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Home My WebLink About07/14/1987 - Special Minutes City Council MINUTES CITY COUNCIL SPECIAL MEETING TUESDAY, JULY 14, 1987 5:00 P.M. COUNCIL MEMBERS PRESENT: Mayor Ringer, Councilmen Boughton, Haddox, Jones, McIlhaney, Gardner COUNCIL MEMBERS ABSENT: Councilman Brown STAFF PRESENT: Assistant City Manager Ragland, City Secretary Jones, Assistant City Attorney Banks, Deputy Finance Director Schroeder, Council Coordinator Hooks VISITORS PRESENT: See guest register. Agenda Item No. 1 - Consideration of an ordinance authorizin~ the Issuance and Sale of General Obligation Refundin~ Bonds Series 1987. City Financial Advisor David Fetzer outlined the refunding procedures accomplished since the July 1st meeting. He noted that the financial advisors recommend American Municipal Bond Insurance Corporation to carry the insurance policy. He stated that four firms were qualified; this firm offered the lowest insurance premium, $81,850.00. Mr. Fetzer described the summary of the refunding issue, and noted that the annual debt service savings for the four year period 1988-1991 is $99,089.94 per year. He pointed out that the effective interest rate on the bonds to be refunded is 9.701%, and the effective interest rate on the refunding bonds is 7.075%. Mr. Fetzer stated that Rauscher Pierce Refsnes, Inc., is making an offer to the City for the refunding bonds. He explained the information and schedules listed in several booklets distributed to the Council; he recommended that the Council consider an Order to proceed with the transaction. Mr. Dick Johnson of Baker & Botts, Bond Counsel summarized the proposed ordinance captioned AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF 10,445,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 1987 PROVIDING THE DETAILS RELATING THERETO, AUTHORIZING THE PURCHASE OF THE BOND INSURANCE POLICY AND THE PAYMENT OF THE PREMIUM THEREFOR, AUTHORIZING AN AGREEMENT WITH THE PAYING AGENT REGISTRAR AND ESCROW AGREEMENT PROVIDING FOR THE FIRM BANKING AND FINANCIAL ARRANGEMENTS FOR THE BOND PAYMENT REFUNDED AND THE BOND PURCHASE AGREEMENT; CALLING CERTAIN OUT- STANDING BONDS FOR REDEMPTION; AND DECLARING THAT THIS ORDINANCE SHALL BE EFFECTIVE IMMEDIATELY UPON ITS ADOPTION. '06277 CITY COUNCIL SPECIAL MEETING TUESDAY, JULY 14, 1987 Page 2 Councilman Haddox moved approval of Ordinance 1715 authorizing the issuance and sale of General Obligation Refunding Bonds Series 1987. Councilman Boughton seconded the motion which carried unanimous- ly, 6-0, with Councilman Brown absent. A~enda Item No. 2 - Adjourn. Mayor Ringer adjourned the meeting at 5:25 p.m. ATTEST: Dian ~o-ne§~ ~ Secretary APPROVED: La f~'yJ J~.~r $~-~yor 06278 PRELIMINARY OI~ICIAL STATEMENT DATED JULY 10, Ratinp: Insured Moody's--# ' NEW ISSUE S&P-- In the opinion of Bond Counsel, under existing statutes, regulations, court decisions and published rulings and assuming continued compliance with certain covenants described herein, interest on the Bonds · is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. See "TAX MATI'ERS" for a discvasion of Bond Counsel's opinion including a further description of corporate alternative minimum tax consequences. $10,455,000' CITY OF COLLEGE STATION, TEXAS (Brazos County) GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987 Dated: July IS, 1987 Due: February 1~, as shown below The Bonds are valid and legally binding obligations of the City of College Station, Texas (the "City"), issued pursuant to a bond ordinance adopted by the City Council of the City, and are payable from and secured by a continuinlg' levy of ad valorem taxes against all taxable pwperty on the tax rolls of the City, within the limits prescribed by law. Interest on the Bonds will be due on February 15, 1988, and each August 15 and February 15 thereafter until the earlier of maturity or prior redemption. The Bonds will be issued in fully registered form in integral multiples of $5,000, and principal and seminnnual interest will be payable by First City National Bank of Houston, Houston, Texas, the paying agent/registrar (the "Registrar"). Principal of the Bonds will be payable to the registered owner at maturity or redemption upon presentation of such Bonds to the Registrar. Interest on the Bonds will be payable by check or draft, dated as of the interest payment date, and mailed by the Registrar to registered owners as shown on the records of the Registrar as of the last business day of the month next preceding each interest payment date. February Maturity Sehedule Yield Yield Amount Maturity Ratu or Price** Amount Maturity Rate or Priee** $ 110,000 1988 __.% __.% $1,025,000 1997 __% __% 570,000 ! 989 ~.% ~.% 1,005,000 1998 ~% __% 555,000 1990 ~.% ~.% 985,000 1999 ~% ~% 535,000 1991 ~.% __.% 965,000 2000 ~% % 450,000 1992 ~.% ~.% 475,000 2001 % % 135,000 1993 % __.% 465,000 2002 % __.% 610,000 1994 % __.% 460,000 2003 __.% __.% 610,000 1995 ~.% ~.% 455,000 2004 ~.% % 1,045,000 1996 ~.% ~.% Redemption The Bonds are optional for redemption prior to maturity on February 15, 1997, or any date thereafter at a price equal to par plus acc~ed interest thereon to the date fixed for redemption. Delivery The Bonds are offered when, as and if issued, subject to approval by the Attorney General of the State of Texas and Baker & Botts, Bond Counsel, Houston, Texas. Certain matters will be passed on for the Underwriter by Mayor, Day & Caldwell, Houston, Texas. Definitive Bonds are expected to be available for delivery on or about July 30, 1987 in Houston, Texas. This Official Statement was prepared under the direction of Moroney, Belcher & Co., Inc., Financial ,4dvisor to the City and Moroney, Beissner & Co., Inc. is not a member of the Underwriting Group. RAUSCHER PIERCE REFSNES, INC. * Subject to change. ** The initial yields will be established by and are the sole responsibility of the Underwriter, and may subsequently be changed. CITY OF COLLEGE STATION, TEXAS ADMINISTRATION The City of College Station operates under a council-manager form of government. The Mayor and Council members must be citizens of the United States and qualified voters of the State of Texas; and must have resided within the corporate limits of the City of College Station for at least one (1) year next preceding the election at which they are candidates. The Mayor and six Council members are elected from the City at large. In each even-numbered year three Council members and a Mayor are elected, and in each odd-numbered year three Council members are elected. The Mayor and each Council member hold office for a period of two years and until his successor is elected and qualified. A vacancy in the City Council is fdled by a special election which must be called within 30 days of the occurrence of such vacancy. If a vacancy occurs within 90 days preceding a general election, no special election will be called and the vacancy will be fdled at the next general election. All powers of the City are vested in the elective council which enacts local legislation, adopts budgets, determines policies, and employs the City Manager, who executes the laws and administers the government ofthe City. The City Council determines the goals ofthe City and operates as a policy making body. The City Manager executes the policies of the Council concerning matters of policy, personnel, and budgeting. ELECTED OFFICIALS ~ Term Omciab Title of Service Expires Larry J. Ringer* .............. Mayor I year 4/88 Fred Brown ..................... Councilman 2 years 4/89 Sara Goode Jones ........... Councilman I year 4/88 Lynn Mcllhaney .............. Councilman 3 years 4/89 Patricia B. Boughton ....... Councilman 8 years 4/88 Jun Gardner .................... Councilman 4 years 4/89 Dick Haddox ................... Councilman I year 4/88 Occupation Professor, Department of Statistics, Texas A&M University Owner, Fred Brown Mazda-BMW Attorney, Hoelscher Lipsey & Jones Homemaker Homemaker Professor, Texas A&M University Executive, Anco Insurance * Mayor Ringer served as a Councilman for 7 years prior to his election as Mayor. ADMINL~TRATIVE OFFICL~ Lq O~elal PosJfloa William K. Cole ............................................................ City Manager Ron Ragland ................................................................. Assistant City Manager Glenn Schroeder ........................................................... Deputy Director of Finance Dian Jones ..................................................................... City Secretary Elrey B. Ash H ............................................................... Director of Capital Improvements Cathy Locke .................................................................. City Attorney Moroney, Beissner & Co., Inc .......................................Financial Advisors Yem of Service i ½ Years 6 months 10 Years 34 Years 12 Years 3 Years 32 Years BOND COUNSEL Baker & Botts, Houston, Texas UNDERWRITER'S COUNSEL Mayor, Day & CaldwelL Houston, Texas 006280 Authorization The City is a political subdivision of the State of Texas and a municipal corporation organiTed and existing under the laws of the State of Texas, and its duly adopted Home Rule Charter (the "Charter"). The Bonds are issued pursuant to the Charter and the general laws of the State of Texas, particularly Article 717k, Vernon's Texas Civil Statutes, and additionally pursuant to an ordinance authori--ing the issuance and sale of the Bonds (the "Bond Ordinance") passed by the City Council on the date of sale of the Bonds. Payment Record The City has never defaulted. PLAN OF FINANCING Purpose The proceeds fwm the sale of the Bonds together with other funds of the City will be used to ( 1 ) refund two series of outstanding General Obligation Bonds and one series of outstanding Combination Tax and Revenue Certificates of Obligation and (2) advance refund two series of outstanding General Obligation Bonds and one series of Combination Tax and Revenue Certificates of Obligation prior to their stated maturities. The bonds and certificates of obligation to be refunded (hereinafter collectively referred to as the "Refunded Bonds") constitute the following issues: Original Amount Maturities Amount to be to be Option Issued Series Refunded Refunded Dates $1,500,000 G.O.--1981 $ 450,000 1989-1991 8/15/87 2,705,000 O.O.-- 1982 !,100,000 1989-1992 8/15/87 6,590,000 G.O.--H 1982 3,325,000 1994-2000 2/15/92 8,630,000 G.O.- 1984 4,050,000 1996-2004 2/01 / 94 284,062 C.O.