owner of the Obligations 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 Obligations 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. Obligations may be assigned by the execution of an assignment form on the respective Obligations 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 Obligations 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 Obligations issued in an exchange or transfer of Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. Neither the City nor the Paying Agent/Registrar will be required to transfer or exchange any Obligation 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 Obligation. RECORD DATE FOR INTEREST PAYMENT . . . The record date (“Record Date”) for determining the person to whom the interest is payable on the Obligations 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 Obligation 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 Ordinances provide for the defeasance of the Obligations when the payment of the principal of and premium, if any, on the Obligations, 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 Obligations. The Ordinances provide 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 Obligations. In the Ordinances, 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. REMEDIES OF HOLDERS OF OBLIGATIONS. . . The Ordinances establish specific events of default with respect to the Obligations. If the City defaults in the payment of the principal of or interest on the Obligations 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 Obligations including but not limited to, their prospect or ability to be repaid in accordance with the Ordinances, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, the Ordinances provide 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 Obligations or the Ordinances and the City's obligations are not uncertain or disputed. Chapter 1371, 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 bonds, but in connection with the issuance of the Obligations, the City has not waived sovereign immunity, and therefore, holders may not be able to bring such a suit against the City for breach of the of Ordinances covenants in the absence of City action. 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 Obligations in the event of default and, consequently, the remedy of mandamus Page 426 of 471 17 may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to represent the interest of the holders of the Obligations upon any failure of the City to perform in accordance with the terms of the Ordinances, 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 Obligations. 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 Obligations may not be able to bring such a suit against City for breach of the 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 Obligations. 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 Obligations 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 Obligations 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 The following is a summary of certain provisions of State law as it relates to ad valorem taxation and is not intended to be complete. Prospective investors are encouraged to review Title I of the Texas Tax Code, as amended (the “Property Tax Code”), for identification of property subject to ad valorem taxation, property exempt or which may be exempted from ad valorem taxation if claimed, the appraisal of property for ad valorem tax purposes, and the procedures and limitations applicable to the levy and collection of ad valorem taxes. VALUATION OF TAXABLE PROPERTY . . . The Property Tax Code provides for countywide appraisal and equalization of taxable property values and establishes in each county of the State an appraisal district and an appraisal review board (the “Appraisal Review Board”) responsible for appraising property for all taxing units within the county. The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District (the “Appraisal District”). Except as generally described below, the Appraisal District is required 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 market value of property, the Appraisal District is required to consider the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and use the method the chief appraiser of the Appraisal District considers most appropriate. The Property Tax Code requires appraisal districts to reappraise all property in its jurisdiction at least once every three (3) years. A taxing unit may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the taxing unit by petition filed with the Appraisal Review Board. State law requires the appraised value of an owner’s principal residence (“homestead” or “homesteads”) to be based solely on the property’s value as a homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further limits the appraised value of a homestead to the lesser of (1) the market value of the property or (2) 110% of the appraised value of the property for the preceding tax year plus the market value of all new improvements to the property. State law provides that eligible owners of both agricultural land and open-space land, 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 as both agricultural and open-space land. The appraisal values set by the Appraisal District are subject to review and change by the Appraisal Review Board. The appraisal rolls, as approved by the Appraisal Review Board, are used by taxing units, such as the City, in establishing their tax rolls and tax rates (see “Tax Information – City and Taxpayer Remedies”). STATE MANDATED HOMESTEAD EXEMPTIONS . . . State law grants, with respect to each city in the State, various exemptions for disabled veterans and their families, surviving spouses of members of the armed services killed in action, and surviving spouses of first responders killed or fatally wounded in the line of duty. LOCAL OPTION HOMESTEAD EXEMPTIONS . . . The governing body of a taxing unit, including a city, county, school district, or special district, at its option may grant: (1) an exemption of up to 20% of the appraised value of all homesteads (but not less than $5,000) and (2) an additional exemption of at least $3,000 of the appraised value of the homesteads of persons sixty-five (65) years of age or older and the disabled. Each taxing unit decides if it will offer the local option homestead exemptions and at what percentage or dollar amount, as applicable. The exemption described in (2), above, may be created, increased, decreased or repealed at an election called by the governing body of a taxing unit upon presentment of a petition for such creation, increase, decrease, or repeal of at least 20% of the number of qualified voters who voted in the preceding election of the taxing unit. Page 427 of 471 18 LOCAL OPTION FREEZE FOR THE ELDERLY AND DISABLED . . . The governing body of a county, municipality or junior college district may, at its option, provide for a freeze on the total amount of ad valorem taxes levied on the homesteads of persons 65 years of age or older or of disabled persons above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon voter initiative, an election may be held to determine by majority vote whether to establish such a freeze on ad valorem taxes. Once the freeze is established, the total amount of taxes imposed on such homesteads cannot be increased except for certain improvements, and such freeze cannot be repealed or rescinded. PERSONAL PROPERTY . . . Tangible personal property (furniture, machinery, supplies, inventories, etc.) used in the “production of income” is taxed based on the property’s market value. Taxable personal property includes income-producing equipment and inventory. Intangibles such as goodwill, accounts receivable, and proprietary processes are not taxable. Tangible personal property not held or used for production of income, such as household goods, automobiles or light trucks, and boats, is exempt from ad valorem taxation unless the governing body of a taxing unit elects to tax such property. FREEPORT AND GOODS-IN-TRANSIT EXEMPTIONS . . . Certain goods that are acquired in or imported into the State to be forwarded outside the State, and are detained in the State for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication (“Freeport Property”) are exempt from ad valorem taxation unless a taxing unit took official action to tax Freeport Property before April 1, 1990 and has not subsequently taken official action to exempt Freeport Property. Decisions to continue taxing Freeport Property may be reversed in the future; decisions to exempt Freeport Property are not subject to reversal. Certain goods that are acquired in or imported into the State to be forwarded to another location within or without the State, stored in a location that is not owned by the owner of the goods and are transported to another location within or without the State within 175 days (“Goods-in-Transit”), are generally exempt from ad valorem taxation; however, the Property Tax Code permits a taxing unit, on a local option basis, to tax Goods-in-Transit if the taxing unit takes official action after conducting a public hearing, before January 1 of the first tax year in which the taxing unit proposes to tax Goods-in-Transit. Goods-in-Transit and Freeport Property do not include oil, natural gas or petroleum products, and Goods-in-Transit does not include aircraft or special inventories such as manufactured housing inventory, or a dealer’s motor vehicle, boat, or heavy equipment inventory. A taxpayer may receive only one of the Goods-in-Transit or Freeport Property exemptions for items of personal property. OTHER EXEMPT PROPERTY . . . Other major categories of exempt property include property owned by the State or its political subdivisions if used for public purposes, property exempt by federal law, property used for pollution control, farm products owned by producers, property of nonprofit corporations used for scientific research or educational activities benefitting a college or university, designated historic sites, solar and wind-powered energy devices, and certain classes of intangible personal property. TAX INCREMENT REINVESTMENT ZONES . . . A city or county, by petition of the landowners or by action of its governing body, may create one or more tax increment reinvestment zones (“TIRZ”) within its boundaries. At the time of the creation of the TIRZ, a “base value” for the real property in the TIRZ is established and the difference between any increase in the assessed valuation of taxable real property in the TIRZ in excess of the base value is known as the “tax increment”. During the existence of the TIRZ, all or a portion of the taxes levied against the tax increment by a city or county, and all other overlapping taxing units that elected to participate, are restricted to paying only