HomeMy WebLinkAbout2002-2598 - Ordinance - 12/05/2002ORDINANCE NO. 2598
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $11,580,000 CITY
OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 2002A AWARDING THE SALE OF THE BONDS; APPROVING
THE OFFICIAL STATEMENT; AND ALL OTHER MATTERS RELATED
THERETO, INCLUDING IMMEDIATE EFFECTIVENESS
WHEREAS, the City of College Station, Texas (the "City" or the "Issuer") has heretofore issued
the following described outstanding bonds (collectively, the "Previously Issued Parity Bonds"), to-wit:
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE AND REFUNDING
BONDS, SERIES 1993, in the originalprincipal amount of $5,850,000, and presently outstanding in
the principal amount of $2,750,000 (the "Series 1993 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1994,
in the original principal amount of $16,500,000, and presently outstanding in the principal amount of
$9,900,000 (the "Series 1994 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1995,
k~ the original principal amount of $6,000,000, and presemly outstanding in the principal amount of
$4,200,000 (the "Series 1995 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE AND REFUNDING
BONDS, SERIES 1996, in the original principal amount of $10,110,000, and presently outstanding in
the principal amount of $7,965,000 (the "Series 1996 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1998,
in the original principal amount of $2,700,000, and presently outstanding in the principal amount of
$2,385,000 (the "Series 1998 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 2000,
in the original principal amount of $10,500,000, and presently outstanding in the principal amount of
$9,930,000 (the "Series 2000 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 2001,
in lhe original principal amount of $23,500,000, and presently outstanding in the principal amount of
$22,890,000 (the "Series 2001 Bonds"); and
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 2002,
in the original principal amount of $18,215,000, and presently outstanding in the principal amount of
$18,215,000 (the "Series 2002 Bonds");
WHEREAS, all ofthe Previously Issued Parity Bonds are secured by a pledge of the net revenues
from the operation of the City's combined waterworks system, sewer system, and electric light and power
system, and are on a parity with each other (and any Parity Bonds, hereinafter defined, which are hereafter
authorized, issued, and delivered); and
WHEREAS, the City Council has detenulned that the outstanding obligations of the City secured
by a pledge of the Net Revenues of the System, as described in Schedule I attached to this Ordinance
(such obligations herein defined as the "Refunded Bonds"), are eligible to be refunded for the public
purpose of achieving a debt service savings; and
WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to the laws
of the State of Texas, including specifically Chapter 1207, Texas Government Code, for the purposes set
forth above; and
WHEREAS, the bonds hereinafter authorized are on a parity with the outslanding Previously Issued
Parity Bonds;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE
STATION, TEXAS;
Section 1. BONDS AUTHORIZED. That the City's bonds (the "Bonds") are hereby authorized
to be issued in the aggregate principal amount of $11,580,000 for the purpose of refunding the Refunded
Bonds and paying the costs of issuance of the Bonds. The Bonds shall be designated as the "City of
College Station, Texas Utility System Revenue Refunding Bonds, Series 2002A".
Section 2. DATES AND MATURITIES. That the Bonds shall be dated December 1, 2002,
shall be in the denomination of $5,000 or any in~.~/ral multiple thereof (an "Authorized Eenominafion"), shall
be numbered consecutively from R- 1 upward, and shall mature on the maturity dam, in each of the years,
and in the amounts, respectively, as set forth in the following schedule:
MATURITY DATE: FEBRUARY 1
2003 350,000 2009 1,115,000
2004 400,000 2010 1,095~00
2005 1,210,000 2011 1,075,000
2006 1,180,000 2012 1,055,000
2007 1,165,000 2013 1,030,000
2008 1,140,000 2014 760,000
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Section 3. RIGHT OF PRIOR REDEMPTION. (a) That the City reserves the fight to
redeem the Bonds maturing on or at, er February 1, 2013, in whole or in part in principal mounts of
$5,000 or any integral multiple thereof, on February 1,2012, or on any date thereaRer, at the redemption
price of par plus accmed interest to the date freed for redemption. If less than all of the Bonds are to be
redeemed by the City, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Regislxar to call by lot Bonds, or portions thereof, within such
maturity or maturities and in such principal amounts, for redemption.
(b) The Bonds [are][are not] subject to mandatory sinking fund redemption prior to their scheduled
maturities [as provided in the FORM OF BOND].
(c) At least thirty (30) days prior to the date any such Bonds are to be redeemed, a written notice
of redemption shall be given by the Paying Agent/Registrar to the registered owner of each Bond or a
portion thereof being called for redemption by depositing such notice in the United States mail, first-class,
postage prepaid, addressed to each such registered owner at the address thereof as shown on the
Registration Books (hereinat~er defined). 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
the Bonds or the portions thereof which are 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, the Bonds, or the portions thereof which are to be so redeemed, thereby
automatically shall be redeemed prior to their scheduled maturities, and shall not bear interest after the date
fixed for their 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/Re~ shall
record in the Registration Books all such redemptions of principal of the Bonds or any portion thereof. If
a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity date,
bearing interest at the same rate, in any Authorized Denomination, at the written request of the registered
owner, and in an 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
this Ordinance. In addition, notice of such redemption shall be provided in the manner described in Section
5(h) hereof, but the failure to provide such notice as described in Section 5(h) hereof shall not affect the
validity or effectiveness of the proceedings for the redemption of the Bonds.
Section 4. INTEREST. That the Bonds scheduled to mature during the years, respectively, set
forth below shall bear interest at the following rates per annum:
maturities 2003, % maturities 2009, %
maturities 2004, % maturities 2010, %
maturities 2005, % maturities 2011, %
maturities 2006, % maturities 2012, %
maturities 2007, % maturities 2013, %
maturities 2008, % maturities 2014, %
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payable to the registered owner of any such Bond, in the manner provided in the FORM OF BOND, on
February 1, 2003, and semiannually thereaikor on August 1 and February 1 of each year.
Section 5. PAYING AGENT/REGISTRAR;BOOK-ENTRYONLYSYSTEM. (a) That
the City shall keep or cause to be kept at the designated corporate Wast office in Dallas, Texas (the
"Designated Trust Office") of JPMorgan Chase Bank, or such other bank, trust company, financial
institution, or other entity duly qualified and legally authorized to serve and perform duties of and services
of paying agent and registrar, named in accordance with the provisions of (g) of this Section hereof (the
'~Paying Agent/Registrar"), books or records of the registration and wansfer of the Bonds (the "Registration
Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep
such books or records and make such transfem and registrations under such reasonable mgnlatious as the
City and the Paying Agent]Registrar may prescribe; and the Paying Agent/Regislrar 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 such registered owner of
each Bond to which payments with respect to the Bonds shall be marled, as bemin provided. The Paying
AgentfRegis~ar shall provide to the City, by electronic means or otherwise, within fifteen (15) Business
Days ofthe delivery of the Bonds to the Purchaser (hereinafter defined), and thereafter no less often than
once every three (3) months, a tree and correct copy of the Registration Books, which copy shall be
~ at the City by the Chief Financial Officer of the City or the designee thereof. The Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by hw, shall
not permit their inspection by any entity other than the City. Registration of each Bond may be Immfencd
in the RegisWation Books only upon presentation and surrender of such Bond for transfer of registration and
cancellation to the Paying Agent/Registrar at its Designated Trust Office during normal business hours,
together with proper written insmuaents of assignment, in form and with guaramee of signatures satisfactory
to the Paying Agent/Regis~-ar, evidencing the assignment of the Bond, or any portion thereof in any
Authorized Denomination, to the assignee or assignees thereof, and the right of such assignee or assignees
to have the Bond or any such portion thereof registered in the name of such assignee or assignees. Upon
the assignment and Wausfer of any Bond or any portion thereof, a new substitute bond or bonds shall be
issued in exchange therefor in the manner heroin provided. As of the date this Ordinance is approved by
the City, the Designated Trust Office is ~ Charlotte, North Carolina corporate trust office of the Paying
Agent/Registrar.
(b) The entity in whose name any Bond shall be registered in the Registration Books at any time
shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether such Bond shall
be overdue, and the City and the Paying Agent/Regislrar .~hall not be affected by any notiee to the contrary
unless otherwise required by law; and payment of, or on account of, the principal of, premium, if any, and
interest on any such Bond shall be made only to such registered owner. All such payments shall be valid
and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid.
(c) The City hereby fiuther appoints the Paying Agent/Re~ to act as the paying agent for
paying the principal of, premium, if any, and interest on the Bonds, and to act as its agent to exchange or
replace Bonds, ail as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records
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of all payments made by the City and the Paying Agent/RegisWar with respect to the Bonds, and of all ex-
changes of such bonds, and all replacements of such bonds, as provided in this Ordinance.
(d) Each Bond may be exchanged for fully registered bends in the manner set forth herein.
Each Bond issued and delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed
principal amount thereof, may, upon surrender thereof at the Designated Trust Office of the Paying
Agent/Registrsr, together with a written request therefor duly executed by the registered owner or the
assignee or assignees thereof, or its or their duly authorized attomeys or representatives, with guarantee
of signatures satisfactory to the Paying Agent/Registrar, at the option of the registered owner or such
assignee or assignees, as appropriate, be exchanged for fully registered bonds, without interest coupons,
in the form prescribed in the FORM OF BOND, in an Authorized Denomination (subject to the
requirement hereinafter stated that each substitute Bond shall have a single stated maturity date), as re-
quested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount
equal to the unpaid or unredeemed principal amount of any Bond or Bonds so surrendered, and payable
to the appropriate registered owner, assignee, or assignees, as the case may be. If a portion of any Bond
shall be redeemed prior to its scheduled maturity as provided herein, at the request of the registered owner
a substitute bond or bonds having the same maturity date, bearing interest at the same rate, in an Authorized
Denomination, and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued
to the registered owner upon surrender thereof for cancellation. If any Bond or portion thereof is assigned
and Iransferred, each bond issued in exchange therefor shall have the same principal maturity date and bear
interest at the same rate as the bond for which it is being exchanged. Each substitute bond shall bear a
letlm' and/or number to distin~miish it from each other bond. The Paying Agen~ shall exchange or
replace Bonds as provided herein, and each fully registered bond delivered in exchange for or replacement
of any bond or portion thereof as permitl~i or required by any provision of this Ordinance shall constitme
one of the Bonds for all purposes of this Ordinance, and may again be exchanged or replaced. On each
substitute bond issued in exchange for or replacement of any bond or bonds issued under this Ordinance
there shall be prinl~l thereon a Paying Agent/Regislmffs Authentication Certificate, in the form set forth in
the FORM OF BOND (the "Au~entication Certificate"). An authorized representative of the Paying
A_gent/Regislrar shall, before the delivery of any such bond, manually sign and date the Authentication
Certificate, and no such bond shall be deemed to be issued or outstanding unless the Authentication
Certificate is so executed and dated. The Paying Agent/Registrar promptly shall cancel all Bonds sur-
rendered 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 Bond or portion thereof, and the Paying Agent/Registrar shall provide for the
printing, execution, and delivery of the substitute bonds in the manner prescribed herein, pursuant to
Chapter 1206, Texas Government Code, and particularly Subchapter B thereof. The duty of such ex-
change or replacement of bonds as described in the preceding sentence is hereby imposed upon the Paying
Agent/Regislrar, and upon the execution of the Authentication Certificate, the exchanged or replaced Bond
shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds
which originally were delivered pursuant to this Ordinance, approved by the Attorney General, and regis-
tered by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Regislrar shall be
required (1) to make any Iransfer or exchange during a period beginning at the opening of business 15 days
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before the day of the first mailing of a notice of redemption of Bonds and ending at the close of business
on the day of such mailing, or (2) to transfer or exchange any Bond after it is selected for redemption, in
whole or in part when such redemption is scheduled to occur within 30 calendar days; provided, however,
such limitation shall not be applicable to an exchange by the owner of the uncalled principal balance of a
Bond.
(e) All Bonds issued in exchange or replacement of any other Bond or portion thereof, (i) shall
be issued in fully registered form, without interest coupons, with the principal of and interest on such bonds
to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled
maturities, (iii) may be transferred and assigned, (iv) may be exchanged for other Bonds, (v) shall have the
characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Bonds shall be
payable, all as provided, and in the manner required or indicated, in the FORM OF BOND.
(0 The City shall pay all of thc Paying Agent/Regismr's reasonable and customary fees and
charges for making transfers, conversions and exchanges of the Bonds in accordance with an agreement
between the City and the Paying Agent/Regismu', but the registered owner of any Bond requesting such
Ixansfer shall pay any taxes or other governmental charges required to be paid with respect thereto. In
addition, the City hereby covenants with the registered owners of the Bonds that it will pay the reasonable
standard or customary fees and charges of the Paying Agent/Regisu'ar for its services with respect to the
payment of the principal of and interest on the Bonds, when due.
(g) Toe City covenants with the registered owners of the Bonds that at all times while the
Bonds are outstanding the City will provide a competent and legally qualified bank, mist company, financial
institution, or other entity duly qualified and legally authorized to serve as and perform the duties and
services of Paying AgentJRegislrar, to act as and perform the services of Paying Agent/Registrar for the
Bonds under this Ordinance, and that the Paying AgentfRegislrar will be one entity. The City reserves the
fight to, and may, at its option, change the Paying Agent/Registrar upon not less than 60 days written notice
to the Paying AgentfRegislrar. In the event that the entity at any time acting as Paying Agent/Regislrar (or
its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the
City covenants that promptly it will 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 Irust 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 AgenffRegislrar, the previous Paying Agent/Registrar promptly shall Iransfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating to the
Bonds, to the City and to the new Paying Agent/Registrar designated and appointed by the City. Upon
any change in the Paying Agent/Registtm', the City promptly will cause a written notice thereof to be sent
by the new Paying Agent/Registrar to each registered owner of the Bonds, by United States mail, first-
class, postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By ac-
cepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed
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to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
Agent/Registrar.
(h)(i) In addition to the manner of providing notice of redemption of Bonds as set forth in Section
3(c) hereof, the Paying Agent/Registrar shall give notice of redemption of Bonds by United Slates mail,
first-chss, postage prepaid, at least thirty (30) days prior to a redemption date to the SID and each
NRMSIR. In addition, in the event of a redemption caused by an advance refunding of the Bonds, the
Paying Agent/Registrar shall send a second notice of redemption to the persons specified in the immediately
preceding sentence at least thirty (30) days but not more than ninety (90) days prior to the actual
redemption date. Any notice sent to the SID and a NRMSIR shall be sent so that such notice is received
at least two (2) days prior to the general mailing or publication date of such notice. The Paying
AgentdRegislrar shall also send a notice of redemption to the registered owner of any Bonds who has not
sent the Bonds in for redemption sixty (60) days atter the redemption date. The failure to send, mail or
receive any such notice described in this clause (i), or any defect therein or in the sending or mailing thereof,
shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond.
(ii) Each redemption notice, whether required in the FORM OF BOND or othexwise by this
Ordinance, shall contain a description of the Bonds to be redeemed including the complete name of the
Bonds, the Series, the date of issue, the interest late, the maturity date, the CUSIP number, the amounts
called of each Bond, the publication and mailing date for the notice, the date of redemption, the redemption
price, the name of the Paying Agent/Registrar and the address at which the Bond may be redeemed
including a contact person and telephone number.
(iii) All redemption paymeats made by the Paying Agent/Registrar to the registered owners of the
Bonds shall include a CUSIP number relating to each amount paid to such registered owner.
Section 6. FORMS. That the form of all Bonds, incl-ding the form of the Authentication
Certificate, the form of Assigranent, and the form of the Comp~xoller's Registration Certificate to
accompany the Bonds on the initial delivery thereof, shall be, respectively, substantially in the form set
forth in Exhibit A to this Ordinance, with such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance. The printer of the Bonds is hereby authorized to print on the
Bonds (i) the form of bond counsel's opinion rehting to the Bonds, and (ii) an appropriate statement of
insurance furnished by a municipal bond insurance company providing municipal bond insurance, if any,
covering all or any part of the Bonds.
Section 7. DEFINITIONS. That, as used in this Ordinance, the following terms shall have the
meanings set forth below, unless the text hereof specifically indicates otherwise:
"Additional Bonds" means the additional parity obligations which the City reserves the right to issue
in the future, as provided in Section 13 of this Ordinance.
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"Bond" or "Bonds" means one or more, as the case may be, of the Bonds authorized to be issued
by this Ordinance.
'~Bond Fund" means the fund provided for in the ordinances authorizing the issuance of the
Previously Issued Parity Bonds.
"City" and "Issuer" mean the City of College Station, Texas, or where appropriate, the City
Council.
"City Council" means the governing body of the City.
"Code" means the Internal Revenue Code of 1986, as amended.
"Defeasance Securities" means (i) direct, noncallable obligatiom of the United States of
America, including obligations that are unconditionally guammeed by the United States of America, ('fi)
noncallable obligations of an agency or instrumentality of the United Slates of America, including
obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on
the date of the purchase thereof are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agom3r 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 financial
arrangements are rated as to investment quality by a nationally recognized investment rating firm not less
than AAA or its equivalent.
"Escrow Agent" means
"Escrow Agreement" means the Escrow Agreement between the City and the Escrow Agent,
executed in connection with the refunding of the Refunded Bonds.
"Initial Purchasers" shall have the meani~ as set forth in Section 24 hereof.
"MSRB" means the Municipal Securities Rulemaking Board.
'~Net Revenues" means the gross revenues of the Systems less the reasomble expenses of
operation and maintenance of the Systems, including all salaries, labor, materials, repairs, and extensions
necessary to render efficient service; provided, however, that only such repairs and extensions, as in the
judgment of the City Council, reasonably and fairly exercised, are necessary to keep the plant or utility in
operation and render adequate service to the City and the inhabitants thereof, or such as might be
necessary to meet some physical accident or condition which would othenvise imtmir the Parity Bonds
shall be deducted in delmnining the '~let Revenues".
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"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time to time.
"Parity Bonds" means collectively the Previously Issued Parity Bonds, the Bonds, and any
Additional Bonds.
"Parity Bonds Ordinances" means collectively the ordinances authorizing the Parity Bonds.
"Previously Issued Parity Bonds" means the outstanding Series 1993 Bonds, Series 1994
Bonds, Series 1995 Bonds, Series 1996 Bonds, Series 1998 Bonds, Series 2000 Bonds, Series 2001
Bonds and Series 2002 Bonds.
"Purchase Agreement" means the bond purchase agreement between the City and the
Underwriters pertaining to the purchase of the Bonds by the Underwriters.
"Refunded Bonds" means those Previously Issued Parity Bonds described in Schedule I to this
Ordinance.
"Reserve Minimum" is defined in Section 13(e) hereof.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Series 1993 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1994 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1995 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1996 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1998 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 2000 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 2001 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 2002 Bonds" means the bonds described in the preamble to this Ordinance.
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"SID" means any person designated by the State of Texas or an authorized department, officer,
or agency thereof as, and determined by the SEC or its staffto be, a state information depository within
the meaning of the Rule fi'om time to time.
"Systems" means the City's entire existing waterworks system, sewer system, and electric light
and power system, including all present and furore extensions, enlargements, additions, replacements,
and improvements thereto.
"Systems Fund" means that fund described in Section 10 hereof.
"Underwriters" shall mean the investment banking firm or syndicate of investment banking firms
which contract to purchase the Bonds in accordance with the terms and conditions of the Purchase
Agreement.
"Year" or "fiscal year" means the regular fiscal year used by the City in connection with the
operation of the Systems, which may be any 12 consecutive months period established by the City
Council.
Section 8. PLEDGE. (a) That the principal of the Parity Bonds, redemption premium, if any,
and any interest payable thereon, are and shall be secured by and payable from an irrevocable first lien
on and pledge of the Net Revenues, and the Net Revenues are further pledged irrevocably to the
establishment and maintenance of the funds created by the Parity Bonds Ordinances. The Parity Bonds
are not and will not be secured by or payable from a mortgage or deed of trust on any real, personal, or
mixed properties constituting the Systems. The owners of the Parity Bonds shall never have the right to
demand payment of such obligations out of any funds raised or to be raised by taxation, or from any
source whatsoever other than the Net Revenues. This Ordinance shall not be eonsmaed as requiring the
City to expend any fimds which are derived fi.om sources other than the operation of the Systems, but
nothing herein shall be construed as preventing the City from doing so.
