HomeMy WebLinkAbout2013-3503 - Ordinance - 06/13/2013 Ordinance No. 2013 -3503
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 13, 2013, at
the designated meeting place, and the roll was called of the duly constituted officers and
members of said City Council, to wit:
Nancy Berry, • Mayor
Karl Mooney, • Mayor Pro Tem
Blanche Brick, ▪ Councilmember
Jess Fields, ▪ Councilmember
John Nichols, • Councilmember
James Benham, • Councilmember
Julie M. Schultz, • Councilmember
and all of said persons were present, thus constituting a quorum. Whereupon, among other
business, the following was transacted at said Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF UP TO
$10,450,000 IN PRINCIPAL AMOUNT OF "CITY OF
COLLEGE STATION, TEXAS CERTIFICATES OF
OBLIGATION, SERIES 2013 "; 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 : 7 NOES : 0
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 13, 2013.
d rry Mashburn u Nancy Berry
City Secretary Mayor
(SEAL)
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CERTIFICATE FOR ORDINANCE AUTHORIZING THE ISSUANCE OF UP TO $10,450,000 IN PRINCIPAL
AMOUNT OF "CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2013";
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
ORDINANCE NO. 2013 -3503
AUTHORIZING THE ISSUANCE OF UP TO $10,450,000 IN PRINCIPAL
AMOUNT OF "CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF
OBLIGATION, SERIES 2013 "; 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 25, 2013, 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 May 2, 2013 and May 9, 2013;
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; 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. AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That said
City's Certificates of Obligation, to be designated the "City of College Station, Texas Certificates
of Obligation, Series 2013", are hereby authorized to be issued and delivered in the principal
amount not to exceed $10,450,000 for (i) the purpose of paying contractual obligations to be
incurred by the City, to -wit, the construction of improvements and extensions to the City's
combined waterworks, sewer and electric systems; and the payment of fiscal, engineering and
legal fees incurred in connection therewith and (ii) to pay the costs of issuance of the
Certificates.
Section 2. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1371.053, Texas Government Code, the Mayor, the
Interim City Manager and the Executive Director of Business Services of the City (each the
"Pricing Officer ") are each hereby authorized to act 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 Purchase Agreement; provided that:
(i) the aggregate principal amount of the Certificates shall not exceed
$10,450,000;
(ii) the true interest cost of the Certificates shall not exceed 4.500% per
annum;
(iii) the net effective interest rate on the Certificates shall not exceed the
maximum rate set forth in Chapter 1204, Texas Government Code, as amended;
(iv) the final maturity of the Certificates shall not exceed February 15, 2033;
(v) the delegation made hereby shall expire if not exercised by the Pricing
Officer on or prior to December 13, 2013; and
(vi) 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.
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(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 Purchase Agreement as described in Section 19 herein.
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 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 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.
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(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
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
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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)
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 60 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
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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 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 Purchase Agreement. 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. DEFINITIONS. That the term "Authorized Denomination" shall mean a
denomination of $5,000 of principal amount of a Certificate or any integral multiple thereof; the
term "Business Day" means 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; the term "Certificates"
and "Certificates of Obligation" shall mean the City of College Station, Texas Certificates of
Obligation, Series 2013, authorized to be issued and delivered by this Ordinance; the term
"MSRB" means the Municipal Securities Rulemaking Board; the term "Rule" means SEC Rule
15c2 12, as amended from time to time; the term "SEC' means the United States Securities and
Exchange Commission; and 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.
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 2013 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
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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 the
Surplus Revenues. 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.
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,
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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.
Section 10. FEDERAL INCOME TAX MATTERS. That 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;
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(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
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent
applicable, section 149(d) of the Code (relating to advance refundings); 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(0 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(0 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
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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 Interim City Manager, any
Assistant City Manager and the Executive Director of Business Services, 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
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 the City obtains an opinion of
nationally - recognized bond counsel substantially to the effect that 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
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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 Executive Director of Business Services 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 Executive Director
of Business Services (or the designee thereof) until delivered to the Underwriter (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
Underwriter 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
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
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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.
(a) Annual Reports. (i) The City shall provide annually to the MSRB, in an
electronic format as prescribed by the MSRB, within six months after the end of each fiscal year
ending in or after 2013, financial information and operating data with respect to the City of the
general type included in the final Official Statement authorized by Section 18 of this Ordinance,
being the information described in Exhibit C hereto. Any financial statements so to be provided
shall be (1) prepared in accordance with the accounting principles described in Exhibit C, or
such other accounting principles as the City may be required to employ from time to time
pursuant to state law or regulation, and (2) audited, if the City commissions an audit of such
statements and the audit is completed within the period during which they must be provided. If
the audit of such financial statements is not complete within such period, then the City shall
provide unaudited financial statements by the required time, and shall provide audited financial
statements for the applicable fiscal year to the MSRB, when and if the audit report on such
statements become available.
(ii) 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 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;
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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
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.
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 subsection (b) of 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
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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
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
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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.
(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.
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(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
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.
Section 18. SALE OF CERTIFICATES; OFFICIAL STATEMENT. (a) The Certificates
shall be sold and delivered subject to the provisions of Section 1 and Section 2 hereof through a
negotiated sale and pursuant to the terms and provisions of a purchase contract (the "Purchase
Agreement "), 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, Raymond James &
Associates, Inc., RBC Capital Markets LLC and BOSC, Inc. (collectively, the "Underwriter ") are
designated. The Pricing Officer is hereby authorized to execute and deliver the Purchase
Agreement for an on behalf of the City. The Certificates shall initially be registered in the name
of the Underwriter or its designee.
(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 D and any addenda,
supplement or amendment thereto, and approves the distribution of such preliminary official
statement in the reoffering of the Certificates by the Underwriter 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 Certificates to be used by the Underwriter 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 Purchase
16
Agreement (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
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 Interim City Manager, the Executive
Director of Business Services 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, any
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 Interim
City Manager, the Executive Director of Business Services of the City, any Assistant City
Manager, and all other officers, employees, and agents of the City, and each of them, shall be
and they are hereby expressly authorized, empowered, and directed from time to time and at any
time to do and perform all such acts and things and to 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 2013 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, proceeds representing
accrued interest on the Certificates shall be deposited to the credit of the Interest and Sinking
Fund. Any amounts remaining after completion of the improvements described in Section 1
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hereof shall be transferred FIRST to the Rebate Fund, to the extent required by Section 10
hereof, and THEREAFTER to 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
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
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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.
(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
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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 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.]
20
PASSED, APPROVED AND EFFECTIVE THIS ScM)e. / 3 , 2013.
City Secretary ity of College Station, Texas Mayor, City ff College Station, exas
I;Y' NE ( AL)
t
APPROVED:
McCall, Parkhurst & Horton L.L.P., Dallas, Texas
Bond Counsel
Ordinance
City of College Station, Texas
Certificates of Obligation, Series 2013
SIGNATURE PAGE
EXHIBIT A
FORM OF CERTIFICATE
NO. UNITED STATES OF AMERICA $
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
CERTIFICATES OF OBLIGATION
SERIES 2013
MATURITY DATE INTEREST RATE DELIVERY DATE CUSIP
% , 2013
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 February 15, 2014, 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 February 15, 2014,
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
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
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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 July 15, 2013,
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, to -wit, the construction of improvements as described in the Certificate Ordinance, and the
payment of fiscal, engineering and legal fees incurred in connection therewith.
THE CERTIFICATES OF THIS SERIES maturing on are subject to
mandatory redemption prior to maturity in part at random, by lot or other customary method
selected by the Paying Agent/Registrar, at par plus accrued interest to the redemption date, and
without premium, with funds on deposit in the Interest and Sinking Fund. Such Certificates shall
be redeemed by the Paying Agent/Registrar on February 15 in each of the years and in the
principal amounts, respectively, as are set forth in the following schedule:
Tenn Certificates due February 15, 20 :
Mandatory Redemption Date: 2/15/ Principal Amount: $
Mandatory Redemption Date: 2/15/_ Principal Amount: $
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* Maturity
The principal amount of the Certificates required to be redeemed pursuant to the
operation of such mandatory sinking fund shall be reduced by the principal amount of any
Certificate which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall
have been purchased by the Issuer and delivered to the Paying Agent/Registrar for cancellation
or (ii) redeemed pursuant to the optional redemption provision described below and not
theretofore credited against a mandatory sinking fund requirement.
ON FEBRUARY 15, , or on any date thereafter, the Certificates of this Series
maturing on February 15, 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 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
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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 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
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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
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, Texas Mayor, City of College Station, Texas
(SEAL)
FORM OF PAYING AGENT /REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT /REGISTRAR'S AUTHENTICATION CERTIFICATE
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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
By:
Authorized Representative
*FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATES 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)
NOTE: *to accompany initial certificates only.
FORM OF ASSIGNMENT
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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:
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by an eligible guarantor institution correspond with the name of the registered
participating in a securities transfer owner as it appears upon the front of this
association recognized signature guarantee Certificate in every particular, without
program. alteration or enlargement or any change
whatsoever.
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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 Obligation (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 Executive Director of Business Services 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.
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
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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.
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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.
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.
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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
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.
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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.
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 the information listed below with EMMA within six (6) months of
each fiscal year end for so long as the respective series of Obligations remains outstanding. The
City's fiscal year ends on September 30 of each year. Therefore, the City must provide updated
B -5
information by March 31 of the subsequent year. If audited financial statements are not available
by March 31, the City must provide unaudited financial information by such date and provide
audited financial statements when such statements become available. The City must file each of
the following items with EMMA:
(1) The City's audited financial statements; and
(2) An update of the financial tables included in the Official Statement used in
connection with the Obligations as described under the caption "Continuing
Disclosure of Information ". The information should be from the most recent
fiscal year end.
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;
(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;
B -6
(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; and
(15) 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.
B -7
EXHIBIT C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 16 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified below (and included in the Appendix
or under the headings of the Official Statement referred to):
1. The "Annual Financial Report" for the most recently concluded fiscal year.
2. The information included in the Official Statement under the following tables, but
for the most recently concluded fiscal year: Tables 1 through 6 and 8 through 20.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 described above, as
such principles may be changed from time to time to comply with state law or regulation.
C -1
EXHIBIT D
PRELIMINARY OFFICIAL STATEMENT
D -1
G �
E c PRELIMINARY OFFICIAL STATEMENT
3 DATED , 2013
? !::
Ratings:
Moody's: Applied For
S &P: Applied For
(See "OTHER INFORMATION —
NEW ISSUE - Book -Entry -Only RATINGS" herein
n In the opinion of Bond Counsel, interest on the Obligations will he 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, including the alternative minimum tax on corporations.
Zi
Y CITY OF COLLEGE STATION, TEXAS
(a Home -Rule City located in Brazos County, Texas)
S19,920,000*
GENERAL OBLIGATION $9,610,000*
IMPROVEMENT AND CERTIFICATES OF OBLIGATION
t REFUNDLNG BONDS SERIES 2013
SERIES 2013
fr Dated Date: July 15, 2013 Due: February 15, as shown on inside cover
r Interest Accrual Date: Date of Delivery
r .r..
The $19,920,000* City of College Station, Texas General Obligation Improvement and Refunding Bonds, Series 2013 (the "Bonds ") and the
t✓ $9,610,000* City of College Station, Texas Certificates of Obligation, Series 2013 (the "Certificates ") are being issued by the City of College
Station, Texas (the "City") pursuant to the terms of two separate ordinances adopted by the governing body of the City. In each of the
ordinances, the City Council of the City delegated to certain authorized officials of the City to finalize the pricing of the Obligations. The
Bonds and the Certificates are referred to herein collectively as the "Obligations."
The Obligations are issuahle only in fully registered form in the denomination of $5,000 principal amount or integral multiples thereof,
`i : S
g Y Y 8t' P P !n P
initially registered solely in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company ( "DTC "), New
York, New York, acting as securities depository for the Obligations. The Obligations initially will be available to purchasers in hook -entry-
.. form only. So long as Cede & Co. is the registered owner of the Obligations, as nominee for DTC, the Paying Agent/Registrar, initially The
Bank of New York Melton Trust Company, N.A., Dallas, Texas (the "Paying Agent/Registrar ") will pay the principal of and interest on the
K
K. G Obligations to Cede & Co., which will, in turn, remit such amounts to DTC participants for subsequent disbursement to the beneficial owners
of the Obligations.
s
y j Interest on the Obligations will be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. Interest on the Obligations
= will accrue from the date of delivery, and will be payable on February 15, 2014, and on each August 15 and February 15 thereafter until
maturity or prior redemption.
w E•' The City reserves the right, at its option, to redeem Obligations of either series having stated maturities on and after February 15, 2023, in
whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2022, or any date thereafter, at the par value
thereof plus accrued interest to the date of redemption. (see "THE OBLIGATIONS — OPTIONAL REDEMPTION ").
'y
x�y
SEE MATURITY SCHEDULE, INTEREST RATES AND YIELDS ON INSIDE COYER
4 E, c .
c The Obligations are payable from annual ad valorem taxes levied against all taxable property in the City, within the legal limits prescribed
by law. The Certificates are additionally payable from a subordinate lien on and pledge of S1,000 of the surplus revenues of the City's
: . combined utility system (see "THE OBLIGATIONS — SECURITY AND SOURCE OF PAYMENT" and "— TAX RATE LIMrrATIONS ").
S. t,
The Bonds and the Certificates are being offered by the City concurrently, under a common Official Statement. The Bonds and the
Certificates are separate and distinct securities being issued and sold independently except for the Official Statement, and, while the Bonds
v ` and Certificates share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently,
Ei including without limitation the date of accrual and payment of interest for each series of the securities being offered, the redemption
p rovisions and the tax treatment of interest for federal income tax purposes.
o
The Obligations of each series are offered for delivery, when issued, and received by the underwriters listed below (the "Underwriters ")
r. c s thereof and subject to the opinion of the Attorney General of the State of Texas and the opinion of McCall, Parkhurst & Horton L.L.P.,
T " 0 Dallas, Texas, Bond Counsel for the City (see "APPENDIX C — FORM OF OPINIONS OF BOND COUNSEL "). Certain legal matters
w be passed upon for the Underwriters by , Houston, Texas, counsel for the Underwriters. It is
expected that the Obligations will be available for delivery through the services of DTC on or about July 25, 2013.
TBD
* Preliminary, subject to change.