planned project and financing costs within the TIRZ and are not available for the payment of other obligations of such taxing units. TAX ABATEMENT AGREEMENTS . . . Taxing units may also enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The taxing unit, 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 Information – Tax Abatement Policy” for descriptions of the City’s tax abatement program. For a discussion of how the various exemptions described above are applied by the City, see “Tax Information – City Application of Property Tax Code” herein. CITY AND TAXPAYER REMEDIES . . . Under certain circumstances, taxpayers and taxing units, including the City, may appeal the determinations of the Appraisal District by timely initiating a protest with the Appraisal Review Board. Additionally, taxing units such as the City may bring suit against the Appraisal District to compel compliance with the Property Tax Code. Beginning in the 2020 tax year, owners of certain property with a taxable value in excess of the current year “minimum eligibility amount”, as determined by the State Comptroller, and situated in a county with a population of one million or more, may protest the determinations of an appraisal district directly to a three-member special panel of the appraisal review board, appointed by the chairman of the appraisal review board, consisting of highly qualified professionals in the field of property tax appraisal. The minimum eligibility amount is set at $50 million for the 2020 tax year, and is adjusted annually by the State Comptroller to reflect the inflation rate. The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the City and provides for taxpayer referenda that could result in the repeal of certain tax increases (see “Tax Information – Public Hearing and Maintenance and Operations Tax Rate Limitations”). The Property Tax Code also establishes a procedure for providing notice to property owners of reappraisals reflecting increased property value, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll. Page 428 of 471 19 LEVY AND COLLECTION OF TAXES . . . The City is responsible for the collection of its taxes, unless it elects to transfer such functions to another governmental entity. Taxes are due October 1, or when billed, whichever comes later, and become delinquent after January 31 of the following year. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty of up to twenty percent (20%) if imposed by the City. The delinquent tax also accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code also makes provision for the split payment of taxes, discounts for early payment and the postponement of the delinquency date of taxes for certain taxpayers. Furthermore, the City may provide, on a local option basis, for the split payment, partial payment, and discounts for early payment of taxes under certain circumstances. PUBLIC HEARING AND MAINTENANCE AND OPERATIONS TAX RATE LIMITATIONS . . . The following terms as used in this section have the meanings provided below: “adjusted” means lost values are not included in the calculation of the prior year’s taxes and new values are not included in the current year’s taxable values. “de minimis rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted), plus the rate that produces an additional $500,000 in tax revenue when applied to the current year’s taxable value, plus the debt service tax rate. “no-new-revenue tax rate” means the combined maintenance and operations tax rate and debt service tax rate that will produce the prior year’s total tax levy (adjusted) from the current year’s total taxable values (adjusted). “special taxing unit” means a city for which the maintenance and operations tax rate proposed for the current tax year is 2.5 cents or less per $100 of taxable value. “unused increment rate” means the cumulative difference between a city’s voter-approval tax rate and its actual tax rate for each of the tax years 2020 through 2022, which may be applied to a city’s tax rate in tax years 2021 through 2023 without impacting the voter-approval tax rate. “voter-approval tax rate” means the maintenance and operations tax rate that will produce the prior year’s total maintenance and operations tax levy (adjusted) from the current year’s values (adjusted) multiplied by 1.035, plus the debt service tax rate, plus the “unused increment rate.” The City’s tax rate consists of two components: (1) a rate for funding of maintenance and operations expenditures in the current year (the “maintenance and operations tax rate”), and (2) a rate for funding debt service in the current year (the “debt service tax rate”). Under State law, the assessor for the City must submit an appraisal roll showing the total appraised, assessed, and taxable values of all property in the City to the City Council by August 1 or as soon as practicable thereafter. A city must annually calculate its “voter-approval tax rate” and “no-new-revenue tax rate” (as such terms are defined above) in accordance with forms prescribed by the State Comptroller and provide notice of such rates to each owner of taxable property within the city and the county tax assessor-collector for each county in which all or part of the city is located. A city must adopt a tax rate before the later of September 30 or the 60th day after receipt of the certified appraisal roll, except that a tax rate that exceeds the voter-approval tax rate must be adopted not later than the 71st day before the next occurring November uniform election date. If a city fails to timely adopt a tax rate, the tax rate is statutorily set as the lower of the no-new-revenue tax rate for the current tax year or the tax rate adopted by the city for the preceding tax year. As described below, the Property Tax Code provides that if a city adopts a tax rate that exceeds its voter-approval tax rate or, in certain cases, its “de minimis rate”, an election must be held to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. A city may not adopt a tax rate that exceeds the lower of the voter-approval tax rate or the no-new-revenue tax rate until each appraisal district in which such city participates has delivered notice to each taxpayer of the estimated total amount of property taxes owed and the city has held a public hearing on the proposed tax increase. For cities with a population of 30,000 or more as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the voter-approval tax rate, that city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. For cities with a population less than 30,000 as of the most recent federal decennial census, if the adopted tax rate for any tax year exceeds the greater of (i) the voter-approval tax rate or (ii) the de minimis rate, the city must conduct an election on the next occurring November uniform election date to determine whether or not to reduce the adopted tax rate to the voter-approval tax rate. However, for any tax year during which a city has a population of less than 30,000 as of the most recent federal decennial census and does not qualify as a special taxing unit, if a city’s adopted tax rate is equal to or less than the de minimis rate but greater than both (a) the no-new-revenue tax rate, multiplied by 1.08, plus the debt service tax rate or (b) the city’s voter-approval tax rate, then a valid petition signed by at least three percent of the registered voters in the city would require that an election be held to determine whether or not to reduce the adopted tax rate to the voter- approval tax rate. Page 429 of 471 20 Any city located at least partly within an area declared a disaster area by the Governor of the State or the President of the United States during the current year may calculate its “voter-approval tax rate” using a 1.08 multiplier, instead of 1.035, until the earlier of (i) the second tax year in which such city’s total taxable appraised value exceeds the taxable appraised value on January 1 of the year the disaster occurred, or (ii) the third tax year after the tax year in which the disaster occurred. State law provides cities and counties in the State the option of assessing a maximum one‐half percent (1/2%) sales and use tax on retail sales of taxable items for the purpose of reducing its ad valorem taxes, if approved by a majority of the voters in a local option election. If the additional sales and use tax for ad valorem tax reduction is approved and levied, the no-new-revenue tax rate and voter-approval tax rate must be reduced by the amount of the estimated sales tax revenues to be generated in the current tax year. The calculations of the no-new-revenue tax rate and voter-approval tax rate do not limit or impact the City’s ability to set a debt service tax rate in each year sufficient to pay debt service on all of the City’s tax-supported debt obligations, including the Obligations. 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. DEBT TAX RATE LIMITATIONS . . . 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 supported 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 of 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 on ad valorem tax-supported debt, as calculated at the time of issuance. THE CITY’S RIGHTS IN THE EVENT OF TAX DELINQUENCIES . . . Taxes levied by the City are a personal obligation of the owner of the property. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of each taxing unit, including the City, having power to tax the property. The City’s tax lien is on a parity with tax liens of such other taxing units. A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the City is determined by applicable federal law. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest. At any time after taxes on property become delinquent, the City may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the City must join other taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, adverse market conditions, taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of a taxpayer’s debt. Federal bankruptcy law provides that an automatic stay of actions 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 a 5% exemption to the market value of the residence homestead. It also grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000. Ad valorem taxes are not levied by the City against 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. 