(b) Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the
pledge of the Net Revenues granted by the City under subsection (a) of this Section, and such pledge is
therefore valid, effective, and perfected. If Texas law is amended at any time while the Bonds are
outstanding and unpaid such that the pledge of the Net 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 Bonds the perfection of the security interest in said pledge, the City agrees
to take such measures as it determines are reasonable and necessary under Texas law to comply with
the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing to
perfect the security interest in said pledge to occur.
Section 9. RATES. That the City covenants and agrees with the holders of the Parity Bonds
that it will: (a) fix and maintain rates and collect charges for the facilities and services afforded by the
Systems which will provide revenues sufficient at all times: (1) to pay all operation, maintenance,
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depreciation, replacement, and betterment charges of the Systems; (2) to establish and maintain the
Bond Fund; (3) to generate in each year Net Revenues equal to 1.25 times the maximum annual
requirements for the payment of the principal of and interest on the Parity Bonds at the time outstanding
(although amounts shall be paid into the Bond Fund only in accordance with Section 10 hereof); and (4)
to pay all indebtedness outstanding against the Systems, other than the Parity Bonds, as and when the
same become due; and (b) deposit as collected all revenues derived from the operation of the Systems
into the Systems Fund.
Section 10. FLOW OF FUNDS. That there has been created and established on the books of
the City, and accounted for separate and apart from all other funds of the City, a special Systems Fund.
All gross revenues received from operation of the Systems are and shall be deposited into and credited
to the Systems Fund immediately upon receipt. The necessary and reasonable expenses of operation
and maintenance of the Systems shall f'u-st be paid fi-om the Systems Fund. The City shall then make
substantially equal monthly payments into the Bond Fund (commencing with respect to the Bonds and
any Additional Bonds on the date of delivery to the initial purchaser thereof) during each year in which
any of the Parity Bonds are outstanding in an aggregate amount equal to 100% of the amounts required
to meet the interest and principal payments (including any sinking fired payments) falling due on or before
the next maturity date of the Parity Bonds. The City shall, at least five days prior to each February 1 and
August 1, deposit into the Bond Fund any additional Net Revenues available in the Systems Fund which
may be necessary to pay in full the interest on and principal (including any sinking fund payments), if any,
coming due on the Parity Bonds such February I or August 1. In no event shall any amount in excess of
the amounts stated above be placed in the Bond Fund for the payment of the interest on or principal of
the Parity Bonds, and any amount so placed may be withdrawn by the City and replaced in the Systems
Fund. Any funds remaining in the Systems Fund, after provision for the reasonable cost of operating and
maintaining the Systems, and after paying the amounts required to be paid into the Bond Fund, may be
used for any lawful purpose.
Section 11. INVESTMENTS. That money in any Fund established by the Parity Bonds
Ordinances may, at the option of the City, be placed or invested in any investments then permitted by
Texas law and permitted in the Parity Bonds Ordinances.
Section 12. FUNDS SECURED. That money in all Funds created by this Ordinance, to the
extent not invested, shall be secured in the manner prescribed by law for securing funds of the City.
Section 13. ADDITIONAL BONDS. That in addition to inferior lien obligations, the City
expressly reserves the right hereafter to issue additional parity bonds and other evidences of
indebtedness now or hereafter authorized by the Legislature of Texas (collectively, the "Additional
Bonds"), and the Additional Bonds, when issued, may be secured by and payable from a first lien on
and pledge of the Net Revenues in the same manner and to the same extent as the outstanding Parity
Bonds but subject to the remaining provisions hereof, and the Previously Issued Parity Bonds, the
Bonds, and the Additional Bonds may be tn all respects of equal dignity. It is provided, however, that no
Additional Bonds shall be issued unless:
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(a) As long as any of the Previously Issued Parity Bonds are outstanding and unpaid, all material
conditions set forth in the Parity Bonds Ordinances are satisfied;
(b) As long as any of the Previously Issued Parity Bonds are outstanding, the "net earnings"
(defined below) of the Systems for the fiscal year next preceding the month in which the ordinance
authorizing such Additional Bonds is adopted, were equal to each of the provisions following in items
(cXi) and (ii) below, determined independently and certified by an independent fLrm of certified public
accountants, based upon an annual audit of the books of the Systems;
(c) An independent firm of certified public accountants, based upon an annual audit of the books
of the Systems, certified that the net earnings of the Systems for the previous fiscal year or for any 12
consecutive month period ending not more than 90 days prior to the date of the adoption of the
ordinance authorizing such Additional Bonds or other evidence of indebtedness were equal to each of
the following determined independently:
(i) at least 1.40 times the average annual requirements for the payment of principal and
interest on the then outstanding Parity Bonds and other evidences of indebtedness payable from
hhe revenues of the Systems and on said Additional Bonds or other evidences of indebtedness,
when issued, sold, and delivered; and
(ii) at least 1.2~ times the maximum annual requirement for the payment of the principal
of and interest on the Parity Bonds then outstanding and on such Additional Bonds, when
issued, sold, and delivered;
provided, however, should the certificate of the accountant certify that the net earnings of the S~
for the period covered thereby were, in either case, less than required above, and a change in the rates
and charges for the services afforded by the Systems became effective at least 60 days prior to the
scheduled date of adoption of the ordinance authorizing such Additional Bonds, then such Additional
Bonds may nevertheless be issued if an independent engineer or engineering finn having a favorable
reputation with respect to such matters certifies that, had such change in rates and charges been effective
for the entire period covered by the accountant's certificate would have met the tests specified in (i) and
(ii) above.
The term "net earnings" as used in this Section shall mean all of the Net Revenues, exclusive of
income received specifically for capital items, after deduction of the reasonable expenses of operation
and maintenance of the Systems excluding expenditures which under standard accounting practice
should be charged to capital expenditures or depreciation;
(d) Such Additional Bonds or other evidences of indebtedness are made to mature on February
1 in each of the years in which Ihey are scheduled io mature; and
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(e) The entire issue of such Additional Bonds is insured in a manner similar to the Previously
Issued Parity Bonds by an insurance company or association of companies whose insured obligations
are rated by either Moody's Investors Service or Standard & Poor's Ratings Services in the same or a
higher rating category than the insured obligations of the City (at the time such Additional Bonds are to
be issued) or the City shall establish a reserve fund for such Additional Bonds by any method or
combination of methods that the City deems reasonable and appropriate provided that (i) the amount of
such reserve fund (or coverage of any surety bond in lieu thereof) shall at least equal the maximum
annual debt service requirements of such Additional Bonds, not to exceed the maximum then permitted
by applicable regulations, procedures, or published rulings of the Internal Revenue Service (the "Reserve
Minimum"); (ii) if any cash reserve fund is funded by making transfers of Net Revenues in the Systems
Fund, such transfers shall be made each month in an amount reasonably sufficient to reach the Reserve
Minimum within a period of not more than five years alter such Additional Bonds are sold and delivered;
and (iii) such reserve fund shall be for the equal benefit of the owner of (x) such Additional Bonds, (y)
any Parity Bonds theretofore issued which are not insured in manner similar to the Previously Issued
Parity Bonds, and (z) any Additional Bonds thereafter issued which are not so insured.
Section 14. GENERAL COVENANTS. That the City further covenants, warrants, and agrees
that in accordance with and to the extent required or permitted by law while the Parity Bonds are
outstanding and unpaid:
(a) PERFORMANCE. It will faitlffully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in each Parity Bonds Ordinance, and in each and every Parity
Bond; it will promptly pay or cause to be paid the principal of and interest on every Parity Bond, on the
dates and in the places and manner prescribed in the Parity Bonds Ordinances; and it will, at the times
and in the manner prescribed, deposit, or cause to be deposited, the amounts required to be deposited
into the Bond and the Reserve Fund, if any; and any bolder of the Parity Bonds may require the City, its
officials and employees, to carry out, respect, or enforce the covenants and obligations of the Parity
Bonds Ordinances by all legal and equitable means, including specifically, but without limitation, the use
and filing of mandamus proceedings in any court of competent jurisdiction against the City, its officials
and employees.
(b) CITY'S LEGAL AUTHORITY. It is a duly created and existing home role city of the State
of Texas, and is duly authorized under the laws of the State of Texas to create and issue the Parity
Bonds; all action on its part for the creation and issuance of said obligations has been duly and
effectively taken; and said obligations in the hands of the holders and owners thereof are and will be
valid and enforceable special obligations of the City in accordance with their terms.
(c) TITLE. It has or will obtain lawful title to the lands, buildings, structures, and facilities
constituting the Systems; it will defend the title to all the aforesaid lands, buildings, structures, and
facilities, and every part thereof, for the benefit of the holders and owners of the Parity Bonds against the
claims and demands of all persons whomsoever; it is lawfully qualified to pledge the Net Revenues to the
payment of the Parity Bonds in the manner prescribed herein; and it has lawfully exercised such fights.
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(d) LIENS. It will from time to time and before the same become delinquent pay and discharge
all taxes, assessments, and govemmental charges, if any, which shall be lawfully imposed upon it or the
Systems; it will pay all lawful claims for rents, royalties, labor, materials, and supplies which if unpaid
might by law become a lien or charge thereon, the lien of which would be prior to or interfere with the
liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner
provided herein; and it will not create or suffer to be created any mechanic's, laborers, materialman's, or
other lien or charge which might or could be prior to the liens hereof, or do or suffer any matter or thing
whereby the liens hereof might or could be impaired; provided, however, that no such tax, assessment,
or charge, and that no such claims which might be used as the basis of a mechanic's, laborer's,
materialman's, or other lien or charge, shall be required to be paid so long as the validity of the same
shall be contested in good faith by the City.
(e) OPERATION OF SYSTEMS; NO FREE SERVICE. It shall continuously and efficiently
operate the Systems and maintain the Systems in good condition, repair, and working order, all at
reasonable cost. No free service of the Systems shall be allowed, and should the City or any of its
agencies or instrumentalities, lessees, or concessionaires make use of the services and facilities of the
Systems, payment monthly of the standard retail price of the services provided shall be made by the City
or any of its agencies or instrumentalities, lessees, or concessionaires out of funds from sources other
than the revenues of the Systems.
(f) FURTHER ENCUMBRANCE. It shall not additionally encumber the Net Revenues in any
manner, except as permitted in the Parity Bonds Ordinances in connection with Additional Bonds, unless
said encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants, and
agreements of the Parity Bonds Ordinances; but the right of the City to issue obligations payable from a
subordinate lien on the surplus Net Revenues is specifically recognized and retained.
(g) SALE OR DISPOSAL OF PROPERTY. It shall not sell, convey, mortgage, encumber,
lease, or in any manner transfer title to, or dedicate to other use, or otherwise dispose of the Systems, or
any significant or substantial part thereot~ provided, however, that when the City deems it necessary to
dispose of any other property to other use, it may do so either when it has made arrangements to
replace the same or provide substitutes therefor, or it is determined by resolution of the City Council that
no such replacement or substitute is necessary.
(la) INSURANCE. It agrees to maintain insurance on the Systems, for the benefit of the holders
or owners of the Parity Bonds, of a kind and in an mount which usually would be carried by private
companies engaged in a similar type ofbusiness in the same area.
(i) RECORDS AND AUDITS. It shall keep proper books, records, and accounts, separate
from all other books, records, and accounts, in which complete and correct en~es shall be made of all
tramaetions relating to the Systems. Upon written request made not more than 60 days following the
close of the fiscal year, the City shall fumish to any holder of any Parity Bonds complete financial
statements of the Systems in reasonable detail covering such fiscal year, certified by the City's auditor.
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Any holders of 25% in principal amount of the Parity Bonds at the time outstanding shall have the right at
all reasonable times to inspect the Systems and all records, accounts, and data of the City relating
thereto.
(j) GOVERNMENTAL AGENCIES. It has or will obtain and keep in full force and effect all
franchises, permits, authorization, and other requirements applicable to or necessary with respect to the
acquisition, construction, equipment, operation, and maintenance of the Systems, and it will comply with
all of the terms and conditions of any and all franchises, permits and authorizations applicable to or
necessary with respect to the Systems.
(k) NO COMPETITION. It will not operate, or grant any franchise or, to the extent it legally
may, permit the acquisition, construction, or operation of, any facilities which would be in competition
with the Systems, and to the extent that it legally may, the City will prohibit any such competing facilities.
Section 15. AMENDMENT OF ORDINANCE. (a) That the holders of the Parity Bonds
aggregating in principal amount 51% of the aggregate principal amount of then outstanding Parity Bonds
shall have the right from time to time to approve any amendment to this Ordinance which may be
deemed necessary or desirable by the City; provided, however, that without the consent of the holders
of all of the Parity Bonds at the time outstanding, nothing herein contained shall permit or be construed
to permit the amendment of the terms and conditions in this Ordinance or in the Parity Bonds so as to:
(i) Make any change in the maturity of the outstanding Parity Bonds;
(ii) Reduce the rate of interest borne by any of the outstanding Parity Bonds;
(iii) Reduce the amount of the principal payable on the outstanding Parity Bonds;
(iv) Modify the terms of payment of principal of or interest on the outstanding Parity
Bonds or impose any conditions with respect to such payment;
(v) Affect the rights of the holders of less than all of the Parity Bonds; or
(vi) Change the minimum percentage of the principal amount of Parity Bonds necessary
for consent to such amendment.
(b) If at any time the City shall desire to amend the Ordinance trader this Section, the City shall
cause notice of the proposed amendment to be published in a financial newspaper or journal published
in The City of New York, New York, once during each calendar week for at least two successive
calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment and shall state
that a copy thereof is on file at the principal office of the Paying Agent/Registrar for inspection by all
holders of Parity Bonds. Such publication is not require& however, if notice in writing is given to each
holder of the Parity Bonds.
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(c) When at any time not less than 30 days, and within one year, from the date of the first
publication of said notice or other service of written notice, the City shall receive an instrument or
insuuments, executed by the holders of at least 51% in aggregate principal amount of all Parity Bonds,
which insmmaent or insmmaents shall refer to the proposed amendment described in said notice and
which specifically consent to and approve such amendment in substantially the form of the copy thereof
on file with the Paying Agent/Registrar, the City Council may pass the amendatory ordinance in
substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this Section,
this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and the
respective fights, duties, and obligations under this Ordinance of the City and all the holders of Parity
Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all respects to such
amendments.
(e) Any consent given by the holder of a Parity Bond pursuant to the provisions of this Section
shall be irrevocable for a period of six months from the date of the fast publication of the notice
provided for in this Section, and shall be conclusive and binding upon all fiature holders of the same
Parity Bond during such period. Such consent may be revoked at any time at~er six months from the
date of the first publication of such notice by the holder who gave such consent, or by a successor in
rifle, by filing notice thereof with the Paying Agent/Regis~ar and the City, but such revocation shall not
be effective if the holders of 51% in aggregate principal amount of the Parity Bonds as in this Section
defined have, prior to the attempted revocation, consented to and approve the amendment.
(f) For the purpose of this Section the fact of the holding of Parity Bonds issued in registered
form without coupons and the amounts and numbers of such Parity Bonds and the date of their holding
same shall be proved by the Registration Books of the Paying Agent/Registrar. The City may
conclusively assume that such ownership continues until written notice to the contrary is served upon the
City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for any one or more of the following purposes:
(i) To add to the covenants and agreements of the City in this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or remedies to
bondholders, or to surrender, restrict, or limit any right or power herein reserved to or confen'ed
upon the City;
(ii) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting, or supplementing any defective provision contained in this Ordinance, or in regard to
clarifying matters or questions arising under this Ordinance, as are necessary or desirable and
not contrary to or inconsistent with this Ordinance and which shall not adversely affect the
interests of the holders of the Parity Bonds;
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(iii) To modify any of the provisions of this Ordinance in any other respect whatever,
provided that (A) such modification shall be, and be expressed to be, effective only after all
Parity Bonds outstanding at the date of the adoption of such modification shall cease to be
outstanding, and (B) such modification shall be specifically referred to in the text of all Additional
Bonds issued after the date of the adoption of such modification.
Section 16. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) That in the event any outstanding Bond is damaged, mutilated, lost, stolen, or desuoyed, the Paying
Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal
amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in
replacement for such Bond in the manner hereinafter provided.
(b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be
made to the Paying Agent/Regiswar. In every case of loss, theft, or destruction of a Bond, the applicant
for a replacement bond shall furnish to the City and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with
respect thereto. Also, in every case of loss, theft:, or destruction of a Bond, the applicant shall furnish to
the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction
ofsuch Bond, as the case may be. In every case of damage or mutilation of a Bond, the applicant shall
surrender to the Paying Agent/Registrar for cancdlafion the Bond so damaged or mutilated.
(c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall
have matured, and no default has occurred which is then continuing in the payment of the principal of,
redemption premium, if any, or interest on the Bond, the City may authorize the payment of the same
(without surrender thereof expect in the ease of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided security or indemnity is furnished as above provided in this Section.
(d) Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the
owner of such Bond with all legal, printing, and other expenses in connection therewith. Every
replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is
lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost,
stolen or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued
under this Ordinance.
(e) In accordance with Chapter 1206, Texas Government Code, this Section of this Ordinance
shall constitute authority for the issuance of any such replacement bond without necessity of further
action by the City Council or any other body or person, and the duty of the replacement of such bonds
is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such bonds in the form and manner and with the effect, as provided in Section
5(d) of this Ordinance for Bonds issued m exchange for other Bonds.
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Section 17. BOOK-ENTRY ONLY SYSTEM. That it is intended that the Bonds initially be
registered so as to participate in a securities depository system (the "DTC System") with The Depository
Trust Company, New York, New York, or any successor entity thereto ("DTC"), as set forth herein.
The definitive Bonds shall be issued in the form of a separate single definitive Bond for each maturity.
Upon issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as the
nominee of DTC, and all of the outstanding Bonds shall be registered in the name of Cede & Co., as the
nominee of DTC. The City and the Paying Agent/Registrar are authorized to execute, deliver, and take
the actions set forth in such letters to or agreements with DTC as shall be necessary to effectuate the
DTC System, including a "Letter of Representation" (the "Representation Letter").
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the City
and the Paying Agent/Registrar shall have no responsibility or obligation to any broker-dealer, bank, or
other financial institution for which DTC holds the Bonds from time to time as securities depository (a
"Depository Participant") or to any person on behalf of whom such a Depository Participant holds an
interest in the Bonds (an "Indirect Participant"). Without limiting the mediately preceding sentence, the
City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the
accuracy of the records of DTC, Cede & Co., or any Depository Participant with respect to any
ownership interest in the Bonds, or (ii) the delivery to any Depository Participant or any Indirect
Participant or any other person, other than a registered owner of a Bond, of any amount with respect to
principal of, premium, if any, or interest on the Bonds. While in the DTC System, no person other than
Cede & Co., or any successor thereto, as nominee for DTC, shall receive a Bond evidencing the
obligation of the City to make payments of principal, premium, if any, and interest pursuant to this
Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions
in this Ordinance with respect to interest checks or drafts being mailed to the holder, the word "Cede &
Co." in this Ordinance shall refer to such new nominee of DTC.
In the event that (a) the City determines that DTC is incapable of discharging its responsibilities
described herein and in the Representation Letter, (b) the Representation Letter shall be terminated for
any reason, or (c) DTC or the City determines that it is in the best interest of the beneficial owners of the
Bonds that they be able to obtain certificated Bonds, the City shall notify the Paying Agent/Registrar,
DTC, and Depository Participants of the availability within a reasonable period of time through DTC of
certificated certificates, and the Bonds shall no longer be restricted to being registered in the name of
Cede & Co., as nominee of DTC. At that time, the City may determine that the Bonds shall be
registered in the name of and deposited with a successor depository operating a securities depository
system, as may be acceptable to the City, or such depository's agent or designee, and if the City and the
Paying Agent/Registrar do not select such alternate securities depository system then the Bonds may be
registered in whatever names the registered owners of Bonds transferring or exchanging the Bonds shall
designate, in accordance with the provisions hereof.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond is
registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of,
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premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and
given, respectively, in the manner provided in the Representation Letter.