P 75
'MATURITY SCHEDULES*
$19,920,000*
General Obligation Improvement and Refunding Bonds, Series 2013
Due Interest Due Interest
Feb. 15 Principal Rate Yield CUSIP"' Feb. 15 Principal Rate Yield CUSIP"'
2014 S 275,000 ^/o % 2024 " $1,580,000 % oro
2015 1,390,000 2025 121 1,665,000
2016 1,350,000 2026 (2) 480,000
2017 1,360,000 2027 r 505,000
2018 1,280,000 2028 520,000
2019 1,195,000 2029 (2) 530,000
2020 1,255,000 2030 (2) 550,000
2021 1,330,000 2031 ' 565,000
2022 1,410,000 2032 (2) 580,000
2023 1,495.000 2033 (2) 605,000
$9,610,000*
Certificates of Obligation, Series 2013
Due Interest Due Interest
Feb. 15 Principal Rate Yield CUSIP t'l Feb. 15 Principal Rate Yield CUSIP t'l
2014 $ 305,000 '3i, °/u 2024 e S 485,000 % %
2015 330,000 2025 (2) 510,000
2016 335,000 2026''' 535,000
2017 350,000 2027 f21 560,000
2018 365,000 2028 t 575,000
2019 385,000 2029 590.000
2020 405,000 2030 fa 610,000
2021 420.000 2031 (2) 630,000
2022 440,000 2032 t2 ' 650,000
2023 (2) 460,000 2033' 670,000
• Preliminary, subject to change.
(1) CUSIP numbers have been assigned to the Obligations by CUSIP Global Services. managed by Standard & Poor's Financial Services LLC
on behalf of the American Bankers Association, and are included solely for the convenience of the purchasers of the Obligations. Neither
the City, the Financial Advisor nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth
herein.
(2) The City reserves the right, at its option, to redeem Obligations of either series having stated maturities on and after February 15. 2023, in
whole or in pail in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2022, or any date thereafter, at the par
value thereof plus accrued interest to the date of redemption.
ii
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 it
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 unlawfrd 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 he construed as the promise or guarantee of the Finoncial 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 Underwriters 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 Underwriters may over -allot or effect transactions which stabilize the market price oJ'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 firm 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.
iii
TABLE OF CONTENTS
MATURITY SCHEDULES u THE COMBINED UTILITY SYSTEM 22
OFFICIAL STATEMENT SUMMARY iv WATERWORKS SYSTEM 22
ELECTED OFFICIALS Vii WASTEWATER SYSTEM 23
SELECTED ADMINISTRATIVE STAFF Vii ELECTRIC SUPPLY SOURCE 23
CONSULTANTS AND ADVISORS Vii WIND WATT RATES 24
INTRODUCTION 1 TABLE 14 - HISTORICAL UTILITY USERS 24
PLAN OF FINANCING 1 TABLE 15 - TEN LARGEST UTILITY CUSTOMERS 24
PURPOSE 1 TABLE 16 - CONDENSED STATEMENT OF OPERATIONS 25
REFUNDED OBLIGATIONS 1 TABLE 17 - VALUE OF THE SYSTEM 25
SOURCES AND USES OF PROCEEDS 2 TABLE 18 - CITY'S EQUITY IN THE SYSTEM 25
THE OBLIGATIONS 2 TABLE 19 - UTILITY REVENUE BOND AND SYSTEM
GENERAL DESCRIPTION 2 SUPPORTED CERTIFICATE DEBT SERVICE 26
AUTHORITY FOR ISSUANCE OF THE BONDS 2 INVESTMENTS 26
AUTHORITY FOR ISSUANCE OF THE CERTIFICATES 3 LEGAL INVESTMENTS 26
SECURITY AND SOURCE OF PAYMENT 3 INVESTMENT POLICIES 27
TAX RATE LIMITATION 3 ADDITIONAL PROVISIONS 28
OPTIONAL REDEMPTION 3 CITY'S INVESTMENT POLICY 28
NOTICE OF REDEMPTION 3 TABLE 20 - CURRENT INVESTMENTS 28
BOOK - ENTRY -ONLY SYSTEM 3 TAX MATTERS 28
PAYING AGENT/REGISTRAR 5 OPINION 28
TRANSFER, EXCHANGE AND REGISTRATION 5 FEDERAL INCOME Tax ACCOUNTING TREATMENT OF
RECORD DATE FOR INTEREST PAYMENT 5 ORIGINAL ISSUE DISCOUNT 29
DEFEASANCE 6 COLLATERAL FEDERAL INCOME TAX CONSEQUENCES 30
REMEDIES OF HOLDERS OF OBLIGATIONS 6 STATE, LOCAL AND FOREIGN TAXES 30
TAX INFORMATION 7 FUTURE AND PROPOSED LEGISLATION 30
AD VALOREM Tax LAW 7 CONTINUING DISCLOSURE OF INFORMATION 30
CONSTITUTIONAL AMENDMENT 8 ANNUAL REPORTS 30
EFFECTIVE Tax RATE AND ROLLBACK TAX RATE 8 EVENT NOTICES 31
PROPERTY ASSESSMENT AND TAX PAYMENT 9 LIMITATIONS AND AMENDMENTS 31
PENALTIES AND INTEREST 9 COMPLIANCE WITH PRIOR UNDERTAKINGS 31
CITY APPLICATION OF PROPERTY TAX CODE 9 OTHER INFORMATION 32
TAX ABATEMENT POLICY 9 RATINGS 32
ECONOMIC DEVELOPMENT PROGRAMS 10 LITIGATION 32
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR
OBLIGATION DEBT 1 1 SALE 32
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY 12 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC
TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT FUNDS IN TEXAS 32
HISTORY 13 LEGAL OPINIONS 32
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY 13 AUTHENTICITY OF FINANCIAL DATA AND OTHER
TABLE 5 - TEN LARGEST TAXPAYERS 13 INFORMATION 33
TABLE 6 - Tax ADEQUACY 14 FINANCIAL ADVISOR 33
TABLE 7 - ESTIMATED OVERLAPPING DEBT 14 VERIFICATION OF ARITHMETICAL AND MATHEbIATICAL
DEBT INFORMATION 15 COMPUTATIONS 33
TABLE 8 - PRO -FORMA AD VALOREM TAX DEBT SERVICE UNDERWRITERS 33
REQUIREMENTS 15 MISCELLANEOUS 34
TABLE 9 - INTEREST AND SINKING FUND BUDGET
PROJECTION 16 SCHEDULE OF REFUNDED
TABLE 10 - SELF - SUPPORTING DEBT 16 OBLIGATIONS........ SCHEDULE I
TABLE I 1 - AUTHORIZED BUT UNISSUED TAX BONDS 17 APPENDICES
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT 17 GENERAL INFORMATION REGARDING THE CITY A
OTHER OBLIGATIONS 17 EXCERPTS FROM THE ANNUAL FINANCIAL REPORT B
PENSION FUND 17 FORMS OF OPINIONS OF BOND COUNSEL C
OTHER POST EMPLOYMENT BENEFITS 17 Th cover page hereof, this page. the appendices included herein and any
FINANCIAL INFORMATION 20 addenda, supplement or amendment hereto, are part of the Official
TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE Statement.
HISTORY 20
TABLE 13 - MUNICIPAL SALES TAX HISTORY 21
FINANCIAL POLICIES 21
iv
OFFICIAL STATEMENT SUMMARY
This sunnnary 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 50.6 square miles (see
"LNTRODUCTION - DESCRIPTION OF THE CITY ").
THE BONDS The Bonds are issued as $19,920,000* City of College Station, Texas General Obligation Improvement and
Refunding Bonds. Series 2013. The Bonds are issued as serial bonds maturing on February 15 in each of
the years 2014 -2033 (see "THE OBLIGATIONS - GENERAL DESCRIPTION").
THE CERTIFICATES The Certificates are issued as $9,610,000* City of College Station, Texas Certificates of Obligation, Series
2013. The Certificates are issued as serial certificates maturing on February 15 in each of the years 2014-
2033 (see "THE OBLIGATIONS - GENERAL DESCRIPTION ").
PAYMENT OF INTEREST Interest on the Obligations will be calculated on the basis of a 360 -day year consisting of twelve 30 -day
months. Interest on the Obligations will accrue from the date of delivery, and will be payable on February
15, 2014, and on each August 15 and February 15 thereafter until maturity or prior redemption (see "THE
OBLIGATIONS - GENERAL. DESCRIPTION ").
AUTHORITY FOR ISSUANCE
OF THE BONDS The Bonds are issued pursuant to the general laws of the State, particularly Chapters 1207, 1251, 1331 and
1371, Texas Goverment Code, an ordinance passed by the City Council of the City, and an election held
November 4, 2003 and November 4, 2008 (see "THE OBLIGATIONS - A r HoRTTY FOR ISSUANCE of THE
BONDS ").
ALTHORrrY FOR ISSUANCE
OF THE CERTIFICATES The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1371, Texas
Government Code and Subchapter C of Chapter 271, Texas Local Government Code, as amended: and an
ordinance passed by the City Council of the City (see "THE OBLIGATIONS - AUTHORITY FOR ISSUANCE
OF THE CERTIFICATES ").
SECURITY FOR THE
BONDS The Bonds constitute direct obligations of the City, secured by and payable from the levy and collection of a
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 "). 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.
SECURITY FOR THE
CERTIFICATES The Certificates constitute direct obligations of the City, secured by and payable from a combination of (i) the
levy and collection of an annual direct and continuing ad valorem tax, within the limits prescribed by law, on
all taxable property Located within the City, and (ii) a subordinate lien on and pledge of $1,000 of the surplus
revenues derived from the City's combined utility system (see "THE OBLIGATIONS - SECURJ Y AND
SOURCE OF PAYMENT "). Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its
maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home -
Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable
Assessed Valuation.
REDEMPTION The City reserves the right, at its option, to redeem Obligations of either series having stated maturities on
and after February 15, 2023, in whole or in part in principal amounts of $5.000 or any integral multiple
thereof, on February 15, 2022, or any date thereafter, at the par value thereof plus accrued interest to the
date of redemption (see "THE OBLIGATIONS — OPTIONAL 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, including the alternative minirnum tax on corporations. See
"TAX MATTERS" for a discussion of the opinion of Bond Counsel and Exhibit C.
USE OF BOND PROCEEDS Proceeds from the sale of the Bonds will be used to (i) pay for the costs of construction, acquisition and
improvements to City streets, (ii) pay for certain parks and park facilities improvements, (iii) refund certain
obligations of the City described in Schedule I to this Official Statement (the "Refunded Obligations ") and
(iv) pay the costs incurred in connection with the issuance of the Bonds. (see "PLAN OF FINANCING -
SOURCES AND USE OF PROCEEDS ").
v
USE OF CERTIFICATE
PROCEEDS Proceeds from the sale of the Certificates will be used (i) to pay for the cost of construction of
improvements to the City's combined electric, watetveorks and sewer system and (ii) to pay the costs
incurred in connection with the issuance of the Certificates (see "PLAN OF FINANCING — SOURCES ANT)
USE OF PROCEEDS ").
RATINGS The presently outstanding tax supported debt of the City is rated "Aa2" 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. In addition, applications for contract ratings have
been made to S &P and Moody's (see "OTHER INFORMATION — RATIRas ").
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 or 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 Obligations (see "THE OBLIGATIONS - BOOK-ENTRY-ONLY SYSTEM ").
PAYMENT RECORD The City has never defaulted in payment of its general obligation tax debt.
* Preliminary, subject to change.
vi
SELECTED FINANCIAL INFORr%IATION
Ratio Tax
Fiscal Per Capita Per Capita Debt to
Year Estimated Taxable Taxable Net Net Taxable Percent
Ended City Assessed Assessed Ad Valorem Ad Valorem Assessed Total
9/30 Population' 1) Valuat ion' 2) Valuation Tax Debt Tax Debt Valuation Collection
2008 89,140 $ 4,477,073,139 $ 50,225 $ 100,660,000 $ 1,129 2.25% 98.99%
2009 91,298 5,024,154,213 55,030 97,720,000 1,070 1.95% 99.93%
2010 93,991 5,390,791,001 57,354 107,570,000 1,144 2.00% 98.49%
2011 94,669 5,455.432,461 57,626 99,140,000 1,047 1.82% 99.76%
2012 97,888 5,738,615,002 58,624 121,560,000 1,242 2.12% 99.83%
2013 97,982 5,944,312,987 60,667 96,272,520 (4) 983 (4) 1.62% (4) 89.47% (5)
(1) Source: The City.
(2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year.
(3) Payable from ad valorem taxes. Does not include self - supporting debt.
(4) Projected. includes the Obligations and excludes the Refunded Obligations.
(5) Collections as of April 30, 2013.
GENERAL Fur%'n CONSOLIDATED STATEMENT SUNLMARY
For Fiscal Year Ended September 30
2012 2011 2010 2009 2008
Beginning Balance $ 14,393,057 $ 13,815,881 $ 11,274,207 (4) $ 11,177,933 (2) $ 12,932,589
Total Revenue 46,560,274 44,034,999 43,729,324 41,074,252 40,296,142
Total Expenditures 55.670,118 56,171,633 56,980,061 57,916,764 51,903.767
Other Financing Sources 11,209,504 12,713,810 15.792,411 15,043,008 (3) 10,660,425
EndingBalance $ 16 $ 14.393.057 $ 13,815,881 $ 9,378.429 S 11.985,389
(1) The City's financial policies require a General Fund balance of 15% of budgeted appropriations at year end. To the extent that the General
Fund balance exceeds this amount, this surplus may be expended in future years for one time expenditures such as capital items and short
tens projects.
(2) Amount lower than Fiscal Year 2008 ending balance due to prior period adjustment.
(3) Increase due to higher return on investment from revenues of the City's utility system and a change in how General and Administrative
transfers are recorded.
(4) Restated.
UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS
For Fiscal Year Ended September 30,
2012 2011 2010 2009 2008
Re %euties:
Electric $ 94,396,234 $ 98,737,655 $ 89,126.259 $ 80,676,212 $ 74,975.691
Water and Wastewater 27,652,449 29,248,180 23,772,503 25,229,487 22.294,720
Interest 136,974 142,700 129,691 579,520 1,263,129
Other 2,857,223 2,584,985 2,531,326 2,461,853 2,726,652
Total Revenues $ 125,042,880 $ 130,713,520 $ 115,559,779 5 108,947,072 $ 101,260,192
Expenses:
Total Expenses $ 88,927,662 $ 96,938,864 5 91,551,106 5 80,848,570 5 73,195.783
Net Available for Debt Service $ 36,115,218 $ 33,774,656 $ 24,008,673 $ 28,098,502 $ 28.064,409
Water (Units Served) 39,338 37,565 37,596 37,344 37,075
Wastewater (Units Served) 36,908 35,563 35,853 34,743 34,743
Electric (Units Served) 39,123 37,829 38,255 37,818 37,777
vii
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
Length of Term
Name Position Service Expiration Occupation
Nancy Berry Mayor 3 Years (1 ) 11/13 Full -time Volunteer
Blanche Brick Council Member 2 Years (2) 11/14 Professor
Jess Fields Council Member 3 Years (3) 11/13 Business Owner
Karl M ooney Council Member 2 Years (2) 11/14 Texas A &M University Director
John Nichols Council Member 6 Months (4) 11/12 Retired Professor
Julie Schultz Council Member 2 Years (2 / 11/14 Business Owner
James Benham Council Member 6 Months (4) 11/12 Business Owner
(1) Elected Mayor in May 2010; former City of College Station Council Member 2004 -2006.