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. Page 430 of 471 21 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 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. Page 431 of 471 22 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) Page 432 of 471 23 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2019/2020 Market Valuation Established by Brazos Central Appraisal District 10,421,438,232 $ (excluding exempt property) Less Exemptions/Reductions at 100% Market Value: Productivity Loss 109,281,559 $ Over 65 Homestead Exemptions 100,307,942 Cap Loss 19,300,903 Pollution Control 289,050 Member Armed Service Surviving Spouse 655,750 Solar 91,200 Freeport 12,923,797 Disabled Veteran 42,115,293 Homestead 152,210,126 Abatements 4,831,255 442,006,875 2019/2020 Taxable Assessed Valuation 9,979,431,357 $ Debt Payable from Ad Valorem Taxes (as of 4/15/2020)(2) Certificates of Obligation, Series 2009 1,285,000 $ General Obligation Improvement Bonds, Series 2009 175,000 General Obligation Refunding Bonds, Series 2010 4,410,000 Certificates of Obligation, Series 2012 11,190,000 General Obligation Improvement and Refunding Bonds, Series 2012 8,325,000 Certificates of Obligation, Series 2013 7,485,000 General Improvement and Refunding Bonds, Series 2013 11,575,000 Certificates of Obligation, Series 2014 24,510,000 General Improvement and Refunding Bonds, Series 2014 21,315,000 Certificates of Obligation, Series 2016 20,425,000 General Improvement and Refunding Bonds, Series 2016 33,455,000 General Improvement and Refunding Bonds, Series 2017 28,120,000 Certificates of Obligation, Series 2017 50,065,000 Certificates of Obligation, Series 2018 32,755,000 Certificates of Obligation, Series 2019 71,990,000 The Bonds(3)18,940,000 The Certificates (4)23,670,000 369,690,000 Less: Self Supporting Debt (5)182,265,000 $ Less: Interest and Sinking Fund as of 2/1/2020 22,897,120 Net Debt Payable from Ad Valorem Taxes(4)164,527,880 $ Ratio of Net Debt Payable from Ad Valorem Taxes to Taxable Assessed Valuation(4)1.65% Per Capita Taxable Assessed Valuation - $81,167 Per Capita Net Funded Debt - $1,338 (4) 2020 Estimated Population - 122,949 (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year.  (2) Excludes the Refunded Obligations, preliminary, subject to change (3) Preliminary, subject to change.  (4) 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 $1,000. See “THE OBLIGATIONS- Security and Source of Payment.” There is no guarantee that payments from these enterprise funds will be made. If payments are not made from the enterprise funds, the City will be required to levy ad valorem taxes in amounts sufficient to make such payments. (5) In the past, the City has sold certificates of obligation to finance projects for the City’s water and sewer system, and electric system and has internally allocated portions of this debt as payable from the respective enterprise funds. The self-supporting amounts listed above are projections of debt that is expected to be retired by the City based on actual historical payments from these funds to pay for debt service the outstanding certificates of obligation. There is no guarantee that payments from these funds will continue in the future. Includes a portion of the Certificates. See “DEBT INFORMATION – TABLE 10 – Self Supporting Debt.” (6) Net of Interest and Sinking Fund as of February 1, 2020. Page 433 of 471 24 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY 2020 2019 2018 % of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single-Family 5,654,665,682$ 54.26% 5,420,353,263$ 54.67% 4,891,101,082$ 53.32% Real, Residential, Multi-Family 2,165,512,093 20.78% 2,014,388,746 20.32% 1,951,938,574 21.28% Real, Vacant Lots/Tracts 170,205,829 1.63% 181,379,036 1.83% 166,018,722 1.81% Real, Acreage (Land Only) 111,699,300 1.07% 107,486,185 1.08% 117,980,979 1.29% Real, Farm and Ranch Improvements 73,131,172 0.70% 92,572,477 0.93% 95,828,034 1.04% Real, Commercial/Industrial 1,722,395,856 16.53% 1,612,617,746 16.27% 1,497,083,484 16.32% Real, Oil, Gas & Other Mineral Reserves 7,641,206 0.07% 12,619,033 0.13% 4,375,082 0.05% Real and Tangible Personal, Utilities 41,354,350 0.40% 40,945,210 0.41% 40,806,430 0.44% Tangible Personal, Business 415,420,441 3.99% 389,192,346 3.93% 360,514,767 3.93% Tangible Personal, Other 2,384,330 0.02% 2,441,400 0.02% 2,449,980 0.03% Real Property Inventory 37,101,583 0.36% 23,400,278 0.24% 31,155,861 0.34% Special Inventory 19,926,390 0.19% 16,814,030 0.17% 13,855,490 0.15% Total Appraised Value Before Exemptions 10,421,438,232$ 100.00% 9,914,209,750$ 100.00% 9,173,108,485$ 100.00% Less: Total Exemptions/Reductions 442,006,875 427,135,373 271,017,930 Taxable Assessed Value 9,979,431,357$ 9,487,074,377$ 8,902,090,555$ 2017 % of % of Category Amount Total Amount Total Real, Residential, Single-Family 4,470,806,990$ 56.58% 3,942,774,761$ 53.35% Real, Residential, Multi-Family 1,275,467,653 16.14% 1,326,289,539 17.95% Real, Vacant Lots/Tracts 158,722,669 2.01% 142,089,823 1.92% Real, Acreage (Land Only) 87,626,228 1.11% 92,882,946 1.26% Real, Farm and Ranch Improvements 113,059,943 1.43% 108,202,479 1.46% Real, Commercial/Industrial 1,340,756,747 16.97% 1,330,864,915 18.01% Real, Oil, Gas & Other Mineral Reserves 5,036,746 0.06% 10,793,941 0.15% Real and Tangible Personal, Utilities 40,325,800 0.51% 30,944,850 0.42% Tangible Personal, Business 371,077,880 4.70% 369,625,180 5.00% Tangible Personal, Other 1,988,130 0.03% 2,024,340 0.03% Real Property Inventory 23,079,643 0.29% 17,672,671 0.24% Special Inventory 13,282,100 0.17% 15,787,080 0.21% Total Appraised Value Before Exemptions 7,901,230,529$ 100.00% 7,389,952,525 $ 100.00% Less: Total Exemptions/Reductions 277,266,358 227,214,245 Taxable Assessed Value 7,623,964,171$ 7,162,738,280 $ Taxable Appraised Value, Fiscal Year Ending September 30, Taxable Appraised Value, Fiscal Year Ending September 30, 2016 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. (Remainder of page intentionally left blank) Page 434 of 471 25 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY 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 Per Capita 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 75,543 175,400,000 1.97% 1,488 2019 121,150 9,487,074,377 78,308 197,690,000 2.08% 1,632 2020 122,949 9,979,431,357 81,167 187,425,000 (4)1.88%(4)1,524 (4) (1) Source: The City. (2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year. Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal District. This amount is subject to change during ensuing year. (3) Payable from ad valorem taxes. Does not include self-supporting debt. as shown on Table 8 and Table 10 (4) Projected, includes the Obligations, excludes the Refunded Obligations. Preliminary, subject to change. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY Fiscal Year General Interest and % Current % Total Ended 9/30 Tax Rate Fund Sinking Fund Tax Levy Collections Collections 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 43,300,209 98.90% 98.90% 2019 0.5058 0.2855 0.2203 46,985,167 99.22% 99.47% 2020 0.5346 0.3132 0.2214 51,722,744 88.50%(1)88.24%(1) (1) Collections as of March 15, 2019. 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, 2020. TABLE 5 - TEN LARGEST TAXPAYERS 2019/2020 % of Total Taxable Taxable Nature Assessed Assessed Name of Taxpayer of Property Valuation Valuation CPP College Station I LLC Real Estate 69,800,000$ 0.70% The Standard at College Station LLC Apartment Buildings 65,100,000 0.65% Sterling-A&M High Rise LLC Apartment Buildings 63,614,688 0.64% FujiFilm Diosynth Biotechnologies Texas LLC Technology 60,671,010 0.61% Woodridge College Station LLC Mall 55,470,994 0.56% Woodridge College Station Phase II LLC Mall 55,373,651 0.55% POM-College Station LLC Mall 54,570,040 0.55% SW Meadows Point LP Apartment Buildings 53,740,000 0.54% Culpepper Family LP Real Estate 53,642,459 0.54% Weinberg Israel Real Estate 52,829,451 0.53% 584,812,293$ 5.86% 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 OBLIGATIONS - Tax Rate Limitation”). Page 435 of 471 26 TABLE 6 - TAX ADEQUACY Net Maximum Tax Suppported Principal and Interest Requirements (2020)…………………………… 20,492,316 $ (1) $0.20742 Tax Rate at 99% Collection Produces ………………………………………………………20,492,343 $ Net Average Tax Supported Principal and Interest Requirements (2020-2040)………………………… 12,400,411 $ (1) $0.12552 Tax Rate at 99% Collection Produces ………………………………………………………12,400,920 $ (1) Includes the Obligations and excludes the Refunded Obligations and self-supporting debt. 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. City's Total Net Estimated Overlapping 2019/2020 Taxable 2019 Tax Debt as % Tax Debt as Assessed Value Tax Rate of 4/15/2020 Applicable of 4/15/2020 City of College Station 9,979,431,357 $ (1)0.5346 164,527,880 $ (2)100.00% 164,527,880 $ Brazos County 20,161,147,751 0.4980 715,050,000 49.98% 357,381,990 Bryan ISD 8,208,177,904 1.2700 191,485,000 2.55% 4,882,868 College Station ISD 9,913,411,361 1.2390 321,720,000 89.14% 286,781,208 Total Direct and Overlapping Funded Tax Debt 813,573,946 $ Ratio of Direct and Overlapping Funded Tax Debt to Taxable Assessed Valuation 8.153% Per Capita Overlapping Funded Tax Debt 6,617 $ Source: Municipal Advisory Council of Texas. (1) Certified taxable assessed valuation for tax year 2019 as reported by the Brazos Central Appraisal. This amount is subject to change during ensuing year. (2) Projected, includes the Obligations and excludes the Refunded Obligations and self-supporting debt. Preliminary, subject to change. (Remainder of page intentionally left blank) Page 436 of 471 27 DEBT INFORMATION TABLE 8 - PRO-FORMA AD VALOREM TAX DEBT SERVICE REQUIREMENTS* Total NetYearLess: Tax Supported % ofEndSelf-Supporting Debt Service Principal9/30 Principal Interest Total Principal Interest Total Principal Interest Total Debt Service(4)Requirements Retired2020 26,275,000$ 14,896,796$ 41,171,796$ -$ 24,472$ 24,472$ -$ -$ -$ 20,703,952$ 20,492,316$ 2021 24,810,000 13,008,482 37,818,482 1,620,000 265,425 1,885,425 1,150,000 489,560 1,639,560 21,680,962 19,662,505 2022 23,370,000 11,928,482 35,298,482 1,665,000 245,136 1,910,136 1,200,000 434,509 1,634,509 19,577,705 19,265,422 2023 23,500,000 10,803,182 34,303,182 1,710,000 223,786 1,933,786 1,215,000 419,233 1,634,233 18,598,420 19,272,781 2024 23,930,000 9,637,095 33,567,095 1,770,000 201,249 1,971,249 1,230,000 403,400 1,633,400 18,267,616 18,904,127 33.70%2025 23,090,000 8,489,295 31,579,295 1,810,000 177,438 1,987,438 1,245,000 386,940 1,631,940 17,725,262 17,473,410 2026 22,920,000 7,369,632 30,289,632 1,855,000 152,142 2,007,142 1,265,000 369,618 1,634,618 17,105,774 16,825,619 2027 19,985,000 6,404,020 26,389,020 1,910,000 125,026 2,035,026 1,285,000 351,255 1,636,255 15,109,961 14,950,339 2028 18,710,000 5,631,570 24,341,570 1,960,000 95,896 2,055,896 1,020,000 333,956 1,353,956 13,810,130 13,941,292 2029 17,010,000 4,946,846 21,956,846 2,015,000 64,281 2,079,281 1,040,000 317,574 1,357,574 12,727,351 12,666,349 63.28%2030 15,650,000 4,319,658 19,969,658 2,075,000 29,186 2,104,186 1,055,000 299,604 1,354,604 11,021,472 12,406,976 2031 16,270,000 3,681,270 19,951,270 550,000 5,308 555,308 1,080,000 279,740 1,359,740 10,802,191 11,064,126 2032 16,930,000 3,018,248 19,948,248 - - - 1,095,000 257,984 