Section 18. DEFEASANCE OF THE BONDS. (a) Defeased Bonds. That any Bond and
the interest thereon shall be deemed to be paid, retired and no longer Outstanding (a "Defeased Bond"),
except to the extent provided in subsection (d) of this Section, when payment of the principal of such
Bond, plus interest thereon to the due date (whether such due date be by reason of maturity or
otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof,
or (ii) shall have been provided for on or before such due date by inevocably depositing with or making
available to the Paying Agent/Registrar in accordance with an escrow agreement or other similar
~ (the "Future Escww Agreement") for such payment (1) hwfifl 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 an'angements have been made by the City with
the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall have become
due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as
aforesaid, such Bond and the interest thereon shall no longer be secured by, payable fi'om, or entitled to
the benefits of, the Net Revenues, and such principal and interest shall be payable solely from such
money or Defeasance Securities.
Co) Investment in Defeasance Securities. Any moneys so deposited with the Paying
the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities
received by the Paying Agent/RegisWar that is not required for the payment of the Bonds and into'est
thereon, with respect to which such money has been so deposited, shall be turned over to the City, or
deposited as directed in writing by the City. Any Future Escrow Agreement pursuant to which the
money and/or Defeasance Securities are held for the payment of Defeased Bonds may contain
pwvisions permitting the investment or ~nvesanent of such moneys in Defeasance Securities or the
substitution of other Defeasance Securities upon the satisfaction of the requirements specified in
subsections (aXi) or (ii) of this Section. Ail income from such Defeasance Securities received by the
Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with respect to
which such money has been so deposited, shall be remitted to the City or deposited as directed in
(c) Paying Agent/Registrar Services. Until all Defeased Bonds shall have become due
and payable, the Paying Agent/RegisWar shall perform the services of Paying Agent/RegisWar for such
Defeased Bonds the same as if they had not been defeased, and the City shall make proper
arrangements to provide and pay for such services as required by this Ordinance.
(d) Selection of Bonds for Defeasance. In the event that the City elects to defease less
than all of the principal amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or cause
to be selected, such amount of Bonds by such random method as it deems fair and appropriate.
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Section 19. TAX COVENANTS. That the Issuer covenants to refrain from any action which
would adversely affect, or to take any action to assure, the treatment of the Bonds as obligations
described in section 103 oftbe 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 Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent ofthe proceeds ofthe
Bonds or the projects financed therewith (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 Issuer,
with respect to such private business use, do not, under the terms of this Ordinance or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10
percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount
in excess of 5 percent is used for a "private business use" which is "related" and not
"disproportionate", within the meaning of section 141(1>)(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 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any), is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(a) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, dit~:fly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148Co)(2) of the Code) which produces a materially
higher yield over the term of the Bonds, other than investment property acquired with -
(1) proceeds of the Bonds invested for a reasonable temporary period of
three years or less or, in the case of refimding bonds, of 90 days or less until such
proceeds are needed for the purpose for which the bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148- I (b) of the Treasury Regulations, and
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(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene
the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable,
secton 149(d) of the Code (relating to advance refimdings); and
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90
percent of the "Excess Earnings", within the meaning of section 148(0 of the Code and to pay to
the United States of America, not later than 60 days after the Bonds have been paid in full, 100
percent of the amount then required to be paid as a result of Excess Eamings under section
148(0 of the Code.
The Issuer understands that the term "proceeds" included "disposition proceeds" as defined in the
Treasury Regulations and, in the case of a refunding bond, transferred proceeds (if any) and proceeds of
the refunded bonds expended prior to the date of the issuance of the Bonds. It is the understanding of
the Issuer that the covenants contained herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the
event that regulations or rulings are hereafter promulgated which modify or expand provisions of the
Code, as applicable to the Bonds, the Issuer 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 fi'om federal income taxation of interest on the Bonds under section
103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose
additional requirements which are applicable to the Bonds, the Issuer agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the
Code. In furtherance of the foregoing, the Mayor, the City Manager, the Director of Fiscal Services
and any Assistant City Manager may execute any certificates or other 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 put, se for the issuance of the Bonds. In order to facilitate compliance with the above clause
(h), a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of
America, and such Rebate Fund shall not be subject to the claim of any other person, including without
limitation the registered owners of the Bonds. The Rebate Fund is established for the additional purpose
of compliance with section 148 of the Code.
Section 20. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR
THE PROJECT. That the City covenants to account for on its books and records the expenditure of
proceeds from the sale of the Bonds and any investment earnings thereon to be used for the purposes
described in Section ! of this Ordinance (such purposes referred to herein and Section 21 hereof as a
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"Project") in accordance with the requirements of the Code. The City recognizes that in order for the
proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to
expenditures within 18 months of the later of the date that (a) the expenditure on a Project is made or
CO) each such Project is completed; but in no event later than three years at, er the date on which the
original expenditure is paid. The foregoing notwithstanding, the City recognizes that in order for
proceeds to be expended under the Code, the sale proceeds or investment earnings must be expended
no more than 60 days at~er the earlier of (a) the fifth anniversary of the date of delivery of the Bonds or
Co) the date the Bonds are retired. The City agrees to obtain the advice of a nationally-recognized bond
counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not
adversely affect the tax-exempt status of the Bonds. For purposes ofthis Section, the City shall not be
obligated to comply with this covenant if it obtains an opinion of a nationally-recognized bond counsel to
the effect that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
Section 21. DISPOSITION OF PROJECT. That the City covenants that the property
constituting the Project will not be sold or otherwise disposed in a Iransaction resulting in the receipt by
the City of cash or other compensation, unless the City obtains an opinion of a nationally-recognized
bond counsel substantially ~o the effect that such sale or other disposition will not adversely affect the
m-exempt status of the Bonds. For purposes of this Section, the portion of the property comprising
personal property and disposed of in the ordinary course of business shall not be treated as a transaction
resulting in the receipt of cash or other compensation. For purposes of this Section, the City shall not be
obligated to comply with this covenant if it obtains an opinion of a nationally-recognized bond counsel to
the effect that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
Section 22. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports. (i)
That the City shall provide annually to each NRMSIR and any SID, within six months after the end of
each Year ending in or after 2003, financial information and operating data with respect to the City of
the general type included in the final Official Statement authorized by Section 23 of this Ordinance, being
the information described in Exhibit B hereto. Any financial statements so to be provided shall be (1)
prepared in accordance with the accounting principles described in Exhibit B hereto, 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 will provide audited financial statements for the applicable Year to each
NRMSIR and any SID, when and if the audit report on such statements become available.
(ii) If the City changes its Year, it will notify each NRMSIR and any SID of the change (and of
the date of the new 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
-22-
or may be included by specific reference to any document (including an official statement or other
offering document, if it is available from the MSRB) that theretofore has been provided to each
NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to thc Bonds, if such event is
material within the meaning of the federal securities laws:
2.
3.
4.
5.
6.
7.
8.
9.
I0.
11.
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
Modifications to rights of holders of the Bonds;
Bond calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the Bonds; and
Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure
by the City to provide financial information or operating data in accordance with subsection (a) 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 Bonds within the meaning of the Rule, except that the
City in any event will give notice of any deposit made in accordance with this Ordinance or applicable
law that causes Bonds no longer to be outstanding.
(ii) The provisions ofthis Section are for the sole benefit of the holders and beneficial owners of
the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable
fight, 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
conceming such information or its usefulness to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
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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) 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 un&rvaiter to purchase or sell Bonds in the primaxy offering of
the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the
Rule since such offering as well as such changed circumstances and (2) either (a) the holders of a
majority in aggregate principal amount (or any greater amount required by any other provision of this
Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or
Co) a person that is unaffdiated with the City (such as nationally recognized bond counsel) determines
that such amendment will not materially impair the interest of the holders and beneficial owners of the
Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (a) 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 apphcable provision
of the Rule or a court of final jurisdiction enters judgment lint such provisions of the Rule are invalid, but
only if and to the extent that the provisions of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primavj offering of the Bonds.
Section 23. SALE OF BONDS; OFFICIAL STATEMENT. (a) That the sale of the
Bonds to the Underwriters, at the purchase price described in the Purchase Agreement, is hereby
authorized, ratified and confirmed. One Bond in the principal amount maturing on each maturity date as
set foah in Section 2 hereof shall be delivered to the Underwriters, and the Underwriters shall have the
right to exchange such bonds as provided in Section 5 hereof without cost.
(b) That the Purchase Agreement setting forth the terms of the sale of the Bonds to the
Undenm'iters, in substantially the form attached to this Ordinance, is hereby accepted, approved and
authorized to be delivered in executed form to the Underwriters.
-24-
(c) That the "Official Statement" prepared in connection with the sale of the Bonds, in
substantially the form attached to this Ordinance, is hereby accepted, approved and authorized to be
delivered in executed form to the Underwriters. The use of the "Preliminasy Official Statement"
prepared in connection with the sale of the Bonds is hereby ratified.
Section 24. BOND INSURANCE. That the Bonds are to be insured by
(the "Insurer"), with the cost of the municipal bond insurance policy to be paid from the proceeds of the
Bonds. A legend provided by the Insurer for inclusion on the Bonds is hereby authorized to be printed
on the Bonds. The City hereby finds that the municipal bond insurance policy to be issued by the
Insurer satisfies the requirement set forth in Section 13(e) hereof.
Section 25. APPROVAL AND REGISTRATION OF BONDS. That the Director of
Fiscal Services is hereby authorized to have control of the Bonds and all necessary records and
proceedings ~g to the Bonds pending their delivery and their investigation, examination and
approval by the Attorney General of the State of Texas, and their registration by the Comptroller of
Public Accounts of the State of Texas. Upon registration of the Bonds, the Comptroller of Public
Accounts (or a deputy designated in writing to act therefor) shall manually sign the Complmller's
Registration Certificate. The Bonds thus registered shall remain in the custody of the City Manager (or
the designee thereof) until delivered to the Undemniters.
Section 26. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Director of Fiscal Services, 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 Bonds and fixing all
details in connection therewith.
Section 27. REFUNDING. That the City hereby finds that the issuance of the Bonds for the
purpose of refunding the Refimded Bonds to realize a net present value savings is a public propose. The
refunding of the Refunded Bonds results in a net present value savings of $. and a gross
savings of $.
Section 28. USE OF PROCEEDS; ESCROW AGREEMENT. That the proceeds from
the sale of the Bonds shall be used in the manner set forth in a letter delivered on behalf of the City by its
financial advisor. The City Manager and City Secretary are hereby authorized, for and on behalf of the
City, to execute and deliver the Escrow Agreement, in substantially the form and substance attached to
this Ordinance, to accomplish the funding of an escrow fund and effect the refunding of the Refunded
Bonds, as described in the Escrow Agreement.
-25-
Section 29. PREAMBLE. That the preamble to this Ordinance is incorporated by reference
and made a part hereof for all purposes.
Section 30. MISCELLANEOUS PROVISIONS. (a) Titles Not Restrictive. That the
rifles assigned to the various sections of this Ordinance are for convenience only and shall not be
considered reslrictive of the subject matter of any section or of any part of this Ordinance.
(b) 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, ten'ns 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 tiffs Ordinance is adopted by the City
and any future amendments thereto or successor provisions thereof. Any reference to "FORM OF
BOND" shall refer to the form of the Bonds set forth in Exhibit A to this Ordinance. Any reference to
the payment of principal in this Ordinance shall be deemed to include the payment of any mandatory
sinking fund redemption payments as may be described herein.
(c) Inconsistent Provisions. All 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.
(d) Severabflity. 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
i-en-minder of ~ ordinance shall nevextheless be valid and the City hereby declares that this Ordinance
would have been enacted without such invalid word, phrase, clause, paragraph, sentence, part, portion,
or provisions.
(e) Governing Law. This Ordinance shall be construed and enforced in accordance with the
laws of the Slate of Texas.
(0 Open Meeting. The City officially finds and determin~ Ihat the meeting at which this
Ordinance is adopted was open to the public; and ltmt public notice of the time, place, and purpose of
such meeting was given, all as required by Chapter 551, Texas Government Code.
(g) 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.
-26-
PASSED AND APPROVED this December 5, 2002.
City Secretary, Ci~o-f Colleg~ation, T~xas Mayor,"~it~fof College Station, Texas
(CITY SEAL)
APPROVED:
Bond Cour~l
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SCHEDULE I
DESCRIPTION OF REFUNDED BONDS
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE AND
REFUNDING BONDS, SERIES 1993, all bonds maturing on February I in each of
the years 2004 through 2013, aggregating $2,500,000 in principal amount;
REDEMPTION DATE: February 1, 2003; REDEMPTION PRICE: par plus accrued
interest.
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS,
SERIES 1994, all bonds maturing on February 1 in each of the years 2005 through
2014, aggregating $8,250,000 in principal amount; REDEMPTION DATE: February
1, 2004; REDEMPTION PRICE: par plus accrued interest.
-28-
NO. R-
FORM OF BOND:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
UTILITY SYSTEM
REVENUE REFUNDING BOND
SERIES 2002A
Exhibit A
to
Ordinance
MATURITY INTEREST ORIGINAL
DATE RATE ISSUE DATE CUSIP
DECEMBER 1, 2002
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE STATION,
IN BRAZOS COUNTY, TEXAS (the "City"), hereby promises to pay to
, or the registered assignee hereof (either being hereinafter called
the "registered owner") the principal amount of
and to pay interest thereon, from the original issue date of this Bond specified above, to the date of its
scheduled maturity or the date of its redemption prior to scheduled maturity, at the rote of interest per
annum specified above, with said interest being payable on February 1,2003, and semiannually on each
August 1 and February 1 thereafter, except that if the Paying Agent/Registrars Authentication Certificate
appearing on the face of this Bond is dated later than February 1, 2003, such interest is payable semian-
nually on each August 1 and February I following such date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall be
paid to the registered owner hereof upon presentation and surrender of this Bond at maturity, or upon
the date fixed for its redemption prior to maturity, at the designated corporate trust office in Dallas,
Texas (the "Designated Trust Office"), of JPMorgan Chase Bank, which is the "Paying Agent/Registrar"
for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
registered owner hereof as shown by the "Registration Books" kept by the Paying Agent/Registrar at the
close of business on the Record Date (hereinafter defined) by check drawn by the Paying Agent/Regis-
trar on, and payable solely from, funds of the City required to be on deposit with the Paying
Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the Paying
Agent/RegisWar by United States mail, gu-st-class, postage prepaid, on each such interest payment date,
to the registered owner hereof at its address as it appears on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described, or by such other method, acceptable to the Paying
Agent/RegisWar, requested by, and at the risk and expense of, the registered owner. The record date
("Record Date") for the interest payable on any interest payment date means the 15th day of the
preceding month_ In the event of a non-payment of interest on a scheduled payment date, and for 30
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from the City. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (the "Special Payment Date", which shall be 15 days after the Special Record Date)
shall be sent at least five business days prior to the Special Record Date by United States mail, first-
class, postage prepaid, to the address of each registered owner of a Bond appearing on the books of
the Paying Agent/Registrar at the close of business on the last business day next preceding the date of
mailing of such notice. The City covenants with the registered owner of this Bond that no hter than each
prindpal payment date and interest payment date for this Bond it will make available to the Paying
AgenVRegistrar the amounts required to pwvide for the payment, in immediately available funds, of all
principal of and interest on the Bonds, when due, in the manner set forth in the ordinance authorizing the
issuance of the bonds (the "Ordinance").
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions are authorized by law or executive order
to close in the city where the Designal~l Trust Office of the Paying Age~/Registrar is located, 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. Notwi~ the
fo~go~ during any period in which ownership of the bonds of this Series is de~nnined only by a
book entry at a securities depository therefor, any payment to the securities depository, or its nominee
or registered assigns, shall be made in accordance with existing an'angements between the City and the
securities depository.
THIS BOND is one of a Series of bonds of like tenor and effect except as to denomination,
number, maturity, interest rate and right of prior redemption, dated as of the Origins! Issue Date stated
above, issued in the aggregate principal amount of $11,580,000 for the purpose of refunding thc
Refunded Bonds (as defined in the Ordinance) and paying the costs of issuance of the Bonds. All
Bonds of this Series are issuable solely as fully registered bonds, without interest coupons, in the
denowin:~tion of any integral multiple of $5,000 (an "Authorized Denomination
THE BONDS of this Series scheduled to mature on and after February 1, 2013 may be
redeemed prior to their scheduled maturities, in whole, or in part in principal amounts of $5,000 or any
integral multiple ~hereof, at the option of the City, on February 1, 2012, or on any date thereafter, at the
redemption price of par plus accrued interest to the date fixed for redemption. If less than all of the
Bonds are to be redeemed by the City, the City shall determine the maturity or maturities and the
amounts therewith to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or
portions thereof, wiflfin such m. amfity or maturities and in such principal amounts, for redemption;
provided, that during any period in which ownemhip of the Bonds is detennin~ only by a book entry at
a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity ~.cl bearing the
same interest rote are to be redeemed, the particular Bonds of such maturity and bearing such interest
rate shall be selected in accordance with the arrangements between the City and the securities
THE BONDS are also subject to mandatory redemption in part by lot pursuant to the terms of
the Orrlinarlce, on February 1 in each of the years 20._ through 20._, inclusive, with respect to Bonds
maturing February 1, 20._, in flae following years and in the following amounts, at a price equal to the
principal amount thereof and ac~med and unpaid in~'est to the date of redemption, without premium:
Year Principal Amount
* Final Maturity
To the extent, however, that Bonds subject to sinking fund redemption have been previously purchased
or called for redemption in part and otherwise than from a sinking fund redemption payment, each
txinci~ amount of Bonds so purchased or redeemed by the ratio which each ~ea~-~ning annual sinking
fund redemption payment for such Bonds bears to the ~otal remaining sinking fund payments, and by
rounding each such payment to the nearest $5,000 integral; provided, that during any period in w~ch
ownership of the Bonds is de~.~ined only by a book entry at a securities depository for the Bonds, the
particular Bonds ~o be called for mandatory redemption shall be selec~ in accordance with the
awangements between the City and the securities depository.
AT LEAST 30 days prior to the date fixed for any such redemption, a written notice of such
redemption shall be given by the Paying Agent/Registrar to the registered owner of each Bond or a
portion thereof being called for redemption by depositing such notice in the United Slates mail, first-
class, postage prepaid, addressed to each such registered owner at his address shown on the
Registration Books of the Paying Agent/Registrar. By the date fixed for any such redemption due
provision shall be made by the City with the Paying Agent/Registrar for the payment of the required
redemption price for this Bond or the portion hereof which is to be so redeemed, plus accrued inl~-rest
lhereon to the date fixed for redm~tion. If sr.h notice of redemption is given, and if due provision for
such payment is made, all as provided above, this Bond, or the portion hereof which is to be so
redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear
interest aiter the date fixed for ils redemption, and shall not be regarded as being outstanding except for
the fight of the registered owner to receive the redemption price plus accrued interest to the date fixed
for redemption from/he Paying AgenVRegistrar out of flae funds provided for such payment. The Paying
Agent/Registrar shall record in the RegisWation Books all such redemptions of principal of this Bond or
any portion hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the
same maturity date, bearing interest at the same rate, in any Authorized Denomination, 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.