(2) Elected May 2011.
(3) Elected May 2010.
(4) Elected November 2012.
(5) On December 8, 2011 Council approved changes to the City's Election Ordinance to move the City's general election day to the first
Tuesday after the rust Monday in November. This change is pursuant to Senate Bill 100, Eighty - Second Regular Legislature.
SELECTED ADM) 1STRATIVE STAFF
Length of Service
Name Position to the City
Kathy Merrill I»terim City Manager 6.5 Years )
Carla Robinson City Attorney 11 Years (
Sherry Mashburn City Secretary 2.5 Years
Ty Elliott Internal Auditor 5.5 Years
David Coleman Director of Water Services 7.5 Years
Timothy Crabb Director of Electric Utility 6.5 Years (i)
Jeff Kersten Executive Director of Business Services 21.5 Years (4)
Ben Roper Director of Information Technology 8.5 Years
David Schmitz Director of Parks and Recreation 4.5 Years (s)
Bob Cowell Executive Director of Development Services 5.5 Years (6 )
Chuck Gilman Director of Public Works and CIP 5 Years (7)
Alison Pond Director of Human Resources 4 Years
Jay Socol Public Communications Director 3 Years
(1) Interim City Manager since May 2013; previously served as Deputy City Manager.
(2) City Attomey since February 2011; previously served as Assistant City Attorney.
(3) Director of Electric utility since December 2012; previously served as Assistant Director of Electric Utility.
(4) Executive Director of Business Services since July 2011; previously served as Chief Financial Officer.
(5) Director of Parks and Recreation since May 2011; previously served as Assistant Director of Parks and Recreation.
(6) Executive Director of Development Services since July 2011: previously served as Director of Planning and Development Services.
(7) Director of Public Works since October 2010.
CONSULTA NTS AND ADVISORS
Auditors Ingrain, Wallis & Company
Bryan, Texas
Bond Counsel McCall, Parkhurst & Horton L.L.P.
Dallas, Texas
Financial Advisor First Southwest Company
Houston, Texas
For additional information regarding the City, please contact:
Jeff Kersten Drew Masterson
Executive Director of Business Services First Southwest Company
City of College Station or 700 Milam Street, Suite 500
1101 Texas Avenue Houston, Texas 77002
College Station, Texas 77840 (713) 651 -9850 Phone
(979) 764 -3552 Phone
viii
PRELIMINARY OFFICIAL STATEMENT
RELATING TO
CITY OF COLLEGE STATION, TEXAS
(a Home - Rule City located in Brazos County, Texas)
S19,920,000*
GENERAL OBLIGATION 59,610,000*
IMPROVEMENT AND CERTIFICATES OF OBLIGATION
REFUNDING BONDS SERIES 2013
SERIES 2013
INTRODUCTION
This Official Statement, which includes the cover pages and Appendices hereto, provides certain information regarding the issuance of the
519,920,000* City of College Station, Texas General Obligation Improvement and Refunding Bonds, Series 2013 (the "Bonds ") and the
59,610,000* City of College Station, Texas Certificates of Obligation, Series 2013 (the "Certificates "). The Bonds and the Certificates are
referred to herein collectively as the "Obligations." Capitalized terns used in this Official Statement, except as otherwise indicated herein, have
the same meanings assigned to such terms in the ordinances authorizing the issuance of the Bonds (the "Bond Ordinance ") and the Certificates
(the "Certificate Ordinance"), respectively. The Bond Ordinance and the Certificate Ordinance are collectively refereed to herein as the
"Ordinances." In the Ordinances, the City Council delegated to certain officers of the City the authority 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, First Southwest Company, 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 Horne -Rule Charter
in October 1938, which was last amended in November 2012. The City operates under a Council/City Manager form of government with a
City Council comprised of the Mayor and six Council members. Some of the services that the City provides are: public safety (police and
fire protection), highways and streets, electric, water and sanitary sewer utilities, health and social services, culture- recreation, public
transportation, public improvements, planning and zoning, and general administrative services. The 2010 Census population was 93,857
and the current estimated population of the City is 97.982. The City covers approximately 50.6 square miles.
PLAN OF FINANCING
PURPOSE
Proceeds from the sale of the Bonds will be used to (i) pay for the costs of construction and acquisition of and improvements to City
streets, (ii) pay for certain parks and park facilities improvements, (iii) refund certain obligations of the City described in SCHEDULE I to
this Official Statement (the "Refunded Obligations ") and (iv) pay the costs incurred in connection with the issuance of the Bonds. (see
"PLAN OF FINANCING — SOURCES AND USE OF PROCEEDS ").
Proceeds from the sale of the Certificates will be used (i) to pay for the cost of construction of improvements to the City's combined
electric, waterworks and sewer system and (ii) to pay the costs incurred in connection with the issuance of the Certificates (see "PLAN OF
FINANCING — SOURCES AND USE OF PROCEEDS ").
REFUNDED OBLIGATIONS
The principal of and interest due on the Refunded Obligations are to be paid on the respective interest payment dates and redemption dates
of such Refunded Obligations, from funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement ") between the
City and The Bank of New York Mellon Trust Company, National Association, Dallas, Texas (the "Escrow Agent "). The Ordinance
authorizing the Bonds provides that from the proceeds of the sale of the Bonds and other available moneys of the City, if any, the City will
deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Obligations on their
respective redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the " Escmw Fund ") and used tkitift
E
nt
J. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations.
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Grant Thornton LLP, a nationally recognized accounting firm, will verify at the time of delivery of the Bonds to the underwriters listed on the
cover page hereof (the "Underwriters ") thereof the mathematical accuracy of the schedules that demonstrate the Federal Securities will mature
and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay, when due, the
principal of and interest on the Refunded Obligations. Such maturing principal of and interest on the Federal Securities will not be
available to make debt service payments on the Bonds (see "OTHER INFORMATION - VERIFICATION OF ARITHMETICAL AND
MATHEMATICAL COMPUTATIONS ").
By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement sufficient to pay the
redemption price of the Refunded Obligations on their respective redemption dates, the City will have effected the defeasance of all of the
Refunded Obligations in accordance with State law. As a result of such defeasance, the Refunded Obligations will be outstanding only for the
purpose of receiving payments from the Federal Securities and any cash held for such purpose by the Escrow Agent and such Refunded
Obligations will not be deemed as being outstanding obligations of the City payable from taxes or revenues nor for the purpose of applying any
limitation on the issuance of debt.
The City has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund, from Lawfully available funds, of any
additional amounts required to pay the principal of and interest on the Refunded Obligations, if for any reason, the cash balances on deposit or
scheduled to be on deposit in the Escrow Fund are insufficient to make such payment.
SOURCES AND USES OF PROCEEDS
The proceeds from the sale of the Obligations will be applied approximately as follows:
THE BONDS THE CERTIFICATES
S ources of Funds
Par Amount S ources of Funds
Original Issue Premium Par Amount $ -
Transfer from Debt Service Fund Original Issue Premium -
Total Uses of Funds $ - Additional Proceeds -
Total Uses of Funds $ Use of Funds
Deposit to Project Fund Use of Funds
Deposit to Escrow Fund Deposit to Project Fund $ -
Deposit to Interest and Sinking Fund Deposit to Interest and Sinking Fund -
Underwriters' Discount Underwriters' Discount -
Cost of Issuance Cost of Issuance -
Total Uses of Funds $ - Total Uses of Funds $ -
THE OBLIGATIONS
GENERAL DESCRIPTION
The Obligations will hear interest from the date of delivery to the Underwriters, and mature on February 15 in each of the years and in the
amounts shown on the inside cover page hereof. Interest on the Obligations will be calculated on the basis of a 360 -day year consisting of
twelve 30 -day months. Interest on the Obligations will accrue from the date of delivery, and will be payable on February 15, 2014, and on
each August 15 and February 15 thereafter until maturity or prior redemption. The definitive Obligations will be issued only in fully
registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co.,
the nominee of The Depository Trust Company, New York, New York ( "DTC ") pursuant to the Book - Entry-Only System described
herein. No physical delivery of the 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 BONDS
The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapters 1251, 1207, 1331 and
1371, Texas Government Code, as amended; an election held November 4, 2008 passed by a majority of the participating voters; and the
Bond Ordinance.
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AUTHORITY FOR ISSUANCE OF THE CERTIFICATES
The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapter 1371, Texas
Government Code and Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as
amended; and the Certificate Ordinance.
SECURITY AND SOURCE OF PAYMENT
All taxable property within the City is subject to an annual continuing direct annual ad valorem tax levied by the City sufficient to provide
for the payment of principal of and interest on all obligations (including the Obligations) payable in whole or in part from ad valorem
taxes, which tax must be levied within limits prescribed by law.
The Obligations are secured by and payable from an annual continuing ad valorem taxes levied against all taxable property in the City,
within the legal limits prescribed by law. The Certificates are additionally payable from a subordinate lien on and pledge of $1,000 of the
surplus revenues of the City's combined utility system.
T.ax RATE LIMITATION
All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem
tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt within the limits prescribed by law. Article
XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 Taxable
Assessed Valuation for all City purposes. The Home -Rule Charter of the City adopts the constitutionally authorized maximum tax rate of
$2.50 per $100 Taxable Assessed Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50
of the $2.50 maximum tax rate for all debt service for obligations payable from annual ad valorem property taxes, as calculated at the time
of issuance.
OPTIONAL REDEMPTION
The City reserves the right, at its option, to redeem Obligations of either series having stated maturities on and after February 15, 2023, in
whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2022, or any date thereafter, at the par
value thereof plus accrued interest to the date of redemption. If less than all of the Obligations are to be redeemed, the City shall
determine the Obligations, or portions thereof, within such maturity to be redeemed. If Obligations (or any portion of the principal sum
thereof) shall have been called for redemption and notice of such redemption shall have been given. such Obligations (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.
NOTICE OF REDEMPTION
Not less than 30 days prior to a redemption date for the Obligations, 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 Obligations 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 OBLIGATIONS CALLED FOR REDEMPTION SHALL BECOME DUE
AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY OBLIGATION OR
PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH OBLIGATION OR PORTION
THEREOF SHALL CEASE TO ACCRUE.
With respect to any optional redemption of the Obligations, unless certain prerequisites to such redemption required by the Ordinances
have been met and moneys sufficient to pay the principal of and premium, if any, and interest on the Obligations 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 Obligations and the Paying Agent/Registrar shall give notice, in the manner in
which the notice of redemption was given. to the effect that the Obligations 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 he 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 Underwriters believe the source of such information to be reliable, but take no
responsibility for the accuracy or completeness thereof
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The City, the Financial Advisor and the Underwriters cannot and do not give any assurance that (I) 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 ilk 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 he 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 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 Obligation ( "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 hook -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).
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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/Registntr, 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 tune. 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 Ciry 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 Terns 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 Underwriters.
PAYING AGENT /REGISTRAR
The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In each Ordinance, the City retains
the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the
Obligations of either series 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
of either series. 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, font 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 he 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 Obligations 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, fast 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 fount satisfactory to the Paying Agent/Registrar. New Bonds or Certificates registered and
delivered in an exchange or transfer will be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as
the Obligations surrendered for exchange or transfer. See "BooK- Er.'IRY -ONZY 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 an Obligation.
RECORD DATE FOR INTEREST PAY?1IEiT
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.
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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 AgenvRegistmr, if and when finds 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.
DEFE.A.SANCE
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 dunes 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 provides that "Defeasance Securities" means (a) direct, noncallable obligations of the
United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable
obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or
insured by the agency or instrumentality and that are rated as to investment quality by a nationally recognized investment rating firm not less
than AAA or its equivalent, (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state
that have been refunded and that rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent and (d) any securities and obligations now or hereafter authorized by Texas law that are eligible to refund, retire or otherwise
discharge obligations such as the Obligations. 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. 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 may have to be relied upon
from year to year. The Ordinances do not provide for the appoinunent of a trustee to represent the interest of the holders of either series 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 puled in Tooke v. City ofMexia, 197 S.W.3d325 (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 either series of the Obligations may not he able to bring such a suit against City for breach of the Obligations of covenants
contained in either Ordinance. Even if a judgment against the City could be obtained, it could not he 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 hear 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.
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TAX INFORMATION
AD VALOREM TAX LAW'
The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District (the "Appraisal District ").
Excluding agricultural and open -space land, which may be taxed on the basis of productive capacity, the Appraisal District is required
under Tide 1, Texas Tax Code (referred to herein as the "Property Tax Code ") to appraise all property within the Appraisal District on the
basis of 100% of its market value and is prohibited from applying any assessment ratios. In determining the market value of property,
different methods of appraisal may be used, including the cost method of appraisal, the income method of appraisal and the market data
comparison method of appraisal, and the method considered most appropriate by the chief appraiser is to be used. State law further limits
the appraised value of a residence homestead for a tax year to an amount not to exceed the lesser of (1) the property's market value in the
most recent tax year in which the market value was detennined by the Appraisal District or (2) the sum of (a) 10% of the property's
appraised value for the preceding tax year, (b) the appraised value of the property for the preceding tax year and (c) the market value of all
new improvements to the property. The value placed upon property within the Appraisal District is subject to review by an Appraisal
Review Board, consisting of three members appointed by the Board of Directors of the Appraisal District. The Appraisal District is
required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its
own expense, and is entitled to challenge the determination of appraised value of property within the City by petition filed with the
Appraisal Review Board.
Reference is made to the Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted
from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the
levy and collection of ad valorem taxes.
Article VIII of the State Constitution ( "Article VIII ") and State law provide for certain exemptions from property taxes, the valuation of
agricultural and open -space lands at productivity value, and the exemption of certain personal property from ad valorem taxation.
Under Section 1 -b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant: (1) An exemption of
not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older; (2) An exemption to the disabled
from all ad valorem taxes thereafter levied by the political subdivision; and (3) An exemption of up to 20°ro of the market value of
residence homesteads. The minimum exemption under this provision is $5,000. In addition State law mandates a complete exemption for
the residential homestead of disabled veterans determined to be 100% disabled by the U.S. Department of Veterans Affairs. Further,
effective January 1, 2012, the surviving spouse of a deceased veteran who had received a disability rating of 100% is entitled to receive a
residential homestead exemption equal to the exemption received by the deceased spouse until such surviving spouse remarries.