--Dated 7/24/81 85,220 1989-1991 7/24/88 400,000 C.O.--Dated 10/23/81 160,000 1988-1991 10/23/87 $9,170,220 The Refunded Bonds will be called for redemption prior to maturity on their respective Option Dates at a price of par plus accrued interest to the date fixed for redemption. The total debt sendce on the Bonds is les~ than the total debt service on the Refunded Bonds. The principal and interest payments on the Refunded Bonds scheduled to become due and payable prior to the Option Dates and the principal amount of the Refunded Bonds scheduled to mature subsequent to the Option Dates are to be paid on the dates each comes due, and on the Option Dates, respectively, fwm funds to be deposited with First City National Bank of Houston, Houston, Texas (the "Esa~w Agent"). The Bond Ordinance provides that from the proceeds of the sale of the Bonds to the Underwriter, and from other funds of the City now on hand and lawfully avnilable for such purpose, the City will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds. Such funds will be held by the Escrow Agent in an escrow account (the "Escrow Fund") and used to purchase direct obligations of the United States of America (the "Federal Securities"). At the time of delivery of the Bonds to the Undervniter, Arthur Andersen & Co., Certified Public Accountants, will verify the mathematical adequacy of the Federal Securities, maturing at such time and yielding interest in amounts, such that together with -nlnvested funds in the EScrow Fund, if any, they will be sufficient to pay, when due, the principal of and interest on the Refunded Bonds. Such maturing principal of and interest on the Federal Securities will not be available to pay debt service on the Bonds. Under a certain Special Escrow Agreement (the "Escrow A~eement") to be dated as of ........................ 1987, between the City and the Escrow Agent, the Escrow Fund is irrevocably pledged for the payment of principal of and interest on the Refunded Bonds. By the deposit of the Federal Securities and cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of the Refunded Bonds pursuant to the terms of the Bond Ordinance. In the opinion of Bond Counsel, as a result of such defeasance, the Refunded Bonds will no longer be payable from the ad valorem taxes, but will be payable solely from the principal of and interest on the Federal Securities and cash held for such purpose by the Escrow Agent, and the pledge of ad valorem taxes for the payment of the principal and interest on the Refunded Bonds will be discharged. Sources and Uses of Funds The proceeds from the sale of the Bonds together with other available City funds will be applied approximately as follows: Sources of Funds: Principal amount of the Bonds .................................................... $ Available City Funds .................................................................... Accrued Interest ............................................................................ Total Available Funds .................................................................. $ Use of Funds: Deposit in Esa'ow Fund (Federal Securities and Cash) ............ $ .Cost of Issuance ............................................................................ Accrued Interest ............................................................................ Total Use of Funds ....................................................................... $ THE BONDS General The Bonds are dated July 15, 1987, and interest on the Bonds will be calculated on the basis of a 360-day year composed of twelve 30-day months, will accrue from July 15, 1987, and is payable semiannually on February 15 and August 15 ofeach year ("Interest Payment Date") commencing February 15, 1988. The Bonds mature on February 15 in the years and in the principal amounts or amounts due at maturity set forth on the cover page hereof. Interest on the Bonds is payable by check or draft mailed on or before each Interest Payment Date by the Registrar to the registered owner thereof as shown on the Re~istrar's books on the Record Date (as defined herein). The record date (the "Record Date") for the interest payable on any Interest Payment Date is the last business day of the month next preceding such Interest Payment Date. The Bonds are issued only as fully renistered bonds in the denomination of $5,000 or any integral multiple thereof. Security The Bonds will constitute valid and legally binding obligations of the City, payable from and secured by a continuing levy of ad valorem taxes against aH taxable property on the tax rolls of the City, within the limits prescribed by law. Optional Provisions AH Bonds maturing on or after February i$, 1988, are optional for redemption in whole or in pan on February 15, 1997, or uny date thereafter at par and accrued interest to the date fixed for redemption. If less than aH of the Bonds are redeemed at any time, the particular Bonds to be redeemed shah be selected 006282 by thc City in integral multiples of $$,000 within any one maturity. The registered owner of any Bond, all or a portion of which has been called for redemption, shall be required to present same to the Registrar for payment of the redemption price on the portion of the Bond so called for redemption and shall be issued a new Bond in the principal amount equal to the portion of such Bond not redeemed. Notice of Redemption Notice of redemption is required to be given by mailing a copy thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed in whole or in pan at the address of such owner on the registration books of the Registrar;, provided, however, that failure to give such notice, or any defect therein, will not affect the validity of the proceedings for the redemption of any Bond or portion thereof with respect to which no such failure or defect has occurred. Any notice mailed in accordance with the provisions of the Bond Ordinance will be conclusively presumed to have been duly given, whether or not registered owner receives the notice. Any Bond or Bonds duly called for redemption, due provision for the full payment of which has been timely made, will cease to bear interest from and ~er the date fixed for redemption. Delivery of the Bonds The Bonds are expected to be available for delivery on or about July 30, 1987. Delivery of the Bonds will be accompll.qhed by the issuance of one Bond for each maturity (the "Initial Bonds") either in typed or printed form, payable to the Underwriter. ~f the Underwriter furnishes to the Registrar, at least five days prior to delivery of the Bonds (or as otherwise agreed to between the Underwriter and the Registrar), instructions designating the names in which Bonds are to be registered, the addresses of the registered owners, the maturities, interest rates and denomination of such Bonds, the gegistrar shall, on the date of delivery, authenticate and deliver in exchange for the Initial Bonds, Bonds registered in accordance with such instructions in an a~gregate principal amount equal to the aggregate principal amount of the Initial Bonds submitted for transfer or exchange. Successor Registrar Provision is made in the Bond Ordinance for replacement of the Registrar. If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar's records and act in the same capacity as the previous Registrar. Any Registrar selected by the City shall be either a national or state banking institution and 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, and subject to supervision or examination by Federal or State authority. Successor Registrars, if any, shall be determined by the City. Registration, Transfer and F, xchange The Bonds may be transferred, registered and assigned only on the registration books of the Registrar, and such registration and transfer shall be without expense or service charge to the owner, except for any tax or other governmental charges required to be paid with respect to such registration and transfer. A Bond may be assigned by the execution of an assi?ment form on the Bonds or by other instrmnent of trnnsfer and assignment acceptable to the Registrar. A new Bond or Bonds will be delivered by the Registrar in lieu of the Bond being transferred or exchanged at the principal office of the Registrar. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of such owner not more than three business days after the receipt of the Bonds to be cancelled in the exchange or transfer and the written instrument of transfer or request for exchange duly executed by the owner or his duly authorized agent, in form satisfactory to the Registrar. New Bonds registered and delivered in an exchange or transfer shall be in denominations of $5,000 or any integral multiple thereof for any one maturity, shall specify the same maturity date and be for a like aggregate principal amount as the Bond or Bonds surrendered for exchange or transfer. Limitation on Transfer or F. atchange of Bonds Neither the City nor the Registrar shall be required to transfer or exchange any Bond during the period of fifteen (15) days next preceding any Interest Payment Date or to transfer or exchange any Bond during the thirty (30) day period prior to the date fixed for the redemption of such Bond. 0628 Bondholders Remedies The Bond Ordinance which requires the City to levy and collect taxes does not specifically provide any remedies that would be available to a Bondholder if the City defaults in the payment of the principal or interest on the Bonds or for the appointment of a uustee to protect and enforce the interests of the Bondholders upon the occurrence of such a default. If a holder of a Bond does not receive payment of principal or interest when due, the holder could seek to obtain a writ of mandamus from a court of competent jurisdiction requiring the City to observe thc covenants contained in the Bond Ordinance, or such holder could presumably recover a judgement against the City. The enforcement of a claim for thc payment of a Bond could be subject to judicial discretion, sovereign police powers of the State and the provisions of the Federal bankruptcy laws, if applicable. There is no provision for aceeleralion of maturity of principal of thc Bonds in the event of default and, consequently, the remedy of mandamus may have to be enforced from year to year. Any judgment against the City could not be enforced by direct levy and execution against the City's property or funds. Further, the registered