AS PROVIDED IN THE ORDINANCE, this Bond, or any unredeemed portion hereof, may,
at the request of the x~istered owner or the assignee or assignees hereof, be assigned, Wansferred, and
exchanged for a like aggregate principal amount of fully registered bonds, without interest coupons,
payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the
same maturity date, and beating interest at the same rote, in any Authorized Denomination as requested
in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon
su~nder of this Bond to the Paying AgenffRegistrar at its Designated Trust Office for cancelhtion, all in
accordance with the form and procedures set forth in the Ordinance. Among other requirements for
such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Regis-
war, together with proper instrmnents of assignment, in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in
any Authorized Denomination to the assignee or assignees in whose name or flames this Bond or any
such portion or portions hereof is or are to be transfen-ed and registered. The form of Assignment
printed or endorsed on this Bond may he executed by the registered owner to evidence the assignment
hereof, but such method is not exclusive, and other instruments of assignment satis~ to the Paying
Agent/RegisWar may he used to evidence the assignment of this Bond or any portion or portions hereof
from time to I/me by the registered owner. The City .4~all pay the Paying AgenVRo/islraffs reasonable
standard or customary fees and charges for transferring, converting and exchanging any Bond or portion
thereof; provided, however, that any taxes or govemmental charges required to he paid with respect
thereto shall be paid by the one requesting such transfer, conversion and exchange. In any
ciraunstance, neither the City nor the Paying Agent/RegisWar shall be required (1) to make any transfer
or exchange during a period be~n. ing at the opening of bnsiness 15 days before the day of the first
~ of a notice of redemption of bonds and ending at the close of business on the day of such
mm-ling, or (2) to transfer or exchange any Bonds so selected for redemption when such redemption is
scheduled to occur within 30 calendar days; provided, however, such limitation shall not be applicable
to an exchange by the registered owner of the uncalled principal balance of a Bond.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering or transferring this
Bond shall be modified to require the appwpriate person or entity to meet the requirements of the
securities depository as to registering or transferring the book enlry to produce the same effect.
IN THE EVENT any Paying AgenVRegistm' for the Bonds is changed by the City, resigns, or
otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will appoint a
competent and legally qualified substitute therefor, and pwmptly will cause written notice thereof to be
mailed to the registered owners of the Bonds.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges ali of the terms and provisions of the Ordinance, agrees to be bound by such terms and
provisions, acknowledges that the Ordinance is duly recorded and available for inspection in the official
minutes and records of the City, and agrees that the terms and provisions of this Bond and the
Ordinance constitute a contract between each registered owner hereof and the City.
THE CITY has reserved the fight, subject to the restrictions stated, and adopted by reference,
in the Ordinance, to issue additional parity revenue bonds which also may be made payable fi'om, and
secured by a fn'st lien on and pledge of, the "Net Revenues" of the City's combined waterworks systat,
sewer system, and electric light and power system (as defined and described in the Ordinance) on a
parity with the Previously Issued Parity Bonds (as defined in the Ordinance) and the Bonds.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation, or from any source whatsoever other than
the aforesaid Net Revenues.
1T IS HEREBY certified and covenanted that this Bond has been duly and validly authorized,
issued and delivered; that all acts, conditions and things required or proper to be performed, exist and
be done precedent to or in the authorization, issuance and delivery of this Bond have been performed,
existed and been done in accordance with law; that this Bond is a special obligation; and that the
principal of and interest on this Bond together with outstanding parity revenue bonds are payable fi-om,
and secured by a first lien on and pledge of, the Net Revenues.
IN TESTIMONY WItERF. DF, the City Council has caused the seal of the City to be duly
impressed or placed in facsimile hereon, and this Bond to be signed with the imtaSnted facsimile
signature of the Mayor and countersigned by the facsimile signature of the 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
It is hereby certified that this Bond has been issued under the provisions of the proceedings
adopted by the City as described in the text of this Bond; and that this Bond has been issued in
exchange for or replacement of a bond, bonds, or a portion of a bond or bonds 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
Paying AgenffRegistrar
By:.
Authorized Representative
(FORM OF COMPTROLLER'S CERTIFICATE A'ITACHED TO
THE BONDS UPON INITIAL DELIVERY THEREOF ONLY)
OFFICE OF COMPTROLLER
STATE OF TEXAS
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Compa-oller of
Public Accounts of the State of Texas.
Wimess my signature and seal [his
Compa-oller of Public Accounts of
the State of Texas
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns
and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
/ /
(Please print or typewrite name and address, including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes
register the transfer of the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:.
Signature Guaranteed:
NOTICE: Signatures must be guaranteed byan
digffie guarantor institution participating in a
Securities Transfer Assochfion recognized
signature guarantee program.
NOTICE: The signature above must
correspond with the name of the registe~
owner as it appears upon the fi'ont of this Bond
in every particular, without alteration or
enlargement or any change whatsoever.
Exhibit B
to
Ordinance
DESCRIFTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 22 of tiffs Ordinance.
Annual Financial Statements and Operating Data
The financ~ information and o~ data with respect to the City to be provided annually in
accordance with such Section m'e as specified below (and included in the Appendix or under the
headings of the Official Statement refen'ed ~o):
1. The "Audit Report" for the most recently concluded fiscal year.
2. The information included in the Official Statement under the following captions, but for the
most recently concluded fiscal y~. Tables 1 ~ough 9 and Appendix B.
Accounting Principles
The a~ounting principles referred to in such Section are the accounting principles described in
the notes to the financial statements referred to in paragraph I described above, as such principles may
be changed from time to time to comply with stale hw or regulation.
PRELIMINARY OFFICIAL STATEMENT
Dated November 21, 2002
NEW ISSUE - Book-Entr~-Only
Ratings:
Moody's:" '
S&P:" '
See ("OTHER I~FORMATION -
RAT~GS' herein)
In the opinion of Bond Counsel. interest on the Bonds will be excludable from gross income for federal income tax purpose~
under existing law. subject to the matters described under "TAX M~TTERS" herein, includtng the alternative minimum tax on
corporations.
$11,580,000'
CITY OF COLLEGE STATION, TEXAS
(a Home Rule City located in Bcazos County, Texas)
UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2003
Dated Date: December 1, 2002
Due: February 1, as shown on the inside cover
PAYMENT TERMS I . . h~St on the $11,580,000' City of College Station, Texas, Utility System Revenue Refunding Bonds,
Series 2003 (the "Bonds") will accrue from December I, 2002 (the "Dated Data") and will be payable on February l, 2003, and
on each August I and February I thereafter until maturity or pfior redemption, and will be calculated on the basis of a 360-<lay
year consisting of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the
nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. Beneficial
ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physleal deflvery of the
Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the
Paying Agent/Regislrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC
for subsequent payment to the beneficial owners of the Bonds. Sea "THE BONDS - BOOK-Em'a¥-O~Y SYSTraY" be~in. The
initial Paying Agent/Registrar is JPMorgan Chase Bank, Dallas, Texas (see 'q-dE BONDS I PAYING AGENT/REGISTRAR").
AtrrnoatTV FOR ISSUANCE ... The Bonds are issued pursuant to thc general laws ofthe State of Texas, pa~cularly Chapler 1207,
Texas Govemmant Code, and an ordinance (tbe "Ordimm~'') pa.~d by the City Council, and are special obligations of tho City of
College Station (the '~ity"), payable, both as to principal and interest, aolely fiom and secured by a fu'st lien on and pledge ofthe
Net Revenues of the City's Ul/lity System (the "Syat~n") The Cit7 has not cavenanted nor obligated itself to pay the Bonds
from monies raised or to be raised from taxation (see ~ BONDS - AtttHoRrrY FOR ISSUANCE").
PURPOSE ... Proceeds from the sale of the Bonds will be used to currently refund $2,500,000' and advance refund
$11,550,000' of the City's outstanding Utility System Revenue Bonds (the "Refunded Bonds") in order to achieve annual and
net present value savings in the City's annual debt service expanse. In addition, proceeds will be used to pay the costs incurred
in connection with the issuance of the Bonds.
See Maturity Sehedule, Interest Rates, and Yields on the reverse of this page
OPTIONAL REDEMPTIOn ... The City reserves the fight, at its option, to redeem Bonds having stated maturities on and after
February 1,2013, in whole or in pan in principal amounts of $5,000 or any integral multiple thereof, on February 1, 2012, or say
date thereat~er, at the par value thereof plus accrued interest to thc date of redemption (see "THE BONDS - OrnolqAL
LEGALITY ... The Bonds are offered for delivery when, as and if issued and received by the Underwriters and subject to thc
approving opinion of the Attorney General of Texas and thc opinion of McCall, Park, hum & Horton L.L.P., Bond Counsel,
Dallas, Texas (see "APPENDIX C - FORM OF BO~O COUIqSEI.'S OPINION"). Certain legal matters will be passed upon for the
Underwriters by Fulbfight & Jaworski L.L.P., counsel for the Underwriters.
DELIVERY... It is expected that the Bonds will be available for delivery through The Depository Trust Company on lanumy 9,
2003.
A.G. EDWARDS & SONS, INC
COASTAL SECURITIES
RBC DAIN RAUSCHER INC.
SALOMON SMITH BARNEY
* Preliminary, subject ~o ehan~e.
Due
February I Princioal
2003 $ 350,000
2004 400,000
2005 1,210,000
2006 I, 185,000
2007 1,165,000
2008 1, ! 40,000
MATURITY SCIIEDULE*
Interest
Rate Yield
Due
Februantl Principal
2009 $I,II5,000
2010 1,095,000
2011 1,075,000
2012 1,055,000
2013 1,030,000
2014 760,000
(Accrued Interest from December 1, 2002 to be added)
Interest
Rate
Yield
* Preliminn.,y, subject to chan~e.
For purposes of complionc~ wftk Rule 15c2-12 of the Securities and F~cchange Commission (the "Rule"). th~ document
constitutes a preliminary o.O~ciol statement of the City with resl~Ct to the Bonds that has been 'deemed final" by the City as of
iO date except for the omission of no more than the information permitted by the Rule.
This O~cial Statement, which includes the cover page and the Appendices hereto, do~ not constitute an offer to sell or the
solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to mai~ such offer, solicitation or sale.
No dealer, broker, salesperson or oth~'person ha~ been autha~ed to give information or to mal~ any representation other ttum
thase contained in this Official Statement. and, if given or made, such other information or representations mu~t 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 completene~ and is not to be construed as the promise or guarantee of the Financial
Advisor. This Oj~cial Statement contains, in part, estimates and matters of opinion which are not intended as statement~ of fact,
and no representation is made as to the correctness of such estimates and opinions, or that they will be realized.
The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of
this O~ciai Statement nor any sale made hereunder shall, under any circurnstances, create any implication that there has been
no change in the affairs of the City or other matters described.
TABLE OF CONTENTS
CITY OFFICIALS, STAFF AND CONSULTANTS #. v
ELECTED OFFICIALS ................................................... V
SELECTED ADMINISTRATIVE STAFF ............................ V
CONSULTANT~ AND ADVISORS ................................... V
INTRODUCTION ...................................................1
PLAN OF FINANCING ........................................ 1
~ BONDS ................................................................. 2
MUNICIPAL BOND INSURANCE POLICY ............... 6
TEH~ SYSTEM .................................................. 7
WATERWORICq SYSTEM .............................................. 7
WAS"mWAXER TaEnthm'm' FAC~ttmS ...................... 7
ELECTRIC SUPPLY SOURCE ......................................... 7
TABLE I - I-hSTORICAL UT~LrrV CUSTOMEB COUNT.... 8
TABLE 2 - TEN LAROEST UTILITY CUSTOMERS ........... 9
DEBT INFORMATION ............. 9
TABLE 3 - P~O-FOm~A UTtLrrY S~STEM REVEmJE
DEBT SERVICE REQt.qREMENTS ......................... 9
FINANCIAL INFORMATION ............................. 10
TABLE 4 - CONDENSED STATEMENT OF OPERATIONS 10
TABLE 5 - COVERAOE AND FUND BALANCES ............ l0
TABLE 6 - VALUE OF THE SYSTEM ............................ l0
TABLE 7 - CrrY's EQurrY IN SYSTEM .......................11
CAeITAL IMPROVEMENT PRO~R~t .......................... 11
FINANCIAL POLICIF~ ................................................ i 1
INVEST~'NTS .......................................................... 12
TABLE 8 - CURRENT INVESTMENTS ...........................13
SELECTED PROVISIONS OF THE BOND
ORDINANCE .....................................................
DEFINITIONS ............................................................ 14
RATE COVENANT ..................................................... 14
FLOW OF FUNDS ....................................................... 15
ADDmONAL PARrrY BONDS .................................... 15
IVIAINTENANCE AND OPERATION; iNSURANCE ........... 16
RECORDS AND ACCOUNTS ........................................ 16
ADDITIONAL COVENANTS ........................................ 16
TAX MATTERS ................................................... 17
OPINION ................................................................... 17
FEDERAL iNCOME TAX ACCOUNTm(I TREATMENT OF
ORIGINAL ISSUE D~SCOtmT ............................. 17
COLLATERAL FEDERAL blCOME TAX CONSEQUENCES 18
STATE, LOCAL AND FOREI(iN TAXES ......................... 18
OTIIER INFORMATION ........................................ 18
RATINGS ................................................................... ] 8
LtTIOATION .............................................................. 19
LF~AL INVESTMENTS AND ELiomuxrv TO S~'nJa~
Posuc l:~rDs m T~x~s ................................. 19
Lr~3AL O~r~o~s ...................................................... 19
AU11tENTtOTY OF FmANC~,L DATA AND OTHER
I~FORUA'nON ................................................. 20
CONTn, Rm~ DmCLOSURE OF INFORMATION ............. 20
VERIFICATION OF MATHEMATICAL COMPUTATIONS.. 21
Ut~DEBwRrrmo ........................................................ 21
FInAnciAL ADVISOR ................................................ 21
MmZ~US ...................................................... 21
CERTIFICATION OF ~ OFFICIAL STATEMENT ........... 22
SCHEDULE OF REFUNDED BONDS ..................... 23
APPENDICES
GENERAL INFORMATION REOARDING THE CITY ........ A
EXCERPTS FROM THE ANNUAL FINANCIAL REPORT.. B
FO~ OF BOND COLr~SEL'S OPrmoN ........................ C
SPECIMEN MUNICIPAL BOND ].NSURANCE POLICY ..... D
Thc cover page h~rcof, this page, thc appendices included
herein and any addenda, supplement or amendment hereto,
are part ofr3e Official Statement.
iii
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Official
Statement. The offering of the Bonds 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.
T~ CaTV ....................................
The City of College Station is a political subdivision and municipal corporation of the State,
located in Brazos County, Texas. The City encompasses approxinuttely 41 square miles (see
"INTRODUCTION - DESCRIPTION OF CITY").
THE BONDS .................................
The Bonds are issued as $11,580,000' Utility System Revenue Refunding Bonds, Series 2003.
The Bonds are issued as serial bonds maturing February 1, 2003* through February I, 2014'
(see '~I'HE BONDS = DESCRIPTION OF THE BONDS").
PAYMENT OF INTEREST ..............
Interest on the Bonds accrues from December I, 2002, and is payable on February 1, 2003, and
each August 1 and February i thereafter until maturity or prior redemption (see "THE BONDS -
DESCRIPTION OF THE BONDS" and "THE BONDS - OPTIONAL REDEMFFION").
AUTHORITY FOR ISSUANCE .........
The Bonds are issued pursuant to the general laws of the State, pamcularly Chapter 1207, Texas
Government Code, and an Ordinance passed by the City Council of the City (see "THE BONDS
- AtmtORrrY FOR ISSUANCE").
SECURITY FOR THE BONDS ..........
The Bonds constitute special obligations of the City, payable, both as to priocipal and int~est,
solely from and secured by a first lien on and pledge of the Net Revenues of the City's Utility
System. The City has not covenanted nor obligated itself to pay the Bonds from monies raised
or to be raised from taxation (sec "THE BONDS - SECURITY AND SOURCE OF PAYMENT").
REDEMPTION ...............................
The City reserves the right, at its option, to redeem Bonds having stated maturities on and after
February I, 2013, in whole or in pan in principal amounts of $5,000 or any integral multiple
thereof, on February I, 2012, or any date thereafter, at the par value thereof pins accrued
interest to the date of redemption. (see "THE BONDS - OPTIONAL REDEMPTION").
TAX EXEMPTION .........................
In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross income
for federal income tax purposes under existing law, subject to the matters desodbed under the
caption "TAX MATTERS" herein, including the alternative minimum tax on corporations.
USE OF PROCI~DS .......................
Proceeds from the sale of the Bonds will be used to (i) refund and defease a poflion of the
City's outstanding utility system revenue bonds as more particularly described in Schedule I
(the "Refunded Obhgations"), in order to lower the overall debt service requirements of the
System, and (ii) pay the costs associated with the issuance of the Bonds (see "PLAN OF
FINANCING - Use of Bond Proceeds").
l~rmc~ ..................................... The presently outstanding revenue debt of the City is rated "Al" by Moody's Investors Service,
Inc. ("Moody's") and "A+" by Standard & Poo~s Ratings Services, a Division of The McGraw-
Hill Companies, Inc. ("S&P"). The City also has other issues outstanding which are rated
"Aaa" by Moody's and "AAA" by S&P through insurance by various commercial insurance
companies. Applications for conlraet ratings on this issue have been made to Moody's and S&P
(see "OTHER INFORMATION - RATINOS'').
BOOK=ENTRY.ONLY
SYSTEM ......................................
Thc definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee
of DTC pursuant to the Book-Enh'y-Only System described herein. Beneficial ownership of the
Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical
delivery of thc Bonds will bc made to the beneficial ownen thereof. Principal of, premium, ii'
any, and interest on the Bonds will be payable by the Paying Agent/Regisunr to Cede & Co.,
which will make distribution of the amounts so paid to the panictpating members of DTC for
subsequent payment to the beneficial owners of the Bonds (see ~ BONDS - BooK-ENTry-
ONLY SYSTEM").
PAYMENT RECORD ...................... The City has never defaulted in payment of its bonds.
* Preliminary, subject to change.
iv
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
City Council
Ron Silvia
James Massey
John Happ
Winnie Garner
Scott Meats
Dennis Maloney
Anne Hazen
Length of
Position Service Term Expires
Mayor 5 Years* 5/04
Mayor Pro-Tem 4 Years 5/04
Councihnember I Years 5/03
Counciimember 4 Years 5/03
Councilmcmber I Years 5/04
Councihnember 4 Years 5/03
Councilmember 5 Years 5/04
Occupation
Retired
Director of Facility Coordination
Airport Director
Bank/rig
Director of Support Services
Painting Coolractor
Retired R.N.
*Elected Mayor ~n May 2002.
SELECTED ADMINISTRATIVE STAFF
Nme
Thomas E. Brymer
Glen Brown
John C. Woody
Charles Cryan
Jeff Kersten
Connie L. Hooks
Len~,th of
Position Servic~ to City
City Manager 15 Years o)
Assistant City Manager 3 Years
Director of Public Utilities 16 Years
Director of Fiscal Services 12 Years
Budget Manager 11 Years
City Secretary 16 Years
(1) City Manager since September 1999.
CONSULTANTS 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 re~aiding thc City, please contact:
Charles Cryan
Director of Fiscal Services
City of Collage Station
!101 Texas Avenue
College Station, Texas 77840
(979) 764-3552 Phone
(979) 764-3899 Fax
or
Drew Masterson
Anthea Moran
First Southwest Company
1021 Main Street, Suite 2200
Houston, Texas 77002
(713) 651-9850 Phone
(713) 654-8658 Fax
PRELIMINARY OFFICIAL STATEMENT
I~LATING TO
$11,580,000'
CITY OF COLLEGE STATION, TEXAS
UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2003
INTRODUCTION
This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of
$11,580,000' City of College Station, Texas, Utility System Revenue Refunding Bonds, Series 2003 (the "Bonds"). Capitalized
terms used in this Official Statement have the same meanings assigned to such terms in the ordinance to be adopted by the City
Council on the date of sale of the Bonds which will authorize the issuance of the Bonds (the 'Ordinance'), except as otherwise
indicated herein (see "SELECI'ED PROVISIONS OF THE BOND ORDINANCE'').
There follows in this Official Statement descriptions of the Bonds 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.
DF. SCRII'TION OF Tllg CITY... The City is a political subdivision and munic/pal corporation of 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
fu'st adopted its Home Rule Charter in October 1938, which was last amended in May 1992. The City operates under a
Council/City Manager form of government with a City Council comprised of the Mayor and six Councilmembers. 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 1990 Census population for the City was 52,456 and the 2000 Census population was
67,890. The City covers approximately 40.8 square miles.