1,352,984 10,203,789 11,097,443 2033 16,165,000 2,390,680 18,555,680 - - - 1,120,000 234,275 1,354,275 9,060,511 10,849,444 2034 15,405,000 1,815,239 17,220,239 - - - 1,150,000 208,387 1,358,387 8,311,475 10,267,150 85.64%2035 12,795,000 1,339,615 14,134,615 - - - 1,170,000 180,308 1,350,308 6,473,641 9,011,281 2036 13,205,000 939,190 14,144,190 - - - 1,200,000 150,561 1,350,561 6,483,547 9,011,204 2037 11,615,000 551,348 12,166,348 - - - 1,235,000 119,511 1,354,511 6,062,318 7,458,541 2038 6,985,000 254,609 7,239,609 - - - 1,270,000 87,068 1,357,068 5,178,989 3,417,688 2039 4,735,000 71,025 4,806,025 - - - 1,305,000 53,203 1,358,203 3,818,952 2,345,276 99.66%2040 - - - - - - 1,340,000 17,956 1,357,956 1,332,621 25,335 100.00%353,355,000$ 111,496,282$ 464,851,282$ 18,940,000$ 1,609,342$ 20,549,342$ 23,670,000$ 5,394,640$ 29,064,640$ 254,056,639$ 260,408,625$ The Certificates(3)Outstanding Debt Service(1)The Bonds(2) (1) Excludes the Refunded Obligations. Preliminary, subject to change. (2) Average life of the Bonds – 5.467 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (3) Average life of the Certificates – 10.188 years. Interest calculated at an average rate for purposes of illustration. Preliminary, subject to change. (4) 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. Page 437 of 471 28 TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION Total Net Tax Supported Debt Service Requirements, Fiscal Year Ending September 30, 2020(1)20,492,316$ Interest and Sinking Fund, September 30, 2019 5,583,524$ Budgeted Interest and Sinking Fund Tax Levy 21,346,328 Budgeted Investment Earnings 150,000 Budgeted Transfers 281,896 27,361,748 Estimated Balance, September 30, 2020 6,869,432$ (1) Excludes the Refunded Obligations and self-supporting debt. Includes the Obligations. Preliminary, subject to change. TABLE 10 – SELF-SUPPORTING DEBT(1) Year Total End Electric Wastewater Water Convention Parking Self-Supporting 9/30 Fund Fund Fund Center Landfill Garage Debt Service 2020 6,676,974$ 6,537,818$ 6,903,809$ 7,100$ 353,850$ 224,400$ 20,703,952$ 2021 6,657,059 7,635,750 7,027,203 6,900 354,050 - 21,680,962 2022 6,556,776 6,735,866 5,955,088 6,675 323,300 - 19,577,705 2023 6,330,371 6,394,505 5,545,569 6,425 321,550 - 18,598,420 2024 5,979,209 6,376,730 5,576,453 6,175 329,050 - 18,267,616 2025 5,667,188 6,119,393 5,602,082 5,925 330,675 - 17,725,262 2026 5,412,585 6,114,845 5,241,119 5,675 331,550 - 17,105,774 2027 4,208,547 5,904,729 4,659,585 5,425 331,675 - 15,109,961 2028 4,051,149 5,533,187 3,896,169 5,225 324,400 - 13,810,130 2029 3,590,288 5,379,717 3,422,397 5,075 329,875 - 12,727,351 2030 2,729,864 5,385,546 2,906,062 - - - 11,021,472 2031 2,536,439 5,360,375 2,905,377 - - - 10,802,191 2032 2,178,939 5,129,681 2,895,169 - - - 10,203,789 2033 1,631,830 4,723,079 2,705,602 - - - 9,060,511 2034 1,033,030 4,573,886 2,704,559 - - - 8,311,475 2035 430,653 3,787,953 2,255,036 - - - 6,473,641 2036 432,185 3,793,601 2,257,761 - - - 6,483,547 2037 432,893 3,795,030 1,834,396 - - - 6,062,318 2038 432,756 3,462,416 1,283,817 - - - 5,178,989 2039 - 2,779,009 1,039,943 - - - 3,818,952 2040 - 1,145,142 187,479 - - - 1,332,621 72,976,738 $ 110,414,668 $ 82,642,106 $ 72,988 $ 3,682,938 $ 446,875 $ 270,236,312 $ (1) 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. Includes a portion of the Obligations. Preliminary, subject to change. TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS 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. Date of Amount Issued Authorization Purpose Authorized To Date Unissued 11/4/2003 Municipal Complex Improvements 7,610,000$ 3,955,000$ 3,655,000$ 11/4/2008 Park Improvements 12,790,000 12,145,000 645,000 77,570,000$ 73,270,000$ 4,300,000$ Page 438 of 471 29 OTHER OBLIGATIONS Currently, the City has no outstanding capital leases or loans. PENSION FUND Plan Description The City accounts for pension cost under GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The City of College Station participates as one of over 880 plans in the multi-employer, nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and the city-financed monetary credits, with interest, were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven actuarially equivalent payment options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits and interest. Plan provisions for the City were as follows: Employees covered by benefit terms at the December 31, 2017 valuation and measurement date are as follows: Inactive employees or beneficiaries currently receiving benefits 481 Inactive employees entitled to but not yet receiving benefits 562 Active employees 908 Total 1,951 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the city. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City of College Station were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City of College Station were 13% and 13% in calendar years 2019 and 2018, respectively. The City’s contributions to TMRS for fiscal year 2019 were $7,750,052 and were greater than the required contributions of $7,483,465. Net Pension Liability The City’s Net Pension Liability (NPL) was measured as of December 31, 2018, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Employee deposit rate 7.00% Matching ratio (City to Employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years at any age; 5 years at age 60 and above Updated service credit 75% repeating transfers Annuity increase (to retirees) 50% of CPI repeating Page 439 of 471 30 Actuarial Assumptions The Total Pension Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions: Salary increases were based on service-related tables. Mortality rates for active members, retirees, and beneficiaries were based on the gender- distinct RP2000 Combined Mortality Table with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. Actuarial assumptions used in the December 31, 2018 valuation were based on the results of actuarial experience studies of TMRS over the four year period from December 31, 210 to December 31, 2014. Assumptions are reviewed annually. The long-term expected rate of return on pension plan investments is 6.75%. The pension plan’s policy with regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long- term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long Term Expected Target Real Rate Asset Class Allocation of Return Doemstic Equity 17.50% 4.30% International Equity 17.50% 6.10% Core Fixed Income 10.00% 1.00% Non-Core Fixed Income 20.00% 3.39% Real Return 10.00% 3.78% Real Estate 10.00% 4.44% Absolute Return 10.00% 3.56% Private Equity 5.00% 7.75% Total 100.00% (Remainder of page intentionally left blank) Inflation 2.5% per year Overall paytoll growth 3.00% Investment rate of return 6.75%, net of pension plan investment expense including inflation Page 440 of 471 31 Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee contributions will remain at the current 7.0% and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) Balance at 12/31/2017 284,444,058$ 257,348,143$ 27,095,915$ Changes for the year: Service Cost 8,830,945 - 8,830,945 Interest (on the Total Pension Liability) 19,084,918 - 19,084,918 Change of benefit terms - - - Differences between expected and actual experience (501,706) - (501,706) Changes of assumptions - - - Contributions - employer - 7,621,669 (7,621,669) Contributions - employee - 3,998,020 (3,998,020) Net investment income (loss) - (7,708,361) 7,708,361 Benefit payments, including refunds of - employee contributions; (12,240,008) (12,240,008) - Administrative expenses - (148,986) 148,986 Other - (7,785) 7,785 Net changes 15,174,149 (8,485,451) 23,659,600 Ending Balance at 12/31/2018 299,618,207$ 248,862,692$ 50,755,515$ Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City, as well as what the City’s net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage- point higher than the current rate: 1% Decrease 1% Increase in Discount Discount in Discount Rate (5.75%) Rate (6.75%) Rate (7.75%) City's net pension liability 95,361,560$ 50,755,515$ 14,497,791$ Pension Plan Fiduciary Net Position Detailed information about the pension plan’s Fiduciary Net Position is available in a separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. Pension Expense For the year ended September 30, 2019, the City recognized pension expense of $12,833,597. (Remainder of page intentionally left blank) Page 441 of 471 32 Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension At September 30, 2019, the City reported deferred outflows and inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 1,122,830$ 442,212$ Changes in assumptions 724,466 - Difference between projected and actual earnings 13,314,507 - Contributions subsequent to the measurement date 5,652,899 - Total ######### 442,212$ Deferred outflows of resources, of $5,652,899 related to pensions resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense in the following years indicated below: Net deferred Fiscal outflows Year Ended (inflows) of Sept. 30: resources 2020 5,799,734$ 2021 2,057,032 2022 1,942,418 2023 4,920,407 2024 - Thereafter - 14,719,591$ OTHER POST EMPLOYMENT BENEFITS Plan Description Plan administration: As required by state laws, in addition to the pension benefits described above, the City makes available certain postretirement benefits to employees who meet TMRS retirement qualifications, retire from City employment, and enroll in the plan before the effective date of their retirement. The City’s OPEB Plan is a single employer defined benefit plan, defined by City policy. The OPEB Plan does not issue a separate report that includes financial statements and required supplementary information for the OPEB Plan. Plan membership. At September 30, 2019 membership consisted of the following: Medical Life and/or Insurance Dental Benefits Benefits Retirees and Retiree Spouses 84 197 Active Employees 900 900 984 1,097 Benefits provided: The City’s defined benefit Other Post-Employment Benefits (OPEB) Plan offers medical, dental, vision, drug, and life insurance benefits to retired employees and their eligible dependents. The OPEB Plan is a single employer defined benefit OPEB plan administered by the City. The benefit levels offered to retired employees and eligible dependents are the same as those afforded to active employees as the City’s group health insurance plan covers both active and retired members. All medical, dental, vision and drug care benefits are provided through the City’s self-insured health plan. As long as monthly premium payments are made, the healthcare plan provides coverage until age 65 for retired employees and eligible dependents enrolled in the City’s OPEB Plan. The life insurance offered though the OPEB Plan provides a $10,000, fully insured death benefit coverage upon retirement, which ceases upon attainment of age 65. The