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Home My WebLink About1987-1715 - Ordinance - 07/14/1987ORDINANCE NO. 1715 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $10,445,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987; PROVIDING THE DETAILS RELATING THERETO; AUTHORIZ- ING THE PURCHASE OF A BOND INSURANCE POLICY AND THE PAYMENT OF THE PREMIUM THEREFOR; AUTHORIZING AN AGREE- MENT WITH THE PAYING AGENT/REGISTRAR, AN ESCROW AGREE- MENT PROVIDING FIRM BANEING AND FINANCIAL ARRANGEMENTS FOR THE BONDS BEING REFUNDED AND A BOND PURCHASE AGREE- MENT; CALLING CERTAIN OUTSTANDING BONDS FOR REDEMPTION AND DECLARING THAT THIS ORDINANCE SHALL BE EFFECTIVE IMMEDIATELY UPON ITS ADOPTION WHEREAS, the following described series or issues of bonds and certificates of obligations of the City of Col- lege Station, Texas (the "City"), are currently outstanding, to-wit: CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1981, dated May 15, 1981, originally is- sued in thp aggregate principal amount of $1,500,000, of which $600,000 principal amount is currently out- standing (the "Series 1981 Bonds"); CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1982, dated February 15, 1982, originally issued in the aggregate principal amount of $2,705,000, of which $1,375,000 principal amount is currently out- standing (the "Series 1982 Bonds"); CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION BONDS, SERIES II 1982, dated November 15, 1982, origi- nally issued in the aggregate principal amount of $6,590,000, of which $5,400,000 principal amount is currently outstanding (the "Series II 1982 Bonds"); CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1984, dated May 1, 1984, originally is- sued in the aggregate principal amount of $8,630,000, of which $7,650,000 principal amount is currently out- standing (the "Series 1984 Bonds"); CITY OF COLLEGE STATION, TEXAS, CERTIFICATE OF OBLIGATION, SERIES 1981, No. 00002, dated July 24, 1981, originally issued in the principal amount of $284,062.50, of which $400,000 principal amount is currently 007RCJDD/PACDAL -1- Ordinance No. 1715 outstanding (the "First Series 1981 Certificate of Obligation"); CITY OF COLLEGE STATION, TEXAS, CERTIFICATE OF OBLIGA- TION, SERIES 1981, No. 00004, dated October 23, 1981, originally issued in the principal amount of $400,000, of which $200,000 is currently outstanding (the "Second Series 1981 Certificate of Obligation"); and WHEREAS, a proposal (the "Proposal") has been sub- mitted to the City Council of the City for the refunding of the following maturities of the outstanding bonds and cer- tificates of obligation of the City described above: the Series 1981 Bonds scheduled to mature February 15, 1989 through 1991, the Series 1982 Bonds scheduled to mature Feb- ruary 15, 1989 through 1992, the Series II 1982 Bonds sched- uled to mature February 15, 1994 through 2000, the Series 1984 Bonds scheduled to mature February 1, 1996 through 2004, the First Series 1981 Certificate of Obligation principal payments scheduled to mature July 24, 1988 through 1991 and the Second Series 1981 Certificate of Obligation principal payments scheduled to mature October 23, 1988 through 1991, aggregating $9,170,218.75 in principal amount (collectively, the "Refunded Securities"); and WEEREAS, in order to provide funds for the refund- ing of the Refunded Securities, the Proposal calls for the issuance and sale by the City of refunding bonds in the ag- gregate principal amount of $10,445,000 and the contribution of $436,118.75 (in immediately available funds) currently on deposit in the interest and sinking funds which were created and have been maintained by the City pursuant to the ordi- nances adopted by the City under which the Refunded Securi- ties were issued (the "Refunded Bond Ordinances"); and WEEREAS, the City Council hereby finds and deter- mines that (i) the acceptance of the Proposal will enable the City to achieve substantial savings in interest expense and (ii) the Proposal should be accepted; and WHEREAS, the City Council further hereby finds and determines that: (i) refunding bonds in the principal amount and bearing interest at the rates shown in Section 3 hereof should be issued under and pursuant to the laws of the State of Texas including Article 717k, Vernon's Texas Civil Stat- utes, as amended, to refund or refinance the Refunded Secu- rities; (ii) all of the Refunded Securities are scheduled to mature, or are subject to redemption prior to maturity, not more than twenty (20) years from the date of such refunding 007RCJDO/PACDAL -2- 005036 Ordinance No. 1715 bonds; (iii) the refunding bonds herein authorized shall be payable from ad valorem taxes on all taxable property on the tax rolls of the City; and (iv) the funds to be deposited with the Escrow Agent pursuant to the Escrow Agreement au- thorized by this Ordinance will be sufficient to provide for the payment or redemption of the Refunded Securities and such deposit will constitute the making of firm banking and fi- nancial arrangements for the discharge and final payment or redemption of the Refunded Securities; and WHEREAS, the City Council hereby further finds and determines that the City has available funds in the amount of $436,118.75 to contribute and apply to the refunding or refinancing of the Refunded Securities, that such amounts are currently on deposit in the interest and sinking funds applicable to the Refunded Securities, which funds will not be needed if the proposed refunding bonds are issued and sold as hereinafter provided; and WHEREAS, the City Council deems it desirable to proceed with the issuance and sale of an issue of refunding bonds in the aggregate principal amount of $10,445,000 in accordance with the Proposal; therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION: Section 1. The bonds of the City of College Sta- tion, Texas, to be designated as "CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987" (the "Series 1987 Refunding Bonds" or the "Bonds"), are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, and particular- ly Article 717k, Vernon's Texas Civil Statutes, as amended, in the aggregate principal amount of $10,445,000 for the purpose of refunding or refinancing: (i) the Series 1981 Bonds scheduled to mature on February 15, 1989, 1990 and 1991, aggregating $450,000 in principal amount; (ii) the Se- ries 1982 Bonds scheduled to mature on February 15, 1989, 1990, 1991 and 1992, aggregating $1,100,000 in principal amount; (iii) the Series II 1982 Bonds scheduled to mature on February 15, 1994, 1995, 1996, 1997, 1998, 1999 and 2000, aggregating $3,325,000 in principal amount; (iv) the Series 1984 Bonds scheduled to mature on February 1, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2004, aggregatinq $4,050,000 in principal amount; (v) the First Series 1981 Certificate of Obligation principal payments scheduled to mature on July 24, 1988, 1989, 1990 and 1991, aggregating $85,218.75 in principal amount; and (vi) the Second Series 007RCJDD/PACDAL -3- 005037 Ordinance No. 1715 1981 Certificate of Obligation principal payments scheduled to mature on October 23, 1988, 1989, 1990 and 1991, aggre- gating $160,000 in principal amount. Section 2. The Series 1987 Refunding Bonds shall be issued and delivered in fully registered form without coupons, shall be dated as of July 15, 1987 (the "Initial Date") and shall be in denominations of $5,000 or any inte- gral multiple thereof up to the aggregate principal amount scheduled for maturity during the year involved. Initially, there shall be seventeen (17) Bonds (the "Initial Bonds") numbered consecutively from R-1 through R-17, inclusive, in order of their maturity, each in the principal amount set opposite the year of maturity in the schedule set forth in Section 3 hereof. Series 1987 Refunding Bonds registered and delivered in exchange for any of the Initial Bonds sur- rendered for transfer or exchange shall be numbered from R-18 upward in the order in which they are authenticated and delivered by the Paying Agent/Registrar hereinafter designat- ed. Section 3. The Series 1987 Refunding Bonds shall bear interest (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Initial Date or the most recent date to which interest has been paid or duly provided for, payable February 15, 1988 and each August 15 and February 15 thereafter until the principal sum is paid in full. Payment of interest shall be made to the registered owner of each Bond as shown on the Bond Register referred to in Section 6 hereof as of the last business day of the cal- endar month next preceding the interest payment date by check or draft mailed by First City National Bank of Houston, Houston, Texas, or its successor (the "Paying Agent/Regis- trar''), to the address of each such owner as it appears on such Bond Register on the date aforesaid. The Series 1987 Refunding Bonds shall mature and become payable, subject to prior redemption in accordance with the provisions of Section 5 hereof, on February 15 in each of the years and in the principal amount set forth in the schedule below, and shall bear interest at the respective rates per annum set forth opposite the year of maturity in said schedule, to-wit: 007RCJDD/PACDAL -4- 005038 Ordinance No. 1715 Year of Maturity 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Principal Amount $ 65 000 585 000 565 000 545 000 455 000 135 000 615 000 610 000 1,045,000 1,025,000 1,005,000 985,000 960,000 470,000 465,000 460,000 455,000 Interest Rate 4.50 % 5.00 5.50 5.75 6.00 6.20 6.40 6.60 6.80 7.00 7.10 7.20 7.30 7.40 7.50 7.60 7.70 Section 4. The principal of the Series 1987 Refunding Bonds shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment thereof, is legal tender for the payment of public and private debts, upon their presentation and surrender as they become due at the principal office of the Paying Agent/Registrar. Section 5. The City reserves the right to redeem, in whole or from time to time in part, all of the Series 1987 Refunding Bonds maturing in the years 1998 through 2004 on February 15, 1997 or any date thereafter, by paying the principal thereof and accrued interest thereon. The City shall, at least forty-five (45) days prior to the date fixed for redemption (unless a shorter notice shall be satis- factory to the Paying Agent/Registrar), notify the Paying Agent/Registrar of such date and the principal amount of Bonds of each maturity to be redeemed. If less than all of the Bonds are to be redeemed, the particular Bonds to be redeemed within each such maturity (in integral multiples of $5,000) shall be selected by the City by such method as it shall deem appropriate. The registered owner of any Bond, all or a portion of which has been called for redemption, shall be required to present such Bond to the Paying Agent/Registrar for payment of the principal of, and accrued interest on, that portion of the Bond called for redemption; 007RCJDD/PACDAL -5- 005039 Ordinance No. 1715 provided, however, that upon the surrender of any such Bond, the City shall execute and the Paying Agent/Registrar shall authenticate and deliver to the registered owner thereof a new Bond or Bonds of the same maturity in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Notice of redemption shall be given by mailing a copy thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed in whole or in part at the address of such owner on the Bond Register referred to in Section 6 hereof; provided, however, that failure to give such notice, or any defect therein, shall not affect the validity of the proceedings for the redemp- tion of any Bond or portion thereof with respect to which no such failure or defect has occurred. Any notice mailed as provided in this Section 5 shall be conclusively presumed to have been duly given whether or not the registered owner receives the notice. Prior to the date fixed for redemp- tion, the City shall deposit, or cause to be deposited, with the Paying Agent/Registrar funds sufficient to pay in full the principal of all Bonds or portions thereof called for redemption, together with accrued interest thereon to the redemption date. Any Bond or Bonds duly called for redemp- tion, due provision for the full payment of which has been timely made, shall cease to bear interest from and after the date fixed for redemption. Section 6. The City shall cause to be kept at the principal office of the Paying Agent/Registrar a register (the "Bond Register") in which, subject to such reasonable regulations as the City and the Paying Agent/Registrar may prescribe, registration of the Series 1987 Refunding Bonds and transfers of the Series 1987 Refunding Bonds shall be made as provided herein. Upon surrender for transfer of any Bond at the principal office of the Paying Agent/Registrar, the City shall execute and the Paying Agent/Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the same maturity, of any authorized denominations, bearing the same rate of interest and of a like aggregate principal amount. At the option of the registered owner of any Bond, such Bond may be exchanged for other Bonds of the same maturity, of any authorized denominations, bearing the same rate of interest, and of like aggregate principal amount, upon surrender of the Bond to be exchanged at the principal office of the Paying Agent/Registrar. Whenever any Bond is so surrendered for exchange, the City shall execute, and the Paying Agent/Registrar shall authenticate and deliver, the Bonds which the registered owner of the Bond making the 007RCJDD/PACDAL -6- 005040 Ordinance No. 1715 exchange is entitled to receive. Ail Bonds issued upon any transfer or exchange of any Bond shall be the valid obliga- tions of the City, evidencing the same debt, and entitled to the same benefits under this Ordinance, as the Bond surren- dered upon such transfer or exchange. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed, or be accompanied by an instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by the registered owner thereof or his attorney duly author- ized in writing. No service charge shall be made to the registered owner for any registration, transfer or exchange of Bonds, but the City or the Paying Agent/Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond during the period of time commencing fifteen (15) days next preceding any interest payment date or to transfer or exchange any Bond during the thirty (30) day period prior to the date fixed for the redemption of such Bond. Section 7. The City, the Paying Agent/Registrar and any other person may treat the individual, firm or corporation in whose name any Series 1987 Refunding Bond is registered on the Bond Register as the absolute owner of such Bond for the purpose of making and receiving payment of the principal thereof and interest thereon and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. Ail payments made to any such person, firm or corporation deemed to be the owner of any Series 1987 Refunding Bond in accordance with this Section 7 shall be valid and effectual and shall discharge the l~ability of the City and the Paying Agent/ Registrar to the extent of the sums paid. Section 8. The Series 1987 Refunding Bonds shall be executed on behalf of the City by the Mayor under its seal attested by the City Secretary. Each such signature may be manually executed or placed in facsimile on the Bonds, and the City's seal may be manually impressed, printed or otherwise placed on the Bonds. Series 1987 Refunding Bonds receiving the manual or facsimile signatures of individuals who were at the time the duly elected or appointed officers of the City shall be binding upon the City notwithstanding that such individuals or either of them shall cease to hold such offices prior to the certification, registration, authentication or delivery of such Bonds or 007RCJDD/PACDAL -7- 005041 Ordinance No. 1715 shall not have held such office on the date of such Bonds, all as provided in the Bond Procedures Act of 1981, as amended. The Initial Bonds, each payable to the Purchaser or Purchasers referred to in Section 16 hereof, shall be executed and submitted to the Attorney General of Texas for approval, and thereupon certified by the Comptroller of Public Accounts of the State of Texas by his manual signa- ture or by the manual signature of one of his deputies thereunto duly authorized. No Series 1987 Refunding Bond authorized by this Ordinance shall be entitled to any right or benefit hereunder, or be valid or obligatory for any purpose, unless the Comptroller of Public Accounts of the State of Texas or his duly authorized deputy shall have executed a Registration Certificate substantially in the form of the Registration Certificate of Comptroller of Public Accounts set forth in Section 9 hereof or the Paying Agent/Registrar shall have executed a Certificate of Auth- entication substantially in the form of the Certificate of Authentication of Paying Agent/Registrar set forth in Section 9 hereof, and either such executed certificate upon any Bond shall be conclusive evidence that such Bond has been executed and delivered pursuant to this Ordinance. Section 9. The form of the Series 1987 Refunding Bonds, including the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be typed or printed on each of the Initial Bonds only and the form of Certificate of Authentication of the Paying Agent/Registrar to be typed or printed on all of the Bonds other than the Initial Bonds, shall be substantially as follows: 005042 Ordinance No. 1715 (Form of Bond) Registered No. Registered $ UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION, TEXAS GENERAL OBLIGATION REFUNDING BOND SERIES 1987 Interest Rate Maturity Date Initial Date CUSIP No. February 15, July 15, 1987 The City of College Station, Texas (the "City"), for value received, hereby promises to pay to or registered assigns, on the Maturity Date shown above, the sum of DOLLARS, and to pay interest thereon until paid, at the rate speci- fied above, from the later of the Initial Date shown hereon or the most recent date to which interest has been paid or duly provided for, beginning February 15, 1988 and semiannu- ally thereafter on August 15 and February 15 of each year, until the princxpal sum shall have been paid in full, such interest to be computed on the basis of a 360-day year of twelve 30-day months. The principal of this Bond is payable in lawful money of the United States of America, without exchange or collection charges at the principal corporate trust office of the Paying Agent/Registrar executing the Certificate of Authentication appearing hereon, upon presen- tation and surrender of this Bond. The interest on this Bond payable on any interest payment date will be paid to the person, firm or corporation in whose name this Bond is registered at the close of business on the last business day of the calendar month next preceding such interest payment date by check or draft dated as of such interest payment date and mailed to such registered owner. 