PLAN OF FINANCING
Pulu,osz... The Bonds are being issued to (i) refund and defcase a portion of thc City's outstanding utility system revenue
bonds as more pmicularly deac~'ibed in Schedule I (the 'Refunded Obligations"), in order to lower the overall debt service
requirements of the System, and (ii) pay the costs associated with the issuance of the Bonds. See SCHEDULE I for a detailed
listing of the Refunded Obligations and their respective call dates and redemption prices.
P~,Y..i~NDED OSLIGATION$... The principal of and interest due on the Refunded Obligations are m be paid on the scheduled interest
paym~t dates, maturity dates and the respective ~lemptinn dam of such Refunded Obli~Uions, from funds to be deposited
pursuant to a certain Escrow Agreeraun~ (the "Escrow Agreement) between the City and JPMorgan Chase Bank, Dallas, Texas (the
~.serow Agent"). The Ordinance pmvidas that from the proceeds oftbe sale of the Bonds received from the Underwrite~, the City
will deposit with the Escrow Agent, the amoun! necessary to aceom01ish the discharge and final payment of the Refunded
Obligations on their respective maturity da2s and redemption dates. Such funds will be held by the Escrow Agent in a special
escrow account (the *F. sorow Fund*) and used to purchase dim:t obligatioas of the United States of Am~rice (the "Federal
Seauities''). Under the Escrow Agreemmt, the Escrow Fond is irrevocably pledged to the payment of thc principal of and interest on
the Refunded Obligations.
Grant Thornton LLP, a nationally recognized accounting firm, will verify at the time of delivery of the Bonds to the Underwriter
thereof ~ mathematical accuracy of the schedules that demonsuate the Federal Securities will mature and pay in,:rest in such
amounts which, ~ngetber with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay, when due, the principal of and
inter~t on the Refunded Obligations. Such maturing principal of and intreat on the Federal Securities will not be available to pay
the Bonds. See *OTHER INFORMATION - V~'FICAT~O~ OF MATm~MA~CAL
By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pu~uant to the Escrow Agreement, the City
will have effected the defeasance of all of the Refunded Obligations in accordance with the law. As a result of such defeasance, the
Refunded Obligations w/Il be outetanding only for the purpose of receiving payments from the Federal Securities and any cash held
for such purpose by the Escrow Agent and such Refimded Obligations will not be deemed as being outstanding obligations of the
City payable from taxes nor for the pu~osc of applying any limitation on the issuance of debt.
* Preliminmy, subject m cha~,e.
THE BONDS
DESCRIPTION OF THE BONDS . .. Thc Bonds are dated December 1, 2002, and mature on February 1 in each of thc years and in
the mounts shown on thc inside cover page hereof. Interest will be computed on thc basis of a 360-day year of twelve 30-day
months, and will be payable on February ! and August 1, commencing February 1, 2003, until maturity or prior redemption.
The definitive Bonds 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 delivcrcd only to Cede & Co., the nominee of Thc Dcpository Trust Company, Ncw York, Ncw York
("DTC") pursuant to thc Book-Entry-Only System described herein. No physical delivery of the Bonds will be made to the
owners thereof. Principal of~ premium, if any, and interest on the Bonds will be payable by thc Paying Agunt/Registrar to Cede
& Co., which will make distribution of the amounts so paid to thc participating members Of DTC for subsequent payment to the
beneficial owners of thc Bonds. Sec "BooK-ENTRY-ONLY SYSTeP~" herein.
AUTHORITY FOR ISSUANCE... The Bonds are issued pursuant to the general laws of the State of Texas, Chapter 1207, Texas
Government Code, and the Ordinance.
SECURITY AND SOURCE OF PAYMENT... The Bonds ere special obligations of the City payable, both as to principal and interest,
solely from and, together with certain outstanding revenue bonds of the City (the "Previously Issued Bonds") and any additional
parity bonds which may be issued in the future, secured by a first lien on and pledge of the Net Revenues of the Sys~nn afl~ the
payment of maintenance and operating expenses. Maint~nence and operating expenses include contractual payments which under
Texas hws and their pmv/sions are established as operating expenses. The City has outstanding Previnusly Issued Bonds secured by
and payable f~om Net Revenues un pmity with the Bo~ds. Thc fulinwing ud~le lists thc original principal emount of thc Outstanding
Bonds, the curranfly outstanding princ/pal amount of the Outstanding Bond% the principal amount of the Refunded Bonds and the
principal emount of thc Ranalning Outsuaxting Bonds.
Original Principal Remaining
Principal Curremly Refunded Outstanding
Series Amount Outstandinf~ Bonds* Bonds*
1990 $4,800,000 S 0 0 0
1993 (a) 5,850,000 2,750,000 2,500,000 250,000
1994 16,500,000 9,900,000 8,250,000 !,650,000
1995 6,000,000 4,200,000 0 4,200,000
1996 (a) 10,110,000 7,965,000 0 7,965,000
1998 2,700,000 2,385,000 0 2,385,000
2000 10,500,000 9,930,000 0 9,930,000
2001 23,500,000 22,890,000 0 22,890,000
2002 18,21 St000 18.2 IS.000 0 ! 8.2 ! 5.000
$ 98,209,881 $ 78,235,000 $10,750,000 $ 67,485,000
Tbe Bonds arc n~x a chr~ upon any otber ineon~ or ~eunes of the ~ ~ ~ n~ ~n~m~ m ~m or p~ ~
~ ~ ~R or m~g ~ of~e ~. ~ ~i~n~ ~ ~ ~ a li~ ~ m~ ~ ~ ~ ~ ~ N~
~n~, ~ ~y just a~ ~e Ci~ ~y ~t ~ enid ~ ~ ~ ~fi~ e~in~ ~ p~ ~ ~ ~ Ci~.
~ ~oml ~, m~ ~ ~ ~ ~, a ~e Fred ~ ~ to ~ ~in~ h m ~ at i~ ~ m ~
av~ ~ d~t ~ ~~ of ~ m~ ~sly I~ ~, ~ Bo~ ~ my Obl~ i~ on a
~ ~ ~ ~ C'~&go~ B~. ~ ~ ~t ~ m ~ ~~ ~ ~ ~d by ~n of~ h~
of~n~ ~i~~a60~~ ~ ~~e~of~~(~'~~
PRO~SIONS OF ~ BO~ O~~'}.
P~z~v ~v~o~s... All of&e N~ ~en~s of~e Sy~m ~& ~ ex~fion of~e in exce~ of~e ~o~ ~u~ W
~bli~ a~ ~inmin ~e ~e F~d a~ h~t ~ Si~g F~d ~ ~o~bly pl~ged ~r &e pa~ent of~ ~ ~
~ &~un. ~ BoM~ ~e ~i~ly ls~ B~d~ md ~y Addi~o~ ~ ~ ~ml~ ~ mmbly ~ ~ a ~ li~
u~ ~eN~ ~n~ of~e ~.
~T~ ... ~e ~ ~ ~nn~ ~ ~e ~ ~t it ~11 at M! ~ ~ ~ ~11~ m~ ~ ~ ~ ~ ~
d~ining Net R~enu~ ~d to ~y inter on ~d ~e pd~ip~ of ~ ~sly I~ Bo~ ~e Bon~, aM ~y A~i~oml
Bo~, ~d W establish ~d mn~min ~ ~s prodded for ~ ~e O~i~nce. ~e Ci~ h~ ~ ~n~ted ~ if~e Sy~
s~uld ~ leg~iy liable ~r ~y o~er ~ss, it ~11 ~ ~ ~ ~ ~ coll~ c~ for ~e s~c~ of ~e
S~ ~ci~t ~ d~ ~ ~d~e~ (~ "SE~D PRO~SIONS OF ~ BO~ O~~ - ~
Cov~.
2
OPTIONAL RRDEMPTION ... Th~ City reserves the right, at its option, to redeem Bonds having stated maturities on and after
February 1, 2013, in whole or in pan in principal amounts of $5,000 or any integral multiple thereof, on February 1, 2012, or any
date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds a~ to be
redeemed, the City may select the maturities of Bonds to be redeemed. If less than all the Bonds of nny maturity are to be
redeemed, the Paying Agent/Registrar (or DTC, while the Bonds nrc in Book-Entry-Only form) will determine by lot the Bonds,
or portions thereof, within such maturity to be redeemed. Ifa Bond (or any portion of the principal sum thereo0 has been called
for redemption and notice of such redemption given, such Bond (or the principal amount thereof to be redeemed) will become
due and payable on such redemption date and interest thereon will 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 Bonds, the City must cause a notice of
redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds t~ be redeemed, in
whole or in pen, at the eddress of the registered owner appearing on the registration books of the Paying Agent/Ragisirar at the
close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED WILL BE
CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER
RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION WILL
BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY
BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR
PORTION THEREOF WILL CEASE TO ACCRUE.
DEFEASANCE... The Ordinance provides for the defeasance of the Bonds when the payment of the principal of and premium, if
any, on the Bonds, plus interest thereon to the duc date thereof (whether such due date be by reason of maturity, redemption, or
otherwise), is provided by irrevocably depositing with a paying agency, in Imst (1) money sufficient to make such payment or
(2) Defeasance Securities, certified by an independent public accounting f'u'm of national reputation to mature as to principal and
interest in such amounts and at such times to insure the availability, without reinvestment of sufficient money to make such
payment, and all necessary and proper fees, compensation and expenses of the paying agent for the Bonds. The Ordinance
provides that "Defeasance Securities" means (a) direct, noncallable obligations of the United States of America, including
obligations that are unconditionally guaranteed by the United States of America, (b) noncallnble obligations of an agency or
instrumentality of the United States of Amc'dca, including obligations that are unconditionally gnaranteeed or insured by the
agency or instrumentality and that are rated as to investment quality by a nationally recognized investment rating finn not less
that AAA or its equivalent, and (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. The City has additionally reserved the right, subject to satisfying the
requirements of(l) and (2) above, to substitute other Defeesance Securities for the Defeasance Securities originally deposited, to
reinvest the uninvested moneys on deposit for such defeasance and to withdraw for the benefit of the City raoneys in excess of
the amount required for such defeasance.
Upon such deposit as described above, such Bonds shall no longer be regarded to be outstanding or unpaid. The City has
reserved the option, however, to be exercised at the time of the defeasance oftbe Bonds, to call for redemption, at an earlier date,
those Bonds which have been defeased to their maturity date, if thc City: (i) in the proceedings providing for the finn b~king
and financial arrangement, expressly reserves the right to call the Bonds for redemption; (ii) gives notice ofthe reservation ofthe
right to the owners of the Bonds immediately following the making of the finn bnnking and financial arrangements; and (iii)
directs that notice of the reservation be included in any redemption notices that it authorizes
ADDITIONAL BONDS... The City may issue Additional Bonds which, together with the Previously Issued Bonds and the Bonds,
will be equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System, subject, however, to
complying with certain conditions in the Ordinance. See "Selected Provisions of Bond Ordinance - Additional Parity Bonds"
for terms and conditions to be satisfied for the issuance of Additional Bonds.
BOOK-ENTRY-ONLY SYSTEM... DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-
registm'ed securities registered in the name of Cede & Co. (DTC's parmership nominee). One fully-registered certificate will be
issued for eech mnlurity of the Bonds in the aggregate principal amount of each such maturity and will be deposited with DTC.
DTC, the world's iargeat dcpository, is a limited-purposc trust company organized under the New York Banking Law, a
"banking organization" within the meaning of thc 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 "cleating agency" registered pursuant to thc
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million
issues of U.S. and non-U.S, equity issues, corporate and municipal debt issues, and money market instruments from over 85
countries that DTC's participants (''Direct Participants") deposit with DTC. DTC also facilitates the post-trade set~lernent among
Direct Participants of sales and other seenfities transactions in deposited securities, through electronic computerized hook-entry
transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities
certificates. Dkect Participants include both U.S. and non-U.S, securities brokers and dealers, banks, ~mst companies, clearing
corporations, and certain other organizations. DTC is a wholly-owned subsidiary of the Depository Trust & Cleating
Corporation ("DTCC'). DTCC, in rum, is owned by a number of Direct Participants of DTC and Members of the Nationnl
Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging
Markets Clearing Corporation, (NSCC, (]SCC, MBSCC, and EMCC, also subsidiaries of DTCC), es well ns by the New York
Stock Exchange, Inc., the American Stock Exchnnge LLC, and the National Association of Seeurities Dealers, Inc. 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,
add cleadng corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. 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 Bonds under thc DTC system must be made by or through Direct Participants, which will receive a credit for the
Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond C'Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confu'mation from DFC of
their purchase. Beneficial owners are, however, expected to receive written confimmtions providing details of the transaction, as
well ns pedodio statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Dkeet
and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership Interests in Bonds, except in the event that use of the book-entry system for the Bends is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in thc name of DTC's
partnership nominee, Cede & Co., or such other name as may be requested by an authorized s~.-presentative of DTC. The deposit
of Bonds 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 thc Bonds; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Bonds arc credited, which may or may not be thc Beneficial Owners.
The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf ofthcir customers.
Conveyance of notices and other conununieafions 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 ns may be in effect from time to time. Beneficial Owners of Bonds may wish to take
certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions,
tenders, defaults, and proposed amendments to the Bond document~ For example, Beneficial Owners of Bonds may wish to
ascertain that the nominee holding the Bonds 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 Paying Agent/Registrar and request that
copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of thc Bonds within an issue arc being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Pa~icipant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a
Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC amils 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as
may be requested by an authorized representative of DTC. DTC's praetlce is to credit Direct Participants' accounts upon DTC's
receipt of funds and con'esponding detail information from the City or the Paying Agent/Registrar, on payable date in accordance
with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is thc 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 nnd not of DFC (nor its nominee), the Paying
Agent/Registrar, or the City, subject to any statutory or regulatory requirements ns amy be in effect from time to time. Payment
of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such nominee as may be requested by an
authorized representative of DTC) is the responsibility of thc City or the Paying Agent/Registrar, disbursement of such payments
to Direct Participants will be the responsibility of DTC, nnd disbursement of such pal~nents to Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Bond purchased or tende~d, through its Participant, to the Paying
Agent/Registrar, and shall effect delivery of such Bonds by causing the Dheot Participant to mmsfer the Participant's intesest in
thc Bonds, on DTC's records, to the Paying Agent/Registrar. The requirement for physical delivery of Bonds in connection with
an ol~ional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by
Direct Participants on DTC's records and followed by a book-entry credit of tendered Bonds to the Paying Agent/Registrar's
DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to
the City or the Paying Agent/Regismtr. Under such circumstances, in the event that a successor depository is not obtsined, Bond
certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry U~tnsfers through DTC (or a successor securities depository).
In that event, Bond certificates will be printed and delivered.
Use of Certain Terms in Other Sections of this O~ciai Statement. In reading this Official Statement it should be understood that
while the Bonds 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 Bonds, but (i) all rights of ownership
must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given
to registered owners under the Ordinance will be given only to DTC.
Infommtion concerning DTC and the Book-Entry System has been obtained from DTC and is not guaranteed as to aceumcy or
completeness by, and is not to be conswaed as a representation by the City or the Underwriters.
PAYING AGENT/REGISTRAR... The initial Paying Agent/Registrar is JPMorgan Chase Bank, Dallas, Texas. In the Ordinance,
the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying
Agent/Registrar at all times until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a conunereial bank
or lmst company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as
and perform the duties nnd services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Regis~tr
for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by
United States mail, first class, postage prepaid, which notice shall also give the address ofthe new Paying Agent/Registrar.
TItANSFEn, EXClIANGi AND REGtSTRATION. .. In &e ~ent the B~k-En~-~ly S~tem sh~ld be dis~ndnu~, ~e Bonds
~y be ~sfe~ ~d exc~E~ on ~e ~gis~tion ~ of &e Paying Agen~e~s~r only u~n presentation ~d sunder
m ~e Paying ~gis~ ~d ~ch ~s~r or ex~ shall ~ ~out ~ or ~ ch~ge w ~e ~gis~ o~,
~t for ~y ~ or o~ ~~ chq~ qu~ m be paid ~ q~ m ~ ~fio~ ~c~ge ~d ~r.
~ ~y ~ ~i~ by ~e ~fion of ~ usi~t fo~ on ~e ~ Bonds or ~ o&er ins~m~t of ~ ~d
~i~t ~mble m ~e Pa~ Ag~e~. N~ Bon~ ~11 ~ deli~ by &e Pay~ A~e~s~, in lira of ~
~ b~g ~e~ or ~g~, at ~e desi~ o~ce of~e h~ng Ag~e~, or ~nt ~ Uni~ Sm~s ~ fi~t
cl~, po~ge p~id, to &e n~ ~gi~ o~ or his d~i~. To ~e ~t ~ssible, n~ Bonds issu~ ~ ~ exchqe or
~s~r of Bonds will be delivered m ~e ~is~ owner or assi~ of &e ~gis~d o~er ~ not mo~ ~ &~e ~s
~s after ~e ~ipt of ~e Bo~s m ~ ~n~l~, ~ ~e ~n ~s~t of ~s~ or ~u~ ~r ~ge duly ~
~ ~ ~gis~ o~er or h~ duly ~o~ ~t, ~ ~ safis~ m ~e Pang ~gis~. N~ Bonds ~
~d delive~d in ~ ex~ or ~sfer ~11 ~ ~ ~y h~l mltiple of $5,0~ for ~y one ~ ~d for a l&e a~pte
~i~ ~t ~ &e Bon~ ~d~d for ~ or ~. S~ 'B~-~v~v S~" h~n ~r a
d~d~on of&e ~st~ m be util~d ini~lly in ~g~ m o~e~ip ~d ~f~ili~ of&e Bon&. Neith~ &e Ci~ nor ~e
Pa~ng Agm~egi~ a~ ~qui~d m ~sfer or exch~ge any Bond call~ ~r ~emp~on, in whole or in p~ ~&in 30 ~ys
of&e dee fix~ for ~d~ption; prodded, h~, such Ii.ration of ~nsf~ is not appli~ble to ~ ex.ge by &e ~gi~
o~ of&e un~ll~ b~ce ora Bond.
P,r. coim D~,rl~ mit Lvrt, n~sr P,~VMSNT ... The record date ("Record Date*') for the interest payable on the Bonds on any
interest payment date means the close of business on thc lSth day of the preceding month.
In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereaRer, 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 thc City. Notice of thc Special Record Date and oftbe scheduled payment date of the
past due interest ("Special Payment Date", which will be 15 days after the Special Record Date) will 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 Holder of a Bond
appearing on the registration books oftbe Paying Agent/Registrar at the close of business on the last business day next preceding
the date of mailing of such notice.
BONDHOLDERS' REMEDIES ... ~:Cpt for thc romady of ma~lnmm to enforce the City's covcnants and obligations under the
Ordinance, the Ordinance does not establish other remedies or specifically enumerate events of default with respect to the Bonds.
The Ordinance does not provide for a trustee to enforce the covenants and obligations of the City. In no event will rcgistemi owncrs
have the fight to have the maturity of the Bonds accelerated as a remedy. The enforcement of the remedy of mandamus may be
difficult and time consuming. No assurance can be given that a mandamus or other legal action to enforce a default under the
Ordinance would be successful. Fuflbermm~, the City is eligfole to seek relief from its creditors under Chapter 9 of the U.S.
Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest represented by a apecifically pledged source
of rovenues, such provision is subject to judicial consuuction. Cbetncr 9 also includes an automatic stay provision that would
prohibit, without Bankauptey Court approval, the prosecution of any other legal action by creditors or bondhokiers of an entity which
has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from credito~ the ability to
enforce any remedies under the Ordinance would be subject to the approval of the Bankruptcy Court (which could require that the
action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad
discretionary powcfl; of a Bankrupt~ Court in administering any proceeding brought before it. The opinion of Bond Counsel will
note that all opinion~ relative to the enforceability of the Ordinance and the Bonds are qualified with respect to the customav/rights
of debtors roletive to their creditors. In addition, while the City has covennnted to secure the Bonds by a fu~t lien on the Net
Revenues, Bond Counsel will opine only that a valid and enforceable lien has been granted on the Net Revenues. Bond Counsel has
not been requested to, and has not, rendered nny opinion as to the priority steto~ of the pledge of the Net Revenues.