In the case of residence homestead exemptions granted under Section 1 -b, Article VIII, ad valorem taxes may continue to be levied against
the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy
would impair the obligation of the contract by which the debt was created.
State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or
children of a deceased veteran who died while on active duty in the armed forces: the exemption applies to either real or personal property
with the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000.
Article VIII provides that eligible owners of both agricultural land (Section 1 -d) and open -space land (Section 1 -d -1), including open -space
land devoted to farm or ranch purposes or open -space land devoted to timber production, may elect to have such property appraised for
property taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1 -d and 1-d -1. Article VIII,
Section 1 -n of the Texas Constitution provides for an exemption from taxation for "goods -in- transit," which are defined as (i) personal property
acquired or imported into the State and transported to another location inside or outside the State, (ii) stored under a contract for bailment in
public warehouses not in any way owned or controlled by the owner of the stored goods, and (iii) transported to another location inside or
outside the State within 175 days of the date the property was acquired or imported into the State. The exemption excludes oil, natural gas,
petroleum products, aircraft and special inventory, including motor vehicle, vessel and out -hoard motor, heavy equipment and manufactured
housing inventory. Pursuant to changes enacted in 2011, all taxing units, including those that have previously taken official action to tax goods -
in- transit, may not tax goods -in- transit in the 2012 tax year or thereafter, unless the governing body of the taxing unit holds a public hearing and
takes action on or after October I, 2011, to provide for the taxation of the goods -in- transit. After holding a public hearing, a taxing unit may
take official action prior to January 1 of the first tax year in which the governing body proposes to tax goods -in- transit. After taking such
official action, the goods -in- transit remain subject to taxation by the taxing unit until the governing body of the taxing unit rescinds or repeals
its previous action to tax goods -in- transit. If, however, a taxing unit took official action prior to October 1, 2011 to tax goods -in- transit and
pledged the taxes imposed on the goods -in- transit for the payment of a debt, taxes may continue to be imposed on goods -in- transit until the debt
is discharged, if cessation of the imposition of the tax would impair the obligation of the contract by which the debt was created. On December
8, 2011, the Council passed an ordinance approving taxation on certain goods -in- transit.
Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a
political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation.
7
Article VIII, Section 1 -j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as goods
detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Decisions to
continue to tax may be reversed in the future: decisions to exempt freeport property are not subject to reversal.
The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones within the City, under
which the tax values on property in the zone are "frozen" at the value of the property at the time of creation of the zone. The City also may
enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct
certain improvements on its property. The City in turn agrees not to levy a tax on all or par 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.
CONSTITUTIONAL AMENDMENT
In a statewide election held on September 13, 2003, voters approved an amendment to Section 1 -b, Article VIII of the Texas Constitution,
that would authorize a county, city. town or junior college district to establish an ad valorem tax freeze on residence homesteads of the
disabled and of the elderly and their spouses. The City is now authorized to freeze ad valorem taxes on residence homesteads of persons
who are disabled or sixty-five years of age or older. If the City Council does not take action to establish the tax limitation, voters within the
City may submit a petition signed by five percent of the registered voters of the City requiring the City Council to call an election to
determine by majority vote whether to establish the tax limitation.
A petition was submitted and an election was held on May 10, 2008. The voters of College Station voted to approve the ad valorem tax
freeze. The City can provide no assurances of the impact, if any, implementation of this ad valorem tax freeze may have on the City's
finances.
If the tax limitation is established, the total amount of ad valorem taxes imposed by the City on a homestead that receives the exemption
may not be increased while it remains the residence homestead of that person or that person's spouse who is disabled or sixty-five years of
age or older. except to the extent the value of the homestead is increased by improvements other than repairs. If a disabled or elderly
person dies in a year in which the person received a residence homestead exemption, the total amount of ad valorem taxes imposed on the
homestead by the taxing unit may not be increased while it remains the residence homestead of that person's surviving spouse if the spouse
is fifty -five years of age or older at the time of the person's death. In addition, the Texas Legislature by general law may provide for the
transfer of all or a proportionate amount of the tax limitation applicable to a person's homestead to be transferred to the new homestead of
such person if the person moves to a different residence within the taxing unit. Once established, the governing body of the taxing unit may
not repeal or rescind the tax limitation.
EFFECTIVE TAX RATE AND ROLLBACK TAX RATE
By the later of September 30 or 60 days after the certified appraisal roll is delivered to the City, the City Council adopts a tax rate per
$100 taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation
expenditures, and (2) a rate for debt service.
Under the Property Tax Code. the City trust annually calculate and publicize its "effective tax rate" and "rollback tax rate ". A tax rate
cannot be adopted by the City Council that exceeds the lower of the rollback tax rate or the effective tax rate until two public hearings are
held on the proposed tax rate following a notice of such public hearing (including the requirement that notice be posted on the City's
website if City owns, operates or controls an internet website and public notice be given by television if the City has a free access to a
television channel) and the City Council has otherwise complied with the legal requirements for the adoption of such tax rate. If the
adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election be held to determine
whether or not to reduce the tax rate adopted for the current year to the rollback tax rate.
"Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values (adjusted).
"Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included in the year's taxable
values.
"Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's values
(adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted) divided by the
anticipated tax collection rate.
The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an
additional one -half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax
rate calculations are required to be offset by the revenue that will he generated by the sales tax in the current year.
Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation
of the various defined tax rates.
8
PROPERTY ASSESSMENT AND TAX PAr rrr
Property within the City is generally assessed as of January 1 of each year. Business inventory may, at the option of the taxpayer, be
assessed as of September. Effective January 1. 2012, oil and gas reserves are assessed on the basis of a valuation process that uses pricing
information contained in the most recent published Early Release Overview of the Annual Energy Outlook published by the United States
Energy Information Administration, as well as appraisal formulas developed by the State Comptroller of Public Accounts. Taxes become
due October 1 of the sauce year, and become delinquent on February 15 of the following year. Taxpayers 65 years old or older are
permitted by State law to pay taxes on homesteads in four installments with the first due before February 15 of each year and the final
installment due before August 15.
PENALTIES AND INTEREST
Charges for penalties and interest on the unpaid balance of delinquent taxes are made as follows:
Cumulative Cumulative
Month Penalty Interest Total
February 6% 1% 7%
March 7 2 9
April 8 3 11
May 9 4 13
June 10 5 15
July 12 6 18
After July, penalty remains at 12 %, and interest increases at the rate of I% each month. In addition, if an account is delinquent in July, an
amount up to 20% attorney's collection fee is added to the total tax penalty and interest charge. Under certain circumstances, taxes which
become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or
interest assessed. hn general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the
amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law
provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of
any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post -
petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained
from the bankruptcy court. In many cases post - petition taxes are paid as an administrative expense of the estate in bankruptcy or by order
of the bankruptcy court.
CITY APPLICATION OF PROPERTY TAX CODE
The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000. The City has
not granted an additional exemption of 20% of the market value of residence homesteads. Ad valorem taxes are not levied by the City
against 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, and discounts are not allowed. The City does collect the additional one -half cent sales tax for reduction of ad
valorem taxes. The City has adopted a tax abatement policy (see "TAX INFORMATION - TAX ABATEMENT PoLUCY "). An election was
held on May 10, 2008 and the voters of College Station approved the ad valorem tax freeze for residential homesteads for disabled and age
65 or older persons. Brazos County collects the taxes for the City.
TAX ABATEMENT POLICY
The City has established tax abatement guidelines and criteria for economic development prospects in the City of College Station. 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 College Station,
Texas.
9
•
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 commimnent 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 PROGRAMS
The City has exercised the authority granted to Texas cities by Article III, Section 52 -a of the State Constitution and Chapter 380, Texas
Local Government Code, to establish a program to loan or grant public funds for the purpose of stimulating business and commercial
activity in the City. The City and the City of Bryan, Texas have 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]
10
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT
2012/2013 Market Valuation Established by Brazos Central Appraisal District $ 6,168,789.302
(excluding exempt property)
Less Exemptions/Reductions at 100% Market Value:
Productivity Loss $ 112,516,988
Over 65 Homestead Exemptions 72,872,635
Community Housing Development Organization 4,651,299
House Bill 366 164,493
Freeport 10,308,992
Homestead Cap Adjustment 10,992,194
Disabled Veteran 12.675,737
Proration 293,977 224.476,315
2012/2013 Taxable Assessed Valuation $ 5,944,312,987
Debt Payable from Ad Valorem Taxes (as of 6/1t2013)
Certificates of Obligation, Series 2005 215,000
General Obligation Improvement Bonds, Series 2005 230,000
General Obligation RefundingBonds. Series 2006 6.575,000
Certificates of Obligation, Series 2006 5,460,000
General Obligation Improvement Bonds, Series 2006 5,175,000
Certificates of Obligation, Series 2007 2.310,000
General Obligation Improvement Bonds, Series 2007 2,295,000
Certificates of Obligation. Series 2008 21,010,000
General Obligation Improvement Bonds, Series 2008 7,000,000
General Obligation Refunding Bonds. Series 2009 4,870,000
Certificates of Obligation. Series 2009 22,790.000
General Obligation Improvement Bonds, Series 2009 2,905,000
General Obligation Refunding Bonds. Series 2010 31,420,000
Certificates of Obligation. Series 2010 2,870.000
General Obligation Improvement Bonds, Series 2010 17,315,000
Certificates of Obligation, Series 2011 7,375,000
General Obligation Improvement Bonds, Series 2011 1,030.000
Certificates of Obligation, Series 2012 15,925,000
General Obligation Improvement and Refunding Bonds, Series 2012 19,365.000
The Bonds* 19,920,000
The Certificates * ( 2) 9,610,000 205,665,000
Less: Self Supporting Debt 1)(3) $ 109,392.480
Less: Interest and Sinking Fund as of 9/30/2012 3,802,443
Net Debt Payable from Ad Valorem Taxes $ 92.470.077
Ratio of Ad Valorem Net Tax Debt to Taxable Assessed Valuation 1.56" <,
2013 Estimated Population - 97,982
Per Capita Taxable Assessed Valuation - $60,667
Per Capita net Funded Debt - 5944
* Preliminary, subject to change.
(1) Excludes the Refunded Obligations.
(2) A portion of the Certificates will be internally allocated by the City as being payable from the surplus revenues from the respective enterprise funds.
Approximately 57,735,000 of the proceeds of the Certificates will pay for improvements to the C'ity's electric system and approximately S1,875,000 will pay for
improvements in the City's wastewater system. The debt service on this 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.
(3) In the past, the City has sold certificates of obligation to finance projects for the City's water and sewer system, and electric system and has internally allocated
portions of this debt as payable from the respective enterprise funds. The self - supporting amounts listed above are projections of debt that is expected to be
retired by the City based on actual historical payments from these funds to pay for debt service the outstanding certificates of obligation. There is no guarantee
that payments from these finds will continue in the future. Includes a portion of the Obligations. See "DEBT INFORMATION - TABLE 10 - SELF
SUPPORTING DEBT."
1 1
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY
Taxable Appraised Value, Fiscal Year Ending September 30,
2013 2012 2011
% of % of % of
Category Amount Total Amount Total Amount Total
Real, Residential, Single - Family $ 3,277,087,380 53.12% $ 3,169,329,494 53.29% $ 3,008,625,229 53.27%
Real, Residential, Multi - Family 1,070,207,772 17.35% 996,353,707 16.75% 965,909,631 17.10%
Real, Vacant Lots/Tracts 118,939,480 1.93% 115,085,384 1.93% 113,005,459 2.00%
Real. Acreage (Land Only) 171,879,670 2.79% 183,146,931 3.08% 152,872,161 2.71%
Real, Farm and Ranch Improvements 22,726,592 0.37% 18,078,677 0.30% 17,561,011 0.31%
Real, Commercial/Industrial 1,121,943,869 18.19% 1,088,046,209 18.29% 1.032,016904 18.27%
Real, Oil, Gas & Other Mineral Reserves 5,391,913 0.09% 5,982,912 0.10% 6,676,457 0.12%
Real and Tangible Personal, Utilities 35,139,050 0.57% 39,148,700 0.66% 39,468,220 0.70%
Tangible Personal, Business 309,881,970 5.02% 298,432,950 5.02% 281,551,650 4.98%
Tangible Personal, Other 2,217,020 0.04% 2,232,990 0.04 °%o 2,264,960 0.04%
Real Property Inventory 23,728,660 0.38% 23, 307,800 0.39% 21,258,188 0.38%
Special Inventory 8,851,423 0.14% 8,004,300 0.13% 7,113,630 0.13%
Exempt Property Adjustment 794,503 0.01% 449,950 0.01% - 0.00%
Total Appraised Value Before Exemptions $ 6,168,789,302 100.00% $ 5,947,600,004 100.00% $ 5,648,323,500 100.00%
Less: Tot al Exemptions /Reductions 224,476,315 208,985,002 192,891.039
Taxable Assessed Value $ 5,944,312,987 $ 5,738.615,002 $ 5,455.432,461
ifINIIIND
Taxable Appraised Value, Fiscal Year Ending September 30,
2010 2009
% of % of
Category Amount Total Amount Total
Real, Residential, Single - Family $ 2,887,801,921 51.63% $ 2,659,452,105 51.18%
Real, Residential, Multi - Family 953,349,494 17.05% 853,608,672 16.43%
Real, Vacant Lots/Tracts 99,960,600 1.79% 93,840,960 1.81%
Real, Acreage (Land Only) 153,251,021 2.74% 132,853,830 2.56%
Real, Farm and Ranch Improvements 19,005,291 0.34% 14,230,530 0.27%
Real, Commercial/Industrial 1,058,340,988 18.92% 1,039,652,110 20.01%
Real, Oil, Gas & Other Mineral Reserves 5,595,938 0.10% 5,238,059 0.10%
Real and Tangible Personal, Utilities 37,016,190 0.66% 40,912,980 0.79%
Tangible Personal, Business 336,024,109 6.01% 333,340,802 6.41%
Tangible Personal, Other 2,341,500 0.04% 2,397,820 0.05%
Real Property Inventory 31,792,970 0.57% 12,556,380 0.24%
Special Inventory 8,270,790 0.15% 8,615,640 0.17%
Exempt Property Adjustment - 0.00% - 0.00%
Total Appraised Value Before Exemptions $ 5,592,750,812 100.00% $ 5,196,699,888 100.00%
Less: Total Exerttptions/Reductions 201,959,811 172,545,675
Taxable Assessed Value S 5,390.791.001 S 5,024,154.213
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.