007RCJDD/PACDAL -9- 005043 Ordinance No. 1715 (Additional Provisions of the Bonds) (To be printed or typed on the face of the Initial Bonds and printed on the back of all other Bonds) THIS BOND is one of the series specified in its title issued in the aggregate principal amount of $10,445,000 (the "Bonds") pursuant to an ordinance (the "Bond Ordi- nance'') duly adopted by the City Council of the City for the purpose of refunding: (i) the City's outstanding General Obligation Bonds, Series 1981, scheduled to mature on February 15, 1989, 1990 and 1991, aggregating $450,000 in principal amount; (ii) the City's outstanding General Obligation Bonds, Series 1982, scheduled to mature on February 15, 1989, 1990, 1991 and 1992, aggregating $1,100,000 in principal amount; (iii) the City's outstanding General Obligation Bonds, Series II 1982, scheduled to mature on February 15, 1994, 1995, 1996, 1997, 1998, 1999 and 2000, aggregating $3,325,000 in principal amount; (iv) the City's outstanding General Obligation Bonds, Series 1984, scheduled to mature on February 1, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2004, aggregating $4,050,000 in principal amount; (v) the City's outstanding Certificate of Obligation, Series 1981, No. 00002, principal payments scheduled to mature on July 24, 1988, 1989, 1990 and 1991, aggregating $85,218.75 in principal amount; and (vi) the City's outstanding Certificate of Obligation, Series 1981, No. 00004, principal payments scheduled to mature on October 23, 1988, 1989, 1990 and 1991, aggregating $160,000 in principal amount; under and in strict conformity with the Constitution and laws of the State of Texas, including without limitation Article 717k, Vernon's Texas Civil Statutes, as amended. The Bonds are payable from the proceeds of an sd valorem tax levied upon all taxable property on the tax rolls of the City, within the limitations prescribed by law. Reference is hereby made to the Bond Ordinance for a descrip- tion of the covenants by which the Bonds are secured, the respective rights thereunder of the registered owners of the Bonds and the City and the terms upon which the Bonds are, and are to be, authenticated and delivered. The City has reserved the right to redeem, in whole or from time to time in part, all of the Bonds matur- ing in the years 1998 through 2004 on February 15, 1997 or any date thereafter, by paying the principal thereof and accrued interest thereon. If less than all of the Bonds of any particular maturity are to be redeemed, the City shall 007RCJDD/PACDAL -10- 005044 Ordinance No. 1715 designate the particular Bonds to be redeemed in integral multiples of $5,000. At least thirty (30) days' prior notice of any such redemption shall be given by mail as provided in the Bond Ordinance. Any Bond or Bonds duly called for redemption, due provision for the full payment of which has been timely made, shall cease to bear interest from and after the date fixed for redemption. As provided in the Bond Ordinance and subject to certain limitations therein set forth, this Bond is trans- ferable on the Bond Register of the City, upon surrender of this Bond for transfer at the principal office of the Paying Agent/Registrar, duly endorsed by, or accompanied by an instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof or his attorney duly authorized in writing, and thereupon one or more new fully registered Bonds of the same maturity, of any authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. Neither the City nor the Paying Agent/Registrar shall be required (1) to transfer or exchange this Bond during the period of time commencing fifteen (15) calendar days next preceding any interest payment date or (2) to transfer or exchange this Bond during the period of time commencing thirty (30} days prior to the date fixed for the redemption of this Bond. The City, the Paying Agent/Registrar and any agent of either of them may treat the person, firm or corporation in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Bond is overdue, and neither the City, the Paying Agent/Registrar nor any such agent shall be affected by notice or knowledge to the contrary. It is hereby certlfied, covenanted and represented that all acts, conditions and things required to exist or to be performed or done precedent to or in connection with the issuance of this Bond in order to render the same a legal, valid and binding obligation of the City have been performed, exist and have been done in regular and due time, form and manner, as required by law, and that the issuance of the Bonds does not exceed any constitutional or statutory limitation. This Bond shall be construed in accordance with and shall be governed by the laws of the State of Texas. 007RC=OO/PA¢OA -11- 005045 Ordinance No. 1715 (Legend to be printed on the face of all Bonds other than the Initial Bonds) REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE. {Additional paragraph to be typed or printed on Initial Bonds only} This Bond shall not be entitled to any right or benefit under the Bond Ordinance, or be valid or become obligatory for any purpose, unless the Comptroller of Public Accounts of the State of Texas or his duly authorized agent shall have executed the Registration Certificate of Comp- troller of Public Accounts endorsed hereon. (Additional paragraph to be printed on the face of all Bonds other than the Initial Bonds) This Bond shall not be entitled to any right or benefit under the Bond Ordinance, or be valid or become obligatory for any purpose, unless the Paying Agent/Registrar shall have executed the Certificate of Authentication endorsed hereon. (Additional paragraph to be typed or printed on all Bonds) Municipal Bond Guaranty Insurance Policy No. 2325BE (the "Policy") with respect to payments due for principal of and interest on this Bond has been issued by AMBAC Indemnity Corporation ("AMBAC Indemnity"). The Policy has been delivered to the United States Trust Company of New York, New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from AMBAC Indemnity or the Insurance Trustee. All payments 007RCJDD/PACDAL -12- 005046 Ordinance No. 1715 required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges and consents to the subrogation rights of AMBAC Indemnity as more fully set forth in the Policy. IN WITNESS WHEREOF, this Bond has been signed by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the City Secretary, and the official seal of the City has been manually impressed, printed or otherwise placed hereon. CITY OF COLLEGE STATION, TEXAS Attest: By City Secretary (City's Seal) 007RCJDD/PACDAL -13- 005047 Ordinance No. 1715 (Form of Registration Certificate of Comptroller of Public Accounts to be typed or printed on the Initial Bonds only) REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS $ S REGISTER NO. I HEREBY CERTIFY that there is on file and of record in my office a certificate to the effect that the Attorney General of the State of Texas has approved this Bond, and further that this Bond has this day been regis- tered by me. day of WITNESS my signature and seal of office this · 1987. (SEAL) Comptroller of Public Accounts of the State of Texas (Form of Certificate of Authentication of Paying Agent/Registrar to be printed on all Bonds other than the Initial Bonds) CERTIFICATE OF AUTHENTICATION This is one of the Bonds referred to in the within mentioned Bond Ordinance. FIRST CITY NATIONAL BANK OF HOUSTON, Houston, Texas, as Paying Agent/Registrar Dated: B~ Authorized Signature 00?RCJDD/PACDAL -14- 005048 Ordinance No. 1715 (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Print or typewrite name, address and zip code of transferee) (Social Security or other identifying number: ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature guaranteed by: NOTICE: The signature on this assignment must correspond with the name of the regis tered owner as it appears on the face of the within Bond in every particular. Section 10. There is hereby created and estab- lished by the City a special fund to be known as the "CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987, INTEREST AND SINKING FUND" (the "Interest and Sinking Fund"), and all taxes levied, assessed and collected for or on account of the Bonds authorized by this Ordinance shall, as collected, be deposited into said Interest and Sinking Fund. While the Bonds or any part of the principal thereof or the interest thereon remain out- standing and unpaid, there is hereby levied and there shall be annually assessed and collected in due time, form and manner and at the same time other City taxes are assessed, levied and collected, in each year beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property on the tax rolls of the City sufficient to pay the current interest thereon and to create a sinking fund of not less than two percent (2%) of the principal amount o~ the Bonds then outstanding or of not less than the amount required to pay the principal payable out of said tax, whichever is greater, full allowance being made for delinquencies and costs of collection, and said taxes, when collected, shall be applied to the principal of and interest on the Bonds and for no other purpose. On July 15 of each year (beginning in 1988) the City will withdraw from the Interest and Sinking Fund and deposit into the interest and 007RCJDD/PACDAL -15- 005049 Ordinance No. 1715 sinking fund for one or more other series of general obliga- tion bonds of the City any amount in such fund that is in excess of the amount of debt service on the Bonds that is due and payable on such July 15 and is to be so applied on such July 15. Section 11. There is hereby created and estab- lished by the City a separate and special fund to be known as the "CITY OF COLLEGE STATION, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987 REBATE FUND" (the "Rebate Fund") for the benefit of the United States of America and the Clty, as their interests may appear pursuant to this Ordinance. There are hereby established within the Rebate Fund two separate accounts to be known as the Deposit Account and the Earnings Account. (a) On each annual anniversary date of the issuance of the Bonds, the City shall pay into the Earnings Account of the Rebate Fund out of legally available funds an amount equal to the aggregate income (determined in accordance with federal income tax accounting principles) attributable to the amounts in the Deposit Account of the Rebate Fund for the period ending on such annual anniversary date of the issuance of the Bonds and beginning on the immediately preceding annual anniversary date of the issu- ance of the Bonds. Such amount is to be with- drawn from the Deposit Account or may, at the election of the City, be paid from other funds legally available therefor. An annual anniver- sary date for the Bonds, for purposes of this Section 11, shall include the first date on which all of the Bonds have been retired. (b) The City shall pay, on each annual anniversary date of the issuance of the Bonds and immediately after the payment to the Earn- ings Account of the Rebate Fund on such date, into the Deposit Account of the Rebate Fund out of funds legally available therefor the amount, if any, which is required to increase the amount on deposit in the Deposit Account to the Tenta- tive Rebate Amount (as hereinafter defined) as of such annual anniversary date. On such annual anniversary date, any amount on deposit in the Deposit Account in excess of the Tentative Rebate Amount shall be withdrawn from the Deposit Account and deposited with the general funds of the City. For these purposes, the 007RCJDD/PACDAL -16- 005050 Ordinance No. 1715 Tentative Rebate Amount as of a date is the amount described in Section 148(f) (3) (A) of the internal Revenue Code of 1986, as amended (the "Code"), with respect to the Bonds determined as of such date, which shall be determined in accordance with Temp. Treas. Reg. ~ 1.103-15AT(d) (1) and any applicable regulations that are issued hereafter. (c) The amounts in the Rebate Fund shall be used solely for the payment to the United States of America of amounts described in Section 148(f) (2) of the Code and the regula- tions thereunder, all as may be applicable to the Bonds. Such payment shall be made by the City in accordance with the requirements of Section 148(f) (3) of the Code and the regu- lations thereunder. The first installment of such payment is to be made by the City within thirty days after the fifth annual anniversary date of the issuance of the Bonds, with each subsequent installment of such payment to be made within five years after the time at which the next preceding installment was required. The last installment of such payments is to be made by the City within thirty days after the final retirement of all of the Bonds. (d) The City shall maintain a record of its periodic determinations of the Tentative Rebate Amount until six years after the final retirement of all of the Bonds. Such records shall summarize the manner in which the Tenta- tive Rebate Amount, if any, was determined on each date of determination. (e) The City covenants and agrees with the holders of the Bonds not to make a prohibited payment, within the meaning of Temp. Treas. Reg. ~ 1.103-15AT(d) (6), with respect to the Bonds. A prohibited payment includes the payment, or agreement to pay, to a party other than the United States of America, an amount that is re- quired to be paid to the United States of America pursuant to Section 148(d) (3) of the Code by entering into a transaction that results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and if the yield on the issue had 007 RCJDD / PACDAL - 17 - 005051 Ordinance No. 1715 not been relevant to either party; provided, however, that the direct purchase of United States Treasury obligations from the United States Treasury is not a prohibited payment. The investment of Bond proceeds in certificates of deposit may, as provided in Temp. Treas. Reg. ~ 1.103-15AT(d) (6) (ii), be a prohibited payment. The City covenants and agrees to maintain such records as may be necessary to establish the absence of any prohibited payment. (f) The provisions of this Section 11 may be amended by the City upon the receipt of an opinion of Bond Counsel that such amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds. Section 12. The Mayor is hereby authorized and directed to submit, or cause to be submitted, the record of the Bonds, and the Initial Bonds, to the Attorney General of the State of Texas for examination and approval and there- after cause the Initial Bonds to be registered by the Comp- troller of Public Accounts of the State of Texas. Upon said registration of the Initial Bonds, said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be endorsed on each of the Initial Bonds, and the seal of said Comptroller shall be impressed or stamped on each such Bond. Section 13. The City hereby covenants and agrees with the Purchaser or Purchasers referred to in Section 16 hereof and any subsequent registered owner of any Series 1987 