SOURCES AND USE OF BOND PROCEEDS... Proceeds fi'om the sale of the Bonds are expected to be expended as follows:
Sources of Funds:
Principal Amount of the Bonds ................................................................................................... $
Premium on the Bonds ................................................................................................................
Debt Service Fund Transfer ........................................................................................................
A~crued Interest ..........................................................................................................................
Total Sources of Funds ............................................................................................................ $
Uses of Funds:
Deposit to Escrow Fund .............................................................................................................. $
Issuance Expenses nad Underwriters Discount ¢,0 ......................................................................
Accrued Interest ..........................................................................................................................
Total Uses of Funds ................................................................................................................. $
~ kdndes nmic~al bond insura~ premium.
MUNICIPAL BOND INSURANCE POLICY
ITO COME]
THE SYSTEM
WATERWORKS SYSTEM
Since December 1981, the City has had the capability to produce and deliver 100% of its water needs through an aqueduct and well
field system located north of the City. This sy~tm includes five wells and will complete a 6a~ well this spring providing a combined
opacity of 23 million gallons per day "mgd'. The water is delivet~l to the distribution system by 14 miles of 30-inch diameter
pipeline and two pumping stations.
Each of the six wells mentioned above is completed into the Simsboro Sand of the Wilcox formation which forms a very prolific
aquifer of high quality water. The City projects that the aquifer will provtde an adequate water supply for College Station and
surrounding communities through the year 2050.
The following water rotes were established by otclinance passed and approved by the City Council nnd became effective on October
Usage Charge Service Charge Meter Size
$2.03 per 1,000 gallons plus $ 8.30 per mo. 5/8"
8.30 per mo. 3/4"
10.45 per mo. 1"
15.50 per mo. I 1/2"
24.50 per mo. 2'
77.40 per mo. 3"
I l $.00 per mo. 4"
140.00 per mo. 6"
Type of Customer
Residential, Commercial and Industrial
WAST~VAT~R SYSTEM
The City's wastes are treated by two City-owned wastewater treatment plnnts located within the City. The Carter Czeek Treatment
Plant was upgraded to meet con'ent treatment stsndmis with two $10 million projects compleaxi in fiscal year 1997. The Lick Creek
Treatment Plant, the newer of the two plants, came on-line during 2002 and has n 2,000,000 gallons per day treatment capacity. The
two plants have a combined treatment capacity of 11.5 mgd ns compnred to avernge current daily denmnd of 6.7 mgd. The trenmlent
plant's capacity is adequate to serve a population estinmted at 122,000.
The following sewer rotes were cstablished by ordinance passed and approved by the City Council and became cffcedve on October
!,2002.
Residential (metered water) ........................................................... $15. ! 4 including 4,000 gallons of metered water
Usage Charge ................................................................................. $ 2.81 per 1,000 gallons of additional metered water
$30.00 maxhnum per month
Residential (without raeter m each unit) ....................................... $20.65 per unit per month
Commercial and lndusuial ............................................................ $9.70 per month
Usage Charge. ................................................................................ $3.11 per i,000 gallons of metered water usage
The City began purchasing electric power from Terms Utilities (now known as TXU) on January !, 1996. That contract resulted
in significant savings to the City's electrical customers. The City is currently paying mmsmiasion charges to a number of outside
utility systems at current Public Utility Commission of Texns allowed rates but is also in litigation regarding some of those fees.
The City is served through two 138 kVA transmission lines tied to a ring bus at the City switching station, three substations, and
256 miles of distribution lines.
Thc clecuic rates were established by ordiuance passed and approved by thc City Council and bec~n~ effective on November 1,
1998. The following elec~c rates are subject to a power adjusm~ent charge which requires that the net energy charge per kilowatt
hour must 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 conunct.
Single Family Residential .............................
Master Metered Multiple Dwelling Units .....
Small Commercial (1/10 KW demnnd) ........
Medium Commercial (15-300 KW) ..............
Service Charge ....................................................... $7.00 per month
plus:
First 500 k-wh~ ...................................................... $0.0582 per kwhr
Additional kwhr (May through October) .............. $0.0516 per kwhr
Additional kwhr (November through April) ......... $0.0456 per kwhr
Tax ......................................................................... 1.50%
PCA ........................................................................ Calculated Monthly
Service Charge ....................................................... $100.00 per menth
plus:
First 500 kwhts ...................................................... $0.0582 per kwhr
Additional kwhr (Mny through October) $0.0516 per kwhr
Additional kwin' (November through April) ......... $0.0456 per kwhr
Tax ......................................................................... 1.5{PA
PCA ........................................................................ Calculated Monthly
Service Cluuge ....................................................... $9.00 per month
plus:
First 1,000 kwhrs ................................................... $0.0661 per kwhr
Over 1,000 kwhrs .................................................. $0.0472 per kwhr
Tax ......................................................................... 8.25%
PCA ........................................................................ Calculated Monthly
Service Clmrge ....................................................... $25.00 per month
plus:
Demand Charge (Per KY0 .................................... $8.44 per KW
Energy Chnrge All kwhrs ...................................... $0.0257 per KW
Minimum Monthly Charge ................................... SI 51.67
Tax ......................................................................... 8.25%
PCA. ....................................................................... Calculated Monthly
Large Coumm~ 000+ KW) .....................
Service Charge ....................................................... $75.00 per month
plus:
Dernnnd Charge (Per KW) .................................... $8.44 per KW
Energy Charge All kwhrs ...................................... $0.0257 per KW
ldinimum Monthly Charge ................................... $2,799.00
Tax ......................................................................... 8.25%
PCA ........................................................................ Calculaugi Monthly
Industrial (1,500 KW and over) .................... Service Charge ...................................................... $250.00 per month
plus:
Demand Charge (Per KW) .................................... $8.00
~ C~arge (fu~t 500,000 kwhrs) .................... $0.0241 perKW
Minimum Monthly $12,247.69
Tax ......................................................................... 8.25%
PCA ........................................................................ Calculated Monthly
TABLE I - H~s'romcAL UTmrrv Cus'roMER Corer
Fi~7.al Year Ended September 30
2002 2001 2000 1999 1998
Water 23,210 22,037 21,242 21,374 21,245
Wastewater 28,399 26,622 26,365 25,652 22,199
Electric 33,386 27,113 26,169 26,804 25,309
TABLE 2 - TIN LARGEST UTILIT~ CUSTOMER$
Total Percent
FY 2002 KWH of KWH
Utility Customer Type of Business Consumotion Consumed
College Station ISD Schools 16,301,994 2.58%
City of College Station Municipality 14,989,349 2.37°4
CBL & Associates Retail Mall 14,095,747 2.23%
Wal-Mart Stores Inc. Retail 7,736,957 1.22%
State Headquarters/TAMU University 7,466,465 I. 18%
Krogers Retail Grocery 7,356,640 I. 16%
Albertsons Retail Grocery 7,258,669 I. 15%
College Station Medical Hospital 6,901,757 1.09%
Dealer Computer Services Technical Support 5,187,600 0.82%
Lane C/S Ltd. Hotel 4.975.200 0.79%
92.270.378 14.60%
DEBT INFORMATION
Tnm.g 3 -P Ro-FoI~IA UTILITY SYSTEM REVENUE DEBT SERVICE REQUIREMENTS
Year Total
End Outstanding Less: Refunded The Bonds* Debt Set-vice
~}/~0 Debt Bonds* Principal [merest Total Reouirements
2003 S 7,759,755 629,063 $ 350,000 S 273,225 $ 623,225 $ 7,753,918
2004 7,662,748 872,688 400,000 401,213 80 ! ,213 7,591,273
2005 7,667,428 1,661,238 1,210,000 377,063 1,587,063 7,593,253
2006 7,565,288 !,600,694 1,185,000 341,138 1,526, ! 38 7,490,73 I
2007 6,995,368 1,539,344 1,165,000 304,431 1,469,431 6,925,455
2008 6,940,523 1,477,250 1,140,000 265,550 1,405,550 6,868,823
2009 6,869,899 !,414,413 1,115,000 224,694 1,339,694 6,795,181
2010 6,802,999 !,350,750 1,095,000 181,888 !,276,888 6,7'29,136
2011 6,716,538 1,286,344 1,075,000 138,488 1,213,488 6,643,681
2012 6,640,585 1,221,400 1,055,000 95,888 1,150,888 6,570,073
2013 6,571,609 !,156,663 1,030,000 53,544 1,083,544 6,498,490
2014 6,263,656 849,750 760,000 16,150 776,150 6,190,056
2015 5,4 i 8,826 5,418,826
2016 5,411,386 5,41 !,386
2017 5,120,071 5,120,071
2018 4,302,381 4,302,381
2019 3,386,356 3,386,356
2020 3,395,550 3,395,550
202 ! 3,405,644 3,405,644
2022 1,471,772 1,471,772
$116368.380 $ 15.059.594 $ 11.580,000 $ 2.673,269 $ 14.253.269 $115.562.055
ANTICIPATED ISSUANCE OF REVENUE BONDS... The City does anticipate the issuance of additional revenue bonds within the
next 12 months.
PENSION FUND... The City provides pension benefits for all of its full-time employees through the Texas Municipal Retiremem
System ("TMRS"), a State-wide administered pension plan. The City makes annual contnbutions to the plan equal to the
amounts accrued for pension expense. (For more detailed information concerning the retirement plan, see APPENDIX B -
"ExcERPTS FROM THE CITY'S ANNUAL F~NANCXAL REPORT" - Note #E).
* Preliminary, subject to chaste.
FINANCIAL INFORMATION
TABLE 4 - CONDENSED STATEMENT OF OPERATIONS
Unaudited Fgr Fiscal Year Ended Scotember 30
2002 2001 2000 1999
1998
Electric $ 43,479,619 $ 42,290,635 $ 35,295,718 $ 32,561,234 $ 33,257,006
Water and Wnstewater 15,825,329 15,118,463 15,696,095 14,276,533 14,198,325
Interest 1,819,970 2,787,779 2,467,905 1,568,912 2,032,895
Other 1.865.381 1.734.798 1,940~771 2.263.337 2,510.885
Total Revenues $ 62,990,299 $ 61,931,675 $ 55,400,489 $ 50,670,016 $ 51,999,111
Expenses:
Total Expenses
Net Available for Debt Service
$ 44.623.788 $ 45.465.778 $ 37.149.229 $ 30.080.145 $ 27.885.854
$ 18.366.511 $ 16,465.897 $ 18.251.260 $ 20,589~871 $ 24.113.257
TABt~ 5 = Cov~p~Gg .~'qu ~ B~cts
Maximum Princil~l and Interest Requirements (2003) ............................................................... $
Coverage of Average Requirements by 9/30/2001 Net Income ...................................................
Average Annual Principal and Interest Requirements (2002-2022) ............................................. $
Coverage of Average Requir~nents by 9/30/2001 Net Income ...................................................
7,753,918 *
2.12 Times
5,778,103 *
2.85 Times
TABLE 6 = VALUE OF THE SYSTEM
Utility Systems
Machinet~ & Equipment
Buildings
Land
Consimction in Progress
Less: Accumulated Depreciation
Net System Value
Unaudited Fiscal Year Ended Scotember 30
2002 2001 2000 1999
173,967,687 $ 150,993,984 $ 129,591,712 $125,291,975
2,595,033 2,595,033 2,574,247 2,656,077
1,721,714 1,721,714 1,721,714 1,721,714
i,072,579 1,072,579 1,01 !,595 1,01 !,595
19~284~i 18 22.953.489 20.002.622 12.093.822
198,641,131 $ 179,336,799 $ 154,901,890 $ 142,775,183
49.314.172 45fl42.750 4~J58.199 38.826.687
149.326.959 l; 133.594.049 $ 112.743.691 $ 103.948.496
1998
120,339,041
2,660,650
1,710,414
1,011,595
7,136.086
132,857,786
35.373.609
97.494.177
* pr~i,,,,i,,,,,.y, subject to change.
10
TAm,~ 7- Crrv's EQotrv !~ SVSTF, M
Unaudited
Ri?? ...... 2002 2001
Net System Value
Current Assets
Restrict~i Assets
Other Resources
Deferred Charges
Total
Current Liabilities $ 5,209,879 $ 5,728,574
Current Liabilities Payable from
Restricted Assets ! 2,854,422 10,979,279
Revenue Bond Debt 75,070,000 60,020,000
General Obligation Bonds 0 0
Other Debt 66.255 69.371
Total Liabilities $ 93,200,556 $ 76,797,224
City's Equity in System $ 121,866,189 $ 114,548,760
Percentage of Equity in System 56.66% 59.86%
Fi~!! Year Ended Seotember 30
2000 1999 1998
$ 149,326,959 $ 133,594,049 $ 112,743,691 $ 103,948~96 $ 97,484,177
37,065,757 33,120,006 39,030,059 40,646,018 36,300,554
27,668,597 23,726,170 15,927,833 8,551,386 11,288,295
200,000 200,000 0 0 130,158
805.432 705.759 641.763 606.927 646.410
$ 215,066,745 $ 191,345,984 $ 168,343,346 $ 153,752,827 $ 145,849,594
$ 4,964,116 $ 3,487,931 $ 3,982,006
6,731,311 6,450,173 6,718,857
39,685,000 32,370,000 39,530,000
0 0 0
35.176 (~.078]
$ 51,415,603 $ 42,303,026 $ 50,186,100
$ 116,927,743 $ !!1,449,801 $ 95,663~94
69.46% 72.49% 65.59%
CAPITAL IMPROVEMENT PROGRAM
Thc utility projects planned for the next two years include continued underground conversion of electric service along major
thoroughfares, line extensions, new customer connections and other system improvements. Beginning in fiscal year 1996 the
City's Electric Utility established the practice of using revenues and current unobligeted resources to pay for certain capital
projects. The City anticipates this practice will help to reduce fontrc debt rcquiranents end provide a more stable basis for future
The City Council focuses on utilization of cunent assets to meet capital requirernent~ The City created a Drainage Utility in
1997. The revenues from the Drainage Utility are planned for use in construction of drainage capital projects without issuing
debt. Cmrent resources and revenues of the water system are used for certain types of capital projects similar to the electric
system. Capital projects for the water system includes a 3.5 million gallon elevated storage tank, an additional well, a parallel
u'ansmission line and line extensions. Wast. ewnter projects include expansion of the Lick Creek wastewater treatment plant to 2
MGD capacity, outfall lines and service connections.
Basis of,4ccounfin~...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-balencing set of accounts. Fund accounting segregates fonds according to
their intended purpose and is used to aid management in demouswating compliance with finence-related legal and comractual
provisions. The minimum number of funds are 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 fired types use the flow of
con'ent 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
Development Services, the support functions for these areas, and the administrative functions for the City.
Thc General Fund for thc 2002-2003 fiscal year is influenced by current policies end any approved policy changes. Thc policies
include inter-fund equity; nmintalning a balance between revenues and expenditures; and maintaining the level of service
currently provided as the City experiences residential and commercial 8~owth.
The City's financial pohcies 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 end short term projects.
11
Debt Service Fund...The Debt Service Fund accounts for the servicing of general long-term debt not being financed by
proprietary or nonexpendable trust funds. It is the City's policy to maintain at least 15% of annual appropriated expenditures for
debt service and any associated fees as the Debt Service Fund balance at fiscal year end. The fund is in compliance with that
policy.
~...Prior to September !, the City Manager submits to the City Council a proposed operating budget for
the fiscal year commencing the following October I. The operating budget includes proposed expenditures and the means of
financing them. Ail budget requests are compiled by the office of Management and Budget and presented with comparative and
supporting data to the Mayor and City Council for review. Public hearings are properly advertised and conducted at City Hall
for taxpayer comments. Prior to September 27, the budget is legally enacted through passage of an ordinance. The City Council
must approve all transfers of budgeted amounts between departments within any fund and any revision that alters the total
expenditure of any fund. An amount is also budgeted each year for contingencies which may arise.
The City invests its investeble funds in investments author/zed by Texas law in accordance with investment polities approved by the
City Council. Both state law and the C~ty's investment policies are subject to change.
LEGAt. I~VZSm~... Under Texas law, the City is anthorized to invest in (!) obligations of the United States or its agencies and
ins~umentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities, (3) collateralized mol~gage
obligations directly issued by a federal agency or insmunentality of the United State~, the underlying security for which is guaranteed
by an agency or inswamentslity oftha United States, (4) other obligations, the principal of and interest on which are unconditionally
gnaranimd or iusumi by, or backed by the full faith and ct~lit of, the State of Texas or the United States or their ~'five agencies
and instrumantalities, (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 finn not less than A or its equivalent, (6) cerdficates of deposit that
are guaranteed or insured by the Federal Deposit Insurance Corporation or are secured as to principal by obligations described in the
preceding clauses or in any other manner and amount provided by hw for City deposits, (7) cerdficates of deposit and share
certificates issued by a stste or federal credit union demiciled in the State of Texas that nrc gnarantend or insured by the Federal
Deposit Insorance Corporation or the National Credit Union Sluue Insurance Fund, or are secured as to principal by obligations
deacdbed in the clauses (i) through (5) or in any other manner and amount provided by hw for City depusi~ (8) fully onlhteralized
repurchase ngreements that have a defined ter~ i,ntion date, are fully secured by obligations described in clause (1), and are placed
through a prinmy government securities dealer or a fumncial institution doing business in the State of Texas, (9) bankers'
acceptances with the remaining term of 270 days or less, if the shot,-term obligations of the accep~g bank or its parent are rated at
least A-I or P-! orthe equivalent by at least one nationally recngnizrd erndit rating agency, (10) commercial papor that is ~_t_~_ at
least A-I or P-! or the equivalent by either (a) two nationally recogniz~i credit raging agsneies or Co) one nationally recognized credit
rating ngency ff the paper is fully seoued by an irrevocable let'm' of credit issued by a U.S. or state bank, (11) no-lond money market
mutual funds re~iated by the Securities and F_zw. ha~e Commission tim have a dollar weigh~i nvernge pmfolio maturity of 90
days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, (12) no-load
mutual funds regism'nd with the Securities and Exchange Commission that: have an average wei~ted maturity of less than two
years; invests exclusively in obligations desen'bed in the preceding clauses; and are continuously rated as to investment quality by at
least one nationally recognized inve~ment rating firm of not less than AAA or ~ equivalent, and (13) bunds, notes or other
obligations, issued by the State of Israel. In addition, the City may invest bond proceeds in accordance with the roms of a
gnaranlmd investment contract, consistent with the provisions of Chapter 2256, Texas Govemmmt Code (Rte"PFIA").
The City rnny invest in such obligations directly or through govenunent investment pools that invest solely in such obligations
provided that the pools are rated no lower than AAA or AAAra or an equivalent by at least one nationally recognized rating service.
The City is specifically prohibited from investing in: (I) obligations whose payment represents the coupon payments on the
ontstanding principal balance of the underlying mortgage-backed security collateral and pays un principal; (2) obligations whose
payment ~-'presents the principal sue, am of cash flow from the underlying mottgsge-backed security and bears no interest; (3)
collateraliznd mortgage obligations that have a stated final maturity of gream' than 10 years; and (4) collateralized mortgage
ItO~'TMENT POtaC'~ZS... 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, matodty, nnd the quality and capability of
investment management; and that include a list of anthorized investments for City funds, maximum allowable stated maturity of any
individual invesm~ent and the maximum average dollar-weighted maturity allowed for pooled fund groups. All City funds must be
invested consistent with a f~mally adopted "Investment Strategy Statement" that specifically addreases each fund's investment. Each
Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of
principal, (3) liquidity, (4) nmdcetsbility ofeach invesma~nt, ($) diversification oftbe portfolio, and (6) yield.