Life insurance benefit for eligible retirees is paid entirely by the City. Page 442 of 471 33 Contributions: Benefit provisions, as well as retiree premium contributions, are established by City management. The City determines the employer and participant contribution rates annually, based on recommendations of City staff and the City’s benefit consultant. For the year ended September 30, 2019, the City’s average contribution rate was 3.1 percent of covered-employee payroll. Investments Investment policy: The goal of the Plan’s investment program is to generate adequate long-term returns that, when combined with contributions, will result in sufficient assets to pay the present and future obligations of the Plan. The Plan has a Balanced Risk Tolerance with a Strategic Asset Allocation of the following: Concentrations: Assets of the OPEB plan are held in Trust by PARS which is fully discussed in Note 24 in the City’s financial statements. Rate of return: For the year ended December 31, 2018, the annual money-weighted rate of return on investments, net of investment expense, was -4.51 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Receivables The OPEB plan has no receivables from long-term contracts with the City for contributions at September 30, 2019. Allocated Insurance Contracts The OPEB plan has no allocated insurance contracts excluded from OPEB plan assets at September 30, 2019. Reserves The OPEB plan has no reserves recorded at September 30, 2019. Net OPEB Liability The components of the net OPEB liability of the City at September 30, 2019 based on the December 31, 2018 measurement and actuarial valuation date, were as follows: Total OPEB liability - ending 7,290,606 $ Plan fiduciary net position - ending (2,430,218) Net OPEB liability - ending 4,860,388 Plan fiduciary net position as a percentage of total OPEB liability 33.33% Changes in the Net OPEB Liability For the year ended September 30, 2019, the City recognized reduction in the OPEB liability of $1,433,588. Effective January 1, 2018, the City has made the following changes to the benefits offered under its Other Post Employment Benefit Plan. To be eligible for premium pricing for medical, dental, vision, and drug benefits at the time of retirement, employees must:  Meet TMRS retirement qualifications,  Be 55 years of age or older,  Have five (5) years of employment at the City of College Station,  Be enrolled in the plan before the effective date of their retirement. Target Allocation Asset Class Allocation Range Cash 5.0% 0-20% Fixed Income 35.0% 30%-50% Equity 60.0% 50%-70% Total 100.0% Page 443 of 471 34 In addition, certain actuarial changes were made when enacting GASB 75 that affected the Net OPEB Liability. Those changes included:  The Entry Age Normal Actuarial Cost Method must be used to attribute the actuarial present value of benefits to service periods in determining the OPEB Liability. This differed from the Projected Unit Credit Cost Method previously used by the City.  Discount Rate changes were allowed under GASB 75. Those changes included that for the unfunded portion of the plan, the discount rate is based on yields of 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. For the funded portion, however, the City could continue to use an assumption similar to the current discount rate.  Instead of recording expense equal to the Annual Required Contribution (ARC), GASB No. 75 required expensing the change in Net OPEB Liability from one period to the next. Some sources of this change are expensed immediately, while others are amortized over a period of approximately ten to twenty years depending on plan demographics. Components of the change in the Net OPEB Liability is as follows: Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balances as of Decmeber 31, 2017 7,815,261 $ 1,521,285$ 6,293,976 $ Changes for the year: Service cost 102,176 - 102,176 Interest 526,551 - 526,551 Changes of benefit terms - - - Differences between expected and - actual experience 95,216 - 95,216 Changes of assumptions of other inputs (458,047) - (458,047) Contributions-employer - 1,864,123 (1,864,123) Net investment income - (164,639) 164,639 Administrative expenses - - - Benefit payments, including refunds of - employee contributions (790,551) (790,551) - Net changes (524,655) 908,933 (1,433,588) Balances as of December 31, 2018 7,290,606 $ 2,430,218 $ 4,860,388 $ Actuarial assumptions. The total OPEB liability for the year ended September 30, 2018 as measured as of December 31, 2017 was determined by an actuarial valuation as of that date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.0% Salary increases 4% to 11% including inflation Discount rate 7.00% Healthcare cost trend rates 8.00% in FY20 decreasing 0.50% per year to an unltimate rate of 4.75% for FY27 and later years Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period December 31, 2010 to December 31, 2014. (Remainder of page intentionally left blank) Page 444 of 471 35 The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation are summarized in the following table: Expected Real Target Rate of Weighted Asset Class Allocation Return Average Cash 5.00% 0.75% 0.04% Fixed Income 35.00% 3.56% 1.25% Equity 60.00% 5.75% 3.45% Total 100.00% N/A 4.74% Discount rate. The discount rate used to measure the total OPEB liability was 7.0 percent. The discount rate used to determine the total OPEB Liability as of the beginning of the measurement year prior to the establishment of the OPEB trust was 3.78%. The weighted average of the Expected Real Rate of Return is added to the Expected Long-Term Inflation assumption and reduced by expected investment expenses (4.74% + 3.00% - 0.75% = 6.99%). This result is then rounded to the nearest 25 basis points to obtain the Expected Long-Term Rate of Return of 7.00%. The projected cash flows into the plan are equal to projected benefit payments out of the plan plus prefunding contributions that have been approved by the City Council. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. The assumed rate of general inflation has been updated since the valuation used for the September 30, 2018 liability to reflect the actuary’s best expectation of future plan experience. The long-term expected rate of return for the plan is 7.0 percent. The plan operates on a pay as you go basis and accumulates assets in trust in addition to the pay as you go amount. Based on the discount rate assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.0 percent) or 1-percentage- point higher (8.0 percent) than the current discount rate: 1% Current 1% Decrease Discount Rate Increase (6.00%) (7.00%) (8.00%) Net OPEB liability 5,421,797 $ 4,860,388 $ 4,357,471 $ Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7.0 percent decreasing to 3.75 percent) or 1-percentage-point higher (9.0 percent decreasing to 5.75 percent) than the current healthcare cost trend rates: Current Healthcare 1% Decrease Cost Trend Rates 1% Increase (7.00% decreasing (8.00% decreasing (9.00% decreasing to 3.75%) to 4.75%) to 5.75%) Net OPEB liability 4,073,135 $ 4,860,388 $ 5,850,899 $ Page 445 of 471 36 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended September 30, 2019, the City recognized OPEB expense/(income) of $16,194. At September 30, 2019, the City reported changes to deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources as follows: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience 82,155$ 511,580$ Changes in actual assumptions - 2,474,833 Difference between projected and actual investment earnings 230,358 - Contributions subsequent to the measurement date 1,530,951 - Total 1,843,464$ 2,986,413$ Deferred outflows of resources, of $1,530,951 related to OPEB resulting from contributions subsequent to the measurement date, will be recognized as a reduction of the net OPEB liability for the measurement year ending December 31, 2019 and recognized in the City’s financial statements as of September 30, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Deferred Year Ended inflows of Sept. 30: resources 2020 (487,729)$ 2021 (487,729) 2022 (487,728) 2023 (487,332) 2024 (545,219) Thereafter (178,163) (2,673,900)$ OPEB Trust 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 passed resolution 2017-0564 appropriating the funds. Effective September 27, 2017, the City entered into a section 115 Irrevocable Exclusive Benefit agent multiple-employer trust to fund its Other Postemployment Benefits Obligation. Trust and Investment Management Services are provided by Public Agency Retirement Services (PARS) and is administered by the City. The investment manager that executes investment transactions is Highmark Capital Management, Inc. and the custodian of the trust’s funds is US Bank. With the establishment of the trust, the City can pre-fund (make annual payments in advance of the obligation) and allocate funds for the express purpose of funding future OPEB costs. The investment returns can be used to reduce the actuarial contributions and can result in lower long-term costs of the plan. As of September 30, 2019 the trust’s balance was $3,865,554. (Remainder of page intentionally left blank) Page 446 of 471 37 FINANCIAL INFORMATION TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY 2019 2018 2017 2016 2015 Revenues: Taxes 59,745,768$ 56,329,528$ 53,749,315$ 48,737,894$ 46,750,120$ Licenses & Permits 1,633,241 1,772,959 2,127,142 2,132,802 1,500,777 Intergovernmental 585,506 910,169 828,510 1,373,950 355,083 Charges for Services 3,753,297 3,940,837 3,863,744 3,809,206 3,572,684 Fines, Forfeits and Penalties 3,544,994 3,211,536 2,917,735 3,255,051 2,693,647 Investment Income 757,250 449,880 241,880 148,302 116,074 Rents & Royalties 184,543 219,538 284,351 187,328 136,228 Contributions 17,905 7,361 7,580 8,880 1,251 Other 957,825 642,547 775,114 434,537 3,252,310 Total Revenues 71,180,329$ 67,484,355$ 64,795,371$ 60,087,950$ 58,378,174$ Expenditures: General Government 8,481,683$ 6,165,016$ 6,228,021$ 5,524,471$ 4,853,358$ Fiscal Services 3,993,584 3,954,488 3,815,223 3,733,550 3,314,990 Police Department 24,299,928 22,631,648 21,372,560 20,170,450 18,533,889 Fire Department 19,888,536 19,624,919 17,001,580 16,916,819 14,881,983 Planning & Development Services 4,180,089 3,740,969 3,741,263 3,243,768 3,106,143 Parks and Recreation 9,350,892 9,129,079 8,621,075 9,279,126 8,194,670 Information Technology 4,591,351 4,488,885 4,600,556 4,491,009 4,112,987 Public Works 9,348,645 9,575,300 8,151,055 11,162,508 9,156,069 Library Services 1,186,313 1,118,522 1,097,876 1,098,326 1,138,568 Contributions 1,467,695 1,380,580 1,280,215 1,220,251 1,187,500 Other - - - 863 217,114 Capital Improvement Projects 289,042 319,406 988,435 667,574 129,896 Total Expenditures 87,077,758$ 82,128,812$ 76,897,859$ 77,508,715$ 68,827,167$ Other Financing Sources (Uses): Sale of General Fixed Assets -$ -$ 47,478$ -$ 8,974,205$ Operating Transfers In 19,427,607 19,245,943 18,347,351 16,507,346 15,094,866 Operating Transfers Out (1,960,180) (3,031,702) (2,911,020) (2,376,443) (11,441,262) Total Other Financing Sources (Uses) 17,467,427$ 16,214,241$ 15,483,809$ 14,130,903$ 12,627,809$ Net Change in Fund Balance 1,569,998$ 1,569,784$ 3,381,321$ (3,289,862)$ 2,178,816$ Fund Balance, Beginning of Year 26,790,569 22,514,523 19,133,202 22,423,064 20,244,248 Prior Period Adjustment - 2,706,262 - - - Fund Balance, End of Year 28,360,567$ 26,790,569$ 22,514,523$ 19,133,202$ 22,423,064$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 447 of 471 38 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 Obligations. 