Refunding Bond that: (a} the City shall take no action, or omit to take any action, which act or omission will adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 1987 Refunding Bonds, and, in partic- ular, covenants to comply with those provisions of Section 103 and Sections 141 through 150 of the Code that affect the exclusion from gross income of the interest on the Bonds. (b) the City shall take no action, or omit to take any action, and in particular will not use, or permit the use of, any proceeds of the 007RCJDD/PACDAL -18- 005052 Ordinance No. 1715 sale of the Series 1987 Refunding Bonds, amounts treated as proceeds of the Bonds or any other amount, in any manner which would cause any Bond to be an arbitrage bond within the meaning of Section 148 of the Code, and to that end the City shall comply with the applicable regula- tions adopted under the Code. (c) after the issuance of the Series 1987 Refunding Bonds, the City shall not intentionally use any portion of the proceeds of the issue of which the Bonds are a part in a manner described in paragraph (1) or (2) of Section 148(a) of the Code or in a manner which would cause the Bonds to fail to satisfy the requirements of Section 149(d) (3) or Section 149(d) (4) of the Code. (d) the City shall pay to the United States of America the amount or amounts deter- mined pursuant to Section 148(f) (2) of the Code with respect to the Series 1987 Refunding Bonds at the time or times required pursuant to Section 148(f) (3) of the Code. (e} after the issuance of the Series 1987 Refunding Bonds, the City shall not take, or omit to take, any action, which act or omission would cause the Series 1987 Refunding Bonds to be federally guaranteed, within the meaning of Section 149(b) of the Code. Section 14. If (1) any mutilated Series 1987 Refunding Bond is surrendered to the Paying Agent/Registrar or (2) the City and the Paying Agent/Registrar receive evidence to their satisfaction of the destruction, loss or theft of any Series 1987 Refunding Bond, and (a) there is delivered to the City and the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless and (b) the City and the Paying Agent/Registrar have no notice that such latter Bond has been acquired by a bona fide purchaser; then and in either such event the City shall execute and upon its request the Paying Agent/Registrar shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same maturity and of like tenor, interest rate and principal amount, bearing a number not contemporaneously outstanding. Upon the issuance of any new Bond under this Section 14, the City may require the payment by the registered owner thereof of a sum 007RCJDD/PACDAL -19- 005053 Ordinance No. 1715 sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent/Registrar) connected therewith. Every new Bond issued pursuant to this Section 14 in lieu of any mutilated, destroyed, lost or stolen Bond shall constitute a replace- ment of the prior obligation of the City, whether or not the mutilated, destroyed, lost or stolen Bond shall be at the time enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Bonds. Section 15. The City covenants at all times to maintain a Paying Agent/Registrar for the Series 1987 Refunding Bonds meeting the qualifications herein set forth, and subject to the remaining provisions of this Section 15 hereby appoints First City National Bank of Houston, Hous- ton, Texas, initially to serve in such capacity. The form, terms and provisions of the proposed Agreement between the City and First City National Bank of Houston providing for such appointment which is attached to this Ordinance as Exhibit A are hereby approved in all respects, and the Mayor and City Secretary are hereby authorized and directed to execute and deliver an agreement substantially in the form of such Agreement, with such changes therein as the officers executing the same shall, as evidenced by their signatures thereon, approve. The City expressly reserves the right to appoint one or more successor Paying Agent/Registrars by (1) filing with the Paying Agent/Registrar then serving a certified copy of a resolution or ordinance giving notice of the termination of the City's agreement with such Paying Agent/Registrar and appointing a successor and (2) giving notice to all of the registered owners of the Bonds and to the Municipal Advisory Council of Texas or its successor. Every Paying Agent/Registrar appointed hereunder shall at all times be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise trust powers, and subject to supervision or examination by federal or state authority. Section 16. The sale of the Series 1987 Refunding Bonds to Rauscher Pierce Refsnes, Inc. at a price equal to the principal amount of the Bonds and accrued interest to the date of delivery, in accordance with the Bond Purchase Agreement attached hereto as Exhibit B, is hereby author- ized, approved, ratified and confirmed. The form, terms and provisions of such Bond Purchase Agreement are hereby approved in all respects and the Mayor and City Secretary 00?RCJDD/PACDAL -20- 005054 Ordinance No. 1715 are hereby authorized and directed, in the name and on behalf of the City, to execute and deliver a Bond Purchase Agreement in substantially the form thereof attached hereto, with such changes therein as the officers executing the same shall, as evidenced by their signatures thereon, approve. It is hereby found and determined by the City Council of the City that the price and terms prescribed for the purchase of the Series 1987 Refunding Bonds as set forth in the Bond Purchase Agreement are the most advantageous reasonably attainable by the City. Section 17. The Official Statement (the "Official Statement"), dated July 14, 1987, a form of which heretofore has been presented to the City Council of the City and is incorporated herein by reference as a part hereof for all purposes, is hereby approved. The use and distribution by the Purchaser or Purchasers referred to in Section 16 hereof of the Official Statement to the ultimate purchasers of the Bonds in substantially the form and content heretofore pre- sented to the City Council of the City, with such changes therein as shall be approved by the Mayor or the City Manager of the City, are hereby in all respects approved and authorized, and the Mayor and the City Secretary of the City are hereby authorized and directed, in the name and on behalf of the City, to execute the Official Statement in substantially the form and content thereof heretofore presented to the City Council of the City, with such changes therein as the officers executing the same shall, as evi- denced by their signatures thereon, approve. The Purchaser or Purchasers referred to in Section 16 hereof are hereby authorized to use and distribute the Official Statement in the form so approved in connection with the sale of the Bonds to the ultimate purchasers thereof. In addition, the use and distribution by the Purchaser or Purchasers referred to in Section 16 hereof of the Preliminary Official Statement, dated July 10, 1987, is hereby ratified and approved. Section 18. Pursuant to the Escrow Agreement, the City will be required to purchase for the account of the Escrow Fund certain open market United States Treasury Secu- rities to fund all or a portion of the Escrow Fund. In this connection, the agreement to purchase such open market Unit- ed States Treasury Securities from Rausher Fierce Refsnes, Inc. is hereby authorized and approved, and the Mayor or the City Manager of the City is hereby authorized to execute and deliver such agreement. Section 19. In connection with the sale of the Series 1987 Refunding Bonds, AMBAC Indemnity Corporation, a 007RCJDD/PACDAL -21- 005055 Ordinance No. 1715 Wisconsin-domiciled stock insurance company, (the "Bond Insurer") has agreed to insure the payment when due of the principal of, and interest on, the Bonds and to issue a municipal bond guaranty insurance policy (the "Bond Insurance Policy") for such purpose, all in consideration of a premium therefor to be paid by the City. The Mayor of the City is hereby authorized to enter into an agreement with the Bond Insurer and to pay, or cause to be paid, the premium due and owing to the Bond Insurer at the closing of the sale of the Series 1987 Refunding Bonds (such payment to be made with a portion of the proceeds to be derived by the City from the sale of the Bonds or from other available funds) and to execute, for and on behalf of the City, such other documents, certificates and agreements in connection with the Bond Insurance Policy as such officer may deem appropriate in the circumstances. Printing on the reverse side of each of the printed Series 1987 Refunding Bonds of a statement describing the Bond Insurance Policy, in form and substance satisfactory to the Bond Insurer and the Mayor of the City, together with the approving legal opinion of Baker & Botts, Bond Counsel and appropriate CUSIP Numbers, is hereby approved and authorized. However, errors or omissions in the printing of such statement, opinion or numbers shall have no effect on the validity of the Bonds. Section 20. The form, terms and provisions of the Special Escrow Agreement (the "Escrow Agreement") by and between the City and First City National Bank of Houston, Houston, Texas, as Escrow Agent (the "Escrow Agent"), attached hereto as Exhibit C are hereby approved in all respects, and the Mayor and the City Secretary of the City are hereby authorized and directed, in the name and on behalf of the City, to execute and deliver an Escrow Agree- ment substantially in the form thereof attached hereto, with such changes as the officers executing the same shall, as evidenced by their signatures thereon, approve. Section 21. Immediately upon receipt of the proceeds of the sale of the Series 1987 Refunding Bonds, the City shall deposit, or cause to be deposited, the proceeds of sale thereof (less accrued interest on the Bonds, if any) with the Escrow Agent for application and disbursement in accordance with the provisions of the Escrow Agreement. Accrued ~nterest, if any, on the Bonds shall be deposited in the Interest and Sinking Fund. In addition, immediately upon delivery of the Series 1987 Refunding Bonds, the Mayor or the Deputy Director of Finance of the City shall cause to be transferred in immediately available funds to the Escrow Agent the sum of $436,118.75, being funds currently on 007RCJDD/PACDAL -22- 005056 Ordinance No. 1715 deposit in the interest and sinking funds which were created and have been maintained by the City pursuant to the Refunded Bond Ordinances and representing the funds to be contributed by the City to accomplish the refunding of the Refunded Securities. The Escrow Agent shall apply and disburse such funds in accordance with the provisions of the Escrow Agreement. The City Council of the City hereby finds and determines that the refunding of the Refunded Securities as described in this Ordinance will enable the City to achieve substantial savings in interest expense. Section 22. The City hereby irrevocably exercises its right to redeem, on August 15, 1987, the Series 1981 Bonds scheduled to mature on February 15, 1989, 1990 and 1991, agqregating $450,000 in principal amount, and the Series 1982 Bonds scheduled to mature on February 15, 1989, 1990, 1991 and 1992, aggregating $1,100,000 in principal amount. Subject only to the issuance, sale and delivery of the Series 1987 Refunding Bonds, the City also hereby irrevocably exercises its right to redeem the other Refunded Securities on the respective dates listed below: Refunded Securities Series II 1982 Bonds maturing on February 15, 1994 through 2000, aggregating $3,325,000 in principal amount Redemption Date February 15, 1992 Series 1984 Bonds maturing on February 1, 1996 through 2004, aggregating $4,050,000 in principal amount February 1, 1994 First Series 1981 Certificate of Obligation principal payments maturing on July 24, 1988 through 1991, aggregating $85,218.75 in principal amount July 24, 1988 Second Series 1981 Certificate of Obligation principal payments maturing on October 23, 1988 through 1991, aggregating $160,000 in principal amount October 23, 1987 007RCJDD/PACDAL 005057 Ordinance No. 1715 In connection with the redemption of the Refunded Securities as provided above, appropriate notices of redemption are hereby authorized to be given to all owners of Refunded Securities as provided in the respective Refunded Bond Ordinances and the Mayor of the City is hereby authorized and directed to execute, and cause to be published or mailed, as the case may be, such notices of redemption, all as more particularly provided in the Refunded Bond Ordinances and the Escrow Agreement. Section 23. In the event that the Series 1987 Refunding Bonds are not issued, sold and delivered as described in this Ordinance for any reason whatsoever, the City hereby agrees to deposit, or cause to be deposited, with University National Bank, College Station, Texas, as paying agent, on or before August 15, 1987, immediately available funds in the amount of $1,628,068.75, which shall be sufficient to pay in full the principal of, and interest on, Refunded Securities which are Series 1981 Bonds and Series 1982 Bonds on the date fixed for redemption thereof as provided in Section 22 hereof. Section 24. This Ordinance shall be effective immediately upon its adoption. 1987. PASSED AND APPROVED this the 14th day of July, (SEAL) 007RCJDD/PACDAL -24- 005058 Ordinance No. 1715 LIST OF EXHIBITS Exhibit A B C Description Bond Registrar and Paying Agent Agreement Bond Purchase Agreement Special Escrow Agreement 007RCJDD/PACDAL -25- 005059 NEW ISSUE OFFICIAL STATEMENT DATED JULY 14, 1987 Ratings: AMBAC Insured Moody's-"Aaa" S&P -"AAA" In the opinion of Bond Counsel, under existing statutes, regulations, court decisions and published rulings and assuming continued compliance with certain covenants described herein, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. See "TAX MATTERS" for a discussion of Bond Counsel's opinion including a further description of corporate alternative minimum tax consequences. $10,445,000 CITY OF COLLEGE STATION, TEXAS (Brazos County) GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987 Dated: July 15, 1987 Due: February 15, as shown below The Bonds are valid and legally binding obligations of the City of College Station, Texas (the "City"), issued pursuant to a bond ordinance adopted by the City Council of the City, and are payable from and secured by a continuing levy of ad valorem taxes against all taxable property on the tax rolls of the City, within the limits prescribed by law. Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond guaranty insurance policy to be issued by AMBAC Indemnity Corporation simultaneously with the delivery of the Bonds. Interest on the Bonds will be due on February 15, 1988, and each August 15 and February 15 thereafter until the earlier of maturity or prior redemption. The Bonds will be issued in fully registered form in integral multiples of $5,000, and principal and semiannual interest will be payable by First City National Bank of Houston, Houston, Texas, the paying agent/registrar (the "Registrar"). Principal of the Bonds will be payable to the registered owner at maturity or redemption upon presentation of such Bonds to the Registrar. Interest on the Bonds will be payable by check or draft, dated as of the interest payment date, and mailed by the Registrar to registered owners as shown on the records of the Registrar as of the last business day of the month next preceding each interest payment date. February 15 Maturity Schedule Amount Maturity Rate Yield Amount Maturity Rate Yield $ 65,000 1988 4.50% 4.50% $1,025,000 1997 7.00% 7.00% 585,000 1989 5.00% 5.00% 1,005,000 1998 7.10% 7.10% 565,000 1990 5.50% 5.50% 985,000 1999 7.20% 7.20% 545,000 1991 5.75% 5.75% 960,000 2000 7.30% 7.30% 455,000 1992 6.00% 6.00% 470,000 2001 7.40% 7.40% 135,000 1993 6.20% 6.20% 465,000 2002 7.50% 7.50% 615,000 1994 6.40% 6.40% 460,000 2003 7.60% 7.60% 610,000 1995 6.60% 6.60% 455,000 2004 7.70% 7.70% 1,045,000 1996 6.80% 6.80% Redemption The Bonds are optional for redemption prior to maturity on February 15, 1997, or any date thereafter at a price equal to par plus accrued interest thereon to the date fixed for redemption. Delivery The Bonds are offered when, as and if issued, subject to approval by the Attorney General of the State of Texas and Baker & Botts, Bond Counsel, Houston, Texas. Certain matters will be passed on for the Underwriter by Mayor, Day & Caldwell, Houston, Texas. Definitive Bonds are expected to be available for delivery on or about July 30, 1987 in Houston, Texas. This Official Statement was prepared under the direction of Moroney, Beissner & Co., Inc., Financial Advisor to the City. Moroney, Beissner & Co., Inc. is not an underwriter of the Bonds. RAUSCHER PIERCE REFSNES, INC. 005060 CITY OF COLLEGE STATION, TEXAS ADMINISTRATION The City of College Station operates under a council-manager form of government. The Mayor and Council members must be citizens of the United States and qualified voters of the State of Texas; and must have resided within the corporate limits of the City of College Station for at least one (1) year next preceding the election at which they are candidates. The Mayor and six Council members are elected from the City at large. In each even -numbered year three Council members and a Mayor are elected, and in each odd -numbered year three Council members are elected. The Mayor and each Council member hold office for a period of two years and until his successor is elected and qualified. A vacancy in the City Council is filled by a special election which must be called within 30 days of the occurrence of such vacancy. If a vacancy occurs within 90 days preceding a general election, no special election will be called and the vacancy will be filled at the next general election. All powers of the City are vested in the elective council which enacts local legislation, adopts budgets, determines policies, and employs the City Manager, who executes the laws and administers the government of the City. The City Council determines the goals of the City and operates as a policy making body. The City Manager executes the policies of the Council concerning matters of policy, personnel, and budgeting. ELECTED OFFICIALS Length Term Officials Title of Service Expires Occupation Larry J. Ringer* Mayor 1 year 4/88 Professor, Department of Statistics, Texas A&M University Fred Brown Councilman 2 years 4/89 Owner, Fred Brown Mazda -BMW Sara Goode Jones Councilman 1 year 4/88 Attorney, Hoelscher Lipsey & Jones Lynn Mcllhaney Councilman 3 years 4/89 Homemaker Patricia B. Boughton Councilman 9 years 4/88 Homemaker Jim Gardner Councilman 4 years 4/89 Professor, Texas A&M University Dick Haddox Councilman 1 year 4/88 Executive, Anco Insurance * Mayor Ringer served as a Councilman for 7 years prior to his election as Mayor. ADMINISTRATIVE OFFICIALS Official Position Years of Service William K. Cole City Manager 1' Years Ron Ragland Assistant City Manager 6 months Glenn Schroeder Deputy Director of Finance 10 Years Dian Jones City Secretary 34 Years Elrey B. Ash II Director of Capital Improvements 12 Years Cathy Locke City Attorney 3 Years Moroney, Beissner & Co., Inc. Financial Advisors 32 Years 005061 BOND COUNSEL Baker & Botts, Houston, Texas UNDERWRITER'S COUNSEL Mayor, Day & Caldwell, Houston, Texas 2 Authorization The City is a political subdivision of the State of Texas and a municipal corporation organized and existing under the laws of the State of Texas and its duly adopted Home Rule Charter (the "Charter"). The Bonds are issued pursuant to the Charter and the general laws of the State of Texas, particularly Article 717k, Vernon's Texas Civil Statutes, and additionally pursuant to an ordinance authorizing the issuance and sale of the Bonds (the "Bond Ordinance") passed by the City Council on the date of sale of the Bonds. Payment Record The City has never defaulted. PLAN OF FINANCING Purpose The proceeds from the sale of the Bonds together with other funds of the City will be used to (1) refund two series of outstanding General Obligation Bonds and one series of outstanding Combination Tax and Revenue Certificates of Obligation and (2) advance refund two series of outstanding General Obligation Bonds and one series of Combination Tax and Revenue Certificates of Obligation prior to their stated maturities. The bonds and certificates of obligation to be refunded (hereinafter collectively referred to as the "Refunded Bonds") constitute the following issues: Original Amount Maturities Amount to be to be Option Issued Series Refunded Refunded Dates $1,500,000 G.O.-1981 $ 450,000 1989-1991 8/15/87 2,705,000 G.O.-1982 1,100,000 1989-1992 8/15/87 6,590,000 G.O.—II 1982 3,325,000 1994-2000 2/15/92 8,630,000 G.O.-1984 4,050,000 1996-2004 2/01/94 284,062 C.O.—Dated 7/24/81 85,219 1989-1991 7/24/88 400,000 C.O.—Dated 10/23/81 160,000 1988-1991 10/23/87 Total $9,170,219 The Refunded Bonds will be called for redemption prior to maturity on their respective Option Dates at a price of par plus accrued interest to the date fixed for redemption. The total debt service on the Bonds is less than the total debt service on the Refunded Bonds. The principal and interest payments on the Refunded Bonds scheduled to become due and payable prior to the Option Dates and the principal amount of the Refunded Bonds scheduled to mature subsequent to the Option Dates are to be paid on the dates each comes due, and on the Option Dates, respectively, from funds to be deposited with First City National Bank of Houston, Houston, Texas (the "Escrow Agent"). The Bond Ordinance provides that from the proceeds of the sale of the Bonds to the Underwriter, and from other funds of the City now on hand and lawfully available for such purpose, the City will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds. Such funds will be held by the Escrow Agent in an escrow account ( the "Escrow Fund") and used to purchase direct obligations of the United States of America (the "Federal Securities"). At the time of delivery of the Bonds to the Underwriter, Arthur Andersen & Co., Certified Public Accountants, will verify the mathematical adequacy of the Federal Securities, maturing at such time and yielding interest in amounts, such that together with uninvested funds in the Escrow Fund, if any, they will be sufficient to pay, when due, the principal of and interest on the Refunded Bonds. Such maturing principal of and interest 011 the Federal Securities will not be available to pay debt service on the Bonds. 3 005062 Under a certain Special Escrow Agreement ( the "Escrow Agreement") to be dated as of July 30, 1987, between the City and the Escrow Agent, the Escrow Fund is irrevocably pledged for the payment of principal of and interest on the Refunded Bonds. By the deposit of the Federal Securities and cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of the Refunded Bonds pursuant to the terms of the Bond Ordinance. In the opinion of Bond Counsel, as a result of such defeasance, the Refunded Bonds will no longer be payable from the ad valorem taxes, but will be payable solely from the principal of and interest on the Federal Securities and cash held for such purpose by the Escrow Agent, and the pledge of ad valorem taxes for the payment of the principal and interest on the Refunded Bonds will be discharged. Sources and Uses of Funds The proceeds from the sale of the Bonds together with other available City funds will be applied approximately as follows: Sources of Funds: Principal amount of the Bonds $10,445,000.00 Available City Funds 436,118.75 Accrued Interest 29,362.20 Total Available Funds $10,910,480.95 Use of Funds: Deposit in Escrow Fund (Federal Securities and Cash) $10,470,092.47 Cost of Issuance 411,026.28 Accrued Interest 29,362.20 Total Use of Funds $10,910,480.95 THE BONDS General The Bonds are dated July 15, 1987, and interest on the Bonds will be calculated on the basis of a 360 -day year composed of twelve 30 -day months, will accrue from July 15, 1987, and is payable semiannually on February 15 and August 15 of each year ("Interest Payment Date") commencing February 15, 1988. The Bonds mature on February 15 in the years and in the principal amounts or amounts due at maturity set forth on the cover page hereof. Interest on the Bonds is payable by check or draft mailed on or before each Interest Payment Date by the Registrar to the registered owner thereof as shown on the Registrar's books on the Record Date (as defined herein). The record date (the "Record Date") for the interest payable on any Interest Payment Date is the last business day of the month next preceding such Interest Payment Date. The Bonds are issued only as fully registered bonds in the denomination of $5,000 or any integral multiple thereof. Security The Bonds will constitute valid and legally binding obligations of the City, payable from and secured by a continuing levy of ad valorem taxes against all taxable property on the tax rolls of the City, within the limits prescribed by law. Optional Redemption All Bonds maturing on or after February 15, 1998, are optional for redemption in whole or in part on February 15, 1997, or any date thereafter at par and accrued interest to the date fixed for redemption. If less than all of the Bonds are redeemed at any time, the particular Bonds to be redeemed shall be selected 005063 4 by the City in integral multiples of $5,000 within any one maturity. The registered owner of any Bond, all or a portion of which has been called for redemption, shall be required to present same to the Registrar for payment of the redemption price on the portion of the Bond so called for redemption and shall be issued a new Bond in the principal amount equal to the portion of such Bond not redeemed. Notice of Redemption Notice of redemption is required to be given by mailing a copy thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed in whole or in part at the address of such owner on the registration books of the Registrar; provided, however, that failure to give such notice, or any defect therein, will not affect the validity of the proceedings for the redemption of any Bond or portion thereof with respect to which no such failure or defect has occurred. Any notice mailed in accordance with the provisions of the Bond Ordinance will be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Any Bond or Bonds duly called for redemption, due provision for the full payment of which has been timely made, will cease to bear interest from and after the date fixed for redemption. Delivery of the Bonds The Bonds are expected to be available for delivery on or about July 30, 1987. Delivery of the Bonds will be accomplished by the issuance of one Bond for each maturity ( the "Initial Bonds") either in typed or printed form, payable to the Underwriter. If the Underwriter furnishes to the Registrar, at least five days prior to delivery of the Bonds (or as otherwise agreed to between the Underwriter and the Registrar), instructions designating the names in which Bonds are to be registered, the addresses of the registered owners, the maturities, interest rates and denomination of such Bonds, the Registrar shall, on the date of delivery, authenticate and deliver in exchange for the Initial Bonds, Bonds registered in accordance with such instructions in an aggregate principal amount equal to the aggregate principal amount of the Initial Bonds submitted for transfer or exchange. Successor Registrar Provision is made in the Bond Ordinance for replacement of the Registrar. If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar's records and act in the same capacity as the previous Registrar. Any Registrar selected by the City shall be either a national or state banking institution and shall be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise trust powers, and subject to supervision or examination by Federal or State authority. Successor Registrars, if any, shall be determined by the City. Registration, Transfer and Exchange The Bonds may be transferred, registered and assigned only on the registration books of the Registrar, and such registration and transfer shall be without expense or service charge to the owner, except for any tax or other governmental charges required to be paid with respect to such registration and transfer. A Bond may be assigned by the execution of an assignment form on the Bonds or by other instrument of transfer and assignment acceptable to the Registrar. A new Bond or Bonds will be delivered by the Registrar in lieu of the Bond being transferred or exchanged at the principal office of the Registrar. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of such owner not more than three business days after the receipt of the Bonds to be cancelled in the exchange or transfer and the written instrument of transfer or request for exchange duly executed by the owner or his duly authorized agent, in form satisfactory to the Registrar. New Bonds registered and delivered in an exchange or transfer shall be in denominations of $5,000 or any integral multiple thereof for any one maturity, shall specify the same maturity date and be for a like aggregate principal amount as the Bond or Bonds surrendered for exchange or transfer. Limitation on Transfer or Exchange of Bonds Neither the City nor the Registrar shall be required to transfer or exchange any Bond during the period of fifteen (15) days next preceding any Interest Payment Date or to transfer or exchange any Bond during the thirty (30) day period prior to the date fixed for the redemption of such Bond. 5 00 5064 Bondholders Remedies The Bond Ordinance which requires the City to levy and collect taxes does not specifically provide any remedies that would be available to a Bondholder if the City defaults in the payment of the principal or interest on the Bonds or for the appointment of a trustee to protect and enforce the interests of the Bondholders upon the occurrence of such a default. If a holder of a Bond does not receive payment of principal or interest when due, the holder could seek to obtain a writ of mandamus from a court of competent jurisdiction requiring the City to observe the covenants contained in the Bond Ordinance, or such holder could presumably recover a judgement against the City. The enforcement of a claim for the payment of a Bond could be subject to judicial discretion, sovereign police powers of the State and the provisions of the Federal bankruptcy laws, if applicable. There is no provision for acceleration of maturity of principal of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be enforced from year to year. Any judgment against the City could not be enforced by direct levy and execution against the City's property or funds. Further, the registered owners of Bonds cannot themselves foreclose on property within the City or sell property within the City in order to pay the principal of and interest on the Bonds. The enforcement of a claim for the payment of a Bond would also be subject to the applicable provisions of the Federal bankruptcy laws and to any other statute affecting the rights of creditors of political subdivisions. Replacement Bonds If any Bond is mutilated, destroyed, stolen or lost, a new Bond in the same principal amount as the Bond so mutilated, destroyed, stolen or lost will be issued. In the case of a mutilated Bond, such new Bond will be delivered only upon surrender and cancellation of such mutilated Bond. In the case of any Bond issued in lieu of and substitution for a Bond which has been destroyed, stolen or lost, such new Bond will be delivered only (a) upon filing with the City and the Registrar of evidence satisfactory to establish to the City and the Registrar that such Bond has been destroyed, stolen or lost, (b) upon furnishing the City and the Registrar with indemnity satisfactory to them, and (c) upon the City and the Registrar having received no notice that such Bond has been acquired by a bona fide purchaser. The person requesting the authentication and delivery of a new Bond must comply with such other reasonable regulations as the Registrar may incur in connection therewith. MUNICIPAL BOND INSURANCE AMBAC Indemnity Corporation AMBAC Indemnity Corporation ("AMBAC Indemnity") is a Wisconsin -domiciled stock insurance company, regulated by the Insurance Department of the State of Wisconsin, and licensed to do business in various states, with admitted assets (unaudited) of approximately $1,000,000,000 and qualified capital (unaudited) of approximately $580,000,000 as of June 30, 1987. Qualified capital consists of AMBAC Indemnity's statutory contingency reserve and policyholders' surplus. AMBAC Indemnity is a wholly- owned subsidiary of AMBAC Inc., a financial holding company which is owned by Citibank, N.A., the employees of AMBAC Indemnity, Xerox Financial Services, Inc. and Stephens Inc. Standard & Poor's Corporation and Moody's Investors Service, Inc. have assigned their ratings of "AAA" and "Aaa", respectively, to the claims paying ability of AMBAC Indemnity. Copies of AMBAC Indemnity's financial statements prepared in accordance with statutory accounting standards are available from AMBAC Indemnity. The address of AMBAC Indemnity's administrative offices and its telephone number are One State Street Plaza, 17th Floor, New York, New York, 10004 and (212) 668-0340. AMBAC Indemnity has entered into stop -loss reinsurance agreements with a number of unaffiliated reinsurers designed to supplement its resources. The stop -loss reinsurance agreements cover all AMBAC Indemnity's existing insured mutual funds, unit trusts, portfolios and new issues insured by AMBAC Indemnity. In addition, AMBAC Indemnity has entered into quota share reinsurance agreements under which a percentage of the insurance or reinsurance underwritten pursuant to certain municipal bond insurance programs of AMBAC Indemnity has been and will be assumed by such reinsurers. 