12
prudence, dis~,cfion, and intelligence would exercise in th~ management of the per~n's own affairs, not for speculation, but for
inveslmeut, considering the probable safety of capital sad the probable income to be derived." At least quarterly the investment
officers of the City shall submit an inveslmem report detailing: (I) the investment position of the City, (2) that all investment officers
jointly prepared sad signed the report, (3) the beginning market value, any additions and changes to market value and the ending
value of each pooled fund group, (4) the book value sad market value of each separately listed asset at the beginning sad end of the
repotting period, (5) the matwity date of each separately invested asset, (6) the acconnt 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
suategy statements and (b) state law. No person may invest City funds without express written authority from the City Council.
AoorrlON~ PaOVlSiONS ... Under Texas law the City is additionally required to: (I) annually review its adopted policies sad
strategies; (2) require any investment officers' with per~nal 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) requi~ the
registered principal of firms seeking to sell securities to the City to: (a) receive and r~ew the City's investment policy, (b)
acknowledge that reasonable conlrols and procedures have been implemented to preclude imprudent investment activities, and (c)
deliver a writ~n statement at. sting to these nxluirements; (4) perform an annual audit of the nvmagem~ conm~ls on investments sad
~ to the City's investment policy; (5) provide specific investment ~ining for the Treasurer, Chief Financial Otftcar sad
investment office~; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investruent of rever~
repurchase agreement funds to no greater than the term of the reverse o~rehase ngreemen~ (7) reslrict the investment in non-money
market mutual funds of any portion of bond proceeds, reserves nmi funds held for debt service and to no more than 15% of the entity's
monddy average fund balance, excluding bond proceeds and reserves and ether funds held for debt service; and (8) require local
government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board
Under Texas law, the City may contract with an investment management finn registered under the Investment Advisers Act of
1940 (15 U.$.C. Section 801>-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 respons~ility as fiduciary of
its assets. In order to renew or extend such a con~ract, the City must do so by order, ordinance or r'-,-,olution. The City has not
conuacted with, and has no present intention of contracting with, any such investment management finn or the State Securities
Board to provide such services.
CITY'S IXVESTMr. NT POLICY...The Director of Fiscal Services shall promptly invest all City funds with the Bank Depository in
accordsaca with the provisions of the current Bank Depository Agreement or in any negotiable instrument that the 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 perfonnnnce will be provided to the City Council. In conjunction with the
monthly financial report, the Director of Fiscal Services shall prepare sad provide a written recapitulation of the City's
invnslment portfolio to the Council, detailing each City investment inslrument with its rate of return sad maturity date.
TABLE 8 = CURRENT INX~.STMENT~
As of September 30, 2002, the City's investable funds were invested in the following categories:
Investment Type
Demand Bank Accounts
Pooled Cash (Texpool)
Money Market Mutual Fund (Fidelity)
Flexible Repurchase Agreements
U.S. Treasury Notes sad Bonds
Subtotal
Book Market
Value Value
$ 1,662,939 $ 1,662,939
4 !,040,499 4 i,040,499
10,055,536 10,055,536
22,310,636 22,310,636
2.012.188 2,040,000
$ 77,081,798 $ 77,109,610
Agencies:
Federal National Mortgage Association (FNMA)
Federal Farm Credit Bank (FFCB)
Federal Home Loan Mortgage Corporation (FHLMC)
Federal Home Loan Bank (FHLB)
Subtotal
Total
$ 20,015,594 $ 20,246,250
4,005,880 4,046,875
I 1,055,340 11,163,649
24.040.763 24.360,~ ! 2
$ 59.117,577 S 59.817.086
$ 136.199,375 $ 136.926.696
13
SELECTED PROVISIONS OF THE BOND ORDINANCE
The Ordinance authorizing the Bonds is in substantially the same form as the ordinances authorizing the outstanding bonds,
selected provisions of which are shown below:
The Ordinmce authorizes the issuance and sale of the Bonds and preacn'bes terms, conditions, and provis/ons for the payment of
the principal of and interest on the Bonds by the City. Set forth below is a summary of certain provisions of the Ordinance.
Paragraph headings are supplied for ease of reference and are not contained in the Ordinance. Such summary is not a complete
description of the entire Ordinance and is qualified by reference to the Ordinance.
DEFINmONS
The following terms have thc respective meanings specified:
(a) "Additional Bonds" means the additional parity bonds wh/ch the City reserves the right to issue.
(b) "Bond Fund" means the fund provided for in the Ordinances authorizing issuance of the P~wionsly Issued Parity Bonds.
(c) "Bonds" means the Bonds to be issued by the Ordinance.
(d) "City" refers to the City of College Station, Texas, or where appropriate to the City Council thereof.
(e) '~::ity Council" means the City Council of the City.
(f) "Net Revenues" means the gross revenues of the Systems less the reasonable expenses of operation and maintenance,
including all salaries, labor, materials, repairs, and extensions necessary to render efficient service; provided, however, that
only such repairs and extensions, as in thc judgment of the City Council reasonably and fairly exercisad, arc necessary to
keep thc plant or utility in operation and render adeqtmte service to thc City and the inhabitants thereof, or such as might be
necessary to meet some physical accident or condition which would otherwise impair thc Parity Bonds shall be deducted in
clctermin~"Nct Revenues.'
(g) 'Parity Bonds" means collectively thc Previously Issued Parity Bonds, the Bonds, and any Additioml Bonds.
(it) 'Paying Agant/Registrar" means, initially, JPMorgan Chase Bank, Dallas, Texas, or any successor appointed in its
capacity as such.
(i) "Systems" as used in the Ordinance means the City's combined watenvorks system, wastcwater system and electric light
(j) "Systems Fund" means the fund provided for in the Ordinance.
The City covenants and agrees with the holders of the Parity Bonds, if and when issued, that it will:
1. Fix and maintain rates and collect charges for the facilities and services afforded by the Systems which will pwvide revenues
sufficient at all times:
a) To pay all operation, ~ depreciation, replacement, and betterment charges of the Systems;
b) To establish and maintain the Bond Fund;
c) To generate in each year Net Revenues equal to !.25 times the maximum annual requirement for the payment of the
principal of and intz~st on the Parity Bonds at the time outstanding and payable f~m the revenues of the Systems
(although anmunts shall be paid into the Bond Fund only in aenordance with the Ordinauce); and
d) To pay all indebtedness other than bonds outstanding against the Systems as and when the same become due; and
2. Deposit as collected all re,~eoues derived from the operation of the Syst~ns into the Systems Fund which shall be kept separate
and apart from all other fixnds of'he City.
14
FLOW OIr FUNDS
There has been created and established on the books of the City, and accounted for separate and apart f~om all other funds of the
City, a special Systems Fund. All gross revenues received from operation of the Systems are deposited into and credited to the
Systems Fund immediately upon receipt. The necessary and reasonable expenses of oparation and maintenance of the Systems
are paid first from the Systems Fund. The City then makes substantially equal monthly payments into the Bond Fund
(commencing with respect to the Parity Bonds on the date of delivery to the initial purchaser thereof) during each year in which
any of the Parity Bonds are outstanding in an aggregate amount equal to 10(PA of the amounts required to meet the interest and
principal payments falling due on or before the next maturity date of the Parity Bonds. The City must, at least five days prior to
August 1, 2003, and each February I and August I thereafter, deposit into the Bond Fund any additional Net Revenues available
in the Systems Fund which may be necessary to pay in full the int~est on and principal, if any, coming due on the Parity Bonds
on such August I or February 1. In no event will an amount in excess of the amounts stated above be placed in the Bond Fund
for the payment of the interest on or principal of the Parity Bonds, and any amount so placed may be withdrawn by the City and
replaced in the Systems Fund. Any funds remaining in the Systems Fund, after provision for the reasonable cost of operating
and maintaining the Systems, and after paying the amounts required to be paid into the Bond Fund, amy be used for any lawful
purpose.
ADDITIONAL PARITY BONDS
In eddition to the inferior lien bonds authorized by law, the City expressly reserves thc right hereafter to issue additional panty
bonds and other evidences of indebtedness now or hewn_tier authorized by the Legislature of Texas (collectively, the "Additional
Bonds"), and the Addilional Bonds, when issued, may be secured by and payable fi'om a first lien on and pledge of the Net
Revenues of the Systom in the same manner and to the same extent as are the Outstanding Parity Bonds but subject to the
provisions that follow, and the Previously Issued Parity Bonds, the Bonds, and the Additional Bonds may in all respects be of
equal dignity. It is provided, however, that no Additional Bonds may be issued unless:
As long as the Previously Issued Parity Bonds am outstanding and unpaid, all material conditions set forth in the Parity Bonds
As long as any of the Previously Issued Parity Bonds are onistanding, the "net earnings" of the System for the fiscal year next
preceding the month in which the ordinance authorizing such Additional Bonds is adopted were equal to each of the provisions
in items (a) and (b) below, determined independently and certified by an independent firm of certified public accountants, based
upon an annual audit of the books of the System=
An independent t'mn of certified public accountants, based upon an annual audit of the books of the Systems, certifies that the
net earnings of thc System for the previous fiscal year or for any 12 consecutive month paried ending not more dan 90 days
prior to the date of the adoption of the ordinance authorizing such Additioml Bonds or other evidence of indebtedness were
equal to each of the following determined independently:
(a) at least 1.40 times the average annual requirements for the payment of principal and interest on the then ontstanding Parity
Bonds and othe~ evidences of indeb~dness payable from the revenues of the Systems and un said Additional Bonds or
other evidences of indebledness, when issued, sold and delivered; and
(b) at least !.25 times the maximum annual requirement for the payment of principal and interest on the Parity Bonds then
outstanding and on such Additioml Bonds, when issued, sold and daliverod;
provided, however, should the certificate of the accountant ~f~ that the net earnings of the Systems for the fucal year
covered thereby were, in either case, less thnn required above, and a change in the rates and charges for services afforded by the
Systems became effective at least sixty (60) days prior to the scheduled date of adoption of the ordinance authorizing such
Additional Bonds, then such Additional Bonds may nevertheless be issued if an independent engineer or engineering finn have
a favorable reputation with respect to such matters certifies that, had such change in rates and charges been effective for the
fiscal year covered by the aceonntant's cerfifica~, the net earnings for the Sys~m for the fiscal year covered by the
accountant's ce~ificate would have met the tests specified in (a) and fo) above.
The term "net earnings" means all of the Net Revenues of the Systems, exclusive of income received specifically for capital
terms, after deduction of the reasonable expenses of operation and maintenance of the Systems excinding expenditures which
under standard acconnting practice should be charged to capital expenditures or depreciation.
4. Sald Additional Bonds are made to mamre on Febmary I in each ofthe yea~ in which they are scheduled to matore; and
15
The entire issue of such Additional Bonds is insured in a manner similar to the Previously Issued Parity Bonds by an insurance
company or association of companies whose insured obligations are rated by either Moody's Investors Service, Inc. or Standard
& Poor's Public Finance Ratings in the same or a higher rating category than the inmu~ obligations of the City (at the time
such Additional Bonds arc to be issued) or the City shall establish a Reserve Fund for such Additional Bonds by any method or
combination of methods that the City deems reasonable and appropriate provided that (i) the amount of such Reserve Fund (or
coverage of any surety bond in lieu thereof) must at least equal the maximum annual debt service requirements of such
Additional Bonds, not to exceed the maximum then permitted by applicable regulatiuns, procedures, or published ratings of the
Internal Revenue Sendce (the 'Reserve Minimum"); (ii) if any cash reserve fond is funded by making transfers of Net Revenues
in the Systems Fund, such mmsfors must be made each month in an amount reasonably sufficient to reach the reserve minimum
within a period of not more than five years after such Additional Bunds arc sold and delivered; and (iii) such Reserve Fund will
be for thc equal benefit of the owners of(x) such Additional Bonds, (y) Parity Bonds theretofore issued which are not insured in
a manner similar to the Previously Issued Parity Bonds, and (z) any Additional Bonds thereafier issued which are not so insured.
M~4~q'FF.N~ICE AND OPERATION; INSURANCE
The City must maintain the Systems in good condition and operate the same in an efficient manner and nta reasonable cost. So
long as any of the Bonds are outstanding, the City agrees to maintain insurance on the Systems, for the benefit of the registered
owner or owners of the Bonds, of a kind and in an amount which usually would be carried by private companies engaged in a
similar type ofbusiness in the same area. The Ordinance is not being conslmed as requiring the City to expend any funds which
are derived from sources other than the operation of the Systems, but nothing herein will be construed as preventing the City
from doing so.
The City must keep propc~ books, records, and accounts, separate from all other books, records, and accounts, in which complete
and correct entries must be made of all transactions relating to the Systems. Upon written request made not more than 60 days
following the close of the fiscal year, the City must fornish to any registered owner of any Parity Bonds, complete financial
statements of the Systems in reasonable detail covering such fiscal year, certified by thc City's Auditor. Any registered owner or
owners of 25% of the Parity Bonds at the time outstanding have the right at all reasonable times to inspect the Systems and all
records, accounts, and data of the City relating thereto.
ADDITIONAL COVENANTS
The City f~her covenants that:
!. h has the lawful power to pledge the revenues suppo~g the Parity Bunds and has lawfully exercised said power under thc
Constitutiun and laws of the State of Texas, that the Parity Bonds are ratably scarred by said pledge of income, in such manner
that one Parity Bond has no preference over any other Bond.
2. Other than for the payment of the Parity Bonds, the rents, revenues, and income of the Systems have not in any manner been
pledged to the payment of any debtor obligations of the City or of the Systems.
3. So long as any of the Pmity Bonds remain unpaid, the City will not sell or encumber the Systems or any substantial pan thereof,
and that it will not encumber die revenues the~of unless such encumbrance is made pummnt to this Ordinance or is junior and
subordinate to ali of the provisiuns ofthe Ordinance.
4. No free service of the Systems is allowed, and should the City or any of its agencies or instmmentalitins mnke use of the
services and facilities of die System, payment of the reasonable value thereof must be made by the City out of funds from
sources other than the revenues and income of thc Systcms.
5. To the extent that it legally may, so long as any of the Bonds or any interest thereon is outstanding, no franchise will be granted
for the installation or operatiun of any competing systems and that the City will prohibit the operation of any such systems other
than those owned by the City and the operation of any such systems by anyone other than the City is hereby prohibited.
16
OPINION
On the date of initisl delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel, will render its
opinion that, in accordance with statutes, regulations, published mhngs and court decisions existing on the date thereof
("Existing Law"), (1) interest on the Bonds for federal income tax purposes will be excludable from the "gross income" of the
holders thereof and (2) the Bonds will not be treated as "specified private activity bonds' the interest on which would be
included as an altemative minimum tax preference item under section 57(aX5) 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 thc purchase, ownership or disposition of the Bonds. See "APPENDIX C - FORM OF OPINION OF BOND COUNSEL."
In rendering its opinion, Bond Counsel will rely upon (a) certain information and representations of the City, including
information and representations contained in the City's federal tax certificate, Co) the verification report prepared by Grant
Thornton LLP, certified public accountants, regarding the mathematical accuracy of certain computations and (c) covenants of
the City contained in the Bond documents relating to certain matters, including arbitrage and the use of thc proceeds of the
Bonds and the property financed or refinanced therewith. Although it is expected that the Bonds will qualify as tax-exempt
obligations for federal income tax purposes as of the date of issuance, the tax-exempt status of the Bonds could be affected by
future events. However, future events beyond the control of the City, as well as the failure to observe the aforementioned
representations or covenants, could cause the interest on the Bonds to become taxable retroactively to the date of issuance.
Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on thc
aforementioned information, representations and covenants, Bond Counsel's opinion is not a guarantee of a result. The Existing
Law is subject to change by the Congress and to subsequent judicial and administrative interpretadon by the courts and the
Department of the Treasury. There can be no assurance that such 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 Bonds.
Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and thc representations of the City
that it deems relevant to render such opinion and is not a guarantee of a remit. No assurances can be given as to whether the
Internal Revenue Service will commence an audit of the Bonds, 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 City as the taxpayer and the Bondholders may have no right to participate in such
procedure. No additional interest will be paid upon any determination of taxability.
FEDERAL INCOMI~ TAX ACCOUNTING TREATMENT Olr ORIGINAL ISSUE DISCOUNT
The initial public offering price to be paid for one or more maturities of the Bonds (the "Original Issue Discount Bonds") may be
less than the principal amount thereof or one or more periods for the payment of interest on the bonds may not be equal to the
accrual period or be in excess of one year. in such event, the difference between (i) the "stated redemption price at maturity" of
each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would
onnstitoto original issue discount. The "stated redemption price at matufit~ means the sum of all payments to be made on the
bonds less the amount of all periodic interest payments. Periodic interest payments am payments which are made during equal
accrual periods (or during any unequal period if it is the initial or final periud) 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 Bond 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 Bond equal to that portion of the amount of such original issue discount allocable to the accrual pefiud. For a
discussion of certain collateral federal tax consequences, see discussion set forth below.
In thc event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity,
however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond 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 Bond was held by such initial owner) is includable in gross income.
Under Existing Law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity
thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual
anniversary dates of the date of the Bonds and ratably within each such six-month period) and the accrned amount is added to an
initial owners basis for such Original Issue Discount Bond 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 mulnplied by the yield
to stated maturity (determined on the basis of compounding at thc 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 pednd on such Original Issue
Discount Bond.
17
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue
Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to roles
which differ from those described above. All owners of Original Issue Discount Bonds 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
redempdou, sale or other disposition of such Original Issue Discount Bonds 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
Bonds.
COLLATERAL FZ~gP.A~ I~COMZ TAX CONSEQUENCES
The following discussion is a summary of certain collateral federal income tax consequences resulting from thc purchase,
ownership or disposition of the Bonds. This discussion is based on existing statutes, regulations, published rulings and court
decisions, ali of which are subject to cbangc or modification, retroactively.
Thc following discuss/on is applicable to investors, other than those who are subject to special provisions of thc Code, such as
financial institutions, property and casualty insurance companies, life insurance companies, owners of inWxests in a FASIT,
individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain S
corporations with Subchapter C earnings and profiu 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 TRF~TMENT WHICH MAY BE ANTIC~ATED TO RESULT FROM THE PURCHASE, OWNERS~ AND
DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS.
Interest on the Bonds will be includable as an adjustment for "adjusted current earnings" to calculate the alternative minimum tax
imposed on corporations by section $5 of the Code. Section 5:5 of the Code imposes a tax equal to 20 percent for corporations,
or 26 percent for noncorporate taxpayers (28 percent for taxable income exceeding S175,000), of the taxpayer's "alternative
minimum taxable income," if the amount of such alternative minimum tax is greater than the taxpayer's regular income tax for
the taxable year.
Interest on the Bonds may be subject to the "branch profits tax" imposed by section 884 of the Code on the effectively-connected
earnings and profits of a foreign corporation doing business in the United States.
Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose inte~st
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 Bonds, if such obligation was acquired at a "market discount" and if the fixed maturity of such obligation
is equal to, or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the extent such
gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market
discount is ignored. A 'rmuket diacount 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 pdoe plus accrued original issue discount). The "aecmed manet discount" is the amount which bea~ 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.
STATEs LOCAL AND FOm~N TAXES
Investors should consult their own tax advisors concerning the tax implications oftbe purchase, ownership or disposition of thc
Bonds 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.
OTHER INFORMATION
Thc presently outstanding t~vcnue debt of thc City is rated "Al" by Moody's and "A+" by S&P. The City also ires other issues
outstanding which are rated "Aaa" by Moody's and "AAA" by S&P through insurance by various commercial insurance
companies. Applications for contract ratings on this issue have been made to Moody's and S&P. An explanation of the
significance of such ratings may be obtained from the company furnishing the rating. 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 enthuly by
either or both of such rating companies, if in the judgment of either or both companies, circumstenoes so wan'ant. Any such
downward revision or withdrawal of such ratings, or either of them, may have on adverse eff~t on the market price of the
18
LITIGATION
Prior to January I, 1996, the City purchased electric power and energy from four cities (Bryan, Denton, Gadand and Greenville)
of the Texas Municipal Power Agency (TMPA) which was delivered through the TMPA and Bryan Iransmission facilities. On
January I, 1996, the City of College Station began purchasing its power through Texas Utilities ti'U) Corporation (now known
as TXU). Bryan and TMPA alleged that College Station and TU were not authorized to use their respective facilities to deliver
power to the City of College Station system and were thus trespassing on those facilities. Bryan and TMPA are seeking
unspecified money damages for the alleged trespass.