owners of Bonds cannot themselves foreclose on property within the City or sell property within the City in order to pay the principal of and interest on the Bonds. The enforcement of a claim for the payment of a Bond would also be subject to the applicable provisions of the Federal bankruptcy laws and to any other statute affecting the rights of creditors of political subdivisions. Replacement Bonds If any Bond is mutilated, destroyed, stolen or lost, a new Bond in the same principal amount as the Bond so mutilated, destroyed, stolen or lost will be issued. In the case of a mutilated Bond, such new Bond will be delivered only upon surrender and cancellation of such mutilated Bond. In the case of any Bond issued in lieu of and substitution for a Bond which has been destroyed, stolen or lost, such new Bond will be delivered only (a) upon filing with the City and the Registrar of evidence satisfactory to establish to the City and the Registrar that such Bond has been destroyed, stolen or lost, and (b) upon furnishing the City and the Registrar with indemnity satisfactory to them, (c) upon the City and the Registrar having received no notice that such Bond has been acquired by a bona fide purchaser. The person requesting the authentication and delivery of a new Bond must comply with such other reasonable regulations as the Registrar may incur in connection therewith. USE OF INFOI~IATION IN OFFICIAL STATEMENT This "Official Statement" has been prepared by Moroney, Beissner & Co., Inc., a firm employed by the City to perform professional services in the capacity of Financial Advisors, including the preparation of this "Official Statement." Information with respect to interest rates, discounts, and other matters relating to the resale of the Bonds, including changes in the affairs of the City subsequent to the date hereof, is the responsibility of the Underwriter and such information is not provided herein. The information set forth herein has been obtained from the City and other sources which are believed to be reliable, but no guarantee is made as to the accuracy or completeness of such information, and its inclusion herein is not to be construed as a representation on the pan of the City nor Moroney, Beissner & Co., Inc~ to such effect. No person has been authorized to give any information or to make any representations other than those contained in this "Official Statement" and, if given or made, such other information or representations must not he relied upon as having been authorized by the City or Moroney Beissner & Co., Inc. This "Official Statement" does not constitute an offer to sell or solicitation of an offer to buy, in any state in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Any information and expressions of opinions herein are subject to change, without notice, and neither the delivery of this "Official Statement," nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in the affairs of the City since the date hereof. 006284 PROPERTY TAXES Property Subject to Taxation by the City Except for certain exemptions provided by federal and State law, all property in the City is subject to ad valorem taxation. Categories of exemptions applicable to the City include property owned by the State or iu political subdivisions if the property is used for public purposes; property exempt from ad valorem taxation by federal law;, certain household goods, family supplies and personal effects; farm products owned by the producers; certain property affiliated with charitable organizations, youth development assoc/ations, religions organizations and qualified schools; designated historical sites, solar and wind- powered energy devices; and most individually owned automobiles. Taxable pwperty in the City is required to be valued for tax purposes at 100% of market value (with limited exceptions) as of January I of each year. The City was authorized by the Texas Constitution to exempt up to 40% of the appraised value of each residential homestead for years 1982 through 1984. The City is authorized to exempt up to 30~ of such value for years 1985 through 1987 and 20~ thereafter. The Texas Property Tax Code (the "Property Tax Code") also provides for exemptions of up to $3,000 for homesteads of disabled veterans and certain survivors of deceased disabled veterans who apply for the exemption. State law also permits the City Counc~ to grant a homestead exemption of not less than $3,000 of appraised value to persons over 65 years of age. The Property Tax Code provides certain restrictions on annual increases in tax rates based on a complex formula. The effect of these limitations is to require a public hearing if the proposed tax increase, other than for taxes levied to pay debt service on Bonds and certain cunlractual obligations, exceeds 3% and an election (upon petition of 10~o of the qnalified voters in the City) to require a rollback to 8% if such an increase exceeds 8%. Taxing Procedures The Brazos County Appraisal District (the "Appraisal District"), a county-wide agency created under the Property Tax Code, is responsible for appraising property in the City, and the Braxos County Appraisal Review Board (the "Review Board") is responsible for reviewing the values established by the Appraisal District. The Appraisal District is governed by a five-person hoard of directors. Voting for membership on the board of directors of the Appraisal District is cumulative, based on toud taxes levied by taxing units within the Appraisal District. Appraisals may be pwtested by taxpayers, and in such case the Review Board determines whether the appraisals are substantially uniform and otherwise wmply with the law. The City also has the right to challenge some Appraisal District determinations, but not the appraised value of an individual taxpayer's property. Orders of the Review Board are subject to appeal to a state district court. The City's tax roll is certified to the City by the Chief Appraiser of the Appraisal District, and the tax rate established by the City Counc/l is applied to the values fixed by the Appraisal District, as reduced by exemptions granted by the City. Tax statements are required to be mailed by October I or as soon thereafter as practicable; taxes are due upon receipt of a tax bill; and taxes become delinquent on February I of the following Tax Year. Split payments are allowed; first half by November 30, and balance by June 30. Delinquent taxes incur a penalty of 6% of the amount of the tax for the first calendar month of delinquency pins l~ for each month or portion of a month of delinquency until July I when the penalty becomes 12%. Taxes that remain delinquent on July ! of the year in which they become delinquent may incur an additional penalty of not greater than 15% of the amount of taxes, penalty and interest due to defray costs of collection. Interest on delinquent taxes accrues at the rate of l~ per month until the tax is paid. To secure the payment of all taxes, as well as penalty and interest on delinquent taxes, the City has a statutory lien on taxable property which is on a parity with the lien of other taxing entities, and the taxpayer is personally liable for payment of the tax. Personal property of the taxpayer is subject to seizure and sale to satisfy delinquent taxes. The City may also sue to foreclose its tax lien on real or personal property, or to enforce personal liability, or both. If a judgment is obtained for foreclosure of the tax lien, no4285 the court may order the property sold to satisfy the lien. The City generally has not attempted to enforce the lien because of the time and expense of foreclosure proceedings. Delinquent taxes on real property are generally paid at such time as the owner sells or transfers title to the property upon which the delinquent tax has accrued. FINANCIAL STATEMENT (As of 5/31/8'/) 1986 Assessed Valuation ( 100% of Actual) ............................................................... $1,121,103,323( 1 ) General Obligation Debt Outstanding: (2) Presently Outstanding Bonds .................................................. $13,330,000 Certificates of Obligation ......................................................... 340,600 Combination Tax & Revenue Certificates of Obligation ....... 1,821,841 The Bonds, Series 1987 ............................................................ 10,455,000 Gwss Debt ....................................................................... $25,947,441 Less: Self Supporting Debt ............................ $5,626,940 Applicable I & S Fund ......................... 1,785,693 7,412,633 Net Debt ...................................................................................................................... $18,534,808 Ratio of Net General Obligation Debt to 1986 Assessed Valuation ......................... 1.65~ 1987 Estimated l~opulation (excluding 9,550 students living on campus) ............... 50,000 Net Debt per Capita .................................................................................................... $371 Assessed Valuation per Capita ................................................................................... $22,422 Area of City ................................................................................................................. 28.5 Sq. Mi. ( 1 ) Net of Exemptions in the amount of $36,629,372. (2) Excludes the Refunding Bonds in the amount of $9,170,220. Also does not include $29,435,000 Utility System Revenue Bonds outstanding. (See "Utility Department".) COMPUTATION OF SELF-SUPPORTING DEBT Net System Revenues Available for debt service for Fiscal Year ended 6/30/86 ................. $10,736,790 Less: Average annual debt service requirements on outstanding Revenue Bonds ................ 3,357,120 Balance available for other purposes ....................................................................................... $ 7,379,670 Average nnnual System General Obligation Bonds debt service requirements ...................... $ 645,$79 Percentage of System General Obligation Bonds Self-supporting .......................................... 100% Note: The City Council adopted an ordinance on June 29, 1976 committing the net revenues of the URlity System, after the payment of Revenue Bond requirements, to the payment of Principal and Interest on the General Obligation Bonds issued for Utility System purposes. This ordinance is authorized by Article 1106, Vernon's Civil Statutes of Texas. TAX COIJ.