6 005065 AMBAC Indemnity has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by AMBAC Indemnity will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by AMBAC Indemnity under policy provisions substantially identical to those contained in its municipal bond guaranty insurance policy shall be treated for federal income tax purposes in the same manner as if such payments were made by the issuer of the Bonds. AMBAC Indemnity makes no representation regarding the Bonds or the advisability of investing in the Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by AMBAC Indemnity and presented under the heading "MUNICIPAL BOND INSURANCE". Payment Pursuant to Municipal Bond Guaranty Insurance Policy AMBAC Indemnity has made a commitment to issue a municipal bond guaranty insurance policy (the "Municipal Bond Guaranty Insurance Policy") relating to the Bonds effective as of the date of issuance of the Bonds. Under the terms of the Municipal Bond Guaranty Insurance Policy, AMBAC Indemnity guarantees the timely payment of the principal of and interest on the Bonds to the United States Trust Company of New York, in New York, New York or any successor thereto ( the "Insurance Trustee") less any amount held by the Trustee or Paying Agent for the payment thereof. AMBAC Indemnity will make such payments to the Insurance Trustee on the date due for payment or within one business day after receipt of notice of nonpayment, whichever is later. The insurance will extend for the term of the Bonds and, once issued, cannot be cancelled by AMBAC Indemnity. The Municipal Bond Guaranty Insurance Policy will insure payment only as principal or interest payments shall become due but shall not be paid. It will not insure payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity, nor will it insure the payment of any prepayment premium. In the event of any acceleration of the principal of the Bonds, the payments insured will be made at such times and in such amounts as would have been made had there not been an acceleration. The Municipal Bond Guaranty Insurance Policy will not insure against nonpayment of principal or interest caused by the insolvency or negligence of any Trustee or Paying Agent or the Insurance Trustee. If the Bonds become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Bonds, AMBAC Indemnity will remain obligated to pay principal of and interest on outstanding Bonds on the originally scheduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event the Trustee has notice that any payment of principal of or interest on a Bond made to a Bondholder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court of competent jurisdiction, such registered owner will be entitled to payment from AMBAC Indemnity to the extent of such recovery if sufficient funds are not otherwise available. If it becomes necessary to call upon the Municipal Bond Guaranty Insurance Policy, payment of interest and principal requires surrender of Bonds or coupons and an appropriate assignment of the Bondholder's right to payment to the Insurance Trustee. Upon remittance and transfer of Bonds and coupons, if any, or appropriate instruments of assignment, AMBAC Indemnity will become the owner thereof. 7 005066 USE OF INFORMATION IN OFFICIAL STATEMENT This "Official Statement" has been prepared by Moroney, Beissner & Co., Inc., a firm employed by the City to perform professional services in the capacity of Financial Advisor, including the preparation of this "Official Statement." Information with respect to interest rates, discounts, and other matters relating to the resale of the Bonds, including changes in the affairs of the City subsequent to the date hereof, is the responsibility of the Underwriter and such information is not provided herein. The information set forth herein has been obtained from the City and other sources which are believed to be reliable, but no guarantee is made as to the accuracy or completeness of such information, and its inclusion herein is not to be construed as a representation on the part of the City nor Moroney, Beissner & Co., Inc. to such effect. No person has been authorized to give any information or to make any representations other than those contained in this "Official Statement" and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or Moroney Beissner & Co., Inc. This "Official Statement" does not constitute an offer to sell or solicitation of an offer to buy, in any state in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Any information and expressions of opinions herein are subject to change, without notice, and neither the delivery of this "Official Statement," nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in the affairs of the City since the date hereof. PROPERTY TAXES Property Subject to Taxation by the City Except for certain exemptions provided by federal and State law, all property in the City is subject to ad valorem taxation. Categories of exemptions applicable to the City include property owned by the State or its political subdivisions if the property is used for public purposes; property exempt from ad valorem taxation by federal law; certain household goods, family supplies and personal effects; farm products owned by the producers; certain property affiliated with charitable organizations, youth development associations, religious organizations and qualified schools; designated historical sites, solar and wind - powered energy devices; and most individually owned automobiles. Taxable property in the City is required to be valued for tax purposes at 100% of market value ( with limited exceptions) as of January 1 of each year. The City was authorized by the Texas Constitution to exempt up to 40% of the appraised value of each residential homestead for years 1982 through 1984. The City is authorized to exempt up to 30% of such value for years 1985 through 1987 and 20% thereafter. The Texas Property Tax Code ( the "Property Tax Code") also provides for exemptions of up to $3,000 for homesteads of disabled veterans and certain survivors of deceased disabled veterans who apply for the exemption. State law also permits the City Council to grant a homestead exemption of not less than $3,000 of appraised value to persons over 65 years of age. The Property Tax Code provides certain restrictions on annual increases in tax rates based on a complex formula. The effect of these limitations is to require a public hearing if the proposed tax increase, other than for taxes levied to pay debt service on Bonds and certain contractual obligations, exceeds 3% and an election (upon petition of 10% of the qualified voters in the City) to require a rollback to 8% if such an increase exceeds 8%. Taxing Procedures The Brazos County Appraisal District ( the "Appraisal District"), a county -wide agency created under the Property Tax Code, is responsible for appraising property in the City, and the Brazos County Appraisal Review Board ( the "Review Board") is responsible for reviewing the values established by the Appraisal District. The Appraisal District is governed by a five -person board of directors. Voting for membership on the board of directors of the Appraisal District is cumulative, based on total taxes levied by taxing units within the Appraisal District. 005067 8 Appraisals may be protested by taxpayers, and in such case the Review Board determines whether the appraisals are substantially uniform and otherwise comply with the law. The City also has the right to challenge some Appraisal District determinations, but not the appraised value of an individual taxpayer's property. Orders of the Review Board are subject to appeal to a state district court. The City's tax roll is certified to the City by the Chief Appraiser of the Appraisal District, and the tax rate established by the City Council is applied to the values fixed by the Appraisal District, as reduced by exemptions granted by the City. Tax statements are required to be mailed by October 1 or as soon thereafter as practicable; taxes are due upon receipt of a tax bill; and taxes become delinquent on February 1 of the following tax year. Split payments are allowed; first half by November 30, and balance by June 30. Delinquent taxes incur a penalty of 6% of the amount of the tax for the first calendar month of delinquency plus 1% for each month or portion of a month of delinquency until July 1 when the penalty becomes 12%. Taxes that remain delinquent on July 1 of the year in which they become delinquent may incur an additional penalty of not greater than 15% of the amount of taxes, penalty and interest due to defray costs of collection. Interest on delinquent taxes accrues at the rate of 1% per month until the tax is paid. To secure the payment of all taxes, as well as penalty and interest on delinquent taxes, the City has a statutory lien on taxable property which is on a parity with the lien of other taxing entities, and the taxpayer is personally liable for payment of the tax. Personal property of the taxpayer is subject to seizure and sale to satisfy delinquent taxes. The City may also sue to foreclose its tax lien on real or personal property, or to enforce personal liability, or both. If a judgment is obtained for foreclosure of the tax lien, the court may order the property sold to satisfy the lien. The City generally has not attempted to enforce the lien because of the time and expense of foreclosure proceedings. Delinquent taxes on real property are generally paid at such time as the owner sells or transfers title to the property upon which the delinquent tax has accrued. FINANCIAL STATEMENT (As of 5/31/87) 1986 Assessed Valuation (100% of Actual) $1,121,103,323(1) General Obligation Debt Outstanding: (2) Presently Outstanding Bonds $13,335,000 Certificates of Obligation 340,600 Combination Tax & Revenue Certificates of Obligation 1,850,247 The Bonds, Series 1987 10,455,000 Gross Debt $25,980,847 Less: Self Supporting Debt $5,655,346 Applicable I & S Fund 1,783,835 7,439,181 Net Debt $18,541,666 Ratio of Net General Obligation Debt to 1986 Assessed Valuation 1.65% 1987 Estimated Population (excluding 9,550 students living on campus) 50,000 Net Debt per Capita $371 Assessed Valuation per Capita $22,422 Area of City 28.5 Sq. Mi. (1) Net of Exemptions in the amount of $36,629,372. (2) Excludes the Refunding Bonds in the amount of $9,170,219. Also does not include $29,435,000 Utility System Revenue Bonds outstanding. (See "Utility Department". ) 9 005068 COMPUTATION OF SELF-SUPPORTING DEBT Net System Revenues Available for debt service for Fiscal Year ended 6/30/86 $10,736,790 Less: Average annual debt service requirements on outstanding Revenue Bonds 3,357,120 Balance available for other purposes $ 7,379,670 Average annual System General Obligation Bonds debt service requirements $ 675,450 Percentage of System General Obligation Bonds Self-supporting 100% Note: The City Council adopted an ordinance on June 29, 1976 committing the net revenues of the Utility System, after the payment of Revenue Bond requirements, to the payment of Principal and Interest on the General Obligation Bonds issued for Utility System purposes. This ordinance is authorized by Article 1106, Vemon's Civil Statutes of Texas. TAX COLLECTION PERIOD Taxes are due October 1 and are delinquent after January 31. Split payments are allowed; first half by November 30, and balance by June 30. No discounts are given on early payments. Penalty and interest on delinquent payments are rigidly enforced. TAX COLLECTION RECORD Percent Tax Collections Tax Assessed Tax Year Year Valuation Rate Current Total Ending 1981 433,053,691(1) 0.31 96.50 100.46 6/30/82 1982 769,127,740(2) 0.31 95.30 96.76 6/30/83 1983 841,670,967 0.31 95.71 98.64 6/30/84 1984 957,398,333 0.36 94.12 96.49 6/30/85 1985 1,099,640,342 0.38 92.96 95.50 6/30/86 1986 1,121,103,323 0.38 93.38 98.57 6/30/87 Delinquent taxes outstanding for all prior years, as of 5/31/87 $287,023 (1) Increase in basis of assessment from 80% to 100% of actual. (2) Revaluation. TAX RATE LIMITATIONS The City of College Station is a Home Rule Charter City with a maximum authorized rate for all purposes of $2.50 per $100 Assessed Valuation. This maximum tax rate is imposed both by the Constitution of the State of Texas and the City Charter. Under the rules of the Texas Attorney General, the City may issue general obligation debt in an amount no greater than that which can be serviced by a debt service tax of $1.50 per $100 assessed valuation, based on 90% collections. TAX RATE DISTRIBUTION Tax Year 1986 1985 1984 1983 1982 1981 General Fund $0.02 $0.02 $ -0- $ -0- $0.0801 $0.1448 Interest & Sinking Fund 0.36 0.36 0.36 0.31 0.2291 0.1652 Total Tax Rate $0.38 $0.38 $0.36 $0.31 $0.3100 $0.3100 00 069 10 TAX ADEQUACY Average Maximum Requirements Requirement (1988-2004) (1989) General Obligation Debt Service Requirements Including the Bonds, Series 1987, but excluding self-supporting Utility System G.O. Bonds$1,811,930 $3,084,024 Interest and Sinking Fund tax levy rate required on 1986 Assessed Valuation of $1,121,103,323 @ 95% collection produces $0.17 $0.29 CITY SALES TAX The City adopted the provisions of Article 1066e, VACS, Section 9, authorizing a 1% sales tax effective July 1, 1968. The sales tax collections are not pledged to payment of the Bonds. Following are sales tax collections for the past ten calendar years and the five-month period ending May 31, 1987. Sales Tax Sales Tax Year Revenue Year Revenue 1977 $ 675,197 1983 $2,558,651 1978 848,536 1984 2,791,869 1979 1,005,363 1985 3,093,459 1980 1,290,503 1986 2,900,842 1981 1,645,040 1987 (5 Months) 1,381,011 1982 2,220,245 GENERAL OBLIGATION BONDS AUTHORIZED BUT UNISSUED Date of Amount Issued Authorized Authorization Purpose Authorized to Date but Unissued 8/13/83 Drainage Improvements $ 1,930,000 $ 700,000 $1,230,000 1/24/84 Police Building 2,200,000 2,200,000 —0- 1/24/84 Fire Station Renovation 555,000 555,000 —0-- 1/24/84 Maintenance and Storage Bldg. 1,425,000 500,000 925,000 1/24/84 Park Improvements 1,150,000 1,150,000 —0- 1/24/84 Street Improvements 6,325,000 3,525,000 2,800,000 $13,585,000 $8,630,000 $4,955,000 FLOATING DEBT OUTSTANDING None 11 0050 0. ESTIMATED DIRECT & OVERLAPPING DEBT STATEMENT The following statement of the estimated direct and overlapping ad valorem tax -supported debt of taxing entities in the City was derived from various sources, including information contained in "Texas Municipal Reports", published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of the information shown below, and no person is entitled to rely upon such information as being accurate or complete. Furthermore, certain of the entities below may have incurred substantial additional debt since the applicable date of this table, and such entities may have programs requiring the issuance of substantial additional debt, the amount of which cannot be determined. Political Subdivision Net Debt Percent Amount As of Overlapping Brazos County $ 9,250,345 12/31/85 34.55 Brazos County F/M & Lateral Road Bonds 71,269 12/31/85 33.63 Bryan ISD 5,439,864 8/31/85 1.03 College Station ISD 20,265,000 8/31/86 91.51 Total Overlapping Net Debt CITY OF COLLEGE STATION Total Direct and Overlapping Net Debt Ratio of Total Direct and Overlapping Net Debt to 1986 Assessed Valuation Per Capita Total Direct and Overlapping Net Debt Assessed Valuation per Capita Taxpayer TWENTY MAJOR TAXPAYERS Amount Overlapping $ 3,185,994 23,968 56,030 18,437,097 $21,713,089 18,541,666 $40,254,755 3.59% $805 $22,422 1986 Assessed Type of Property Valuation General Telephone Utility $ 28,472,563 CBL Management Retail Shopping Mall 20,397,910 Westinghouse Electric Corp. Manufacturing 18,598,890 College Station Hotel Partnership Hotel 13,192,062 Texas Instruments Manufacturing 11,308,220 Federated Department Store Retail 11,257,210 Ramada Inn Hotel 9,410,010 Western Gulf Savings & Loan Shopping Center 8,396,070 Continental Real Estate Partnership Apartments 8,113,060 Sears, Roebuck & Co. Retail 8,083,450 Plantation Oaks Assn. Apartments 7,283,884 J. C. Culpepper, Jr Retail Center 7,232,755 Area Progress Real Estate 6,847,051 Anderson Ridge Partners Apartments 6,253,910 Sundance/Sausalito Apartments 6,234,390 ARC/AMS, Inc. Office Building 6,047,670 College Park Association Apartments 5,840,180 Benjamin E. Jackson Co. Apartments 5,434,520 Robert Callaway Apartments 5,366,450 Dillards Retail 5,279,820 Total Twenty Major Taxpayers as percent of City's total 1986 Assessed Valuation 005071 12 $200,050,075 17.84% Debt Service Requirement Schedule* $10,445,000 G.O. Refunding Bonds Present Total Series 1987 New Total Self -Supporting Fiscal Year Debt Service Debt Service Debt Included Ending 6/30 Requirements Principal Interest Total Requirements in Total 1988 $3,309,749 $ 65,000 $381,708.44 $ 446,708.44 $3,756,457.44 $ 966,497 1989 3,764,200 585,000 701,767.50 1,286,767.50 5,050,967.50 1,966,944 1990 2,353,594 565,000 672,517.50 1,237,517.50 3,591,111.50 658,894 1991 2,238,607 545,000 641,442.50 1,186,442.50 3,425,049.50 640,417 1992 2,198,274 455,000 610,105.00 1,065,105.00 3,263,379.00 621,464 1993 2,146,151 135,000 582,805.00 717,805.00 2,863,956.00 598,772 1994 1,546,174 615,000 574,435.00 1,189,435.00 2,735,609.00 579,307 1995 1,331,730 610,000 535,075.00 1,145,075.00 2,476,805.00 426,841 1996 750,486 1,045,000 494,815.00 1,539,815.00 2,290,301.00 407,376 1997 718,342 1,025,000 423,755.00 1,448,755.00 2,167,097.00 391,263 1998 410,898 1,005,000 352,005.00 1,357,005.00 1,767,903.00 172,179 1999 209,204 985,000 280,650.00 1,265,650.00 1,474,854.00 2000 960,000 209,730.00 1,169,730.00 1,169,730.00 2001 470,000 139,650.00 609,650.00 609,650.00 2002 465,000 104,870.00 569,870.00 569,870.00 2003 460,000 69,995.00 529,995.00 529,995.00 2004 455,000 35,035.00 490,035.00 490,035.00 * Excludes the Refunded Bonds. HISTORY OF GENERAL FUND REVENUES AND EXPENDITURES The following General Fund Revenues, Expenditures and Balances of Cash and Temporary Investments were taken from the City's Annual Audit Reports: Fiscal Year Ending 6/30/86 6/30/85 6/30/84 6/30/83 6/30/82 Revenues: Ad Valorem Tax $ 208,481 $ 6,205 $ -0- $ 562,998 $ 600,281 City Sales Tax 2,986,594 2,996,933 2,641,715 2,563,221 1,794,603 Franchise Tax 315,272 267,991 299,269 228,951 177,753 Court Fines 459,872 442,921 342,761 483,050 403,421 Licenses, Permits & Certificates 266,068 220,738 193,065 226,466 299,577 Other 523,513 848,909 759,330 920,728 915,908 Total Revenue $ 4,759,800 $ 4,783,697 $ 4,236,140 $4,985,414 $4,191,543 Transfers from other Funds 7,274,034 6,420,545 5,504,181 4,147,326 3,033,427 Total Revenue & Transfers $12,033,834 $11,204,242 $ 9,740,321 $9,132,740 $7,224,970 Expenditures: Administration $ 4,450,643 $ 4,163,401 $ 3,631,097 $3,153,804 $2,554,165 Police Department 2,946,321 2,508,822 2,289,774 2,051,548 1,651,836 Fire Department 2,279,295 2,136,437 1,869,004 1,819,797 1,388,723 Streets 814,437 974,704 902,918 640,462 405,758 Parks & Recreation 1,588,725 1,430,430 1,238,709 1,024,694 779,480 Miscellaneous 163,920 119,784 89,687 863,239* 140,244 Total Expenditures $12,243,341 $11,333,578 $10,021,189 $9,553,544 $6,920,206 Excess of Revenues & Transfers Over Expenditures $ (209,527) $ (129,336) $ (280,868) $ (420,804) $ 304,764 Balances of Cash and Temporary Investments $ 1,234,993 $ 1,829,360 $ 2,071,242 $2,254,000 $2,543,403 * Includes an expenditure of $817,725 for the purchase of fire fighting equipment. 