12
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 Valuation Per Capita Tax Debt' ` Valuation Per Capita
2008 89,140 $ 4,477,073,139 $ 50,225 $ 100,660,000 2.25% $ 1,129
2009 91,298 5,024,154,213 55,030 97,720,000 1.95% 1,070
2010 93,991 5,390,791,001 57,354 107,570,000 2.00% 1,144
2011 94,669 5,455,432,461 57,626 99,140,000 1.82% 1,047
2012 97,888 5,738,615,002 58,624 121.560,000 2.12% 1,242
2013 97,982 5,944,312,987 60,667 96,272,520 (41 1.62% (4) 983 (4)
(1) Source: The City.
(2) As reported by the Brazos Central Appraisal District; subject to change during the ensuing year.
(3) Payable from ad valorem taxes. Does not include self - supporting debt.
(4) Projected. includes the Obligations and 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
2008 $ 0.4394 $ 0.1933 $ 0.2461 $ 19,973,882 98.99% 98.99%
2009 0.4394 0.1934 0.2460 22,076,134 98.73% 99.93%
2010 0.4394 0.2100 0.2294 23,623,086 97.93 °ro 98.49%
2011 0.4475 0.2273 0.2202 24,304,840 99.31% 99.76%
2012 0.4380 0.2365 0.2015 25,043,183 99.10% 99.83%
2013 0.4380 0.2351 0.1956 25,518,199 88.94% (1) 89.47% (1 '
(1) Collections as of April 30, 2013.
TABLE 5 - TEN LARGEST TAXPAYERS
2012/2013 % of Total
Taxable Taxable
Nature Assessed Assessed
Name of Taxpayer of Property Valuation Valuation
Post Oak Mall - College Station, LLC Retail $ 57,025,440 0.96%
College Station Hospital L.P. Medical 56,167,890 0.94%
SHP - The Callaway House LP Apartments 48,525,670 0.82%
BVP 2818 Place LP Apart ments 41,197,320 0.69%
Wal-Mart Real Estate Business Trust Retail 40,765,700 0.69%
SW Meadows Point LP Apartments 40,102,200 0.67%
Woodlands of College Station LP Apartments 39,816,500 0.67%
Jefferson Enclave LP Apartments 39,607,120 0.67 °ro
Jamespoint Management Housing 39,165,800 0.66 °ro
Weinberg, Isreal & David Alkosser Housing 38,103,080 0.64%
$ 440,476,720 7.41%
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 ").
13
TABLE 6 - Tax ADEQUACY
Net Maximum Tax Supported Principal and Interest Requirements (2013) $ 11,862,388 (r)
$0.20158 Tax Rate at 99% Collection Produces $ 11,862,721
Net Average Tax Supported Principal and Interest Requirements (2013 -2033) $ 6,517,706 (I)
$0.11076 Tax Rate at 99% Collection Produces $ 6,518,082
(1) Includes the Obligations and excludes the Refunded Obligations and self supporting debt. Interest has been estimated for the purpose of illustration.
Preliminary, subject to change.
TABLE 7 - ESTIMATED OVERLAPPING DEBT
Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on
properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This
statement of direct and estimated overlapping ad valorem tax debt ( "Tax Debt ") was developed by the City from information obtained from
the Brazos Central Appraisal District. Except for the amounts relating to the City, the City has not independently verified the accuracy or
completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain
of the entities listed may have issued additional debt since the date hereof and such entities may have programs requiring the issuance of
substantial amounts of additional debt, the amount of which cannot be determined. The following table reflects the estimated share of
overlapping Tax Debt of the City.
City's
Total Estimated Overlapping
2012/2013 Taxable 2012 Tax Debt as % Tax Debt as
Assessed Value Tax Rate of 6/1/2013 Applicable of 6/1/2013
City of College Station $ 5,944,312,987 0.4380 $ 205,665,000 (r) 100.00% $ 205,665,000
Brazos County 11 950,789,417 0.4850 98,640,000 52.82% 52,101,648
Bryan ISD 5,449,763 905 1.2900 143,545,000 2.08% 2,985,736
College Station ISD 6,027,417,818 1.3350 217,865,000 87.91% 191,525,122
Total Direct and Overlapping Funded Tax Debt $ 452,277,506
Ratio of Direct and Overlapping Funded Tax Debt to Taxable Assessed Valuation 7.609%
Per Cap it a Overlapping Funded Tax Debt $ 4,616
Source: Municipal Advisory Council of Texas.
(1) Projected, includes self supporting debt and the Obligations. Preliminary, subject to change.
14
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TABLE 9 - INTEREST AND SINKING FIND BUDGET PROJECTION
Total Net Tax Supported Debt Service Requirements, Fiscal Year Ending September 30, 2013 $ 11,862,388 ()
Interest and Sinking Fund, September 30, 2012 $ 3,802,443
Catenated Interest and Sinking Fund Tax Levy (d). 99% Collection 11,979,931
Budgeted Investment Earnings 50,000 15,832,374
Estimated Balance, September 30, 2013 $ 3,969,985
(1) Includes the Obligations and excludes self - supporting debt. Preliminary, subject to change.
TABLE 10 - SELF-SUPPORTING DEBT*
Year Total
End Electric Wastewater Water Convention Parking Self - Supporting
9/30 Fund Fund (') Fund Center Landfill Garage Debt Service (h)
2013 $ 3,573,133 S 2,910,882 $ 2,782,611 $ 30,419 $ 397,710 $ 466,300 $ 10,161,055
2014 4,378,185 2,976,640 2,946,765 30,419 400,960 462,463 11,195,431
2015 4,341,496 2,634,867 3,254,481 35,344 403,910 466,375 11,136,473
2016 4,362,190 2,646,296 3,260936 35,194 406,560 463,925 11,175,100
2017 4,235,706 2,644,602 3,164,500 69,419 359,135 470,475 10,943,836
2018 4,212,211 2,572,352 3,115,929 68,019 361,610 224,738 10,554,857
2019 4,197,257 2,519,085 3,093,331 71,475 363,448 222,475 10,467,071
2020 4,202,254 2,530,944 3,109,019 74,631 364,335 224,400 10,505,584
2021 4,221,350 2,483,915 3,067,950 67,731 364,535 - 10,205,481
2022 4,175,363 1,586,854 2,054,317 70,831 364,335 - 8,251,700
2023 3,935,647 1,236,645 1,634,333 73,697 363,566 - 7,243,888
2024 3,588,049 1,227,435 1,640,101 71,394 366,941 - 6,893,920
2025 3,275,592 959,768 1,657,324 73,725 368,385 - 6,334,793
2026 3,024,784 962,238 1,306,208 75,763 368,798 - 5,737,789
2027 3,047,873 964,189 1,311,649 72,838 369,285 - 5,765,834
2028 3,059,484 960,701 1,324,026 69,913 364,210 - 5,778,334
2029 2.537,820 794,744 776,236 76,725 368,280 - 4,553,805
2030 1,644,330 796,324 207,506 - - - 2,648,160
2031 1,452,612 778,724 204.750 - - - 2,436,086
2032 1,099,128 541,178 205,000 - - - 1,845,306
$ 68,564,464 S 34.728,382 S 4 0.1 16,970 S I . $ 6,356,003 $ 3,001,150 $ 153.834503
• Preliminary, subject to change.
(1) Includes a portion of the City's Certificates of Obligation, Series 2004, Series 2008, Series 2009, Series 2010, Series 2011, Series 2012, a portion of the
General Obligation Refundng Bonds, Series 2010. General Obligation Improvement and Refunding Bonds, Series 2012 and a portion of the
Obligations.
(2) Includes a portion of the City's Certificates of Obligation, Series 2004, Series 2008, Series 2010, Series 2011, Series 2012 a portion of the General
Obligation Refunding Bonds, Series 2010, General Obligation Improvement and Refunding Bonds, Series 2012 and a portion of the Obligations.
(3) Includes a portion of the City's Certificates of Obligation, Series 2008, Series 2008. Series 2009, Series 2012 a portion of the General Obligation
Refunding Bonds, Series 2010, General Obligation Improvement and Refunding Bonds, Series 2012 and a portion of the Obligations.
(4) Includes a portion of the City's Certificates of Obligation, Series 2009. 52,305,000 of the Certificates of Obligation, Series 2009 was defeased from
the Convention Center portion on December 1. 2011.
(5) Includes the Fiscal Year 2010 debt service payment of the City's Certificates of Obligation, Series 2000A and a portion of the City's General
Obligation Refunding Bonds, Series 2009.
(6) 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
16
TABLE 11 - AUTHORIZED BUT UNISSUED TAX BONDS
Date of Amount Issued
Authorization Purpose Authorized To Date The Bonds Unissued
1i24/1984 (t) Fire Substation Building $ 700,000 $ - $ - $ 700,000
1/24/1984 (t) Street Improvements 6,325,000 5,825.000 - 500,000
11/4/2003 Street Improvements 17,980,000 17,980,000 - -
11/4/2003 Traffic Management 3,000,000 3,000,000 - -
11/4/2003 Park lrnprovements 8,105,000 8.105,000
11/4/2003 Municipal Comp lex Imp rovements 7,610,000 3,955.000 - 3.655,000
11/4/2003 Fire Station Improvements 1,710,000 1,710.000 - -
11 /4/2008 Street Improvements 48,785.000 16,360,000 6,525.000 25,900,000
11/4/2008 Library Improvements 8,385.000 - - 8.385.000
11/4/2008 Fire Substation Building 6.990,000 6,990,000 - -
11/4/2008 Park Improvements 12,790,000 3,840,000 2,725,000 6,225,000
S 122,380,000 S 67.765.000 5 0 25 (i 3 OPt S 45.365,000
(1) Contains projects which may have been completed or abandoned; therefore, the remaining authorized but unissued bonds are not likely to ever he
issued.
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT
The City has no firm plans for the issuance of additional general obligation debt payable from ad valorem taxes within the next twelve months.
OTHER OBLIGATIONS
Currently, the City has no outstanding capital leases or loans.
PENSION FUND
The City provides pension benefits for all of its full -time employees through the Texas Municipal Retirement System ("TMRS"). a
State -wide administered pension plan. The City makes annual contributions to the plan equal to the amounts accrued for pension expense.
(For more detailed uiformation concerning the retirement plan. see "APPENDIX B - EXCERPTS FROM THE CITY OF COLLEGE STATION, TEXAS
ANNUAL FINANCIAL REPORT" - Section V - Note D.)
The City recently received the contribution rates for Plan Year 2012 from TMRS as determined by the December 31, 2010 actuarial valuation.
The City's monthly phase -in contributions rate of 16.25% became effective January 1, 2011. The funding status as of December 31, 2011 is as
follows:
12'31i2011
Actuarial Value of Assets $ 159,366,251
Actuarial Accrued Liability (AAL) 203,172,476
Percent of Pension Benefit Obligation 78.46%
Unfunded Actuarial Accrued Liability (UAAL) $ 43,756225
Annual Covered Payroll 41,553,358
Percent of Covered Payroll 105.30%
Estimated Employer Contribution $ 7,506,378
OTHER POST EMPLOYMENT BENEFITS
PROGRAM DESCRIPTION ... In addition to pension benefits, as required by state laws and defined by City policy, the City makes available
postretirement medical, dental, vision, drug and life insurance benefits to all employees who meet TMRS retirement qualifications, retire
from the City and who enroll themselves and their eligible dependent(s) on or before the effective date of their retirement through the
City's single- employer defined benefit other post- employment benefit (OPEB) plan. The life insurance plan provides a $10,000 fully
insured death benefit coverage upon retirement which ceases upon attainment of age 65 for retirees. So long as monthly premium
payments are made, the healthcare plan provides lifetime insurance to eligible retirees, their spouses and dependents through the City's
group health insurance plan, which covers both active and retired members. Benefit provisions as well as retiree premium contributions
are established by management.
17
The City determines the employer and participant contribution rates annually based on recommendations of City staff and the City's
consultant. All medical, dental, vision and drug care benefits are provided through the City's self - insured health plan. The benefit levels
are the same as those afforded to active employees. Life insurance for eligible retirees is paid entirely by the City.
During fiscal year 2012, 29 former employees were covered under this arrangement, with claims totaling $141,585.
ANr.w,u OPEB COST AND NET OPEB OBLIGATION ...The City's annual OPEB cost is based on the annual required contribution (ARC)
of the City, an amount actuarially determined in accordance with the parameters of GASB Statement 45. Despite the apparent implications
of the term ARC, the City is not required to contribute the ARC to the plan each year, Instead, the ARC provides a basis for evaluating
whether the City's contributions for OPEB are adequate to fund the benefits during the working lifetime of current employees (i.e., the
normal cost) and to amortize existing unfunded obligations (i.e., the obligations for current retirees plus that portion of the current
employees' obligations that are attributed to past service) in a systematic manner over the amortization period prescribed by GASB.
The annual OPEB cost is the annual accounting expense recorded on the City's Statement of Revenues, Expenses and Changes in Net
Assets and on the City's Statement of Activities. The annual OPEB cost is equal to (1) the ARC for the current fiscal year, plus (2) interest
on the Net OPEB Obligation at the beginning of the year, reduced by (3) an adjustment to the ARC which is equal to an amortization of
the beginning of the year Net OPEB Obligation. The City terminated its Borrowed Employee Agreement with BVSWMA, Inc. Therefore,
the related OPEB obligation of $134,385 was removed.
2010 2011 2012
Annual Required Contribution (ARC) $ 2,438,554 $ 1,850,510 $ 1.360,907
Interest on Net OPEB Obligations 131,799 211,750 276,044
Adjusted to the ARC (150.551) (262,374) (342,039)
Annual OPEB Cost 2,419,802 1,799,886 1,294,912
Contributions M ade (381,459) (513,998) (141,585)
Increase in net OPEB obligation $ 2,038,343 $ 1,285,888 $ 1,153,327
Net OPEB Obligation, beginning of year 2,196,647 4,234,990 5,520,878
Net OPEB Obligation, end of year $ 4,234 990 $ 5,520,878 $ 6,674,205
Three -Year Trend Information
Percentage
Fiscal Annual Actual of Annual
Year OPEB Contribution OPEB Cost Net OPEB
Ended 9/30 Costs Made Contribution Obligation
2009 $2,241,140 $ 44,493 1.99% $2,196,647
2010 2,419,802 381.459 15.76% 4,234,990
2011 1,799,886 513,998 28.56% 5,520,878
2012 1,294,912 141,585 10.93% 6,674,205
Generally, the Net OPEB Obligation is the cumulative difference since the effective date of GASB 45 between the annual OPEB cost and
the employer's contributions to the plan including the OPEB liability/(asset) at transition, if any. Because the City did not have an OPEB
liability /(asset) at transition, the Net OPEB Obligation as of October 1, 2008 is zero. Whenever the City contributes an amount less than
the annual OPEB cost, this shortfall will increase the City's Net OPEB Obligation.