~-CTION PERIOD Taxes are due October I and are delinquent after January 31. Split payments are allowed; first half by November 30, and bahnce by June 30. No discounts are given on early payments. Penalty and interest on delinquent payments are rigidly enforced. 006286 TAX COI.I.~.CrlON RECORD Percent Tax Colleeflom Tax Assessed Ttx Ymr Yenr Vnluatioa Rtte Current TotAl Kndin[. 1981 433,053,691 ( 1 ) 0.3 ! 96.50 100.46 6/30/82 1982 769,127,740( 2 ) 0.31 95.30 96.76 6/30/83 1983 841,670,967 0.3 ! 95.71 98.64 6/30/84 ! 984 957,398,333 0.36 94. ! 2 96.49 6/30/85 1985 1,099,640,342 0.38 92.96 95.50 6/30/86 1986 1,121,103,323 0.38 93.38 98.57 6/30/87 Delinquent taxes outstanding for all prior years, as of 5/31/87 ........................................ $287,023 ( 1 ) Increase in basis of assessment from 80% to 100~ of actual. (2) Revaluation. TAX RATE LIMITATIONS The City of College Station is a Home Rule Chnrter City with a maximum authorized rate for all p~ of $2.50 per $100 Assessed Valuation. This maximum tax rate is imposed both by the Constitution of the State of Texas and the City Charter. Under the rules of the Texas Attorney General, the City may issue general obligation debt in an mount no greater than that which can be serviced by a debt service tax of $1.50 per $100 assessed valuation, based on 90% collections. TAX RATE DISTRIBUTION Tax Year 1996 199S 1984 1993 General Fund ......................................... $0.02 $0.02 $ -0- $ -0- Interest & Sinking Fund ........................ 0.36 0.36 0.36 0.31 Total Tax Rate ....................................... $0.38 $0.38 $0.36 $0.31 19~2 19~1 $0.0801 $0.1448 0.2291 0.1652 $0.3100 $0.3100 TAX ADEQUACY General Obligation Debt Service Requirements Including the Bonds, Series 1987, but excluding self-supporting Utility System G.O. Bonds... Interest and Sinking Fund tax levy rate required on 1986 Assessed Valuation of $1,121,103,323 ~ 95% collection produces ........................ Average Maximum Requirements Requirement $1,812,790 $3,074,094 $0.17 $0.29 CITY SALES TAX The City adopted the provisions of Article 1066e, VACS, Section 9, authori=-ing a I% sales tax effective .July 1, 1968. The sales tax collections are not pledged to payment of the Bonds. Following are sales tax collections for the past ten calendar years and the five-month period ending May 31, 1987. Salen Tax Sales Tax Year Revenue Year Revenue 1977 .................................................... $ 675,197 1978 .................................................... 848,536 1979 .................................................... 1,005,363 1980 .................................................... 1,290,503 1981 .................................................... !,645,040 1982 .................................................... 2,220,245 1983 .................................................... $2,558,651 1984 .................................................... 2,791,869 1985 .................................................... 3,093,459 1986 .................................................... 2,900,842 1987 (5 Months) ............................... 1,381,011 Date of' Authorization 8/13/83 i/24/84 1/24/84 1/24/84 1/24/84 !/24/84 GENERAL OBLIGATION BONDS AUTHORIZED BUT UNISSUED Drainage Improvements Police Building Fire Station Renovation Maintenance and Storage Bldg. Park Improvements Street Improvements Amount Issued Autharized Au~aerixed to Date but Unissued $ 1,930,000 $ 700,000 $1,230,000 2,200,000 2,200,000 --0- 555,000 555,000 --0- 1,425,000 500,000 925,000 1,150,000 1,150,000 -0- 6,325,000 3,525,000 2,800,000 $13,585,000 $8,630,000 $4,955,000 FLOATING DEBTOUTSTANDING None ESTIMATED DIRECT & OVERLAPPING DEBT STATEMENT The following statement of the estimated direct and overlapping ad valorem m-supported debt of taxing entities in the City was derived from various sources, including information contained in "Texas Munidpal Reports", published by the Municipal Adv/sory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of the information shown below, and no person is entitled to rely upon such information as being accurate or complete. Furthermore, certain of the entities below may have incurred substantial additional debt since the applicable date of thl, table, and such entities may have programs requiring the issuance of substantial additional debt, the amount of which cannot be determined. Ne~ Debt Pelifleal Subdivision Amount BFaZOS County ...................................................... $ 9,25o,345 Brazos County F/M & Lateral Road Bonds .......71,269 Bryan lSD ............................................................ 5,439,864 Coue e Station LSD ............................................. 20,265,000 Percent Amaunt Asof Overlappln~ Overhpph~ 12/31/85 34.55 $ 3,185,994 12/31/85 33.63 23,968 8/31/85 1.03 56,030 8/31/86 91.51 18,437,097 Total Overlapping Net Debt .................................................................................................... $21,713,089 CTFY OF COLLEGE STATION ............................................................................................. ! 8,534,808 Total Direct and Overlapping Net Debt .................................................................................. $40,247,897 Ratio of Total Direct and Overlapping Net Debt to 1986 Assessed Valuation ...................... 3.59% Per Capita Total Direct and Overlapping Net Debt ............................................................... $805 Assessed Valuation per Capita ................................................................................................. $22,422 10 006288 TWENTY MAJOR TAXPAYERS Ttzpayer General Telephone ................................................................. CBL Management .................................................................. Westinghouse Electric Corp ................................................... College Station Hotel Partnership ......................................... Texas Instruments .................................................................. Utility Retail Shopping Mall Manufacturing Hotel Manufacturing Federated Department Store ................................................. Retail Ramada Inn ............................................................................ Hotel Western Gulf Savings & Loan ............................................... Shopping Center Continental Real Estate Partnership ..................................... Apartments Sears, Roebuck & Co ............................................................. Retail Plantation Oaks Assn ............................................................. Apartments J. C. Culpepper, Jr. ................................................................. Retail Center Area Progress ......................................................................... Real Estate Anderson Ridge Parmers ....................................................... Apartments Sundance/Sausalito ............................................................... Apartments ARC/AMS, Inc. ..................................................................... Office Building College Park Association ....................................................... Apartments Benjamin E. Jackson Co ........................................................ Apartments Robert Callaway .................................................................... Apartments Dillards ................................................................................... Retail Twenty Major Tnxpeyers ns percent of City's total 1986 Assessed Valuation ................... Estimated Debt Service Requirement Schedule* S10,4~000'* O.O. Refundina Bonds Present Total Series lgg7 New Total Fiseal Year Debt Service Debt Service Endin8 6/30 Requirements Principal Interest Total Requirements 1988 $3,309,749 $I !0,000 S358,147 $ 468,147 $3,777,896 1989 3,764,200 570,000 706,838 1,276,838 5,041,038 1990 2,353,594 555,000 676,058 1,231,058 3,584,652 1991 2,238,607 535,000 644,423 1,179,423 3,4 ! 8,030 1992 2,198,274 450,000 612,858 1,062,858 3,261,132 1993 2,146,151 135,000 585,858 720,858 2,867,009 1994 1,546,174 610,000 577,420 1,187,420 2,733,594 1995 1,331,730 610,000 537,770 1,147,770 2,479,500 1996 750,486 1,045,000 496,595 1,541,595 2,292,081 1997 718,342 1,025,000 424,490 1,449,490 2,167,832 1998 410,898 1,005,000 352,740 i,357,740 1,768,638 1999 209,204 985,000 28i,385 1,266,385 1,475,589 2000 965,000 210,465 1,175,465 1,175,465 2001 475,000 140,020 615,020 615,020 2002 465,000 104,870 569,870 569,870 2003 460,000 69,995 529,995 529,995 2004 455,000 35,035 490,035 490,035 * Excludes the Refunded Bonds. ** Subject to change. Il 19~ Assemed Vahafloa $ 28,472,563 20,397,910 18,598,890 13,192,062 11,308,220 11,257,210 9,410,010 8,396,070 8,1 ! 3,060 8,083,450 7,283,884 7,232,755 6,847,051 6,253,910 6,234,3~0 6,047,670 5,840,180 5,434,520 5,366,450 5,279,820 $200,050,075 17.84% Debt Ineluded in Total $ 966,497 1,966,944 658,894 640,417 621,464 598,772 579,307 426,841 407,376 391,263 172,179 HISTORY OF GENERAL FUND REVENUES AND EXPENDITURES The following General Fund Revenues, Expenditures and Balances of Cash and Temporary Investments were taken from the City's Annual Audit Reports: 6/3O/86 Revenue: ~ Valorem Tax ....................................... City Sales Tax ........................................... Franchise Tax ........................................... Court Fines Licenses, Permits & Certi~ca~s ............... Total Revenue .................................................. $ 4,759,800 Fiscal Year F. nding 208,481 S 6,205 S --0- $ 562,998 S 600,281 2,986,594 2,996,933 2,641,715 2,$63,221 1,794,603 315,272 267,991 299,269 228,951 177,753 459,872 442,92 ! 342,761 483,050 403,42 ! 266,068 220,738 193,065 226,466 299,577 523,513 848,909 759,330 920.728 915,908 $ 4,783,697 S 4,236,140 $4,985,414 $4,191,543 6,420,545 5,504,18 ! 4,147,326 3,033,427 SI 1,204,242 S 9,740,32 ! S9,132,740 $7,224,970 Tramf~n lmm other Funds .............................7,274,034 Total Revenue & Tramfen .............................. $12,033,834 Expenditures: Admini~'~ra~on .......................................... $ 4,450,643 Polie~ Department .................................... 2,946,321 Fire Depamuent ....................................... 2,279,295 Streets ........................................................ 814,437 Parks & Recrea~on ...................................!,$88,725 Miscellaneous ............................................ 