13 005072 UTILITY DEPARTMENT As of 5/31/87 Utility System Revenue Bonds Outstanding $29,435,000 Fund Balances: Interest and Sinking Fund $3,178,274 Operating Fund 646,016 Total Fund Balances $3,824,290 REVENUE BONDS AUTHORIZED BUT UNISSUED Date of Amount Authorization Authorized Purpose Previously Authorized but Issued Unissued 8/13/83 $9,500,000 Sanitary Sewer System Improvements $4,500,000 $5,000,000 UTILITY SYSTEM OPERATING STATEMENTS The following condensed operating statements were taken from audits prepared by Hereford Lynch & Co., CPA's, Huntsville, Texas for the years 1982 through 1984 and Deloitte Haskins & Sells, CPA's, for 1985 and 1986. Fiscal Year Ended June 30 1986 1985 1984 1983 1982 Revenue: Electric $27,494,226 $26,770,175 $21,265,591 $18,630,622 $13,077,553 Water &Sewer 4,973,166 4,594,125 4,379,039 3,931,081 2,770,761 Tap Fees 54,513 83,725 159,763 267,648 197,464 Interest* 532,699 571,594 715,994 566,176 83,932 Other 1,125,838** 419,872 473,437 782,197 506,942 Total Revenue $34,180,452 $32,439,491 $26,993,824 $24,177,724 $16,636,652 Expenses: Power Purchased $15,964,427 $15,244,981 $10,502,052 $10,902,294 $ 5,901,946 Water Production 1,259,270 1,293,240 846,761 653,689 631,226 Tap Expense 50,828 72,742 67,783 91,701 121,880 Other Expenses 6,169,137 5,062,580 4,731,990 3,637,748 2,649,460 Total Expenses' $23,443,662 $21,673,543 $16,148,586 $15,285,432 $ 9,304,512 Available for Debt Service $10,736,790 $10,765,948 $10,845,238 $ 8,892,292 $ 7,332,140 Coverage of Average Annual Debt Service Requirements on Revenue Bonds 3.20x 3.21x 3.23x 2.65x 2.18x The maximum annual debt service requirements on the Bonds is $5,096,158 and occurs in fiscal year ending 6/30/88. The net revenues available for Debt Service for the Fiscal Year ending 6/30/86 are 2.11 times this maximum annual requirement. * Excludes interest earned on construction funds. ** Includes an energy rebate of $635,465. CUSTOMER COUNT 6/30/86 6/30/85 6/30/84 6/30/83 6/30/82 Water 14,327 13,162 13,137 12,718 10,628 Sewer 17,420 16,388 16,567 15,822 13,361 Electric 16,258 15,946 15,684 14,985 12,881 0 5073 14 WATER, SEWER AND ELECTRIC RATES (All customers are billed monthly) The following water, sewer and electric rates were established by Ordinance passed and approved by the City Council and became effective on July 1, 1987. WATER Type of Customer Residential $1.50 per 1,000 gallons $5.00 per month service charge Commercial and Industrial $1.50 per 1,000 gallons $6.50 per month service charge SEWER Residential $11.00 per household unit Commercial and Industrial $0.96 per 1,000 gallons of water usage $3.50 per month service charge ELECTRIC The following electric rates are subject to a power adjustment charge which requires that the net energy charge per kilowatt hour shall be increased or decreased by an amount per kilowatt hour equal to any increase or decrease in the wholesale rate paid for electric energy by the City by virtue of the fuel clause in the wholesale contract. Residential Service Charge $5.50 per month, plus: First 100 kwhrs $0.1054 per kwhr Next 400 kwhrs $0.0754 per kwhr Over 500 kwhrs $0.0684 per kwhr Over 500 kwhrs used per month in the billing months of November thru April $0.603 per kwhr Small Commercial (1-10 KW de- mand) Service Charge $8.00 per month, plus: First 200 kwhrs $0.1124 per kwhr Next 800 kwhrs $0.0975 per kwhr Over 1,000 kwhrs $0.0675 per kwhr Medium Commercial and Industrial (10-500 KW demand) Service Charge $15.00 per month, plus: Demand Charge $9.00 per kw of billing demand First 50,000 kwhrs $0.0418 per kwhr Over 50,000 kwhrs $0.0368 per kwhr The minimum monthly charge under this rate schedule shall be the highest one of the following charges: 1) $105.00 per month plus applicable power cost adjustment on the kilowatt-hours used. 2) The sum of service charge and demand charge under the above rate plus applicable power cost adjustment on the kilowatt-hours used. 3) The minimum monthly charge specified in the customer's service contract with the City, plus applicable power cost adjustment on the kilowatt-hours used. 15 00 074 Type of Customer Large Commercial and Industrial (500/1500 kw demand) Service Charge $50.00 per month, plus Demand Charge $4,375 for the first 500 kw of billing demand $8.25 per kw of billing demand for all over 500 kw, plus Energy charge First 250,000 kwhrs $0.0363 per kwhr All additional kwhrs $0.0333 per kwhr The minimum monthly charge under this rate schedule shall be the highest one of the following charges: 1) $4,425.00 per month plus applicable power cost adjustment on the kilowatt-hours used. 2) The sum of service charge and demand charge under the above rate, plus applicable power cost adjustment on the kilowatt-hours used. 3) The miminum monthly charge specified in the customer's service contract with the City, plus applicable power cost adjustment on the kilowatt-hours used. Industrial Customer (1,500 kw and over demand) Service Charge $50 per month, plus Demand Charge $12,375 for the first 1,500 kw of monthly billing demand; $7.75 per kw for all additional kw of billing demand, plus Energy Charge $0.0335 per kwhr for first 500,000 kwhrs; $0.0295 per kwhr for all kwhrs over 500,000 The minimum monthly charge under this rate schedule shall be the highest one of the following charges: 1) $12,425.00 per month plus applicable power cost adjustment on the kwhrs used. 2) The sum of service charge and demand charge under the above rate plus applicable power cost adjustment on the kwhrs used. 3) The minimum monthly charge specified in the customer's service contract with the City, plus applicable power cost adjustment on the kwhrs used. WATER SUPPLY SOURCE Since December, 1981, College Station has had the capability to produce and deliver 100% of its water needs through the new aqueduct system from the new well field. This newly completed system includes three wells with a combined capacity of 12 million gallons per day. The water is delivered to the distribution system by 14 miles of 30 -inch diameter pipeline and two pump stations. Each of the three wells mentioned above is completed into the Simsboro Sand of the Wilcox formation which forms a very prolific aquafer of high quality water and which should be capable of supporting a combined population of 300,000. 16 005075 SEWAGE TREATMENT FACILITIES College Station's wastes are treated by the City -owned sewage treatment plant located within the City. The sewage treatment plant has a capacity of 8.9 million gallons per day ( mgd) average load, and 15.8 mgd, peak load. The City is presently experiencing approximately 5.4 mgd average load and 12.0 mgd peak load. The sewage treatment plant capacity is adequate to serve a population estimated at 80,000. ELECTRIC SUPPLY SOURCE The City of College Station presently purchases 100% of its electrical power from Gulf States Utilities under a contract extending through 1997. The City is served through three 138 kva transmission lines tied to a ring bus at the City switching station. One 138 line comes from the Ree Dee substation in Madisonville, Texas, one line from the Lewis Creek station in Willis, Texas and one line from the Grimes substation in Shiro, Texas. The City is a member of the Lone Star Municipal Power Agency, a joint action agency authorized by the 68th Legislature of Texas in 1983. The other member cities are Caldwell, Texas, Kirbyville, Texas and Newton, Texas. The Agency was formed for the purpose of seeking and securing a long term, reliable and economic power supply source for these Cities, all of which currently purchase power from Gulf States Utilities Company. UTILITY SYSTEM REVENUE BONDS DEBT SERVICE REQUIREMENT SCHEDULE Fiscal Year Ending 6/30 Principal Interest Total P&I 1987 2,490,000 2,653,008 5,143,008 1988 2,605,000 2,491,158 5,096,158 1989 2,545,000 2,308,808 4,853,808 1990 2,465,000 2,117,933 4,582,933 1991 2,415,000 1,926,895 4,341,895 1992 2,375,000 1,733,695 4,108,695 1993 2,275,000 1,537,758 3,812,758 1994 2,225,000 1,344,383 3,569,383 1995 2,205,000 1,150,808 3,355,808 1996 2,205,000 954,563 3,159,563 1997 2,175,000 756,113 2,931,113 1998 2,025,000 558,188 2,583,188 1999 1,525,000 370,875 1,895,875 2000 1,490,000 227,525 1,717,525 2001 905,000 85,975 990,975 17 005 76 GENERAL INFORMATION LOCATION The City of College Station is located in East Central Texas in Brazos County approximately 140 miles north of the Gulf of Mexico. College Station lies 90 miles north of Houston, 165 miles south of Dallas, and 100 miles east of Austin. The City covers an area of 28.5 square miles and has an elevation varying from 200 to 400 feet. The City has an excellent climate, with an annual mean temperature of 65.6 degrees, and average rainfall of 38.75 inches. COMMUNICATION The City of College Station is provided newspaper service by "The Eagle" which is published daily and has a circulation of approximately 26,200, and the "Battalion", which is published five times weekly and which has a circulation of 22,000. There are two television channels and two community cable antenna systems, with a total of thirteen television channels available. Five radio stations serve the area, three FM and two AM. TRANSPORTATION Airlines —Commercial, corporate and private airport facilities are provided the residents of College Station by Easterwood Airport, which is located on the City's west side. Rio Airways provides five daily flights to and from Houston and ten daily flights to and from Dallas out of Easterwood, which is owned and operated by Texas A&M University. There is currently an annual average of approximately 40,000 passenger boardings at Easterwood. Bus Lines —Four bus lines, Greyhound, Central Texas, Central and Arrow Coach, serve the City of College Station. Five north -bound and four south -bound buses connect the City with Houston and Dallas. Railroads —Rail freight service is provided by the Southern Pacific Transportation Company and Missouri Pacific Lines. Truck Lines —Seven truck lines, United Postal Service and United Parcel Service supply daily freight services. BANKING FACILITIES Banking services are provided by the following: Deposits as of 5-31-87 First Republic Bank A&M $112,928,000 University National Bank 45,052,875 United Bank -College Station, N.A. 34,180,000 Homestead Savings & Loan Association 29,366,000 Commerce National Bank 16,889,500 In addition there are the following branches of financial institutions located in College Station: First State Bank of Caldwell—Post Oak Branch Lamar Savings—College Station Branch Community Savings & Loan—College Station Branch of City Savings UTILITIES The residences and commercial establishments of College Station are supplied water, sewer and electric service by the City -owned facilities. General Telephone Company of the Southwest provides telephone facilities and Lone Star Gas Company provides gas utility service. 005077 18 ECONOMIC BACKGROUND Of major importance to the City of College Station is Texas A&M University, with a 5,200 acre campus located within the City. The economic impact on the City by the University continues to be substantial. A University in-house study shows that campus -generated funds contribute over $300 million annually to the local economy. The 1986 fall semester total resident enrollment was 36,570, and the Texas A&M payroll totaled in excess of $200 million. The University is a leading research center, with a total volume of research for the 1985-86 fiscal year of $121.2 million, up $7 million over the previous year. The University employs in excess of 11,000 and the University physical plant in College Station is valued in excess of $500 million. INDUSTRIAL DEVELOPMENT In addition to the University, employment is provided by more than 75 manufacturing industries located in, or adjacent to, the City which produce such products as aluminum windows, business forms, furniture, chemicals, rubber shoe soles, soft drinks, dairy products, feeds and fertilizers, livestock and camper trailers, modular homes, hoisting equipment, bronze castings, and geophysical survey sensors. WESTINGHOUSE ELECTRIC CORP. Westinghouse Electric Corp. has a 158,000 square foot electronic assembly manufacturing plant within the City which is operated by the Westinghouse Defense and Electronic Systems Center producing defense radar -related equipment. The College Station facility has a 1986 assessed valuation of $18.6 million and currently employs approximately 500 people. BUILDING PERMITS College Station has grown rapidly over the past 14 years as evidenced by an increase in population from 17,700 in 1970 to an estimated 50,000 in 1987 (excluding approximately 9,550 students living on campus). Development within the city is demonstrated by the number and value of construction permits issued by the City over the past ten years. Calendar Year Residential Permits Commercial/Industrial Permits Number Value Number Value 1978 287 $8,899,612 240 $10,250,643 1979 267 11,606,261 252 6,212,298 1980 359 25,707,945 238 9,697,550 1981 603 50,667,095 417 30,114,838 1982 663 64,567,551 398 40,177,931 1983 424 27,275,747 503 32,116,239 1984 134 23,500,892 457 45,545,079 1985 194 9,587,839 323 15,779,281 1986 225 8,825,516 268 22,450,866 1987(thru May 31) 91 4,408,495 99 5,595,079 19 005078° COMMERCIAL DEVELOPMENT POST OAK MALL Post Oak Mall had its official opening in February 1982. Anchor tenants of the 750,000 square foot shopping center are Sears Roebuck and Dillard's department stores, each containing in excess of 100,000 square feet of space. Foley's Department Store, a division of Federated Stores, has a 100,000 square foot facility in the Mall. The Mall, which is situated on 100 acres of land with parking area adequate to accomodate 5,000 cars, is ultimately planned to contain 125 stores with 1,020,000 square feet of shopping area. CITY MANAGEMENT College Station was incorporated in 1938 and has a Council -City Manager form of government with City employees totaling 480 today. The City has benefited from the availability of technical information and assistance made available by Texas A&M University. Over the years, numerous College professors and business people have served in City government and administration. The City has adopted and does enforce comprehensive zoning and building restrictions which promote orderly growth and development. The City's ordinances require all subdividers, at their own expense, and without provision for refund, to install streets and water and sewer lines in any planned subdivision. These facilities are constructed under the City's specifications and inspection and when completed are deeded to the City free and clear. All areas within the City are now adequately served with water, sewer and electric service. CITY OWNED FACILITIES The City has constructed a major part of its present facilities out of current revenues. Approximately 99%, or 155 miles, of streets within the City are hard surface. The City has a complete water distribution, sewage collection and treatment system with 188 miles of sanitary sewer lines and 179 miles of water lines. The City owns the electrical distribution system with 149 miles of distribution lines, and purchases its electricity from Gulf States Utilities Company. College Station owns modern and efficient fire fighting equipment, with 79 full time firemen. The fire department has seven fire trucks, three modulance style ambulances for emergency medical service and six administrative vehicles. The City has a fully equipped and effective police department with 75 full time police officers, and four radio dispatchers that service both fire and police departments. RESIDENTIAL CALIBER College Station, a community of above-average value homes, townhomes and apartments, is principally a residential community for faculty, students and other personnel of Texas A&M University. There is a blend of new modern homes and older stately structures along tree shaded streets. Residential values range from $50,000 to $200,000. Thirty new apartment projects, with 20 or more units in each, as well as a number of townhouse projects, have been completed within the past two years. Substandard housing is virtually nonexistant and is of no significance in the local economic picture in College Station. RECREATION The College Station park system presently includes 27 parks encompassing 318 acres. Collectively these parks contain 13 playgrounds, 10 soccer fields, 14 softball/baseball diamonds; 2 swimming pools, a gymnasium, and a number of picnic shelters. The Parks Department sponsors a variety of organized athletic and acquatic programs as well as many special events throughout the year. Central Park features 47 acres of nature trails, picnic facilities and athletic fields. Just south of College Station is the Texas World Speedway, which provides all types of racing events. 