ACTUARIAL METHODS AND ASSUMPTIONS ... Actuarial valuations involve estimates of the value of reported amounts and assumptions
about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are
compared to past expectations and new estimates are made about the future.
The required schedule of funding progress immediately following the notes to the financial statements presents multi -year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability
for benefits. GASB No. 45 calculations are based on the types of benefits provided under the terms of the substantive plan at the time of
each valuation and on the pattem of sharing of costs between the employer and plan participants to that point. In addition, the projection
of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations
on the pattern of cost sharing between the employer and plan participants in the future.
18
Actuarial calculations reflect a Long -term perspective. In addition, consistent with that perspective, actuarial methods and assumptions
used in developing the amounts in this report include techniques that are designed to reduce short -term volatility in actuarial accrued
liabilities.
The required contribution rates were determined as part of the October 1, 2010 actuarial valuation. Significant methods and assumptions
follow:
Actuarial valuation date 10 /1/2010
Actuarial Cost Method: Projected Unit Credit
Amortization Method: Level dollar
Remaining Amortization Period: 30 year open period
Amortization Period for New Gains/Losses 30 years
Asset Valuation Method: M arket
Actuarial Assumption:
Investment Rate of Return* 5.00%
*Includes Inflation at: 4.00%
Projected Salary Increases N/A
Annual Healthcare Trend Rates: 8.50% in FYE 2011 declining
to 5.00% in FYE 2018
FUNDING STATUS AND FUNDING PROGRESS ... The Schedule of Funding Progress presents information as of the current valuation date and
the two preceding valuation dates. As of the date of this financial statement. the City has had two valuations, that for the fiscal year
beginning October 1, 2008, and one for the fiscal year beginning October 1, 2010.
Unfunded Annual UAAL as
Actuarial Actuarial Actuarial Actuarial Covered Percentage of
Valuation Value of Accrued Liability Funded Accrued Payroll Covered
Date Assets (AAL) Ratio Liability (AAL) (Fiscal Year) Payroll
10/1/2008 $ - $ 15,244,888 0.00% $ 15,244,888 $41,019,952 37.16%
10/1/2010 - 13,868,768 0.00% 13,868,768 43,000,000 32.25%
10/1/2010 9,356,116 0.00% 9,356,116 43,000,000 21.76%
(I) The plan was changed effective January 1, 2012 to eliminate post -65 medical coverage and was changed effective January 1, 2013 to eliminate one of
the PPO benefit options. While the plan typically undergoes a biennial valuation, pursuant to paragraph 12 of GASB 45, a new valuation must he
performed if there are significant changes to the plan since the previous valuation. For the fiscal year ending September 30, 2012, a new actuarial
valuation incorporating these changes to the plan provisions was perforaned using October 1, 2010 valuation date.
There are factors that affect the ability to compare amounts reported from one actuarial valuation date to the next. The assumptions that
have been changed since the previous valuation are:
- the Discount Rate has been updated to reflect changes in the allocation of assets of the employer and the expected return on
such assets:
- the Assumed Per Capita Health Benefit Costs and Assumed Expenses for retirees and dependents have been updated to
reflect changes in claims and expense expectations: and
- the Health Benefit Cost Trend and Expense Trend have been updated to reflect changes in short -term expectations of the
annual rate of increase of the Assumed Per Capita Health Benefit Costs.
Two separate valuations, each of which used the October 1, 2010 valuation date, were used to develop results for the fiscal years ending
September 30, 2011 and September 30, 2012.
At September 30, 2012, the City's actuarial accrued liability for OPEB benefits was $9,356,116, all of which was unfunded.
19
FINANCIAL INFORMATION
TABLE 12 - GENERAL Fl■ REVENUES AND ExPENDITURE HISTORY
Fiscal Year Ended September 30,
2012 2011 2010 2009 2008
Revenues:
Taxes $ 37,527,211 $ 35,236,521 $ 33,134,813 $ 31,662,441 $ 30.984,741
Licenses & Permits 1,496,424 1,054,986 964,344 1,007,151 1.154,902
Intergovernmental 520,948 589,326 795,750 829,506 536,215
Charges for Services 2,296,105 2,539,881 4,043,200 2,922,495 3,149,076
Fines, Forfeits and Penalties 3,636,209 3,823,406 3,817,193 3,589,478 3,412.827
Special Assessments - - - - 914
Investment Income 88,684 92,017 69,379 235,181 593,514
Rents & Royalties 686,729 589,528 749.635 292,660 279,004
Contributions 20,168 33,995 15,366 22,725 25,046
Reimbursed Expenditures - - - 358.756 426
Other 287,796 75,339 139,644 153,859 159,477
Total Revenues $ 46,560,274 $ 44,034,999 $ 43,729,324 $ 41,074,252 $ 40,296,142
Expenditures:
General Government $ 4,189,987 $ 5,021,221 $ 4.098,364 $ 4,763,622 $ 6,187,469
Fiscal Services 2,871,677 2,997,993 3,086,275 3,161.357 3,411,717
Police Department 15,465,837 14,890,520 13,724,355 14,083.071 13,219,117
Fire Department 12,578,396 11,444,702 11,414,188 11,754,088 11,251,400
Planning& Development Services 3,523.742 3,298,725 2,456,322 2,803,512 2,281,747
Parks and Recreation 4,329,869 6,602,097 8,295,138 8,785,858 8,985,860
Information Technology 3 ,844,107 648,589 3,886,102 3,298,479 3,366,764
Public Works 5,884,577 5,021,642 6,099,189 6,495,104 7,157,121
Library Services 1,072,551 3,901,721 1,080,030 1,119,771 993,102
Claims - 1,061,581 1,600,000 - -
Reimbursed Administrative - (t ' - tt) - ul - (t) (6,497,466)
Contributions 937.813 - 783,883 790,262 657,592
Other 183,530 736.192 327,210 385,178 173,637
Capital Improvement Projects 788,032 129,005 476,462 715,707
Total Expenditures $ 55,670,118 $ 56.171,633 $ 56,980,061 $ 57,916,764 $ 51,903,767
Other Financing Sources (Uses):
Sale of General Fixed Assets - 8,690 $ 5,615 $ 5,606 $ 10,981
Operating Transfers In 15,539.293 16,065,942 15,786,796 15,047,102 11,591,668
Operating Transfers Out (4,329,789) (3,360,822) - (9,700) (942,224)
Total Other Financing Sources (Uses) $ 11,209,504 $ 12,713,810 $ 15,792,411 $ 15,043,008 $ 10,660,425
Net Change in Fund Balance $ 2,099,660 $ 577,176 $ 2.541,674 $ (1,799 504) $ (947,200)
Fund Balance, Beginning of Year 14,393,057 13,815,881 11,274,207 (;) 11,177,933 ( �) 12,932,589
Fund Balance, End of Year $ 16.492,717 $ 14.393.057 $ 13,815.881 $ 9,378,429 $ 11,985.389
Source: The City's audited financial statements.
(1) Reimbursed Administrative expenses are now being taken against the appropriate department expenditures.
(2) Beginning Fund Balance differ from Fiscal Year 2008 Ending Fund Balance due to the reclassification of the Court Security Fund, Efficiency Time
Payment Fund and Police Seizure as Special Revenue Fund. The funds are considered special revenue funds since they are restricted by specific
legislation.
(3) Restated.
20
TABLE 13 - MU NICIPAI. 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 (ii: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 I) Tax Levy Tax Rate Capita
2008 $ 19,822,906 99.24% $ 0.44 $ 222
2009 19,438,179 88.05% 0.39 213
2010 19,328,578 81.82% 0.36 206
2011 20,292,871 83.49 °i 0.37 214
2012 21,498,319 85.84% 0.38 220
2013 13,545,493 12} 53.08% 0.23 138
(1) Provided by the City.
(2) As of April 30, 2013.
(3) Based on population estimates provided by the City.
FL" ANCL/L 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 2012 -2013 fiscal year is influenced by current policies and any approved policy changes. The policies include
inter -fund equity; maintaining a balance between revenues and expenditures; and maintaining the level of service currently provided as the
City experiences residential and commercial growth.
The City's financial policies are for a General Fund balance of 15% of budgeted appropriations at year end. To the extent that the General
Fund balance exceeds this amount, this surplus is to be expended in future years for one time expenditures such as capital items and short
tenn projects.
Debi 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 °%o of annual appropriated expenditures for debt service and any
associated fees as the Debt Service Fund balance at fiscal year end. The City is in compliance with that policy.
Budxerary 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 fiord. An amount is also budgeted each year for
contingencies which may arise.
21
THE COMBINED UTILITY SYSTEM
WATERWORKS SysTENi
Since December 1981, the City has had the capability to produce and deliver 100% of its water. The system has been expanded to a
system of nine wells, with a combined capacity of 29 million gallons per day. The water is delivered to the distribution system by 14 miles
of 30 -inch diameter and 36 inch diameter pipeline and two pumping stations. These pipelines will be fully redundant once TxDoT
completes the Villa Maria / 2818 overpass and the City completes the pipeline re- routing necessary to accommodate the overpass.
Two of the wells mentioned above are shallow wells, less than 1,500 feet, drilled into the Carrizo and Sparta aquifers. The remaining six
are deep wells, approximately 3,000 feet, drilled in the Simsboro Sand formation of the Canizo -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.
However, the Simsboro Sand formation is now regulated by the Brazos Valley Groundwater Conservation District, and new permitting
requirements have made it very difficult to drill new deep wells. The City has recently completed drilling Simsboro Well #8, which was
placed in service before the high demand summer season of 2011. A Drilling/Operating Permit application has been filed with the
Groundwater District for the City to drill Simsboro Wells #9 and #10. Well #9 is planned for completion in 2017 to meet projected
demands for water. Well #10 would be constructed later, depending upon the growth of water demands.
The City has completed a Water Reclamation project. which pumps effluent from the wastewater treatment plant up to Veteran's Park for
irrigation of playing fields, reducing the demand on the potable water system by approximately 350.000 gallons per day.. Additional
phases of the reclaimed water system are in the planning stages.
The City also has stand by generators at strategic locations sufficient to provide adequate potable water for health and safety during and
extended electrical power outage.
Water rates were established by ordinance, passed and approved by the City Council, and became effective October 1, 2010. The
Residential rates are inclined block rates to encourage water conservation.
Meter
Type of Customer Usage Charge (per 1,000 gallons) Service Charge Size
Residential, Commercial and Industrial $ 10.19 per mo. 5/8"
10.19 per mo. 3/4"
12.78 per mo. 1"
19.03 per mo. 1 1/2"
30.05 per mo. 2"
94.84 per mo. 3"
140.90 per mo. 4"
171.53 per tno. 6"
Residential $2.26 for usage from 0- 10,000 gallons
$2.94 for usage from 11,000 - 15,000 gallons
$3.61 for usage from 16,000 - 20,000 gallons
$4.28 for usage from 21,000 - 25,000 gallons
$4.96 for usage from 26,000 gallons and more
Commercial and Industrial $2.49 per 1,000 gallons
Commercial Irrigation Usage Charge $2.68 per 1,000 gallons
22
WASTEWATER SYSTEM
The City's waste water is treated by three City-owned wastewater treatment plants, Carter Creek Treatment Plant, Lick Creek Treatment
Plant, and Carter's Lake Treatment Plant located within the City limits. The three plants have a combined treatment capacity of 11.5 mgd
as compared to average current daily demand of 6.5mgd. The treatment plant's capacity is adequate to serve a population estimated at
122,000.
Sewer rates were established by ordinance, passed and approved by the City Council, and became effective on October I, 2012.
Residential (metered water) $18.78 including 4,000 gallons of metered water
Usage Charge $3.76 per 1,000 gallons of additional metered water
$41.34 maxinnun per month
Residential (without meter to each unit) $23.89 per unit per month
Commercial and Industrial $16.11 per month
Usage Charge $4.44 per 1,000 gallons of metered water usage
ELECTRIC: SUPPLY SOURCE
The City began purchasing power from American Electric Power (AEP) Energy Partners, Inc. on February 1, 2003. The City's contracts
provide for base load power through 2027 and for intermediate load power through the end of 2014. The variable components for
purchased power are the costs for additional power needed above the contracted load shape, congestion charges through the transmission
grid, and ancillary charges from the ERCOT System. The City continues to pay transmission charges to a number of outside utility
systems at current Public Utility Commission of Texas defined rates.
The City is served through the Electric Reliability Council of Texas (ERCOT) transmission grid, and owns 20 miles of 138kV transmission
lines, six substations, and 400 miles of distribution lines.