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%. Fiscal Year % of Equivalent of Ended Total Ad Valorem Ad Valorem Per 9/30 Collected (1)Tax Levy Tax Rate Capita (2) 2016 27,163,480$ 84.71% 0.38$ 255$ 2017 28,561,762 77.18% 0.36 260 2018 28,799,040 66.51% 0.33 244 2019 28,432,571 60.51% 0.31 235 2020 13,222,913 (3)25.56% 0.14 108 (1) Provided by the City. (2) Based on population estimates provided by the City. (3) Collections as of February 29, 2020. The sales tax breakdown for the City is as follows: 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 2019-2020 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 18% 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. Brazos County Sales & Use Tax 1/2 % Property Tax Reduction 1/2 % City Sales & Use Tax 1 % State Sales & Use Tax 6 1/4 % Total 8 1/4 % Page 448 of 471 39 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 ten wells, with a combined capacity of 38 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 eight 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 recently completed the construction of another Simsboro well, Well #9 that will meet the city’s demands for water for many years into the future. Well #10 remains in the planning stages, and would be constructed in future years, depending upon the rate of growth of water demands. College Station is also investigating other water supply strategies for the future. The City has completed a Water Reclamation project, which pumps effluent from the wastewater treatment plant 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 the watering season. 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. 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 are established by ordinance, passed and approved by the City Council. The following rates became effective October 1, 2019. 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 12.40 per mo. 3/4” 15.60 per mo. 1” 23.20 per mo. 1 1/2” 36.65 per mo. 2” 115.60 per mo. 3” 171.75 per mo. 4” 209.10 per mo. 6” 209.10 per mo. 8” Residential $2.75 for usage from 0-10,000 gallons $3.60 for usage from 11,000-15,000 gallons $4.40 for usage from 16,000-20,000 gallons $5.20 for usage from 21,000-25,000 gallons $6.05 for usage from 26,000 gallons and more Commercial $3.05 per 1,000 gallons Commercial Irrigation Usage Charge Commercial Irrigation Multifamily 3+ units MUD #1 Residential and Commercial $3.25 per 1,000 gallons Rates as above with an added 50% surcharge (Remainder of page intentionally left blank) Page 449 of 471 40 WASTEWATER SYSTEM The City’s wastewater is treated by three City-owned wastewater treatment plants, Carter Creek Treatment Plant, Lick Creek Treatment Plant, and Carter Lake Treatment Plant located within the City limits. The three plants have a combined treatment capacity of 11.5 mgd. An expansion of the Lick Creek Treatment plant is currently underway and will increase the city’s combined treatment capacity to 14.5 mgd. Sewer rates were established by ordinance, passed and approved by the City Council, and became effective on October 1, 2017 Residential (metered water) .......................................................... $21.29 including 4,000 gallons of metered water Usage Charge ................................................................................ $4.26 per 1,000 gallons of additional metered water $46.87 maximum per month Residential (without meter to each unit)....................................... $27.09 per unit per month Commercial and Industrial ........................................................... $18.27 per month Usage Charge ................................................................................ ....................................................................................................... $5.07 per 1,000 gallons of metered water usage There are 2,217 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 $46.87 per month. After six months of documented 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 AEP Energy Partners (AEPEP) and Garland Power and Light (GP&L). With AEPEP, the City has a fixed block, around the clock (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 2027. 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 the City's advisement, 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, eight substations, and 510 miles of distribution lines. ERCOT serves as 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 September 27, 2018. 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. 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) ......................... $0.11869 per kWh kWh (November through April) .................... $0.11323 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 Page 450 of 471 41 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) .............. $0.0682 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 TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED) 2019 2018 2017 2016 2015 Water 42,787 44,995 43,199 41,709 41,540 Wastewater 46,171 46,031 42,840 40,866 40,806 Electric 39,155 39,435 39,300 40,141 43,471 Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 451 of 471 42 TABLE 15 - TEN LARGEST UTILITY CUSTOMERS Total Percent FY 2019 KWH of KWH Utility Customer Type of Business Consumption Consumed CSISD Schools 29,533,036 3.46% City of College Station Municipality 22,318,501 2.61% Scott & White Clinc/Hospital/Pharmacy 20,959,472 2.45% HEB Grocery Retail 12,397,420 1.45% Texas A&M University 12,025,041 1.41% Biotechnologies Texas LLC Medical 10,052,080 1.18% Wal-Mart Retail 8,710,000 1.02% CBL & Associates Retail Mall 8,097,220 0.95% College Station Medical Center Medical 8,009,755 0.94% Dealer Computer Services Inc Retail 6,174,000 0.72% 138,276,525 16.18% TABLE 16 - CONDENSED STATEMENT OF OPERATIONS 2019 2018 2017 2016 2015 Revenues: Electric 102,443,382 $ 102,511,712 $ 99,179,570 $ 98,904,688 $ 98,763,293 $ Water and Wastewater 34,313,203 33,602,131 31,333,922 29,484,851 28,732,968 Interest 2,654,945 1,262,551 697,655 346,312 180,423 Other 3,558,330 2,520,335 3,179,821 3,636,420 3,546,138 Total Revenues 142,969,860 $ 139,896,729 $ 134,390,968 $ 132,372,271 $ 131,222,822 $ Expenses: Total Expenses 81,725,180 $ 77,828,073 $ 78,766,516 $ 76,771,094 $ 82,079,813 $ Net Available for Debt Service 61,244,680 $ 62,068,656 $ 55,624,452 $ 55,601,177 $ 49,143,009 $ Water (Units Served) 42,787 44,995 43,199 41,709 41,540 Wastewater (Units Served) 46,171 46,031 42,840 40,866 40,806 Electric (Units Served) 39,155 39,435 39,300 40,141 43,471 For Fiscal Year Ended September 30, TABLE 17 – VALUE OF THE SYSTEM 2019 2018 2017 2016 2015 Utility Systems 617,910,408$ 579,717,873$ 553,774,054$ 527,435,531$ 507,758,485$ Construction in Progress 45,129,947 46,447,061 30,240,705 23,520,025 13,213,020 663,040,355$ 626,164,934$ 584,014,759$ 550,955,556$ 520,971,505$ Less: Accumulated Depreciation 263,680,722 246,243,993 229,374,628 213,325,487 198,339,390 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Fiscal Year Ended September 30, (Remainder of page intentionally left blank) Page 452 of 471 43 TABLE 18 – CITY’S EQUITY IN THE SYSTEM Resources 2019 2018 2017 2016 2015 Net System Value 399,359,633$ 379,920,941$ 354,640,131$ 337,630,069$ 322,632,115$ Current Assets 116,643,763 102,382,543 70,636,223 63,085,837 52,023,881 Restricted Assets 36,743,001 11,296,693 30,149,917 21,849,829 19,977,038 Other Resources - - - - - Deferred Charges 6,485,373 3,506,226 5,197,104 5,425,502 2,381,933 Total 559,231,770$ 497,106,403$ 460,623,375$ 427,991,237$ 397,014,967$ Obligations Current Liabilities 14,711,183$ 12,467,547$ 10,681,761$ 9,511,319$ 13,688,841$ Current Liabilities Payable from Restricted Assets 18,432,091 15,872,611 15,887,617 15,462,903 10,735,825 General Obligation Debt 45,850,605 52,738,157 59,325,710 55,626,759 43,175,000 Certificates of Obligation 126,583,979 91,642,717 77,282,370 78,814,496 83,445,000 Revenue Bond Debt - - - - 13,395,000 Other Debt (1)10,773,356 8,016,706 8,899,938 9,418,425 8,593,734 Total Liabilities 216,351,214$ 180,737,738$ 172,077,396$ 168,833,902$ 173,033,400$ City's Equity in System 342,880,556$ 316,368,665$ 288,545,979$ 259,157,335$ 223,981,567$ Percentage of Equity in System 61.31% 63.64% 62.64% 60.55% 56.42% Fiscal Year Ended September 30, (1) Includes OPEB Net Pension Obligations. TABLE 19 – UTILITY REVENUE BOND AND SYSTEM SUPPORTED GENERAL OBLIGATION DEBT SERVICE Original Outstanding Principal Principal Amount as of 9/30/2019 2008 (2)15,925,000 $ 820,000 $ 2009 (2)19,490,000 1,950,000 2010 (2)2,850,000 1,865,000 2010 (1)(3)25,905,000 6,920,000 2011 (2)7,920,000 5,540,000 2012 (2)16,415,000 11,930,000 2012 (1)(3)9,570,000 3,975,000 2013 (2)10,230,000 7,920,000 2013 (1)(3)6,255,000 3,195,000 2014 (2)23,555,000 19,270,000 2014 (1)(3)14,455,000 7,255,000 2016 (2)7,250,000 6,370,000 2016 (1)(3)18,710,000 16,335,000 2017 (2)12,140,000 11,440,000 2017 (1)(3)9,205,000 9,205,000 2018 (2)18,655,000 18,655,000 2019 (2)38,670,000 38,670,000 257,200,000 $ 171,315,000 $ Series (1) Represents refunding bonds. (2) Certificates of Obligation supported in whole or in part by Utility System revenues. (3) General Obligation Bonds supported in part by the Utility System revenues. Page 453 of 471 44 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 Authorized investments are summarized as follows: (1) obligations, including letters of credit, of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks; (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 and interest of 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) interest-bearing banking deposits that are guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or the National Credit Union Share Insurance Fund or its successor; (8) interest-bearing banking deposits other than those described by clause (7) if (A) the funds invested in the banking deposits are invested through: (i) a broker with a main office or branch office in this State that the City selects from a list the City Council or a designated investment committee of the City adopts as required by