20 05079 EDUCATIONAL FACILITIES The College Station Independent School District is a fully accredited system offering educational facilities for kindergarten through high school. The school system currently includes two kindergartens, two elementary schools, one middle school ( fifth and sixth grades); one junior high school (seventh and eighth grades) and one high school. The College Station ISD facilities are also used by Blinn College, offering two years of college level courses. The Texas A&M University System provides the higher educational needs of the Community, offering both four year college programs and extensive graduate degree opportunities. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of (i) the mathematical computations of the adequacy of the maturing principal amount of the Federal Securities to be held by the Escrow Agent together with the interest earned and to be earned thereon to pay, when due, the principal of and interest on the Refunded Bonds and (ii) the mathematical computation of yield supporting Bond Counsel's conclusion that the Bonds are not "Arbritrage Bonds" under Section 148 of the Internal Revenue Code of 1986, as amended ("Code"), will be verified by the firm of Arthur Andersen & Co., independent Certified Public Accountants, whose opinion with respect thereto will be available at delivery. TAX MATTERS The delivery of the Bonds is subject to the opinion of Baker & Botts, Houston, Texas, Bond Counsel, to the effect that, under existing statutes, regulations, court decisions and published rulings, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations provided that such interest will be included in adjusted net book income ( adjusted current earnings for taxable years beginning after 1989) for purposes of computing the alternative minimum tax liability of a corporation imposed by Section 55 of the Code and the environmental tax imposed on certain corporations by Section 59A of the Code and may be subject to the branch profits tax imposed on foreign corporations by Section 884 of the Code and to the tax imposed by Section 1375 of the Code on the excess net passive income of certain S corporations. The Code imposes a number of requirements that must be met subsequent to the issuance of the Bonds in order for interest on the Bonds to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of bond proceeds, limitations on the investment of bond proceeds prior to expenditure, and a requirement that excess arbitrage earned on the investment of bond proceeds be paid periodically to the United States of America. The City has covenanted in the Bond Ordinance ( the "Tax Covenants") that it will comply with these requirements. Bond Counsel's tax opinion that is described above will assume continuing compliance with the Tax Covenants and will rely upon, among other matters, a certificate executed by officers of the City with respect to certain facts, estimates and expectations, including facts, estimates and expectations which are solely within the City's knowledge and the report of Arthur Andersen & Co., CPA's, described under "Verification of Mathematical Computations" with respect to the accuracy of certain calculations. If the City should fail to comply with the Tax Covenants, if the above-described certificate were to be inaccurate or if the Arthur Andersen & Co. calculations were to be inaccurate, the interest on the Bonds could be includable in gross income from the date of issuance thereof, regardless of the date on which the event causing such taxability occurs. The balance of the discussion under this caption "Tax Matters" assumes that there will be continuing compliance with the Tax Covenants, that the above-described certificate is accurate, and that the Arthur Andersen & Co. calculations are accurate. 21 005000 Corporate Alternative Minimum Tax and Environmental Tax. The Code imposes a 20 percent alternative minimum tax on the "alternative minimum taxable income" of certain corporations, if the amount of such alternative minimum tax is greater than the amount of the corporation's regular income tax. Section 59A of the Code also imposes an additional 0.12 percent "environmental tax" on the alternative minimum taxable income of a corporation in excess of $2,000,000. For taxable years beginning in 1987, 1988, or 1989, a corporation's alternative minimum taxable income includes, in general, 50 percent of the amount by which adjusted net book income of the corporation exceeds its alternative minimum taxable income ( excluding the amount obtained by the calculation summarized in this sentence). For later taxable years, a corporation's alternative minimum taxable income includes, in general, 75 percent of the amount by which adjusted current earnings of the corporation exceeds alternative minimum taxable income (excluding the amount obtained by the calculation -summarized in this sentence). Interest on the Bonds will be included, for purposes of the alternative minimum tax and the environmental tax, in the adjusted net book income and adjusted current earnings of a corporation. The effect of owning a Bond upon a corporate investor's liability for such alternative minimum tax (which is payable only to the extent it exceeds the corporation's regular tax liability) and the environmental tax will depend on the corporation's particular facts and circumstances. Except as described above in the discussion regarding the book income item for certain corporations, interest on the Bonds will not be subject to the alternative minimum tax on individuals or corporations. Foreign Branches and S Corporations. Certain foreign corporations doing business in the United States may be subject to the new "branch profits tax" on their effectively -connected earnings and profits including tax-exempt interest such as interest on the Bonds. In addition, certain S corporations may be subject to the tax imposed by Section 1375 of the Code on the excess net passive income of such corporations which excess net passive income includes tax-exempt interest such as interest on the Bonds. Collateral Tax Consequences and Other Tax Matters. Except as stated above, Bond Counsel will express no opinion as to any federal, state or local tax consequences resulting from the acquisition, ownership, carrying or disposition of the Bonds. Ownership of tax-exempt obligations may result in collateral federal income tax consequences to financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations which are not discussed herein. These categories of purchasers should consult their own tax advisors as to such matters. Purchasers of a Bond should consult their own tax advisors with respect to the state and local tax consequences of owning a Bond. OFFICIAL STATEMENT CERTIFICATE At the time of payment for and delivery of the Bonds, the City will furnish the Underwriter a certificate signed by the Deputy Director of Finance acting in his official capacity, to the effect that the "Official Statement" has been authorized and approved by the City Council, and to the best of his knowledge and belief after reasonable investigation: (a) neither the "Official Statement" nor any amendment or supplement thereto contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (b) since the date of the "Official Statement" no event has occurred which should have been set forth in an amendment or supplement to the "Official Statement" which has not been set forth in such amendment or supplement; and (c) there has not been any material adverse change in the operation or financial affairs of the City since the date of such "Official Statement." 22 005081 LEGAL MATTERS Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the unqualified approval of the Attorney General of the State of Texas and of Baker & Botts, Bond Counsel, whose approving opinion will be printed on the Bonds. Baker & Botts was not requested to participate, and did not take part, in the preparation of the Official Statement except as hereinafter noted, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained herein, except that, in its capacity as Bond Counsel, such firm has reviewed the information under the captions "PLAN OF FINANCING" ( except for statements with respect to sources and uses of funds and other accounting matters), "THE BONDS", "LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS" and "TAX MATTERS" in the Official Statement to determine whether such information presents a fair and accurate summary of the provisions of the law and the instruments described under such captions. The legal fees to be paid to Baker & Botts in connection with the issuance of the Bonds are contingent on the sale and delivery of the Bonds. NO LITIGATION CERTIFICATE The City will furnish withoutcost to the Underwriter a certificate signed by the Mayor and City Secretary which will recite, among other things, that no litigation of any nature has been filed or is now pending to restrain or enjoin the issuance or delivery of the Bonds, or which would affect the provision made for their payment or security, or in any other manner questioning the proceedings or authority concerning the issuance of the Bonds, and that so far as is known and believed, no such litigation is threatened. RATINGS The outstanding General Obligation Bonds of the City are rated "A-1" by Moody's Investors Service, Inc. ("Moody's") and "A+" by Standard & Poors Corporation ("S&P"). Moody's and S&P have assigned their municipal bond ratings of "Aaa" and "AAA", respectively, to this issue of Bonds with the understanding that upon delivery of the Bonds a guaranty insurance policy insuring the timely payment of the principal of and interest on the Bonds will be issued by AMBAC Indemnity Corporation. SECURITIES LAWS The Bonds have not been registered or qualified under the Securities Act of 1933, as amended, in reliance upon the exemption provided by Section 3( a )( 2 ). The Bonds have not been registered or qualified under the Texas Securities Act in reliance upon various exemptions it contains, or under the securities acts of any other jurisdiction. The City assumes no responsibility for registering or qualifying the Bonds under the securities laws of any jurisdiction in which the Bonds may be offered, sold, assigned, hypothecated or otherwise transferred. This disclaimer of responsibility for registration or qualification of the Bonds does not mean that the Bonds may be exempt from securities registration or qualification provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS Section 9 of the Bond Procedures Act of 1981 states: "All bonds issued by an issuer shall constitute negotiable instruments, and are investment securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of law or court decision to the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas". The Act further provides that such bonds are eligible to secure deposits of any public funds of the state or any political subdivision or public agency of the state, and are lawful and sufficient security for those deposits to the extent of their market value, when accompanied by any unmatured coupons attached to the bonds. No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. 23 00:5;082 UNDERWRITING The Underwriter, Rauscher Pierce Refsnes, Inc., agrees, subject to certain conditions, to purchase the Bonds from the City, at a price of par plus accrued interest. The City will pay an underwriting fee to the Underwriter in an amount equal to 1.7% of the aggregate principal amount of the Bonds. The Underwriter's obligations are subject to certain conditions precedent, and they will be obligated to purchase all of the Bonds if any of the Bonds are purchased. One of such conditions is that the City will purchase from the Underwriter certain federal securities for deposit in the Escrow Fund. The Bonds may be offered and sold to certain dealers and others at prices lower than such public offering prices, and such public prices may be changed, from time to time, by the Underwriter. FINANCIAL ADVISOR Moroney, Beissner & Co., Inc. serves as Financial Advisor to the City and in this capacity supervised the preparation of this Official Statement and represented the City in the negotiations pertaining to the sale of the Bonds to the Underwriter. Under the terms of the contract between Moroney, Beissner & Co., Inc. and the City, it is agreed and understood that Moroney, Beissner & Co., Inc. shall not be permitted to purchase any Bonds from the City nor have any interest, directly or indirectly, in the original purchase and sale of the Bonds, except as agent for the City. As Financial Advisor to the City, Moroney, Beissner & Co., Inc. will be paid a fee based upon a percentage of the principal amount of Bonds actually sold and delivered, which fee is contingent upon such sale and delivery. OTHER MATTERS All information contained in this Official Statement is subject, in all respects, to the complete body of information contained in the original sources thereof and no guaranty, warranty, or other representation is made concerning the accuracy or completeness of the information herein. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered as statements of fact. THIS OFFICIAL STATEMENT was approved, and the execution and delivery of this Official Statement authorized, by the City Council of the City of College Station, Texas on July 14, 1987. ATTEST: /s/ DIAN JONES City Secretary 005083 24 CITY OF COLLEGE STATION, TEXAS /s/ LARRY J. RINGER Mayor EXHIBIT I AUDIT REPORT The information contained on the following pages are excerpts from the City's Audit Report for the year ending June 30, 1986 as prepared by: Deloitte Haskins & Sells Certified Public Accountants Houston, Texas The information on the following pages is not intended to be a complete statement of the City's financial condition. A complete Audit Report is available upon request to: Moroney, Beissner & Co., Inc. Houston, Texas Financial Advisors to the City I-1 0Q508L Deloitte Haskins -Sells 1200 Travis Houston, Texas 77002 (713) 651-1700 Telex 762840 AUDITORS' OPINION Mayor Larry Ringer and Members of City Council of the City of College Station, Texas: We have examined the general purpose financial statements of the City of College Station, Texas ("City") as of June 30, 1986 and for the year then ended, listed in the foregoing table of contents. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying general purpose financial statements present fairly the financial position of the City at June 30, 1986, and the results of its operations and the changes in financial position of its proprietary fund types and pension trust fund for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination also comprehended the supplemental financial information, listed in the foregoing table of contents, as of June 30, 1986 and for the year then ended. In our opinion, such supplemental financial information, when considered in relation to the general purpose financial statements, presents fairly in all material respects the information shown therein. In connection with our examination, nothing came to our attention that caused us to believe that the City was not in compliance with any of the accounting or financial reporting requirements of the various bond resolutions governing the outstanding bonds of the City. Our examination was not, however, directed primarily toward obtaining knowledge of such noncompliance. The accompanying statistical tables, listed in the foregoing table of contents, were not audited by us and, accordingly, we express no opinion on them. September 12, 1986 I-2 00 H CO N d 1. .7 0, v1 O 00 .0 v1 VD O n 00 N O ,O 00 H M 6 H N M H ,O M M n VD H O O, 00 .O 00 1. M M NO N00 M 40 A N O N f. r4 M M H O ,O H .Y O CO O, H ,O v1 CO 0 M H 0 00 O O N H 0.-1,0 01.0000 MM NIO v1N .O O, 00 ...n (NI W N .-4 n La 00 O1 00 n .O M H 0 ,O 00 O, 1. MM 0 O, 0 04 N .7 .7 6 0 on n d00 N 4-4 M M 0 N 0 .O v1 N N v\ O.M O 0 co 0 O O O H 0) H CO M v M N H CO 04 04 v 01 0 N v 4h 04 . 10 01 ro W 1+ H Cl) .0 0 I (0 F 00 0) • W 0 0 0 cp 3 H U 0 u u OF COLLEGE STATION, TEXAS H 0) N 0 L 01 0) 0) W 44 h N w � 6 >, W H 0 ro4 H 0 •0 • •0 7 w w $ 2,028,845 0 0 rIn A 0004 0 0 0 r4 CO v\ 4 4 00 CO M .-. VI f` v1 M 04 00 w V1 >, N 0 04 M 01 4-4 M 0 04 40 0 n N 01 1O .O H 0) W . 1 0 ,O 0 .7 00 n 10 N .O N. M M 00 N .7 10 0. 0) CO 0 M .7 .0 O .7 co c0 0 CO 04 H 0 1.1 O, u 0,•. .4) E. H 0, 00 00 M 00 .-1 (,)M .-4 .7 00 v1 N H 400 0, H b 01 0 03 n -I W ,O N 00 .7 0,M t.00 0M ..100, CV N 04 ,D Vl N N H0, M H 04. 0 •O M 1. 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W X 01 a1 E W > 0 1.. 61 0) 0 H 0 04 00 `D 0 0 40 U 0 0 H H Z W H O• 0. 0) H 44 H 4-1 01 .1 a1 0 0 0) 0) 01 v 14 0 .) 0) 0) W 00 .0 0 01 O. 0 co W 01 0 W 4.1 N W 0 H 0 0 61 10 R0 H .0 (4 0 U •• u 3 U 0 0 0 .0 .0 00 10 u 0 W •0 0 H u W W 4.1 1:4 0 0 0 0 0 U V) 444 W 0 41 (0 0 .0 0 ••4 ... 0 •0 .0 •r. 0 G .0 0 W > 1.1 W W IO H 07 O1 U •.4 0 0) 0 13 0) 14 0 14, W U 10 W 11 0) u C H O u 04 17 0 u •.+ 0 04 0 0 •c 0 4061 0000E.0 13 W .O 0. 0 N W 00 W .1. H 01 0 H 1 0 u a1 •rl a 0 04 IO 0 0 44 0 0 H u 14 • 0 0 0 0 • u 0 0 0 4.4 W H 0) 410.0 H •0 7 0 a1 > •0 0 40 .0 •r1 H 0 (1 0) 0 H 61 4.4 ..4 .0 W H W H 44 0 H 11 . r., W aJ •.4 C H . •0 H 0 (0 4.4 > 0 .O 10 .0 O w C: 01 H .A > 0> W 0 0 H O u '0 0 0 .0 0 4 W W 0 U W 04 0 (3 H 81 0 0)0.4.)(00000.Z4)4)4)04004) U 14> 0 0 d e-0 w 6¢ U 0 w W> W,0 U H Q H 0 v O 44 O H •.. O p: 6 U N W A H a N0 04 • U W E E I-3 157.737,724 $22,416,259 $34,455,593 $80,240,707 $10,449,094 0, 1,4N n .7 •4 00 0, O CO H H 4A 00 00 TOTAL ASSETS See notes to general purpose financial statements. 005086 STATION. TEXAS CITY OF COLLEGE E .-1 N N 0 N N H .0 01 I 01 (1 00 01 000 0 0 Account Grou H 00 ro N N (1) 1.1 01 • >i a) 0 W rn 0 • 0 0 0 .4 >1 0) N 0 0! > .( H 0 0 11 'O 0 •N 0 W W 40 W 0! 0 N u •.1 0 H •( 1+ 21 N CL 0 0 N W 01 M W H 0144 0 •.1 01 a •r, 0 0 U a u (...4 0) O C A v 04 14 W 0 0 N y H 0 -4 a 0 U v.+ 0) H 0 .4444. a 0 Z^ N u 0) 0 0 > 0. I0L 0) U 0 1/0 44 .4 0 0 COMBINED BALANCE SHEET - 1tl 0)0) 11 0 LIABILITIES H 0` 00 `0) 00 . C00 0 10 00.,'10 04 0"0001 00 1001 0 0 0.000 V1 .0 .-4 01 CO 1O i. CO 01 0 40 '0 01 10 .0 H �0 1000 N .7O O CO .7 CO" 4.0" 004 CON. H 00 40 so 10 00 O. 10 V104 .704 41. 00 10 .O .7 N N H N .-I H d2 0. 0 0. H O CO .-1 H N 00.7 10 d .700 0 0 100 O 1. 4-1 00 .O 01 0 0 co 10 v1 .7 in H 1. c0 01 0 1A 10 01 40 1. 01 0. N .7 0 O CO CO' 4w4 CO 0-1 0140 N 10 N 00 0. 10 140 N 04 0. 01 10 H H .-1 N N iA H .'-4 00 O 01 04 00 W V1 H H N 03 4000 (0 11 11 1- H 10 as N 10 N H 4-7 N CO CNI 01 10 N O 04.7 .-4 O .7 N 01 N JA n 10 0- N N V1 0 00 '0 I. 0. H..rn H .7 00 0) 1,577,840 O 0 00 c0 H 0 0 I!1 0 .t O'1 Op 0. 0 '010 N h M M .0 N O\ 1n .7 .100 00 0 (•1 N 00 Al Al 0(0 (0 O N 1' Ulw ft .7 M 0 N O10 .7 01 H (•1 01 N H iN 1O M H N 0 01 N .0 H N 04 O 00' N N 00 04 00.000 00En ,D00 ,D (10.'1,n V1 01 10 1. 01 111 (0 .7 to 01 00 0 .700.0) 0 co O. en - .1 .1 N 0 0 N H O. 10 .j H 10 01 H 00 00 N O N f. H �004 0- N N H H ., r» u 0H N N ( (0 01 (0 4) 0) 0 0) O v u 0v 0 U O 0 0) •.1 •.1 •.1 N a) 4+ U 07 N 'O 01 1 •..4 0f 0 ro 0 .+ OH 4-4 N N a) O. N 0 4.1 .4 0 0 0 •O H H 0 ro •'4 •.) 14 '0 0 ro 41 01 al 0u Aa000 ro 0 .0110W :: 0 21 000•".1> 0 1) H U a) T 1. A 00 0, u 0 1 1n A •.1 44 0 0. w N.0 0. 0 0 H 'O O W 4) H VO 01 (0 ~ 0 .. 0) it 01 0 0 0.0 0 0 1 1 0 u 00 0 0 •~ 0) 04 0 .-1 .r 0 01 0 •44 0 0 0 14 4) 0 0 • 4 •.1 a) 'O ..1 A 0 .0 (0 0 4-4 •r1 •rl 0) .41 )0 N 0 ZL W 0) Ll .-1 O N 07 U 0. al CO 0 W u 1, (0 0) 0 U 04 0 .-) •4-1 A 0 0) 0) 01 (40)0)0(4044(00010(0 N 00 .0 H ro w •0 u 0 0 (0 a..• ro •4.1 0 0 E 0. 0 0 •.1 u 'o •.1 N N 4.4 T 0 0 0 0 04 4.1 0 .-4 0. al 0, a) a) 0 •O A 0 H 0 0., .0 10 N 0 Z •.1 00 0 0 .0 4.4 - ro > > 0) 0 A 1, ro m a a) .. (0 44.1 al • 4 A 0 0 01 4, (0 a) a) ro ro A O N P. •. .0 0 a) U 0 0 0 0 04 0) N N 0 H. 0 H 0 L 04.4.4 7 •.1 '0 01 .-1 00 •. 0 a) H N (•1 E al H •.1 a 00 O •rr 0 u N 10 a) 0 01 N w N i+ ,_, 'O 10 u 0) •.1 4, +1 0 0 H N ..( N 0 N N 0) 'u 0) a) G N .rl 0 0) 0 0 0, 1+ H (0 al N N 01 7 4.1 0 14 '0 N N N 1J 1.) ,u0 0) u 7 0 •.1 u 00 N •4 0 N U> 0 U N U(0 0 N N 0 0 1 > 0 N O N CO •.1 0 A 0 U a) a) a) 0 0 0) a) E Z 00 0) 0) 0 U U N W HO 0 .(00 40 04(,) 0 0 N N N 10 v 0000 d•.44400 a 44000 .) 00508? -4 1,304,178 3.914.629 1. Al Al 0 Al M N 1. 01 (. 0 0 01 01 H V1 H n CO 1/1 n . srs 0 .7 00 0- . 10 N .,t 00 00 0. N M 0 .7 N 0. ('1 1. 00 H Al H 10,242,177 0- 0 H 1- 10 10 0 c0 00 (0 N 01 H W O CO N 0 10.7 n H .7 1(1 01 os 0) (0 01 01 0 0 N 401000 CO. 0 N 00 1. 00 H H ,0 ri 00 111 0)\O 1• 0 N 0, H N N N a, 0 0) a) N >, N N L 0 0) 0 O ct •� I 0)) ( a) (0 .-1 (0 A 40 .. (0, H N 1.4 N I. 0 04 0 '• A H N to 0) O N u 0(0 0) O 0 T '0 •.1 0) •.a . O) 0o ro 0 41 1+ ro 0 0 u •rl CL 00° L 0 0 •N 0 CO u 01 4.4 N •. 0 ro u 4., 0 0 •.1 (.4 0 0 0 N Z •' 0) •.1 10 0' 0 (0 H •.1 N W ro 0) .✓ '0 1.1 '0 0 0 0 > • .4 04 '0 01 0) 0 01 CO 0 00 •44 A H a) 4, 0) '0 O. O ro > 0 01 44-1 41 ro 10 H 4,0 (0(40)0)440)00.0) 01 0) •.1 0 0 01 'O > CO H > 0) •N 00 0 H A E 0) N 10 0) N (0 a N '0 •.I N W •N 1J O N a) .O a) a) 0 0 H U H N N •rt co N (0 )4 0 0 .0 0 10 0 41 a) 10 0) 0 o¢ F U H 440 44 0 0 44 'a w 81,466,328 10 01 1,•1 N 00 00 00 c- 0 O .7 00 0 N V1 0 (0 is 01 I. O Oh 00 O .t Al Al 00 00 .0 H 0. H 00 1/1 M 0 0 00 N 1. O .} N 04 O 00 00 01 4 CO 4-1 H H •0A 416,259 1157,737,724 N N $34,455,593 10.449.094 1,957,062 Total fund 5.871.691 TOTAL LIABILITIES AND FUND EQUITY to general purpose financial statements. L 00 CITY OF COLLEGE STATION, TEXAS TRUST FUNDS 0 wz 1) CaW z Z D. 0 ro 0 H 0) 7 _ i1 0 0 0 O 0) 0) H 0 7 ro 44 0 01 0) O O N JJ 01 u O CU 0 ro N C) 0) U 0 N C� IN .a 0) •.%0 1 0 eJ a 0) O 0. N .a O. 01 .4 M O P. h, NO V1 0' V1 N 00 M 00 r` O 0 4 01 V1 .I W 0 h. O V1 01 VD V1 P. 0..-1 4 M .j'NN N .4 .a al4 M 00 O 0 N W 40M .0 N V1 4 V1 aR N V1 4 -4 M .-� 01 N.-I.D.a MM N O r` rr .-1 N V1 .O O. N 00 M r.4 .-d N CO 01 4 01 V1 r- .4 .p M 00 0 V1 M N .d V. 00 .l'. r-.4 M 4.-1 . r. M w ca 0) U 14 u N 0) V) u N N 0) n 0) •.0i .1 H 0 x 0 H P. W U C9 r+ O H 0) 0 0 0) N EXPENDITURES 00 O. M .-1 .O M.OM M .O N 1• 0. 00 0 00 .'p V1 '0 N h. .-1 .O h O. M 0 -.4 4 .-1 N V1 0..t .-1 N .D h` 00 0 4 N r` N N u1 r` .-1 -4 .a N N -. .4 O00. M .a .O 01 V) C.1 VD N). 0. 000 4 V1 .O N h..-1 .0 01(+10.4.7.1 N r` 01 4 .4 N 0 .7 N n N N V1 r4 .+ r-4 N N _.4 .1 M 00 h. N 00 0` 0 0 •.1 ro u r~ > 00 .0 Oro+ 0) •.01 )4 L 10 N • • •.NI 0 U 0) 0) 0 14 0 0 •.1 U 0 co •.1 a) 0 .0 4 )4 00 H . 7 N '0 •.1 7 0 0: 10 0 w w w (444 w w U I-5 0) •.1 c0 N L w •.a 0 0 '0 ro '0 Lo 0) N 7 E h. ./ .-1 N r` .-1 N '0 00 CD Ora .7 1r1 O. 0..O 01 V1 O. V1 O .O •D O .•a V1 M h. $ 400 CO VD.44 N V\ re N O v O. 00 N ul M 4 0 00 .a O N N 0) N 0 a4 0 0) a X 0) 01 00 N V1 M 4 0. .O M h. 4 .a Vi N .+ M 00 O CO 01 .O V1 O .00 r. c•1 r. 0 .O .a GD N N M 0) 00 N c0 0 4.1 .01 (0 u •.4 •.1 W 01 CU IDu -4 0) N 10 4.1 0 .a 7 •.1 07 41 0 > O. 0 N •.1 0) 111 114 N 0 N 1-J 4 u N 0 CD O. C0 W P 1.4CD 1,584,597 of revenues .O N .O CO u'1 M .O .4 .O 01 O r, 00 00 h, .•d 4 O. V1 O CA 4 .d 00 4 .O N d O. N 00 OO .O 4 A N >, 0) N 7 0l 4.1 •.1 ..1 U '0 W 0) 0) 4 v 0) ro 0 N co 0) ?C w 7 u '0 G 0) a x 0) H > O Ed) k] Cr) 03 w V a 0 V) z reU 7. PC W x O 01 h. N M CO 0, 4 N M h• .O h. .t r..O .•1 4 .4 A A O 0 (P4 M -4 .a v v A A .a O. O. 4.003 .1 V1 01 V1 v u O O 00 01 M .... M N N CD CD 01 0. V1 V1 No/ 4,637,923 A N IM. 0. .a 0. V1 V1 M .7 0 ('1 00 S14,575,244 M101 ' 0 .b Na 00 h. .O .0 N r. 01 M N .7 .0 NO .a 0. 4 4 0'. 401- Cm 9 O. .O V1 V1 CO 4 CO 0. CO r• O 00 h. V1 N N h` O N .4 0. O 4 M 00 N 4 .O .4 M .t CO 0 0 v N N 7 0) N 00) N > 0 0 0 0) N O N 0) N ai w 0 a) •40 00 000 q fi 0 0 0 N N .0000.,° .1 A O1 w00w 0 N '.O +ro •uN .4 0 CU 0170 14 N 0) •.1 4,) 00 00 ,0 b u4 O 0 01 '0 •+ •.1 O 01 N 9 0) O) H N ,C P• N 00 44 co U 0 a) a a 0 x 0 O H W N ra FUND BALANCES, JULY 1, 1985 FUND BALANCES, JUNE 30, 1986 See notes to general purpose financial statements. 005088 CITY OF COLLEGE STATION, TEXAS STATION, TEXAS CITY OF COLLEGE z H N W U z 2 Z>>44.0 F y C 0 0 01 0cn 0,4 o UM 0. W¢ W • M D to "a �1 0 04 0�1.1 a a w oG •�H 1a 1 WN 0 Zt� F H 41 04 E-4 W q O 6 z w • g • w W pz . E a CO 1O in O 10 000- .4 0n4 0 T 0 N .7 0 ro 10 .-1 .-1 10 Vl O O 0 0 .:0 0 1.011 w 10 .7 N O ✓ 440v M sri. CO N 01 4r1 M N ro •.� " 0)▪ E" 0. Nn •41 b H .1 0 0. 0 0 40 v 14 011 to P4 E 0 _ .•1 0 01 10 ro .-1 u H 0 F O T 01 Z H 0. 0 M 0 T 0 41 •F u l0 0 N 0 •O 0 H U •'oM a W F r0- 0.4 04 U W Z H 10 T w w 6 00 11.1 N FO 0161 N ~10 ti) v F 016 a 10'1 O.0 u 0 0 X 1 HF Z P. W 0 W µ 0.1 "a a ti 01 WH -1Q z 0 a 170• Z > a 1''1 a a H 4.43 O 1 W >.. F>.G W La I• F -1 '= H 4 W 0 6 µ. F p a W W z00 O 0 005089 O N .-I M O In st 0 O K 30,389,983 H W 4) W 04 N 10 O 44 u v trs 00 00c0 O 0 .1 •.1 4.) 0 ro 4141 41 H 01 01 >+ 0 0 �a 0 •-/ w 14 H H •.O. w .001 0 0 •.1 U w u 0 0 U 0) 0 1•d 0 Z FUND EQUITY, 532,435,491 04 3 J �0? Cm OM 401 h 010410 O0- M 00 CO 0- 00 M 0- Aftft. 01. N 1O 01 0D )1 00 010-.-104 O 01 .-I CO M 4 00 1O M .+ N 04 N M N 44 01 o M .7 01 O 011001. CO 00 0- 00• ft 04 10 01 0O N OD 04 004 03 01 0001 d 40 M .•1 N 04 wll • 0 d 44 .4 11) r1 ro ..1 0 a ro 0 44 w 0 CO 0. .. 0 0. O • .-1 M H z 0 o w 1-1 00 0 44 H N 0' u W 0 0 w N 141 01 111 04 n 04 0.7 M0- 03 N10 00 100-0- 0 00 M N N 0000.1 •000.+ 0 1O v'11n M .4- .3.0(0('4004CO01 w .4.701.70401 00 J 010000 0.1h d 011304.701-1 10 40 d M 1.011 10 .-1 0 N 141 04 M N O. 10 01 03 M M N 0- .Q .n .7 M 1.1 .7 M 04 N 01 N .•I 0- N O 0 0 11 00- 04 M - .47 010)00.440303030 ‚0014140110003 0- .7 010N .y 001 0.1 01.701.7 N.0- Ch .7 0100CO 0 01 .+s 0 el 10- N 10 10 .7 M M 10 •-1 O N 01 0- 04 N M .0 01 0000.-1 ti0 d 01.70 N .7 M .LA•. N N N 10 1. N general fund W 0- N w H ✓ Oro0.w ww Z 44 0' ., w ro 0 X 44 0 0. 0 to 0 0 w w 0 0 X H 01 w .0 00 w N 6 6 >4. w 00 W 0 •0 •.0+ .ro •..+ 0 .•• 4 awl O 0 •.. a 0. 0 ro E 41 0 V 10 N 0 •.1 O 41 •JX ro E ro .44 u 0.1 >1 •.1 u O ro W 00 41 44 41 • .4 0 0 11 ro M • • • 0 w ▪ (a to w 0 0 w w 0 •.1 0 H H 44 H w H ro 0. Z ea •.1 ..+ •.1 E 0 •. 0 0 4) 0 •.1 w 0. u H H u 14 0 IH .0 1... •0 0. •.1 04 0 w w 44 3 0 F 0 U w w •.1 w F 0 0 0.r. •N 0 0 4.1 H .-• ro 0) ro 44 41 41 D: 0.0.-1 6 H.. 0.•.+ 0 S. 0 E WW ge1)004-, . N w 610ro 044 0 00 0 0 Cr w a1 •0 w to W •'". N N 0 41 410,44)0000) t0060 44 O a 0 F 0 F I-6 OPERATING INCOME (LOSS) r�0) N OM .�7 0011 ✓1 O 01 7 04 .7 v d HI 04 N 0 CO N (EXPENSES): NONOPERATING 111 N .-1 nn CP) 00 0- 0 1.01 0 04 n 0- 0 h sd• 01 HI M N 01 .0 .•1 00 00 O N al al N q Cu X w 01 0 w a w H (0 00 0001 •.1 .Pi 0 .4 .141 • O w 14 H 0. w 0 4) 14 0 w 0 41 41 0 0 to 40 0 w w H H H r. 41 • 41 f- L O 0 41 0 11 H O OTHER OFFICES: WASHINGTON, D. C. DALLAS AUSTIN BAKER & BOTTS ONE SHELL PLAZA 910 LOUISIANA HOUSTON, TEXAS 77002-4995 , 1987 EXHIBIT II TELEPHONE: (713) 229-1234 TELECOPIER: (713) 229-1730 TELEX:76-2779 CITY OF COLLEGE STATION, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 1987 IN THE AGGREGATE PRINCIPAL AMOUNT OF $10,445,000 We have acted as bond counsel in connection with the issuance and sale by the City of College Station, Texas (the "City") of City of College Station, Texas, General Ob- ligation Refunding Bonds, Series 1987, in the aggregate principal amount of $10,445,000 (the "Bonds"), issued in fully registered form in multiples of $5,000 each for any one maturity, maturing on February 15 in the years 1988 through 2004 in the amounts set forth below and bearing in- terest per annum from their date until maturity or earlier redemption at the following rates: Year of maturity 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Principal amount $ 65,000 585,000 565,000 545,000 455,000 135,000 615,000 610,000 1,045,000 1,025,000 1,005,000 985,000 960,000 470,000 465,000 460,000 455,000 Interest Rate per annum 4.50 % 5.00 5.50 5.75 6.00 6.20 6.40 6.60 6.80 7.00 7.10 7.20 7.30 7.40 7.50 7.60 7.70 The Bonds are being issued pursuant to an ordinance (the "Ordinance") adopted on July 14, 1987 by the City Council of the City. The principal of the Bonds is payable to the reg- istered holders thereof at maturity or redemption upon pre- sentation of the Bonds to First City National Bank of II4 005090 BAKER & BOTTS Page 2 Houston, Houston, Texas, or its successors, the Paying Agent/Registrar of the Bonds. Interest on the Bonds will be paid on each February 15 and August 15, commencing February 15, 1988, until the principal is paid, by check or draft mailed by the Paying Agent/Registrar. The City has reserved the right to redeem all Bonds maturing on February 15, 1998 or thereafter on Febru- ary 15, 1997 and at the times thereafter specified in the Ordinance, by paying the principal amount thereof, and ac- crued interest thereon, to the date of redemption. We have examined certified counterparts of the Ordinance; the Initial Bonds (as defined in the Ordinance); certified copies of proceedings of the City Council of the City; an executed opinion of the Attorney General of the State of Texas relating to, among other things, the validity of the Bonds; a certificate of Arthur Andersen & Co. with respect to certain calculations; certain certificates of representatives of the City and other public officials, upon which certificates we rely. BASED ON SUCH EXAMINATION, IT IS OUR OPINION that the Bonds have been duly authorized, executed, issued and delivered in accordance with the Constitution and laws of the State of Texas and constitute the legal, validand bind- ing general obligations of the City enforceable against the City in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium or other laws or ju- dicial decisions relating to or affecting the enforcement of creditors' rights or contractual obligations generally and the exercise of judicial discretion in accordance with gen- eral principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) . The Bonds are payable from and secured by an annu- al ad valorem tax upon all taxable property located in the City to pay the interest on, and the principal of, the Bonds as such interest and principal, respectively, become due and payable, within the limits prescribed by law. IT IS FURTHER OUR OPINION that, under existing statutes, regulations, court decisions and published rul- ings, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations provided that such interest will be included in adjusted net book income II -2 005091 BAKER & BOTTS Page 3 (adjusted current earnings for taxable years beginning after 1989) for purposes of computing the alternative minimum tax liability of a corporation imposed by Section 55 of the Internal Revenue Code of 1986, as amended (the "Code"), and the environmental tax imposed on certain corporations by Section 59A of the Code, and may be subject to the branch profits tax imposed on foreign corporations by Section 884 of the Code and to the tax imposed by Section 1375 of the Code on the excess net passive income of certain S corpora- tions. The opinion expressed in the preceding sentence as- sumes continuing compliance by the City with covenants con- tained in the Ordinance with respect to the requirements imposed by the Code that must be met subsequent to the issu- ance of the Bonds for interest on the Bonds to be excludable from gross income for federal income tax purposes. Such requirements include limitations on the use of bond pro- ceeds, limitations on the investment of bond proceeds prior to expenditure and a requirement that excess arbitrage prof- its be paid periodically to the United States of America. Except as stated above, we express no opinion re- specting any federal, state or local tax consequences at- tributable to the acquisition, ownership, carrying or dis- position of the Bonds. There are certain collateral federal income tax consequences of the ownership of tax-exempt obli- gations, such as a Bond, to certain persons (e.g., financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retire- ment benefits and taxpayers who may have incurred or contin- ued indebtedness to purchase or carry tax-exempt obliga- tions) which are not discussed herein. Respectfully, II -3 005092