The current electric rates were established by ordinance passed and approved by the City Council and became effective on October 1,
2010. 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 had been set at zero prior to March 1, 2007. It 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:
kwhrs May through October) $0.1181 per kwhr
kwhr (November through April) $0.1134 per kwhr
Tax 1.50%
Transmission Delivery Adjustment (TDA) Calculated as needed
Master Metered Multiple Dwelling Units Service Charge $100.00 per month per master meter
plus:
kwhrs (May through October) $0.1181 per kwhr
kwhr (November through April) $0.1134 per kwhr
Tax 1.50%
TDA Calculated as needed
Small Commercial (1 -10 KW demand) Service Charge $9.00 per month
plus:
First 1,000 kwhrs $0.1358 per kwhr
Over 1,000 kwhrs $0.1038 per kwhr
Tax 8.25%
TDA Calculated as needed
23
Medium Commercial (15 -300 KW) Service Charge $25.00 per month
plus:
Demand Charge (Per KW) $10.40 per KW
Energy Charge All kwhrs $0.0736 per KW
Minimum Monthly Charge $181.00
Tax 8.25%
TDA Calculated as needed
Large Commercial (300 — 1,500 KW) Service Charge $75.00 per month
plus:
Demand Charge (Per KW) $10.40 per KW
Energy Charge All kwhrs $0.0710 per KW
Minimum Monthly Charge $3,195.00
Tax 8.25%
TDA Calculated as needed
Industrial (1,500 KW and over) Service Charge $250.00 per month
plus:
Demand Charge (Per KW) $9.85
Energy Charge (first 500,000 kwhrs) $0.0689 per KW
Minimum Monthly $15,034.85
Tax 8.25%
TDA Calculated as needed
WLND WATT RATES
Participation Level: Residential & Commercial
10% $0.0020 per KW
o'
50 io $0.0100 per KW
100% $0.0200 per KW
TABLE 14 - HISTORICAL UTILITY USERS (UNITS SERVED)
Fiscal Year Ended September 30,
2012 2011 2010 2009 2008
Water 39,338 37,565 37,596 37,344 37,075
Wastewater 36,908 35,563 35,853 34,743 34,743
Electric 39,123 37,829 38,255 37,818 37,777
TABLE 15 - TEN LARGEST UTILITY CUSTOMERS
Total Percent
FY 2012 KWH of KWH
Utility Customer Type of Business Consumption Consumed
City of College Station Municipality 22,474,964 2.87%
CSISD School 15,917,174 2.03%
CBL & Associates Retail Mall 11,752,740 1.50%
Texas A &M University 11,190,122 1.43%
College Station Medical Center Hospital 9,011,789 1.15%
Kroger Retail Grocery 6,177,120 0.79%
Scott & White Clinic Clinic 5,531,341 0.71%
Wal-Mart Retail 5,429.720 0.69%
EH College Station LP Hotel 5,013,900 0.64%
Dealer Computer Services, Inc. Retail 4.816,400 0.61%
97.3 15,270 12.43%
s
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TABLE 16 - CONDENSED STATEMENT OF OPERATIONS
For Fiscal Year Ended September 30,
2012 2011 2010 2009 2008
Revenues:
Electric $ 94,396,234 $ 98,737,655 $ 89,126,259 $ 80,676,212 $ 74,975,691
Water and Wastewater 27,652,449 29,248,180 23,772,503 25,229,487 22,294,720
Interest 136,974 142,700 129,691 579,520 1,263,129
Other 2,857,223 2,584,985 2,531,326 2,461,853 2,726,652
Total Revenues $ 125,042,880 $ 130,713,520 $ 115,559,779 $ 108,947,072 $ 101,260,192
Expenses:
Total Expenses $ 88,927,662 $ 96,938,864 $ 91,551,106 $ 80,848,570 $ 73,195,783
Net Available for Debt Service $ 36,1 15,218 $ 33,774,656 $ 24,008,673 $ 28,098,502 $ 28,064,409
Water (Units Served) 39,338 37,565 37,596 37,344 37,075
Wastewater (Units Served) 36,908 35,563 35,853 34,743 34,743
Electric (Units Served) 39,123 37,829 38,255 37,818 37,777
TABLE 17 -VALUE OF THE SYSTEM
Fiscal Year Ended September 30,
2012 2011 2010 2009 2008
Utility Systems $ 435,064,838 $ 366,563,463 $ 348,347,759 $ 318,485,023 $ 293,094,037
Construction in Progress 20,430,326 69,987,787 69,448,456 69,561,781 67,833,091
$ 455,495,164 $ 436,551,250 $ 417,796,215 $ 388,046,804 $ 360,927,128
Less: Accumulated Depreciation 158,428.406 142,344,667 131,366,712 120,579,498 107,679,617
Net System Value $ 297,066.758 $ 294,206,583 $ 286,429,503 $ 267,467,306 $ 253,247,511
TABLE 18 - CITY'S EQUITY LN THE SYSTEM
Fiscal Year Ended September 30,
Resources 2012 2011 2010 2009 2008
Net System Value $ 297,066,758 $ 294,206,583 $ 286,429,503 $ 267,467,306 $ 253,247,511
Current Assets 53,031,034 47,319,652 42,528,426 53,391,673 45,761,719
Restricted Assets 10,143,761 5,166,872 5,592,025 6,926,456 8,098,103
Other Resources 120,000 240,000 360.000 360,000 680,000
Deferred Charges 780,390 919,183 842,458 869,924 859,979
Total $ 361,141,943 $ 347,852,290 $ 335,752,412 $ 329,015,359 $ 308,647,312
Obligations
Current Liabilities $ 17,180,367 $ 20,308,090 $ 18,126,521 $ 15,418,179 $ 13,741,421
Current Liabilities Payable from
Restricted Assets 13,474,895 11,049,949 10,735,762 9,942,046 9,066,763
General Obligation Debt 30,675,000 24,020,000
Certificates of Obligation 55,865,000 48,085,000 42,265,000 36,185,000 22,920,000
Revenue Bond Debt 41,505,001 49,845,002 81,525,000 87,745,000 93,724,997
Other Debt 4,561,927 (t) 3,249,873 (t) 1,551,658 (I) 152,262 180,630
Total Liabilities $ 163,262,190 $ 156,557,914 $ 154,203,941 $ 149,442,487 $ 139,633,811
City's Equity in System $ 197,879,753 $ 191,294,376 $ 181,548.471 $ 179,572,872 $ 169,013,501
Percentage of Equity in System 54.79% 54.99% 54.07% 54.58% 54.76%
(1) Includes OPEB Net Pension Obligations.
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TABLE 19 — UTILITY REVENUE BOND AND SYSTEM SUPPORTED CERTIFICATE DEBT SERVICE
Original Outstanding
Principal Principal
Series Amount as of 6/1/2013
2005 $ 8,035,000 $ 355,000 *
2005A (1) 12,995,000 6,510,000 *
2006 16,950,000 12,985,000
2007 18,665,000 14,915,000
2008 (2) 15,925,000 13,235,000
2009 (2 ' 19,490,000 21,825,000
2010 (2) 2,850,000 2,555,000
2010 0) (3) 25,905,000 21,915,000
2011 ( �) 7,920,000 7,375,000
2012 (2) 16,415,000 15,925,000
2012 (1)t3) 9,570,000 8,760.000
2013 (2) 9,610,000 9,610,000 *
$ 154.720,000 $ 126,355.000
* Preliminary, subject to change. Excludes the Refunded Obligations.
(1) Represents refunding bonds.
(2) Certificates of Obligation supported in whole or in part by Utility System revenues.
(3) General Obligation Improvement Bonds supported in part by the Utility System revenues.
INVESTMENTS
The City invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City
Council. Both state law and the City's investment policies are subject to change.
LEGAL INVESTMENTS
Under State law, the City is authorized to invest in: (1) obligations of the United States or its agencies and instrumentalities, including
letters of credit; (2) direct obligations of the State or its agencies and instrumentalities; (3) collateralized mortgage obligations directly
issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or
instrumentality of the United States; (4) other obligations, the principal of and interest on which are unconditionally guaranteed or insured
by, or backed by the full faith and credit of, the State or the United States or their respective agencies and instrumentalities, including
obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the
United States; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality
by a nationally recognized investment rating firm not less than A or its equivalent; (6) bonds issued. assumed, or guaranteed by the State of
Israel; (7) certificates of deposit and share certificates (i) issued by a depository institution that has its main office or a branch office in the
State of Texas, that are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance
Fund, or are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law
for City deposits, or (ii) where (a) the funds are invested by the City through (I) a broker that has its main office or a branch office in the
State of Texas and is selected from a list adopted, at least annually, by the City as required by law or (II) a depository institution that has
its main office or a branch office in the State of Texas that is selected by the City; (b) the broker or the depository institution selected by
the City arranges for the deposit of the funds in certificates of deposit in one or more federally insured depository instinitions, wherever
located, for the account of the City; (c) the full amount of the principal and accrued interest of each of the certificates of deposit is insured
by the United States or an instrumentality of the United States, and (d) the City appoints the depository institution selected under (a)
above, a custodian as described by Section 2257.041(d) of the Texas Government Code, or a clearing broker- dealer registered with the
Securities and Exchange Couunission and operating pursuant to Securities and Exchange Commission Rule 15c3 -3 (17 C.F.R. Section
240.15c3 -3) as custodian for the City with respect to the certificates of deposit; (8) fully collateralized repurchase agreements that have a
defined termination date, are fully secured by a combination of cash and obligations described in clause (1) which are pledged to the City,
held in the City's name, and deposited at the time the investment is made with the City or with a third party selected and approved by the
City and are placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing
business in the State of Texas; (9) bankers' acceptances with the remaining term of 270 days or less, if the short -term obligations of the
accepting bank or its parent are rated at least "A -1" or "P -1" or the equivalent by at least one nationally recognized credit rating agency;
(10) commercial paper that is rated at least "A -1" or "P -1" or the equivalent by either (a) two nationally recognized credit rating agencies
or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a bank
organized and existing under the laws of the United States or any state; (11) no -load money market mutual funds regulated by the
26
Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90 days or less and include in their
investment objectives the maintenance of a stable net asset value of $1 for each share; (12) no -load nmtual funds registered with the
Securities and Exchange Commission that: have an average weighted maturity of less than two years: invests exclusively in obligations
described in the preceding clauses; and are continuously rated as to investment quality by at least one nationally recognized investment
rating firm of not less than "AAA" or its equivalent; provided, however, that the City is not authorized to invest in the aggregate more than
15% of its monthly average fund balance. excluding bond proceeds and reserves and other funds held for debt service, in such no -load
mutual funds, and (13) for bond proceeds, guaranteed investment contracts that have a defined termination date, are secured by obligations
of the United States or its agencies and instrumentalities in an amount equal to the amount invested under the contract, and are pledged to
the City and deposited with the City or a third party selected and approved by the City.
The City is also authorized to invest its funds through an eligible investment pool if the governing body of the City by rule, ordinance, or
resolution, as appropriate, authorizes investment in the particular pool. To be eligible to receive funds from and invest funds on behalf of
the City, an investment pool must furnish to the investment officer or other authorized representative of the City an offering circular or
other similar disclosure instrument that contains, at a minimum, the following information: (1) the types of investments in which money is
allowed to be invested; (2) the maximum average dollar - weighted maturity allowed, based on the stated maturity date, of the pool: (3) the
maximum stated maturity date any investment security within the portfolio has; (4) the objectives of the pool; (5) the size of the pool; (6)
the names of the members of the advisory board of the pool and the dates their terns expire; (7) the custodian bank that will safekeep the
pool's assets; (8) whether the intent of the pool is to maintain a net asset value of one dollar and the risk of market price fluctuation; (9)
whether the only source of payment is the assets of the pool at market value or whether there is a secondary source of payment, such as
insurance or guarantees, and a description of the secondary source of payment; (10) the name and address of the independent auditor of the
pool; (11) the requirements to be satisfied for an entity to deposit funds in and withdraw funds from the pool and any deadlines or other
operating policies required for the entity to invest funds in and withdraw funds from the pool; and (12) the performance history of the pool,
including yield, average dollar - weighted maturities, and expense ratios.
Governmental bodies in the State are authorized to implement securities lending programs if (i) the securities loaned under the program are
100 °43 collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either
secured by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of
credit issued by a state or national hank that is continuously rated by a nationally recognized investment rating firm not less than "A" or its
equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph
under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental
body. held in the name of the governmental body and deposited at the time the investment is made with the City or a third party designated
by the City; (iii) a loan made under the program is placed through either a primary govermnent securities dealer or a financial institution
doing business in the State; and (iv) the agreement to lend securities has a term of one year or less.
The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided
that the pools are rated no lower than "AAA" or "AAAm" or an equivalent by at least one nationally recognized rating service. The City is
specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal
balance of the underlying mortgage- backed security collateral and pays no principal; (2) obligations whose payment represents the
principal stream of cash flow from the underlying mortgage- hacked 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 fonnaily 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.
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ADDITIONAL PROVISIONS
Under Texas law the City is additionally required to: (I) 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 fimus 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 Treasurer, Chief Financial Officer 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.
Car's INVESTMENT POLICY
The Executive Director of Business Services 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 Chief Financial Officer 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 April 30, 2013, the City's investable funds were invested in the following categories:
Book Market
Investment Type Value Value
Demand Bank Accounts $ 46,541,762 $ 46.541,762
Certificates of Deposit 15,038,335 15,038,335
Pooled Cash (TexpooUfexS'TAR) 30,995,273 30,995,273
Money Market Mutual Fund 20,397,666 20,397,666
$ 112,973,036 S 112,973,036
TAX MATTERS
OPINION
On the date of initial delivery of each series 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 he 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 OPINIONS OF BOND COUNSEL.
28
In rendering its opinions, Bond Counsel will rely upon (a) certain information and representations of the City, including information and
representations contained in the City's federal tax certificate, (b) the Verification Report prepared by Grant Thornton LLP with respect to
the refunding of the Refunded Obligations and (c) covenants of the City contained in the respective Ordinances authorizing each series of
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 Bonds or
Certificates, as the case may be, to become includable in gross income retroactively to their date of issuance.
The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance
of the 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.
FEDERAL INCOME T.4 /I 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 Lssue 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.
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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.
Interest on the Obligations will be includable as an adjustment for "adjusted current earnings' to calculate the alternative minimum tax
imposed on corporations by section 55 of the Code.
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 nninirnis 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 TA.NTS
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.
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 each series 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.ernma.msrb.org ( "EMMA ").
ANNUAL REPORTS
The City will provide certain updated financial information and operating data to the MSRB annually. 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 this information within
six months after the end of each fiscal year ending in and after the City's 2012 -13 fiscal year. The City will provide the updated
information to the MSRB through EMMA in accordance with recent amendments to Rule 15c2 -12 (the "Rule ") promulgated by the United
States Securities and Exchange Commission (the "SEC ").
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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. The updated information will include audited financial statements, if the City conunissions an audit and it is completed by the
required time. If audited financial statements are not available by the required time, the City will provide unaudited financial statements by
the required time and audited financial statements when and if such audited financial statements become 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 City's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 in each year, unless the
City changes its fiscal year. If the City changes its fiscal year, it will notify the MSRB of the change.
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 (hut 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 undertake such an action or the termination of a definitive agreement relating to any suchactions, other than pursuant to its terms, if
material; and (14) appointment of a successor or additional trustee or the change of name of a trustee. if material. In addition, the City will
provide timely notice of any failure by the City to provide annual financial information in accordance with their agreement described
above under "Annual Reports ". For these purposes, any event described in clause (12) is considered to occur when any of the following
occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code
or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially
all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a
plan of reorganization. arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the City.
The City will provide each notice described in the previous paragraph to the MSRB through EMMA, in accordance with the Rule.
LiNMIITATIONS 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 fume 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 wrrH PRIOR UNDERTAKINGS
During the Last five years, the City has complied in all material respects with all continuing disclosure agreements made by it in
accordance with the Rule.
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OTHER INFORMATION
RATLNGS
The presently outstanding tax supported debt of the City is rated "Aa2" by Moody's and "AA" by S &P, without regard to credit
enhancement. Applications for contract ratings have been made to S &P and Moody's. 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.