The Texas Public Utility Commission (TPUC) adopted rates and charges effective January 1, 1996. The rates and charges so
established were to remain in effect until the TPUC adopted Iransmission rates for use throughout the Electric Reliability Council
of Texas (EPCOT). TMPA and Bryan appealed those rates and charges. The TPUC established rates and charges in a similar
numner for the period January !, 1997 through August 31, 1999. TMPA and Bryan appealed those charges each year through the
TPUC and various state district courts.
In addition, the City is a party to an action before the Federal Energy Regulatory Commission (FERC) regarding rate issues for
the same per/od.
On June 18, 2001, the Texas Supreme Court invalidated the rate setting portions of TPUC Substantive Rules 23.67 and 23.70.
The court held that the TPUC lacked anthofity to establish mmsmission rates and charges for the period September 1, 1995
through August 31, 1999 for municipally owned transmission facilities. The TPUC and FERC had prcviously set rates for this
period based on the methodology used by the TPUC. At this point, it is not clear the effect these actions will have on the City's
general purpose financial statements. Due to the complexity of the rate setting methodologies and the legal issues involved,
mnnagement is unable to make a determination of loss contingency, if any, therefore, no provision has been made in the
accompanying general purpose financial ststemants. Management intends to vigorously defend the City's position in regard to
these actions.
LEGAL INVESTMENTS AND ELIGIBn.iTY TO SECURE PUBLIC FUNDS IN TEXAS
Section 9 of the Bond Procedures Act provides that thc Bonds "will constitute negotiable instruments, and are investment
secur/tiea governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any previsions of law or court decision to
the contrary, and are legal and authorized investments for banks, savings banks, Irust companies, building and loan associations,
savings and loan associations, insurance companies, fiduciaries, and Imstees, and for the sinking fund of cities, towns, villages,
school districts, and other political subdivisions or public agencies of the State of Texas". The Bonds are eligible to secure
deposits of any public funds of the state, its agencies and political subdivisions, and are legal security for those deposits to the
extent of their market value. For political subdivisions in Texas which have adopted investment policies and guidelines in
accordance with the Public Funds Investment Act (V.T.C.A., Government Code, Chapter 2256), the Bonds may have to be
assigned a rating of"A" or its equivalent as to inveslment quality by a national rating agency before such obligations are eligible
investments for sinking funds and other public funds. No review by the City has been made of the laws in other states to
determine whethe~ the Bonds are legal investments for various institutions in those states.
No representation is made that the Bonds will be acceptable to public entities to secure their deposits or acceptable to such
institutions for investment purposes. The City has made no investigation of other laws, rules, regulations or investment criteria
which might apply to any such persons or entities or which might otherwise limit the suitability of the Bonds for any of the
foregoing proposes or limit the authority ofsoch persons or entities to purchase or invest in the Bonds for such purposes.
L~3AL Ol, lmOl~S
The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including
the unqualified approving legal opinion of the Attorney General of Texas approving the Bonds and to the effect that the Bonds
are valid and legally binding special 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 Bonds 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 MATFERS"
herein, including the alternative minimum tax on corporations. Bond Counsel has reviewed the information relating to the Bonds
and the Ordinance to determine that such information conforms to the Ordinance. The legal fee to be paid to Bond Counsel for
services rendered in connection with the issuance of the Bonds is contingent on the sale and delivery of the Bonds. The legal
opinion will accompany the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the
Book-Entry-Only System. With respect to the transaction described in the Official Statement, Bond Counsel represents only the
City.
The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the
attorneys rendering thc opinions as to the legal issues explicitly addressed therein. [n render/ng a legal opinion, the attorney does
not become an insurer or guarantor of that expression of professional judgement, 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.
19
A~cn'Y OF FINANCIAt, DATA AND OTi~R INfOaMATION
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 nmde to such documents for further information. Reference is made to original
documents in all respects.
CONTINUING DISCLOSURE OF INFORMATION
In the Ordinance, the City has made thc following agreement for the benefit of the holders and beneficial owners of the Bonds.
The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the
agreement, the City will be obligated to provide certain updated financial information and operating data annually, and timely
notice of specified material events, to certain information vendors. This information will be available to securities brokers and
others who subscribe to receive the information from the vendors.
ANNUAL REPORTS ... The City will provide certain updated financial information and operating data to certain information
vendors annually. Thc 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 I through 8 and in Appendix B. The
City will update and provide this information within six months after the end of each fiscal year. The City will provide the
updated information to each nationally recognized municipal securities information repository ("NRMSIR") and to any state
information depository ("SID") that is designated by the State of Texas and appwved by the State of Texas and approved by the
staffofthe United States Securities and Exchange Commission (the "SEC').
The City may provide updated information in foil text or may incorporate by reference certain other publicly available
documents, as permitted by SEC Rule 15c2-12 (the "Rule"). The updated information will include audited finnncial statements,
if the City commissions an audit and it is completed by the required time. If audited finnncial statements are not available by the
required time, the City will provide uuaudited 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 pursuan~ 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 each NRMSIR and the SID of the change.
The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a
qualified SID. The address of the Municipal Advisory Council is 600 West 8th SIreat, P.O. Box 2177, Austin, Texas 78768-
2177, and its telephone number is 512/476-6947.
M_~TraUAL EVENT NOTICES... The City will also provide timely notices of certain events to certain information vendors. The
City will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision to
purchase or sell Bonds: (l) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled
draws on debt service resins, es reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflccting financial
difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) edverso tax opinions or events
affecting thc tax-exempt status of the Bonds; (7) modifications to rights ofbolders of the Bonds; (8) Bond calls; (9) defeasances;
(10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes. (Neither thc Bonds nor
the Ordinance make any provision for liquidity entmucement.) In addition, thc City will provide timely notice of any failure by
the City to provide information, data, or financial statements in accordence with its agreement described above under "ANI, WAt.
Rr~OaTS." The City will provide each notice described in this paragraph to the SID and to either each NRMSIR or the
Municipal Securities Rulemaking Board ("MSRB").
AVAlCAnp.rrv ol~ ImrOg, M~TION mOM NRMSIRS AInU SID... The City has agreed to provide the foregoing information only
to NRMSIRs and the SID. The information will be available to holders of Bonds only if the holders comply with the procedures
and pay the charges established by such information vendors or obtain the information through securities brokers who do so.
LIMITATIONS AND AMENDMENTS... The City has agreed to update information and to provide notices of material events only as
described above. The City has not agreed to provide other informadon that may be relevant or material to a complete
presentatinn of its financial results of operations, condition, or prospects or agleed 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 Bonds at any future date. The City disclaims any contractual or tort liability for
damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made
pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the City to comply with its
agreement.
2O
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 Bonds 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 ora majority in aggregate principal amount of the outstanding
Bonds consent to the amendment or Co) any person unaff~liated 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 Bonds. The
City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the
applicable provisions of the Rule or a court of final jurisdiction enters judhnnent that such provisions of the Rule are invalid, but
only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling
Bonds in the primary offering of the Bonds. 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 "A~U^L R~oR'rs" 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.
COMPLO~CE W~TH Paloa UNDERTAKINGS... The City has complied in all material respects with all continuing disclosure
agreements made by it in accordance with the Rule.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
The accuracy of (i) thc mathematical computation of the adequacy of the maturing principal amounts of thc Escrowed 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 Obligations and (ii) the mathematical computation of yields supporting Bond Counsel's conclusion that
the Bonds are not "arbitrage bonds" under the Code will be verified by Grant Thornton LLP, whose opinion with respect thereto
will be available at the time of delivery of the Bonds. 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 examining the
arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and infonnation on
which the computations are based and, accordingly, has not expressed un opinion on the data used, the reasonableness of the
assumptions, or the achievability of the forecasted outcome.
UNDERWRITING
The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the City, at an underwriting discount of
· The Uudervaim's will be obligau~i to purchase all of the Bonds if any Bonds are purchased. The Bonds to be offered
to ~e public may be offered and sold to certain dealers (including the Uuderwrit~s end other dealers depositing Bonds into
invesUnent uusts) at prices lower than the public offering prices of such Bonds, and such public offet/ng prices may be changed, from
The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter 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 Underwriter does
not guarantee the accuracy or completeness of such information.
FINANCIAL ADVISOR
First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The
Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of
the Bonds. First Southwest Company, in its capacity as Finenclai Advisor, has relied on the opinion of Bond Counsel and has
not verified and does not assume any responsibility for the information, covenants and representations contained in uny of thc
legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or
future actions taken by any legislative or jndiclal 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.
MISCELLANEOUS
The financial data and other information contained herein have been obtained from the City's 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 ar~ made
subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete
m~'aents of such provisions md retm~ce is made to such documents for timber information. Re. fence is made to original
21
CERTIFICATION OF THE OFFICIAL STATEMENT
The Ordinance authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any
addenda, supplement or amendment thereto, and authorize its further use in the renffering of thc Bonds by thc Underwriters.
ATTEST:
Mayor
City of College Station, Texas
City Secretary
22
Schedule 1
SCHEDULE OF REFUNDED BONDS
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
THE C~TY
Thc City, located in Brazos County, is situated in the middle of a triangle bounded by Dallas/Ft. Worth, Houston, and San
Antonio and Austin. Approximately 8(P/o of the Texas population is located within a 200 mile radius of the City. The City is
principally a residential community for faculty, students and other personnel of Texas A&M University. Thc City periodically
accesses technical information and assistance made available by Texas A&M University.
The City was incorporated in 1938 and has a Council-City Manager form of government with City employees totaling 805
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
s~reets 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 thc City are now
adequately served with water, wastewater and electric service.
CITY OWNED FACllATIES
The City has constructed a major part of its present facilities out of current revenues. Approximately ? l I lane miles of streets
(99.1P,~) within the City are hard surface. The City has a complete water distribution, wastewater collection and lrcatment
system with 300 miles of wast:water and water lines. The City owns the electrical distribution system with 256 miles of
dislributinn lines, and purchases its electricity from Texas Utilities.
The City has a fully equipped police department with 98 full time police officers and 44.5 support personnel and fire department
with 100 full-time equivalents. The City has 18 police patrol cars and one jail facility with a capacity of 20.
EDUCATIONAL FACILITIES
The College Station Independent School District is n fully accredited system offering educational facilities for kindergarten
through high school. The School District has a student enrollment in excess of $,200 and employs over 600 people. The School
District's facilities are also used by Blinn College, offering two years of college level courses.
Texas A&M University provides higher educational facilities, offering both four year college programs and graduate de~-ee
programs.
The Brszos Valley Medical Center is located on 25 acres within the City. The 100,O00 square foot facility is a full care hospital
containing 100 beds and employing 340 people. Other area health care providers include: Care Plus Medical Center, College
Station Medical Center, St. Joseph Regional Health Care Center, and Scott & White Clinic.
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 (IO0 miles) and interstate 35 to the north, and Houston (90 miles) to the south. Also, State Highway 30
links the City to Huntsville (45 miles) and Interstate 45 to the east.
Airlines Commereial, co~orate 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 Ai~sort out of Easterwood.
Coulter Field is located north of the City of Bryan and provides n recently completed 4,000 foot lighted
runway. Coulter Field otters all types of services for the private aircrafi.
Bus Lines Two bus lines serve the City with daily service connecting the City with Houston and Dallas.
Railroads Rail f~eight 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 33 parks encompassing 913 acres, including a 515 acre wilderness park.
Collectively, these parks contain 24 playgrounds, 17 soccer fields, 15 basketball courts, 14 softball/baseball diamonds, 3
swimming pools, a gymnuium, and a number of picnic shelters. The Parks Depamnent sponsors a variety of organized athletic
and aquatic pro~rmns as well as many special events throughout the year.
A-!
POPULATION
Of~¢!~! U.S. Census
1940 1950 1960 1970 1980 ! 990 2000
City of College Station 2,184 7,925 11,396 ! 7,676 37,272 52,456 67,890
Brazos County 26,977 38,390 44,895 57,978 93,588 121,862 152,415
ECONOMIC BACKGROUND
Texas A&M Unive~itv and System
Of major importance to the City is Texas A&M University which hu a 5,200 acre campus located within the City. The City is
principally a residential community for faculty, students and other personnel of the University. Texas A&M University and its
System are the largest employer in Brazos County and a major contributor to the local economy. Texas A&M has a significant
economic impact on the City, contributing an estimated $766.5 million annually to the local economy. Texas A&M has
consistently ranked in the top ten nationally among public institutions of higher education in both enrollment and research grants.
Research dollars totaled approximately $394 million for 2000. The University has approximately 25,680 permanent and pen-
time employees with a payroll of $679 million and has a physical plant valued in excess of $1.5 billion.
Texas A&M had an enrollment of 44,026 students, the 3rd largest in the nation, during the fall semester of 2000. There are
currently over 700 National Merit Scholars enrolled at Texas A&M University, ranking in the nation's top 10 universities for
National Merit Scholar enrollment.
Student Rec Center
The Student Rec Center is a 286,000 square foot building located on the Texas A&M University campus. The Center includes
multi-purpose gyms with badminton, basketball and volleyball courts, indoor soccer courts with dasher bum'ds, 14
racquetball/handball courts, and two squash courts with glass backwalls. The Center is home to a 14,000-square foot area with
machine weights, free weights, cardiovascular equipment, and a cardio-theater; five activity rooms for aerobics, dance and
martial arts; and a quarter-mile four-lane walking/jogging track. It features a 42-foot indoor rock climbing facility with
interehngeable hand and footholds, an outdoor activity area with a six-lane lap, and a free-form pool with a cool water spa. The
building also houses a natatoritnn that seats 2,500 with a 50-meter, eight-lane Olympic-size pool, a five-lane instructional pool, a
diving well with one and three meter springboards and competitive platforms, and hot tubs.
Georte Bush Pr~identinl Library and Museum
The City is the site of the George Bush Presidential Library and Museum, located on the campus of Texas A&M Univel~ity.
Texas A&M provides programs and facilities such as research and instructional programs related to the library end museum, a
conference center, communications center, educational museum/library center, and family-oriented facilities such as a park
surrounding the presidential library and museum.
During 2000, the presidential library and related facilities attracted more than 150,000 visitors to the community. As a result, the
room occupancy rate for 2000 was in excess of 70%. The increase in tourism has spurted the construction of several new hotels.
In addition, the City is currently under contract for a public/private venture to construct a 300-room full service hotel to be
associated with a City owned 45,000 square foot conference center. This project is scheduled to be completed in the 3rd quarter
of 2004.
Construction was completed during 1998 on a special events center located on the Texas A&M University campus. The $36.7
million Reed Arena seats up to 12,500 people and is the largest such facility in the Brazos Valley area. The center attracts
athletic events, concerts and exhibits.
A-2
MAJOR AREA EMPLOYERS
Number of
Firm Name Product Employees
Texas A&M University and System Education/Research 19,97 I
Bryan lSD Education 1,868
St. loseph's Regional Hospital Hospital 1,I 70
Reliant Building Products Aluminum Windows !,100
Sanderson Farms, Inc. Poultry Processing I, 100
City of Bryan Municipal 859
City of College Station Municipal 805
College Station ISD Education 800
Brazos County Government 796
Wal-Mart Supcrcenter- Bryan Retail 600
UCS/Rentsys Computer Hardware and Software 550
Hamilton State School Education 500
Young Contractors, Inc. Construction 500
Saott & White Clinic Clinic 375
College Station Medical Center Medical 327
First American Bank SSB Bank 300
Biinn College College 293
Britt Rice Electric Electrical Con.actor 200
Kent Moore Cabinets Cabinet Manufacturer 200
Source: Bryan-College Station EcouomJc Development Corporation.
In addition to thc University, employment is provided by more than 85 manufacturing industries located in, or adjacent to, thc
City which produce such products as aluminum windows, furniture, chemicals, dahy products, feeds and fertilize~, modular
homes, bronze castings, and geophysical survey sensors. A growing research park is located within the Texas A&M campus.
Major tenants include the Offshore Technology Resenreh Center nnd the Food Safety Inspection School National Training
Center. Automated Management systems provides a major automated accounting service for independent propen'y and casualty
insurance agents. The City has also developed the College Station Business Center, a 200-acre business park. Tenants within
the park include (or will include) United Computer Systems ("UCS"), which will eventually employ approximately 800 people;
Cabletime, a graphics advertising business; Prudigene, a biotechnology research business; and Stata Corporation, a software
re~ar~ business. Businesses either under consUuction or in place uccount for approximately 300,000 square feet of buildings
mui employ approximately 1,000 people.
INCOME AND AGE STATISTICS
College Station
Median Household Total Household
Calendar Estimated Total Effective Effective
Year (11 Punulation Retail Sales Buvin~ Income ~
1997 60,300 7 i 3,118,000 ! 8,919 715,456,000
1998 66,000 792,53 i,000 19,481 820,064,000
1999 65,400 626,034,000 21,456 873,068,000
2000 67,200 987,04 !,000 23,260 976,163,000
2001 70,400 974,869,000 25,661 1,007,953,000
Brazos County
Median Household Total Household
Calendar Estimated Total Effective Effective
Year it) Pooulation Retail Sales Buvina Income Buyina Income
1997 132,600 1,356,737,000 26,271 1,843,501,000
1998 142,400 1,487,107,000 26,65 ! 2,084,009,000
1999 145,000 2,066,179,000 27,925 2,230,843,000
2000 154,700 2,307,670,000 29,418 2,441,456,000
2001 158,600 2,225,738,000 30,992 2,534,254,000
(I) Calendar year 2002 was not available at time of pdnting.
Source: Sales & Maflteting Management.
A-3
BUILDING PERMITS
College Station has grown rapidly over the past 30 years as evidenced by an increase in population fi.om 17,676 in 1970 to
67,890 in 2000. The following table sets forth the number and value of consmmction permits issued by the City over the past
several years.
Residential Construction Conunercial Construction Total
Number Number Number
Year of Permits Value of Permits Value of Permits Value
1997 590 53,435,022 212 47,682,555 802 I 0 I, I i 7,577
1998 655 69,831,880 150 57,439,865 805 127,271,745
1999 1,020 87,917,466 138 26,665,024 1,158 114,582,490
2000 639 85,278,855 162 46,094,230 80 i i 31,373,085
2001 782 79,340,756 191 40,194,722 973 119,535,478
Source: The
COUNTY CHARACTERISTICS
Brazos County was created in 1841 from Robertson and Wnshington Counties. The economy is diversified primarily by
agribusiness, computer manufacturing, research and development, nmi education. The Texas Almannc designates cattle, bogs,
sorghums, corn, cotton, whest, oats and pecans as the principal sources of agricultural income.
The County hed a 2000 population of 152,415, an increase of 25.07% since 1990. Minerals produced in the County include sand
and gravel, lignite, gas and oil.
LA~OR STATISTICS
COLLEGE STATION
Labor Total
Year Fowe ..F, a3.R]R.Y~= ~ Rate
1997 28,051 27,421 630 2.2%
1998 29,371 28,846 525 1.8%
! 999 30,059 29,506 553 !.8%
2000 30,538 30,051 487 1.6%
2001 30,881 30,349 532 1.7%
2002 (') 31,667 31,088 579 !.8%
BRAZOS COUNTY
Labor Total
Year Force Em{mlovment Unem{mlovment Rate
1997 70,429 68,925 1,504 2.1%
1998 73,761 72,508 1,253 1.7%
1999 75,486 74,166 1,320 1.7%
2000 76,699 75,537 I, i 62 1.5%
2001 77,554 76,285 1,269 1.6%
2002 (I) 79,524 78,143 i,381 i.7%
Souse: Texas Workfor~e Commission.
(1) Avera~ through October.
A=4
APPENDIX B
EXCERPTS FROM TH~
CITY OF COLLEGE STATION, TEXAS
ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 2001
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, 2001, and is not
intended to be a complete statement of the City's financial condition. Reference is made to
APPENDIX C
FORM OF BOND COI.~NSi~L'S OPINION
APPENDIX D
SPECIMEN MUNICIPAL BOND INSURANCE POLICY