163,920 Total Expendintres .......................................... $12,243,341 E~___,~__ of Revenues & Tramt'ers Over Expenditures ................................................. $ (209,527) !~1~ of ~ and Temporary Investments ................................................... $ i,234,993 S 4,163,401 $ 3,631,097 $3,153,804 $2,554,165 2,508,822 2,289,774 2,051,548 1,65 !,836 2,136,437 1,869,004 !,819,797 !,388.723 974,704 902,918 640,462 405,758 !,430,430 !,238,709 !,024,694 779,480 ! 19,764 89,687 863,239* 140,244 $11,333,578 SI0,021,189 S9,553,544 $6,920,206 S (129,336) $ (280,868) S(420,804) S 304.764 S !,829,360 S 2,071,242 $2,254,000 $2,543,403 * Indudes an expenditure of $817,725 for the purchase of fire fighting equipment. UTII.1TY DEPARTMENT As of 5131187 Utility System Revenue Bonds Outstanding ............................................................................ $29,435,000 Fund Bnlnnces: Interest and Sinking Fund ......................................................................... $3,178,274 Operating Fund .......................................................................................... 646,016 Total Fund Balances .................................................................................. $3,824,290 REVENUE BONDS AUTHORIZED BUT UNISSUED Date of Amount Prev~ AetborlaM bet $9,500,000 Sanitary Sewer System Improvements S4,500,000 8/13/83 $5,000,000 ,eo 2 o 12 UTILITY SYSTEM OPERATING STATEMENTS The following condensed operating statements were taken from audits prepared by Hereford Lynch & Co., CPA's, Huntsville, Texas for the years 1982 through 1984 and Deloitte Haskins & Sells, CPA's, for 1985 and 1986. Fiscal Year Ended June 30 1986 lOSS 1984 198.3 19~2 Revenue: Eiecmc ................................ $27.494,226 Water & Sewer ................................. 4,973,166 Tap Fees ............................................. 54,513 Interest* ................................................. 532,699 Other ........................................................ 1,125,838'* Total Revenue ................................................ $34,180,452 Expenses: Power Purchased ..................................... $15.964,427 Water Producuon ..................................... 1,259.270 Tap Expense ............................................. 50,828 Other Expenses ......................................... 6,169,137 Total Expenses: ............................................... $23,443,662 Avmlable for Debt Service .............................. $10,736,790 Coverage of Average Annual Debt Sennce Reqmrements on Revenue Bonds ................ 3.20x $26,770,175 $21,265,591 $18,630,622 $13,077,553 4,594,125 4,379,039 3,931,081 2,770.761 83,725 159,763 267,648 197.464 571,594 715,994 566,176 83,932 419,872 473,437 782,197 506.942 $32,439,491 $26,993,824 $24,177,724 $16,636,652 $15,244,981 $10,502,052 $10,902,294 $ 5,901,946 1,293,240 846,761 653,689 631,226 72,742 67,783 91,701 121,880 5,062,580 4,731,990 3,637,748 2,649,460 $21,673,543 $16,148,586 $15.285,432 $ 9,304,512 $10,765,948 $10,845,238 $ 8,892,292 $ 7.332,140 3.21x 3.23x 2.65x 2 18x The maximum annual debt service requirements on the Bonds is $5,096,158 and occurs in fiscal year ending 6/30/88. The net revenues available for Debt Service for the Fiscal Year ending 6/30/86 are 2.11 times this maximum annual requirement. * Excludes interest earned on construction funds. ** Includes an energy rebate of $635,465. Water ................................................. Sewer .................................................. Electric ............................................... CUSTOMER COUNT 6/30186 6/30/8S 6130184 6/30/83 6130182 14,327 13,162 13,137 12,718 10,628 17,420 16,388 16,567 15,822 13,361 16,258 15,946 15,684 14,985 12,881 13 06291 WATER, SEWER AND ELECTRIC RATES (All customers are billed monthly) The following water, sewer and electric rates were established by Ordinance passed and approved by the City Council and became effective on July 1, 1987. WATER Type of Customer Residential ................................................................ $1.50 per 1,000 gallons $5.00 per month service charge Commercial and Industrial ...................................... $1.50 per 1,000 gallons $6.50 per month service charge SEWER Residential ................................................................ $11.00 per household unit Commercial and Industrial ...................................... $0.96 per 1,000 gallons of water usage $3.50 per month service charge ELECTRIC The following electric rates are subject to a power adjustment charge which requires that the net energy charge per kilowatt hour shall be increased or decreased by an amount per kilowatt hour equal to any increase or decrease in the wholesale rate paid for electric energy by the City by virtue of the fuel clause in the wholesale contract. Residential .............................................. Service Charge ........................ $5.50 per month, plus: First 100 kwhrs ....................... $0.1054 per kwhr Next 400 kwhrs ....................... $0.0754 per kwhr Over 500 kwhrs ....................... $0.0684 per kwhr Over 500 kwhrs used per month in the billing months of November thru April .................................... $0.603 per kwhr Small Commercial (i-10 KW de- mand) ................................................. Medium Commercial and Industrial ( 10-500 KW demand) ....................... Service Charge ........................ $8.00 per month, plus: First 200 kwhrs ....................... $0.1124 per kwhr Next 800 kwhrs ....................... $0.0975 per kwhr Over 1,000 kwhrs .................... $0.0675 per kwhr Service Charge ........................ $15.00 per month, plus: Demand Charge ..................... $9.00 per kw of billing demand First 50,000 kwhrs .................. $0.0418 per kwhr Over 50,000 kwhrs .................. $0.0368 per kwhr The minimum monthly charge under this rate schedule shall be the highest one of the following charges: ! ) $105.00 per month plus applicable power cost adjustment on the kilowatt-hours used. 2) The sum of service charge and demand charge under the above rate plus applicable power cost adjustment on the kilowatt-hours used. 3) The minimum monthly charge specified in the customer's service contract with the City, plus applicable power cost adjustment on the kilowatt-hours used. 14 06292 Type of Customer Large Commercial and Industrial ( 500/1500 kw demand) .................... Service Charge ........................ Demand Charge ..................... First 250,000 kwhrs ................ All additional kwhrs ............... $50.00 per month, plus $4,375 for the first 500 kw of billing demand $8.25 per kw of billing demand for all over 500 kw, plus Energy charge $0.0363 per kwhr $0.0333 per kwhr The minimum monthly charge under this rate schedule shall be the highest one of the following charges: 1 ) $4,425.00 per month plus applicable power cost adjustment on the kilowatt-hours used. 2) The sum of service charge and demand charge under the above rate, plus applicable power cost adjustment on the kilowatt-hours used. 3) The miminum monthly charge specified in the customer's service contract with the City, plus applicable power cost adjustment on the kilowatt-hours used. Industrial Customer (1,500 kw and over demand ) ..................................... Service Charge ........................$50 per month, plus Demand Charge ..................... $12,375 for the first !,500 kw of monthly billing demand; $7.75 per kw for all additional kw of billing demand, l~lus Energy Charge ........................ $0.0335 per kwhr for first 500,000 kwhrs; $0.0295 per kwhr for all kwhrs over 500,000 The minimum monthly charge under this rate schedule shall be the highest one of the following charges: ! ) $12,425.00 per month plus applicable power cost adjustment on the kwhrs used. 2) The sum of service charge and demand charge under the above rate plus applicable power cost adjustment on the kwhrs used. 3) The minimum monthly charge specified in the customer's service contract with the City, plus applicable power cost adjustment on the kwhrs used. WATER SUPPLY SOURCE Since December, 1981, College Station has had the capability to produce and deliver 100% of its water needs through the new aqueduct system from the new well field. This newly completed system includes three wells with a combined capacity of 12 million gallons per day. The water is delivered to the distribution system by ! 4 miles of 30-inch diameter pipeline and two pump stations. Each of the three wells mentioned above is completed into the Simsboro Sand of the Wilcox formation which forms a very prolific aquafer of high quality water and which should be capable of supporting a combined population of 300,000. 15 0629 SEWAGE TREATMENT FACILITIES College Station's wastes are treated by the City-owned sewage treatment plant located within the City. The sewage treatment plant has a capacity of 8.9 million gallons per day (mgd) average load, and 15.8 mgd, peak load. The City is presently experiencing approximately 5.4 mgd average load and 12.0 mgd peak load. The sewage treatment plant capacity is adequate to serve a population estimated at 80,000. ELECTRIC SUPPLY SOURCE The City of College Station presently purchases 100% of its electrical power from Gulf States Utilities under a contract extending through 1997. The City is served through three 138 kva transmission lines tied to a ring bus at the City switching station. One 138 line comes from the Ree Dee substation in Madisonville, Texas, one line from the Lewis Creek station in Willis, Texas and one line from the Grimes substation in Shiro, Texas. The City is a member of the Lone Star Municipal Power Agency, a joint action agency authorized by the 68th Legislature of Texas in ! 983. The other member cities are Caldwell, Texas, Kirbyville, Texas and Newton, Texas. The Agency was formed for the purpose of seeking and securing a long term, reliable and economic power supply source for these Cities, all of which currently purchase power from Gulf States Utilities Company. UTILITY SYSTEM REVENUE BONDS DEBT SERVICE REQUIREMENT SCHEDULE FiscalYearEnd~g6/30 1987 ........................................................ 1988 ........................................................ 1989 ........................................................ 