LriTGATION
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 LNVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Governrnent 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
invesunent 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 OPINIONS
The City will furnish a complete transcript of proceedings incident to the authorization and issuance of the Obligations, including the
unqualified approving legal opinion of the Attorney General of Texas approving the Obligations 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 legal opinion of Bond
Counsel, to like effect and to the effect that the interest on the Obligations will be excludable from gross income for federal income tax
purposes under section 103(a) of the Code, subject to the matters described under "TAX MATTERS" herein, including the alternative
minimum tax on corporations. In its capacity as Bond Counsel, McCall, Parkhurst & Horton L.L.P. has reviewed the information under the
captions "PLAN OF FINANCING" (except for the subsection "SOURCES AND USES OF PROCEEDS "), "THE OBLIGATIONS," "TAX
MATTERS," "OTHER INFORMATION — LEGAL. INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FuN°DS IN TEXAS," "OTHER
INFORMATION — REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE," "OTHER INFORMATION — LEGAL OPINIONS," and
"CONTINUING DISCLOSURE OF INFORMATION" (except under the subheading "COMPLIANCE WITH PRIOR UNDERTAKINGS ", as to
which no opinion is expressed) in the Official Statement and Bond Counsel is of the opinion that the information relating to the
Obligations and the Ordinances contained under such captions is a fair and accurate summary of the information purported to be shown.
The legal fee to be paid to Bond Counsel for services rendered in connection with the issuance of the 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. In connection with the transactions described in the
Official Statement, Bond Counsel represents only the City. Certain legal matters will be passed upon for the Underwriters by
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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
First Southwest Company 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. First Southwest Company, 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.
VERIFICATION OF ARITIIMETIC.AL AND MATHEMATICAL COMPUTATIONS
The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the City
relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and
interest to redeem the Refunded Obligations and (b) computation of the yields of the Bonds and the restricted Federal Securities were verified
by Grant Thornton, LLP, certified public accountants. Such computations were based solely on assumptions and information supplied by First
Southwest Company on behalf of the City. Grant Thornton, LLP has restricted its procedures to verifying the arithmetical accuracy of certain
computations and has not made any study or evaluation of the assumptions and information on which the computations are based and,
accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted
outcome.
UNDERWRITERS
, (the "Underwriters "), have agreed, subject to certain customary conditions precedent to
closing, to purchase the Bonds from the City. The purchase price for the Bonds is $ (representing the par amount of the
Bonds, plus a premium of $ and less an underwriters' discount of $ ) plus accrued interest on the Bonds.
The Underwriters will be obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds to be offered to the public may be
offered and sold to certain dealers (including the Underwriters and other dealers depositing Bonds into investment trusts) at prices lower
than the public offering prices of such Bonds, and such public offering prices may be changed, from time to tune, by the Underwriters.
The Underwriters, have agreed, subject to certain customary conditions precedent to closing, to purchase the Certificates from the City.
The purchase price for the Certificates is $ (representing the par amount of the Certificates, plus a premium of
$ and less an underwriters' discount of $ ) plus accrued interest on the Certificates. The Underwriters
will be obligated to purchase all of the Certificates if any Certificates are purchased. The Certificates to be offered to the public may be
offered and sold to certain dealers (including the Underwriters and other dealers depositing Certificates into investment trusts) at prices
lower than the public offering prices of such Certificates, and such public offering prices may he changed, from time to tine, by the
Underwriters.
The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the
information in this Official Statement in accordance with, and as part of, their 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 Underwriters do not guarantee the
accuracy or completeness of such information.
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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 Underwriters.
Mayor
City of College Station, Texas
ATTEST:
City Secretary
City of College Station, Texas
•
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Schedule I
SCHEDULE OF REFUNDED OBLIGATIONS*
General Obligation Debt
Certificates of Obligation, Series 2005 General Obligation Improvement Bonds, Series 2005
Maturity Interest Par Amount Call Call Maturity Interest Par Amount Call Call
February 15 Rate to be Refunded* Date Price February 15 Rate to be Refunded* Date Price
2015 4.000% $ 230,000 2115.2014 100.00 2015 4.000% $ 245,000 2/15/2014 100.00
2016 4.000% 160,000 2/15/2014 100.00 2016 4.000% 255,000 2/15/2014 100.00
2017 4.000% 170,000 2115,2014 100.00 2017 4.000% 270,000 2/15/2014 100.00
2018 4.125% 180,000 2/151014 100.00 2018 4.125% 285,000 2152014 100.00
2019 4.125% 190,000 2/152014 100.00 2019 4.125% 305,000 2/15/2014 100.00
2020 4.250% 200,000 2/151014 100.00 2020 4.250% 320,000 2452014 100.00
2021 4.250% 215,000 2/152014 100.00 2021 4.250% 340,000 2/15/2014 100.00
2022 4.375% 225,000 2/15'2014 100.00 2022 4.375% 360,000 2/152014 100.00
2023 4.375% 235,000 2/152014 100.00 2023 4.375% 380,000 2/15/2014 100.00
2024 4.500% 250,000 2/151014 100.00 2024 4.500% 400,000 2 100.00
2025 4.500% 265,000 2115/2014 100.00 2025 4.500% 420,000 2/15/2014 100.00
5 2 320,000 S 3,580,000
Utility System Revenue Debt
Utility System Revenue Refunding Bonds. Series 2005A Utility System Revenue Bonds, Series 2005
Maturity Interest Par Amount Call Call Maturity Interest Par Amount Call Call
February 1 Rate to be Refunded* Date Price February 1 Rate to be Refunded* Date Price
2015 5.250% S 350,000 (0 2/1/2014 100.00 2015 4.000% $ 375,000 2/1/2014 100.00
2016 5.000% 365,000 t0 2/1/2014 100.00 2016 4.00090 395,000 2112014 100.00
2017 5.000% 325,000 (a) 211.2014 100.00 2017 4.000% 420,000 2:12014 100.00
2018 4.000% 170,000 ( r) 2/1/2014 100.00 2018 4.000% 445,000 2/12014 100.00
S 1,210,000 2019 4.125% 470,000 2/1/2014 100.00
2020 4.125% 495,000 2'1'2014 100.00
2021 4.250% 525,000 2112014 100.00
2022 4.375% 555,000 212014 100.00
2023 4.375% 585,000 2/1.2014 100.00
2024 4.500% 615,000 2/1!2014 100.00
2025 4.500% 650,000 2/1/2014 100.00
$ 5,530,000
* Preliminary, subject to change.
(1) Par amount refunded is less than entire maturity.
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APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
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 895
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.
In March 2013 Forbes magazine named College Station one of the nation's 25 best places to retire. College -town cultural
amenities, low cost of living, median home price, warm climate and low crime rate help land the City on Forbes list.
CITY OWNED FACILITIES
The City owns many facilities including. streets, utilities, parks, public buildings, and other infrastructures. Approximately 482
miles of streets (99 %) within the City are hard surface. The City has a complete water distribution, wastewater collection and
treatment system with 734 miles of wastewater and water lines. The City owns the electrical distribution system with
approximately 444 miles of distribution lines, and purchases its electricity from American Electric Power.
The City has a fully equipped police department with 132 full time police officers and 62 support personnel. The department has
31 police patrol cars and one holding facility with a capacity of 17. The fire department consists of 132 full time fire fighters and
7 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. Fire Station #6 opened in December 2012.
EDUCATiONAL FACILITIES
The College Station Independent School District (the "School District ") is a fully accredited system offering 14 educational
campuses for pre- kindergarten through high school. The School District has a student enrollment in excess of 10,600 and employs
over 1,450 people. The School District opened a second high school, College Station High School, in August 2012. The School
District's facilities are also used by Blinn College, a community college offering two years of college level courses.
Texas A &M University provides higher educational facilities, offering both four year college programs and graduate degree
programs.
HEALTH CARE
The College Station Medical Center "The MED" is located on 25 acres within the City. The 200,000 square foot facility is a full
care hospital containing 167 beds and employing more than 500 people. The MED recently completed a $23 million hospital
expansion. The MED is a Trauma Level III facility, Cycle III accredited Chest Pain Center, Certified Primary Stroke Center and
was the region's first Sleep Center to be accredited by the American Academy of Sleep Medicine.
On March 30. 2011. Scott and White broke ground on a 403,000 square foot, 5 -story 143 bed hospital. Construction is near
completion and is scheduled to open in August 2013. Scott & White Hospital - College Station will house 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, Scott & White Clinic, and The Physicians
Centre.
A -1
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 htterstate 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 Esterwood.
Coulter Field is located north of the City of Bryan and provides a 4,000 foot lighted runway. Coulter Field
offers all types of services for the private aircraft.
Bus Lines Two bus lines serve the City with daily service connecting the City with Houston and Dallas.
Railroads Rail freight service is provided by the Union Pacific Railroad. Union Pacific Railroad operates a main
freight line from Houston through Bryan - College Station to Dallas -Fort Worth and beyond.
RECREATION
The College Station park system presently includes 50 parks encompassing 1.330 acres, including a 515 acre wilderness park.
Collectively, these parks contain 57 playgrounds, 30 soccer fields, 26 basketball courts, 36 softball/baseball diamonds, 27 tennis
courts. 3 swimming pools, a spray park, a gymnasium, and a number of picnic shelters. The Parks Department sponsors a variety of
organized athletic and aquatic programs as well as many special events throughout the year.
POPULATION
Official U.S. Censust
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
It) U.S. Census Bureau, American Conununity Survey
ECONOMIC BACKGROUND
Texas A &M University and System
The City of College Station's major asset is being the home of Texas A &M University (TAMU). TAMU is located on an
approximately 5,200 acre campus within the City. TAMU has a significant economic impact on the City, contributing over $1.7
billion dollars annually to the local economy. TAMU has consistently ranked in the top 20 nationally among public institutions of
higher education in both enrollment and research grants. Each year, TAMU's approximately 2,500 faculty members conduct an
estimated $689 million worth of sponsored research projects. In 2012. U.S. News and World Report ranked Texas A &M second in the
nation among public universities in the "great school, great prices" category. Kiplinger's 2013 "best value" ranks Texas A &M 1" in
Texas and 18 among the nation's top public colleges.
Texas A &M ranks as the nation's sixth largest university in enrollment, with close to 50,000 students. Texas A &M ranks as one of
the nation's top 10 university for National Merit Scholars having over 500 National Merit Scholars enrolled. TAMU and its System,
combined with its system agencies, employs more than 27,000 full -time and part -time staff.
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.
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One I l e alth Plus Biocorridor
College Station entered into an interlocal agreement for the One Health Plus Biocorridor with the Ciry of Bryan. The 3,500 acre
Biocorridor will be an international destination for education, research, development, commercialization and production of innovative
technologies to improve global health. In March 2013, Texas A &M University announced a partnership with pharmaceutical giant
GlaxoSmithKline to create $91 rnillion influenza- manufacturing facility. The facility is expected to bring 7,000 jobs to the area.
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, conunercial 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 two Tax Increment Reinvestment Zones to help
fund the necessary infrastructure. The City is also in the process of establishing 2 Municipal Management Districts to be used as a
tool for development of these areas as well.
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 which has positioned the University to host regional payoffs as well as national championship games. In
the Fall of 2012, Texas A &M began playing in the Southeastern Conference. Texas A &M's move to the SEC has proved positive for
the City. At the end of the 2013 football season, the University will begin a $450 million renovation to Kyle Field making it the
largest college stadium in the SEC and Texas with a seating capacity of 102,500.
The City's sport complex's as well as the ease to get around makes College Station attractive to several organizations. Over the past
several years, the Amateur Softball Association and the Texas Amateur Athletic Federation have chosen College Station to host state
tournaments and events. In addition, the City facilitates two major softball tournaments, a soccer tournament, a 7 on 7 flag football
tournament and baseball tournaments throughout the year. The City is in the process of adding 2 additional synthetic athletic fields at
Veterans Park and Athletic Complex. This is anticipated to allow additional tournaments to be held in this area.
MAJOR AREA EMPLOYERS
Number of
Firm Name Product Emp loyees
Texas A &M University and System Education/Research 18,000+
Bryan ISD Education 1000+
St. Joseph's Regional Hospital Health Service 1000+
Sanderson Farms. Inc. Poultry Processing 1000+
College Station ISD Education 1000+
Reynolds & Reynolds Computer Hardware and Software 1000+
City of College Station Government 500 -999
Brazos County Govermnent 500 -999
City of Bryan Government 500 -999
Wal -M artiSam's Retail 500 -999
HEB Grocery Retail 500 -999
College Station Medical Center Health Service 500 -999
Scott & White Clinic Health Service 500 -999
Kent Moore Cabinets Cabinets 400+
Blinn College - Bryan Campus Education 400+
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
Parmership, Schlumberger, Texas 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, SourceNet
Solutions, 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 houses Lynntech, Inc. and RBC
Technologies.
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LABOR STATISTICS
College Station
Labor Total
Year Force Employment Unemployment Rate
2007 41,082 39,507 1,575 3.8%
2008 43,687 41,844 1,843 4.2%
2009 45,998 43,566 2,432 5.3%
2010 47,301 44,488 2,813 5.9%
2011 47,972 44,939 3,033 6.3%
2012 47,092 44,328 2,764 5.9%
2013 (1) 47,455 45,047 2,408 5.1%
Brazos County
Labor Total
Year Force Employment Unemployment Rate
2007 88,010 84,788 3,222 3.7%
2008 91,440 87,805 3,635 4.0%
2009 96,669 91,418 5,251 5.4%
2010 99,119 93,101 6,018 6.1%
2011 100,643 94,245 6,398 6.4%
2012 98,755 92,963 5,792 5.9%
2013 (r) 99,639 94,526 5,113 5.1%
Source: Texas Workforce Commission.
(1) As of April 30, 2013
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 2013, the estimated population of College Station was 97,982. The following table sets forth the number and value of
construction permits issued by the City over the past several years.
Residential Construction Comrnercial Construction Total
Calendar Number Number Number
Year of Permits Value of Permits Value of Permits Value
2007 990 $ 161,466,990 413 $ 74,683,795 1,403 $ 236,150,785
2008 1,131 164,494,779 346 154,313,994 1,477 318,808,773
2009 792 82,316,558 243 46,947,099 1,035 129,263,657
2010 860 93,158,066 309 162,053,510 1,169 255,211,576
2011 971 124,132,135 359 123,779,052 1,330 247,911,187
2012 1,208 149,737,218 325 67,478,910 1,533 217,216,128
2013 421 44,952,570 116 39,410,254 537 84,362,824 (1)
Source: The City.
(1) Represents permits issued through April 30, 2013.
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.
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APPENDIX B
EXCERPTS FROM THE
CITY OF COLLEGE STATION, TEXAS
ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 2012
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, 2012, and is not
intended to be a complete statement of the City's financial condition. Reference is made to
the complete Report for fin information.
APPENDLX C
FORMS OF OPINIONS OF BOND COUNSEL