Section 2256.025, Texas Government Code; or (ii) a depository institution with a main office or branch office in the State that the City selects; (B) the broker or depository institution selected as described by (A) above arranges for the deposit of the funds in the banking deposits in one or more federally insured depository institutions, regardless of where located, for the City’s account; (C) the full amount of the principal and accrued interest of the banking deposits is insured by the United States or an instrumentality of the United States; and (D) the City appoints as the City’s custodian of the banking deposits issued for the City’s account: (i) the depository institution selected as described by (A) above; (ii) an entity described by Section 2257.041(d), Texas Government Code; or (iii) a clearing broker dealer registered with the SEC and operating under SEC Rule 15c3-3; (9) (i) certificates of deposit or share certificates meeting the requirements of Chapter 2256, Texas Government Code (the “Public Funds Investment Act”), that are issued by an institution that has its main office or a branch office in the State and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or their respective successors, and are secured as to principal by obligations described in clauses (1) through (8) or in any other manner and provided for by law for City deposits, or (ii) certificates of deposits where (a) the funds are invested by the City through (A) a broker that has its main office or a branch office in the State and is selected from a list adopted by the City as required by law, or (B) a depository institution that has its main office or branch office in the State 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), Texas Government Code, or a clearing brokerdealer registered with the SEC and operating pursuant to SEC Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with respect to the certificates of deposit; (10) fully collateralized repurchase agreements as defined in the Public Funds Investment Act, that have a defined termination date, are secured by a combination of cash and obligations described in clauses (1) or (13) in this paragraph , require the securities being purchased by the City or cash held by the City to be 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; (11) 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 (8) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than “A” or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) below, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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; (12) certain bankers’ acceptances with stated maturity of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated not less than “A-1” or “P-1” or the equivalent by at least one nationally recognized credit rating agency; (13) commercial paper with a stated maturity of 365 days or less that is rated not less than “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 United States or state bank; (14) no-load money market mutual funds registered with and regulated by the SEC that provide the City with a prospectus and other information required by the Securities Exchange Act of 1934 or the Investment Company Act of 1940 and that comply with federal SEC Rule 2a-7 (17 C.F.R. Section 270.2a- 7), promulgated under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.); and (15) no-load mutual funds registered with the SEC that have an average weighted maturity of less than two years, and have either (a) a duration of one year or more and invest exclusively in obligations described in under this heading, or (b) a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities, other than the prohibited obligations described below, in an amount at least equal to the amount of bond proceeds invested under such contract. Page 454 of 471 45 A political subdivision such as the City may enter into 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 (8) above, other than the prohibited obligations described below, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (8) above, clauses (13) through (15) above, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name 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, if the City Council authorizes such investment in the particular pool by order, ordinance, or resolution and the investment pool complies with the requirements of Section 2256.016, Texas Government Code. The City may also contract with an investment management firm registered (x) under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), or (y) 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 ordinance, order or resolution. 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. 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. Page 455 of 471 46 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 29, 2020, 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 31,934,770 31,934,770 Money Market Mutual Fund 283,314,901 283,314,901 US Agencies and Securities 5,000,000 5,028,700 325,249,671$ 325,278,371$ TAX MATTERS OPINION . . . On the date of initial delivery of the Obligations, 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 Obligations for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Obligations 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 Obligations. See APPENDIX C - Form of Opinion of Bond Counsel. In rendering its opinion, 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 Obligations relating to certain matters, including arbitrage and the use of the proceeds of the Obligations and the property financed or refinanced therewith. Failure of the City to comply with these representations or covenants could cause the interest on the Obligations, 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 Obligations in order for interest on the Obligations 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 Obligations to be included in gross income retroactively to the date of issuance of the Obligations. 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 Obligations. 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 Obligations. A ruling was not sought from the Internal Revenue Service by the Issuer with respect to the Obligations or the property financed or refinanced with proceeds of the Obligations. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Obligations, 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 Obligation holders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Page 456 of 471 47 FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Obligations”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Obligation, and (ii) the initial offering price to the public of such Original Issue Discount Obligation would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the Obligations 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 Obligation 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 Obligation 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 Obligation prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Obligation 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 Obligation was held by such initial owner) is includable in gross income. Under Existing Law, the original issue discount on each Original Issue Discount Obligation 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 Obligation 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 Obligation. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Obligations 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 Obligations should consult their own tax advisors with respect to the determination 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 Obligations 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 Obligations. 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 Obligations. 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 OBLIGATIONS. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, 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 Obligations, 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 Obligations 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. Page 457 of 471 48 Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations 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 Obligations 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. 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 Obligations under federal or state law, and could affect the market price or marketability of the Obligations. 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 Obligations should consult their own tax advisors regarding the foregoing matters. CONTINUING DISCLOSURE OF INFORMATION In the Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of Obligations. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Obligations. 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 2020. 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 2020. 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 Tables 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 Obligations 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 Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of holders of the Obligations, if material; (8) Obligation calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Obligations, 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 Page 458 of 471 49 undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. 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.” Neither the Obligations nor the Ordinances provide for debt service reserves, liquidity enhancement, or credit enhancement. 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 the events listed in clause (15) and (16) above, the term “financial obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) a guarantee of either (A) or (B). The term “financial obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. 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. 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 Obligations 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 Obligations 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 Obligations 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 Obligations 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 Obligations. 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 . . . 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. (Remainder of page intentionally left blank) Page 459 of 471 50 OTHER INFORMATION RATINGS The presently outstanding tax supported debt of the City is rated “Aa1” by Moody's and “AA+” by S&P, without regard to credit enhancement. Applications have been made to Moody’s, S& P and Fitch Ratings Services for contract ratings on the Obligations. 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 Obligations. 