1991 ........................................................ 1992 ........................................................ 1993 ........................................................ 1994 ........................................................ 1995 ........................................................ 1996 ........................................................ 1997 ........................................................ 1998 ........................................................ 1999 ........................................................ 2000 ........................................................ 2001 ........................................................ Principal lnt~at Total P&I 2,490,000 2,653,008 5,143,008 2,605,000 2,491,158 5,096,158 2,545,000 2,308,808 4,853,808 2,465,000 2,117,933 4,582,933 2,415,000 1,926,895 4,341,895 2,375,000 !,733,695 4,108,695 2,275,000 1,537,758 3,812,758 2,225,000 1,344,383 3,569,383 2,205,000 1,150,808 3,355,808 2,205,000 954,563 3,159,563 2,175,000 756,113 2,931,113 2,025,000 558,188 2,583,188 1,525,000 370,875 1,895,875 1,490,000 227,525 1,717,525 905,000 85,975 990,975 16 06294 AUDIT REPORT The information contained on the following pages are excerpts from the City's Audit Report for the year ending June 30, ! 986 as prepared by: Deloitte Ha~kln~ & Se, lla Certified Public Accountants Houston. Texas The information on the following pages is not intended to be a complete statement of the City's financial condition. A complete Audit R~port is available upon request to: Moroney, B~issner & Co., Inc. Houston, Texas Financial Advisors to the City 17 O06295 Deloitte Haskins-Sells 1200 Trsvis Houston, Texas 77002 (713) 651-1700 Telex 762840 AUDITORS' OPINION Mayor Larry Ringer and Members of City Council of the City of College Station, Texas: We have examined the general purpose financial statements of the City of College Station, Texas ("City") as of June 30, 1986 and for the year then ended, listed in the foregoing table of contents. Our examination vas made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying general purpose financial statements present fairly the financial position of the City at June 30, 1986, and the results of its operations and the changes in financial position of its proprietary fund types and pension trust fund for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year, Our examination also comprehended the supplemental financial information, listed in the foregoing table of contents, as of June 30, 1986 and for the year then ended. In our opinion, such supplemental financial information, when considered in relation to the general purpose financial statements, presents fairly in all material respects the information shown therein. In connection with our examination, nothing came to our attention that caused us to believe that the City was not in compllance with any of the accounting or financial reporting requirements of the various bond resolutions governing the outstanding bonds of the City. Our examination was not, however, directed primarily toward obtaining knowledge of such noncompliance. The accompanying statistical tables, listed in the foregoing table of contents, were not audited by us and, accordingly, we express no opinion on them. September 12, 1986 18 006296 CI ,d Z 19 .q06'297 2O 006298 21 ';' n'06299 GENERAL INFORMATION LOCATION The City of College Station is located in East Central Texas in Brazos County approximately 140 miles north of the Gulf of Mexico. College Station lies 90 miles north of Houston, 165 miles south of DaHas, and 100 miles east of Anstin. The City covers an area of 28.5 square miles and has an elevation varying from 2O0 to 400 feet. The City has an excellent climate, with-an annual mean temperature of 65.6 degrees, and average rainfall of 38.75 inches. COMMUNICATION The City of College Station/s provided newspaper service by "The Eagle" which is published daily and has a drcniation of approximately 26,2O0, and the "Battalion", which is published five times weekly and which has a c/rculation of 22,000. There are two television channeh and two community cable antenna systems, with a total of thirteen television channels available. Five radio stations serve the area, tluee FM and two AM. TRANSPORTATION Airlines Bus Lines Railroads Truck Lines --Commerdal, corporate and private airport fac/lit/es are provided the residents of College Station by Easterwood Airport, which is located on the City's west side. Rio Airways provides five daily flights to and from Houston and ten daily flights to and from Dallas out of Easterwood, which is owned and operated by Texas A&M University. There is currently an annual average of approximately 40,000 passenger boardings at Easterwood. --Four bus lines, Greybound, Central Texas, Central and Arrow Coach, serve the City of College Station. Five north-bound and four south-bound buses connect the City with Houston and Dallas. --Rail freight service is provided by the Southern Pac/fic Transportation Company and Missouri Pac/fic Lines. --Seven truck lines, United Postal Service and United Parcel Service supply daily freight services. BANKING FACIIATIES Banking services are provided by the following: First Republic Bnnl~ A&M .............................................................................................. University National Bank ................................................................................................ United Bank-college Station, N.A. ................................................................................ Homestead Savings & Loan Association ........................................................................ Commerce National Bank ............................................................................................... $112,928,000 45,052,875 34,180,000 29,366,000 16,889,500 In addition there are the following branches of fmandal institutions located in College Station: First State Bank of Caldwell--Post Oak Branch Lamar Savinge--CoHege Station Branch Community Savings & Loan--college Station Branch of City Savings The residences and commercial establishments of College Station are supplied water, sewer and electric service by the City-owned facilities. General Telephone Company of the Southwest provides telephone facilities and Lone Star Gas Company provides gas utility service. 23 00.630 ! ECONOMIC BACKGROUND Of major importance to the City of College Station is Texas A&M University, with a 5,200 acre campus located within the City. The economic impact on the City by the University continues to be substantiaL A University in-house study shows that campns-generated funds contribute over $300 million snnunlly to the local economy. The 1986 fall semester total resident enrollment was 36,570, and the Texas A&M payroll wtaled in excess of $200 million. The University is a leading research center, with a total volume of research for the 1985-86 fiscal year of $121.2 million, up $7 million over tho previous year. The University employs in excess of 1 !,000 and the University physical plant in College Station is valued in excess of $500 million. INDUSTRIAL DEVELOPMENT In addition to the University, employment is provided by more than 75 manufacturing industries located in, or adjacent to, the City which produce such products as aluminum windows, business forms, fumitu~, chemicals, rubber shoe soles, soft drinks, dai~y products, feeds and fertilizers, livestock and camper trailers, modular homes, hoisting equipment, bronze castings, and geophysical survey sensors. WESTINGHOUSE ELECTRIC CORP. Westinghouse Electric Corp. hu a 158,000 square foot electronic assembly manufacturing plant within the City which is operated by the Westinghouse Defense and Electronic Systems Center producing defensz radar-related equipment. The College Station facility has a 1984 assessed valuation of $18.6 million and currently employs approximately 500 people. BUILDING PERMITS College Station has grown rapidly over the past 14 years as evidenced by an increase in population from 17,700 in 1970 to an estimated 50,000 in 1987 (excluding approximately 9,550 students living on campus). Development within the city is demonstrated by the number and value of construct/on permits issued by the City over the past ten years. Residential Permits Calendar Year Number 1978 ...................................... 287 1979 ...................................... 267 1980 ...................................... 359 1981 ...................................... 603 1982 ...................................... 663 1983 ...................................... 424 1984 ...................................... 134 1985 ...................................... 194 1986 ...................................... 225 1987(thruMay31) ............. 91 Commerchl/lndustritl Permits Vslue Numbes Vtbe $8,899,612 240 $10,250,643 !1,606,261 252 6,212,298 25,707,945 238 9,697,550 50,667,095 417 30,11~838 64,567,551 398 40,177,931 27,275,747 503 32,116,239 23,500,892 457 45,545,079 9,587,839 323 15,779~81 8,825,516 268 22,450,866 ~408,495 99 5,595,079 24 COMMERCIAL DEVELOPMENT POST OAK MiLL Post Oak Mall had its official opening in February 1982. Anchor tenants of the 750,000 square foot shopping center are Sears Roebuck and Dillard's depamnent stores, each containing in excess of 100,000 square feet of space. Foley's Deparunent Store, a division of Federated Stores, has a IO0,000 square foot facility in the Mall. The Mall, which is situated on 100 acres of land with parking area adequate to accomodate 5,000 cars, is ultimately plsnned to conudn 125 stores with 1,020,000 square feet of shopping area. CITY MANAGEMENT College Station was incorporated in 1938 and has a Council-City Manager form of government with City employees totaling 480 today. The City has benefited from the availability of u~mical information and assistance made available by Texas A&M University. Over the years, numerous College professors and business people have served in City government and administration. The City has adopted and does enforce comprehensive zoning and building restrictions which promote 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 sewer l/nes in any planned subdivision. These fadlities 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, sewer and electric CITY OWNED FACILITIES The City has constructed a major pan of its present facqities out of current revenues. Appwximately 99~, or 155 miles, of streets within the City are hard surface. The City has a complete water distribution, sewage collection and treatment system with 188 miles of sanitary sewer lines and 179 miles of water lines. The City owns the elecuical disuibution system with 149 miles of distribution lines, and purchases its electricity from Gulf States Utilities Company. College Station owns modem and efficient fire fighting equipment, with 79 full time firemen. The fire department has seven fire trucks, three modulance style ambulances for emergency medical service and six admini.~trative vehicles. The City has a fully equipped and effective police department with 75 full lime police officers, and four radio dispatchers that service both fire and police departments. RESIDENTIAL CALIBER College Station, a community of above-average value homes, townhomes and apartments, is principally a residential community for faculty, students and other personnel of Texu A&M University. There is a blend of new modem homes and older stately structures along tree shaded streets. Residential values range from $50,000 to $2O0,O00. Thirty new apartment projects, with 20 or more units in each, u well as a number of townhouse projects, have been completed within th~ past twO years. Substandard housing is virtually nonexistant and is of no significance in the local economic picture in College Station. RECREATION The College Station park system presently includes 27 parks encompassing 318 acres. Collectively these parks contain 13 playgrounds, 10 soccer fields, 14 softball/baseball diamonds; 2 swimming pools, a 8b'nmasium, and a number of picnic shelters. The Parks Department sponsors a variety of organized athletic and acquatic programs as well as many spec/al events throughout the year. Central Park features 47 acres of nature trails, picnic facilities and athletic fields. Just south of College Station is the Texas World Speedway, which provides all types of racing events. 25 '006303 EDUCATIONAL FACILITIES The College Station Independent School District is a fully accredited system offering educational facilities for kindergarten through high school. The school system currently includes two kindergartens, two elementary schools, one middle school (fifth and sixth grades); one junior high school (seventh and eighth grades) and one high school. The College Station ISD facilities are also used by EIiinn College, offering two years of college level coUrseS° The Texas A&M University System provides the higher educational needs of the Community, offering both four year college programs and extensive graduate degree opportunities. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of (i) the mathematical computations of the adequacy of the maturing principal amount of the Federal Securities to be held by the Escrow Agent together with the interest earned and to be earned thereon to pay, when due, the principal of and interest on the Refunded Bonds and (ii) the mathematical computation of yield supporting Bond Counsel's conclusion that the Bonds are not "Arbritrage Bonds" under Section 148 of the Internal Revenue Code of 1986, as amended ("Code"), will be verified by the firm of Arthur Andersen & Co., independent Certified Public Accountants, whose opinion with respect thereto will be available at delivery. TAX MATTERS The delive~ of the Bonds is subject to the opinion of Baker & Botts, Houston, Texas, Bond Counsel, to the effect that, under existing statutes, regulations, court decisions and published ruling, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations provided that such interest will be included in adjusted net book income (adjusted current earnings for taxable years be~nning after 1989) for purposes of computing the alternative minimum tax liability of a corporation imposed by Section 55 of the Code and the environmental tax imposed on certain corporations by Section 59A of the Code and may be subject to the branch profits tax imposed on foreign corporations by Section 884 of the Code and to the tax imposed by Section 1375 of the Code on the excess net passive income of certain S corporations. The Code imposes a number of requirements that must be met subsequent to the issuance of the Bonds in order for interest on Bonds to be excludable from gross income for federal income tax purposes. These requirements include limitations on the nse of bond proceeds, limitations on the investment of bond proceeds prior to expenditure, and a requirement that excess arbitrage earned on the investment of bond proceeds be paid periodically to the United States of America. The City has covenanted in the Bond Ordinance (the "Tax Covenants") that it will comply with these requirements. Bond Counsel's tax opinion that is described above will assume continuing compliance with the Tax Covenants and will rely upon, among other matters, a certificate executed by officers of the City with respect to certain facts, estimates and expectations, including facts, estimates and expectations which are solely within City's knowledge and the report of Arthur Andersen & Co., CPA's, described under "Verification of Mathematical Computations" with respect to the accuracy of certain calculations. If the City should fail to comply with the Tax Covenants, it' the above-described certificate were to be inaccurate or if the Arthur Andersen & Co. calculations were to be inaccurate, the interest on the Bonds could be includable in gross income from the date of issuance thereof, regardless of the date on which the event causing such taxability occurs. The balance of the discussion under this caption "Tax Matters" assumes that there will be continuing compliance with the Tax Covenants, that the alCove-described certificate is accurate, and that the Arthur Andersen & Co. calculations are accurate. 26 06304 Cor~rate Alternative Minimum Tax and Environmental Tax. The Code imposes a 20 porceut alternative minimum ttut on the "alternativ~ minimum taxable income" of certain corporations, if the amount of such alternative minimum tax is greater than the amount of the corporation's regular income tax. Section $9A of the Code also imposes an additional 0.12 percent "environmental tax" on the alternative minimum taxable income of a corporation in excess of $2,000,000. For taxable years be_tinning in 1987, 1988, or ! 989, a corporation's alternative minimum taxable income includes, in general, 50 percent of the amount by which adjusted net book income of the corporation exceeds its alternative minimum taxable income (excluding the amount obtained by the calculation summarized in this sentence). For later taxable years, a corporation's alternative minimum taxable income includes, in general, 75 percent of the amount by which adjusted current earnings of the corporation exceeds alternative minimum taxable income (excluding the amount obtained by the calculation summarized in this sentence). Interest on the Bonds will be included, for purposes of the alternative minimum tax and the environmental tax, in the adjusted net book income and adjusted current earnin~ of a corporation. The effect of' owning a Bond upon a corporate investor's liability for such alternative minimum tax (which is payable only to the extent it exceeds the corporation's regular tax liability) and the environmental tax will depend on the corporation's particular facts and circumstances. Except as described above in the discussion regarding the book income item for certain corporations, interest on the Bonds will not be subject to the alternative minimum tax on individuals or corporations. Foreign Branches and $ Corlmrations. Certain foreign corporations doing business in the United States may be subject to the new "branch profits tax" on their effectively-counected earnings and profits including tax-exempt interest such as interest on the Bonds. In addition, certain S corporations may be subject to the tax imposed by ~ectiun 1375 of the Code on the excess net passive income of such corporations which excess net passive income includes tax-exempt interest such as interest on the Bonds. Collateral Tax Consequences and Other Tax Matters. Except as stated above, Bond Counsel will express no opinion as to any federal, state or local tax consequences resnltin~ from the acquisition, ownership, carryi~ or disposition of the Bonds. Ownership of tax-exempt obligations may result in collateral federal income tax consequences to fmunc/al institutions, property and casualty insurance companies, individual rec/pients of Sodal Seatdty or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations which are not discu~ed herein. These categories of purchasers should consult their own tax advisors as to such matters. Purchasers of a Bond should consult their own tax advisors with respect to the state and local tax consequences of owning a Bond. OFFICIAL STATEMENT CERTIFICATE At the time of payment for and delive~ of the Bonds, the City will furnish the Underwriter a certificate s/gnad by the Deputy Director of Finance acting in his official capacity, to the effect that the "Official Statement" has been authorized and approved by the City Council, and to the best of his knowledge and belief after reasonable investigation: (a) neither the "Official Statement" nor any amendment or supplement thereto contains uny untrue statement of a material fact or omits to state uny material fact necessary to make the statements therein, in light of ciraunstances in which they were made, not misleading; (b) since the date of the "Official Statement" no event has occurred which should have been set forth in un amendment or supplement to the "Official Statement" which has not been set forth in such amendment or supplement; and (c) there has not been any material adverse change in the operation or financial affairs of the City since the date of such "Offidal Statement." 