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 OBLIGATIONS FOR SALE The sale of the Obligations 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 Obligations have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Obligations been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Obligations under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations must not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. 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 Obligations 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 Obligations by municipalities or other political subdivisions or public agencies of the State of Texas, the PFIA requires that the Obligations 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 Obligations 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 Obligations 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 Obligations for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for such purposes. No review by the City has been made of the laws in other states to determine whether the Obligations are legal investments for various institutions in those states. LEGAL MATTERS The City will furnish to the Initial Purchaser a complete transcript of proceedings had incident to the authorization and issuance of the Obligations, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Obligation and to the effect that the Obligations are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Obligations or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Obligations will also be furnished. In its capacity as Bond Counsel, such firm has reviewed the information describing the Obligations in the Notice of Sales and Bidding Instructions, the Official Bid Forms and the Official Statement to verify that such information conforms to the provisions of the Ordinances. 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 legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations. The legal opinion will accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book-Entry-Only System. The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 the 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 from the transaction. Page 460 of 471 51 The various legal opinions to be delivered concurrently with the delivery of the Obligations 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 Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. 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 Obligations, 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 Obligations, 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 pertaining to the City contained in its Official Statement and any addenda, supplement or amendment thereto, for its Obligations on the date of such Official Statement, on the date of purchase of said Obligations, 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, 2019, 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 Obligations, in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Obligations; or which would affect the provisions made for their payment or security, or in any manner question the validity of the Obligations. 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. Page 461 of 471 52 INITIAL PURCHASER After requesting competitive bids for the Bonds, the City accepted the bid of ______________ (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the page 2 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Bonds. 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 page 4 of the Official Statement at a price of ______(%) of par plus a cash premium of $____________. The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Certificates. MISCELLANEOUS The Ordinances authorizing the issuance of the Obligations will also approve the form and content of this Official Statement, and any addenda or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Initial Purchaser. Pricing Officer City of College Station, Texas Page 462 of 471 53 Schedule I SCHEDULE OF REFUNDED OBLIGATIONS* Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 140,000$ 8/13/2020 100.00 2022 3.000% 145,000 8/13/2020 100.00 2023 3.000% 155,000 8/13/2020 100.00 2024 3.000% 160,000 8/13/2020 100.00 2025 3.125% 170,000 8/13/2020 100.00 2026 3.250% 175,000 8/13/2020 100.00 2027 3.375% 185,000 8/13/2020 100.00 2028 3.500% 190,000 8/13/2020 100.00 2029 3.500% 200,000 8/13/2020 100.00 2030 3.500% 210,000 8/13/2020 100.00 1,730,000$ Certificates of Obligation, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 3.000% 950,000$ 8/13/2020 100.00 2022 3.000% 995,000 8/13/2020 100.00 2023 3.000% 1,040,000 8/13/2020 100.00 2024 3.000% 1,090,000 8/13/2020 100.00 2025 3.125% 1,135,000 8/13/2020 100.00 2026 3.250% 1,190,000 8/13/2020 100.00 2027 3.250% 1,245,000 8/13/2020 100.00 2028 3.375% 1,300,000 8/13/2020 100.00 2029 3.500% 1,360,000 8/13/2020 100.00 2030 3.500% 1,425,000 8/13/2020 100.00 11,730,000$ General Obligation Improvement Bonds, Series 2010 Par Amount Maturity Interest to be Call Call February 15 Rate Refunded Date Price 2021 2.200% 370,000$ 8/13/2020 100.00 2022 2.400% 390,000 8/13/2020 100.00 2023 2.600% 405,000 8/13/2020 100.00 2024 2.800% 430,000 8/13/2020 100.00 2025 3.000% 445,000 8/13/2020 100.00 2026 3.100% 465,000 8/13/2020 100.00 2027 3.200% 490,000 8/13/2020 100.00 2028 3.300% 510,000 8/13/2020 100.00 2029 3.400% 535,000 8/13/2020 100.00 2030 3.500% 560,000 8/13/2020 100.00 2031 3.600% 585,000 8/13/2020 100.00 5,185,000$ Certificates of Obligation, Series 2011 * Preliminary, subject to change. Page 463 of 471 APPENDIX A GENERAL INFORMATION REGARDING THE CITY Page 464 of 471 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 1,034.75 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 578 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 835 miles of wastewater and water lines. The City owns the electrical distribution system with approximately 490 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. The fire department consists of 158 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 18 educational campuses for pre-kindergarten through high school. The School District has a student enrollment in excess of 13,500 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 additional facilities. The bonds would fund a 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 approximately 69,000 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. In 2019, The Med was purchased by the CHI St. Joseph system and is now called CHI St. Joseph Health College Station Hospital. 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. Other area health care providers include: St. Joseph Regional Health Care Center, Baylor Scott and White Clinic, and The Physicians Centre. Page 465 of 471 A - 2 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 parks system encompasses 1,364 acres of parks and facilities spread throughout the city. This includes 4 dog parks, 1 skate park, 63 playgrounds, 4 recreation centers, 12 ponds, 2 pools, a splash pad, 34.5 miles of walking trails, 2 municipal cemeteries and the Ringer Library. 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 69,000 students, with more than 508,000 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 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. 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) Page 466 of 471 A - 3 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 sixth in the nation in average attendance for the 2019 season with average attendance of 97,459 for home games, according to figures released by the NCAA. The City’s premiere sport complexes, as well as the ease to get around, makes College Station attractive to a number of high profile organizations. Over the past several years, Texas Amateur Athletic Federation has chosen College Station to host state tournaments and events. In addition, the City facilitates four major softball tournaments, multiple soccer tournaments, two 7 on 7 football tournaments and baseball tournaments throughout the year. The City plans to add 4 synthetic infield & natural grass outfield baseball/softball fields at the new Texas Independence Ballpark. This is anticipated to allow additional tournaments to be held in this area. (Remainder of page intentionally left blank) Page 467 of 471 A - 4 MAJOR AREA EMPLOYERS Number of Firm Name Product Employees Texas A&M University and System Education/Research 27,000+ Bryan ISD Education 2000+ College Station ISD Education 2000+ Texas A&M Health Science Center Education 2000+ Reynolds & Reynolds Computer Hardware and Software 1800+ Blinn College - Bryan Campus Education 1000+ Sanderson Farms, Inc. Poultry Processing 1000+ CHI St. Joseph's Regional Hospital Health Service 1000+ Wal-Mart/Sam's Retail 1000+ HEB Grocery Retail 1000+ City of College Station Government 1000+ Brazos County Government 500-999 City of Bryan Government 500-999 College Station Medical Center Health Service 500-999 Ply Gem Windows Manufacturing 500-999 Baylor Scott & White Health Service 500-999 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. LABOR STATISTICS College Station Labor Total Force Employment Unemployment Rate 2016 56,997 55,062 1,935 3.4% 2017 58,042 56,261 1,781 3.1% 2018 60,167 58,454 1,713 2.8% 2019 61,507 59,812 1,695 2.8% 2020 (1)62,799 61,096 1,703 2.7% Year Brazos County Labor Total Force Employment Unemployment Rate 2016 111,251 107,409 3,842 3.5% 2017 113,040 109,558 3,482 3.1% 2018 116,493 113,189 3,304 2.8% 2019 119,010 115,819 3,191 2.7% 2020 (1)114,949 111,494 3,455 3.0% Year Source: Texas Workforce Commission. (1) Average as of February 2020. Page 468 of 471 A - 5 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 2019, the estimated population of College Station was 122,738. The following table sets forth the number and value of construction permits issued by the City over the past several years. Residential Construction Commercial Construction Other Construction* Total Calendar Number Number Number Number Year of Permits Value of Permits Value of Permits Value of Permits Value 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 1,190 257,998,990 208 170,405,189 - - 1,398 428,404,179 2018 1,953 177,627,344 461 103,143,722 - - 2,414 280,771,066 2019 553 100,803,824 102 80,992,499 1,911 98,242,242 2,566 280,038,565 Source: The City. * Starting in 2019 all new pools, remodels/renovations, new roofs, demolitions, slab only and other improvements are reported under “Other Construction”. These permits were previously reported under Residential and Commercial. 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] Page 469 of 471 APPENDIX B EXCERPTS FROM THE CITY OF COLLEGE STATION, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2019 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, 2019, 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. Page 470 of 471 APPENDIX C FORM OF OPINION OF BOND COUNSEL Page 471 of 471