27 006305 Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the unqualified approval of the Attorney (}eneral of the State of Texas and of Baker & Botts, Bond Counsel, whose approving opinion will be printed on the Bonds. Baker & Botts was not requested to participate, and did not take part, in the preparation of the Official Statement except as hereinafter noted, and such rum has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained herein, except that, in its capacity as Bond Counsel, such rum has reviewed the information under the captions "PLAN OI7 FINANCING" (except for statements with respect to sources and uses of funds and other accounting matters), "THE BONDS", "LEGAL INVESTMEN'I~ AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS", and "TAX MATTERS" in the Official Statement to determine whether such information presents a fair and accurate summa~ of the provisions of the law and the instruments described under such captions. The legal fees to be paid to Baker & Botts in connection with the issuance of the Bonds are contingent on the sale and delivery of the Bonds. NO LITIGATION CERTIFICATE The City will furnish without cost to the Underwriter a Certificate signed by the Mayor and City Secretary which will redte, amon~ other things, that no litigation of any nature has been fried or is now pendin~ to restrain or enjoin the issuance or delive~ of the Bonds, or which would affect the provision made for their payment or security, or in any other manner questioning the proceedings or authority concernin~ the issuance of the Bonds, and that so far as is known and believed, no such litigation is threatened. RATINGS--INSURANCE The outstanding General Obligation Bonds of the City are rated "A-1" by Moody's Investors Service, Inc. ("Moody's) and "A+" by Standard & Poor's Corporation ("S&P") (the "Rating Agencies"). The City has applied for a policy of insurance on the Bonds. No applications for contract ratings on the Bonds have been made to the Rating Agencies pending the outcome of the application for insurance. SECURITIES LAWS The Bonds have not been registered or qualified under the Securities Act of 1933, as amended, in reliance upon the exemption provided by Section 3(a)(2). The Bonds have not been registered or qualified under the Texas Securities Act in reliance upon various exemptions it colltains~ or under the securities acts of any other jurisdiction. The City assumes no responsibility for registering or qualifying the Bonds under the securities laws of any jurisdiction in which the Bonds may be offered, sold, assigned, hypothecated or otherwise transferred. This disclaimer of responsibility for registration or qualification of the Bonds does not mean that the Bonds may be exempt from securities registration or qualification provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS Section 9 of the Bond Procedures Act of 1981 states: "All bonds issued b~ an issuer shall constitute negotiable instruments, and are investment securities governed by Chapter 8, Texas Uniform CommeA'cial Code, notwithstanding any provisions of law or court decision to the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas". The Act further provides that such bonds are eligible to secure deposits of any public funds of the state or any political subdivision or public agency of the state, and are lawful and sufficient security for those deposits to the extent of their market value, when accompanied by any unmatured coupons attached to the bonds. No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. 28 UNDERWRITING The Underwriter, Rauscher Pierce Refines, Inc., agrees, subject to certain conditions, to purchase the Bonds from the City, at a price of par plus accrued interest. The Underwriter's obligations are subject to certain conditions precedent, and they will be obligated to purchase all of the Bonds if any of the Bonds are purchased. One of such conditions is that the City will purchase from the Underwriter certain federal securities for deposit in the Escrow Fund. The Bonds may be offered and sold to certain dealers and others at prices lower than such public offering prices, and such public prices may be changed, from time to time, by the Underwriter. FINANCIAL ADVISOR Moroney, Beissner & Co., Inc. serves as Financial Advisor to the City and in this capacity supervised the preparation of this Official Statement and represented the City in the negotiations pertaining to the sale of the Bonds to the Underwriter. Under the terms of the contract between Moroney, Beissner & Co., Inc. and the City, it is agreed and understood that Moroney, Beissner & Co., Inc. shah not be permitted to purchase any Bonds from the City nor have any interest, directly or indirectly, in the original purchase and sale of the Bonds, except as Agent for the City. As Financial Advisor to the City, Moroney, Beissner & Co., Inc. will be paid a fee based upon a percentage of the principal amount of Bonds actually sold and delivered, which fee is contingent upon such sale and delivery. OTHER MAWrERS All information contained in this Official Statement is subject, in aH respects, to the complete body of information contained in the original sources thereof and no guaranty, warranty, or other representation is made concerning the accuracy or completeness of the information herein. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered as statements of fact. THIS OFFICIAL STATEMENT was approved, and the execution and delivery of this Official Statement authorized, by the City Council of the City of College Station, Texas on ........................ 1987. ATTEST: /s/ City Secretary CITY OF COLLEGE STATION, TEXAS /s/ Mayor 29 006307 OTHI~R OIr KIC[$ WAiHINGTON, D, C. DALi. AB AU~ITIN BAKER & BOTTS ON~' IM£LI. ~I~ZA eIO LOU I SI.~NA HOUSTON, TE:XAS 77002-4ees EXHIBIT TI'LI'PHON E: (713) TI'L I'COiI)I I' R. (713) TE:LI:X. 7e - 1~77ll , 1987 CITY OF COLLEGE STATION, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987 IN THE AGGREGATE PRINCIPAL AMOUNT OF $ We have acted as bond counsel in connection with the issuance and sale by the City of College Station, Texas (the "City") of City of College Station, Texas, General Obligation Refunding Bonds, Series 1987, in the aggregate principal amount of $ (the 'Bonds"), issued in fully registered form in multiples of $5,000 each for any one maturity, maturing on February 15 in the years 1988 through 2004 in the amounts set forth below and bearing interest per annum from their date until maturity or earlier redemption at the following rates= All Bonds scheduled to mature during the years Principal amount Interest Rate per annum 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 $ % The Bonds are being issued pursuant to an ordinance (the "Ordinance") adopted on July , 1987 by the City Council of the City. The principal of the Bonds is payable to the reg- istered holders thereof at maturity or redemption upon pre- 006308 BAKE:R & BOTTS Page 2 sentation of the Bonds to First City National Bank of Houston, Houston, Texas, or its successors, the Paying Agent/Registrar of the Bonds. Interest on the Bonds will be paid on each February 15 and August 15, commencing February 15, 1988, until the principal is paid, by check or draft mailed by the Paying Agent/Registrar. The City has reserved the right to redeem all Bonds maturing on February 15, 1998 or thereafter on February 15, 1997 and at the times thereafter specified in the Ordinance, by paying the principal amount thereof, and accrued interest thereon, to the date of redemption. We have examined certified counterparts of the Ordinance~ the Initial Bonds (as defined in the Ordinance)~ certified copies of proceedings of the City Council of the City~ an executed opinion of the Attorney General of the State of Texas relating to, among other things, the validity of the Bonds~ a certificate of Arthur Andersen & Co. with respect to certain calculations~ certain certificates of representatives of the City and other public officials, upon which certificates we rely. BASED ON SUCH EXAMINATION, IT IS OUR OPINION that the Bonds have been duly authorized, executed, issued and delivered in accordance with the Constitution and laws of the State of Texas and constitute the legal, valid and bind- ing general obligations of the City enforceable against the City in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium or other laws or judicial decisions relating to or affecting the enforcement of creditors' rights or contractual obligations generally and the exercise of judicial discretion in accordance with general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Bonds are payable from and secured by an annual ad valorem tax upon all taxable property located in the City to pay the interest on, and the principal of, the Bonds as such interest and principal, respectively, become due and payable, within the limits prescribed by law. IT IS FURTHER OUR OPINION that, under existing statutes, regulations, court decisions and published rulings, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax pref- erence for purposes of the federal alternative minimum tax imposed on individuals and corporations provided that such 06309 BAKER & BOTTS Page 3 interest will be included in adjusted net book income (ad- justed current earnings for taxable years beginning after 1989) for purposes of computing the alternative minimum tax liability of a corporation imposed by Section 55 of the Internal Revenue Code of 1986, as amended (the WCode"}, and the environmental tax imposed on certain corporations by Section 59A of the Code, and may be subject to the branch profits tax imposed on foreign corporations by Section 884 of the Code and to the tax imposed by Section 1375 of the Code on the excess net passive income of certain S corpora- tions. The opinion expressed in the preceding sentence assumes continuing compliance by the City with covenants contained in the Ordinance with respect to the requirements imposed by the Code that must be met subsequent to the issu- ance of the Bonds for interest on the Bonds to be excludable from gross income for federal income tax purposes. Such requirements include limitations on the use of bond proceeds, limitations on the investment of bond proceeds prior to expenditure and a requirement that excess arbitrage profits be paid periodically to the United States of America. Except as stated above, we express no opinion respecting any federal, state or local tax consequences attributable to the acquisition, ownership, carrying or dis- position of the Bonds. There are certain collateral federal income tax consequences of the ownership of tax-exempt obli- gations, such as a Bond, to certain persons (e.g., financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retire- ment benefits and taxpayers who may have incurred or contin- ued indebtedness to purchase or carry tax-exempt obliga- tions) which are not discussed herein. Respectfully, 006310 GUEST REGISTER CITY COUNCIL SPECIAL MEETING TUESDAY, JULY 14, 1987 5:00 P.M. o 14. 15. 0 16. 17. ® 18. 19. 20. 21. 22. 10. 23. 11. 24. 12. 25. 13. 26. 0063 ~ ~