Ord. 1060 04-08-02Ordinance No. 1060
Approved April 8, 2002
CITY OF PEARLAND, TEXAS
$25,000,000
PUBLIC IMPROVEMENT BONDS,
SERIES 2002
TRANSCRIPT OF PROCEEDINGS
PLEASE SEE FILE FOR
SIGNED COPY
Andrews & Kurth L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4200
HOl 648951 1
ANDREWS & KURTH
MAYOR, DAY & CALDWELL L.L.P.
AUSTIN ATTORNEYS TELEPHONE: 713.220.4200
DALLAS FACSIMILE: 713.220.4285
LONDON 600 TRAVIS, SUITE 4200
LOS ANGELES HOUSTON, TEXAS 77002 MARCUS W. DEITZ
NEW YORK DIRECT: 713.220.4876
THE WOODLANDS email: marcusdeitz@akllp.com
WASHINGTON, D.C.
July 3, 2002
Mr. Young Lorfing
City Secretary
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Re: City of Pearland, Texas $25,000,000 Permanent Improvement Bonds, Series 2002
Dear Mr. Lorfing:
Enclosed are two (2) copies of the transcript of proceedings relating to the captioned
financing for your distribution.
It was a pleasure working with you on this transaction and I look forward to our working
together again in the future.
Please call me at 713-230-4876 if you have any questions.
Very truly yours,
Marcus M. Deitz
7943:cm
Enclosures (2)
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CITY OF PEARLAND, TEXAS
$25,000,000
PUBLIC IMPROVEMENT BONDS,
SERIES 2002
TRANSCRIPT OF PROCEEDINGS
Andrews & Kurth L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4200
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CITY OF PEARLAND, TEXAS
$25,000,000 PERMANENT IMPROVEMENT BONDS
SERIES 2002
INDEX OF CONTENTS
Closing Memorandum
1
I. BOND PROCEEDINGS AND DOCUMENTS
Ordinance Authorizing Issuance of the Bonds 2
Preliminary Official Statement and
Official Notice of Sale
Official Statement 4
Paying Agent/Registrar Agreement 5
II. BOND ELECTION PROCEEDINGS
Resolution Calling Bond Election 6
Affidavit of Publication of Notice of Election 7
Affidavit of Posting Notice of Election 8
Ordinance Canvassing Returns and Declaring Results of Election 9
Department of Justice Letter 10
III. CITY CERTIFICATES
General Certificate 11
Signature Identification and No -Litigation Certificate 12
Federal Tax Certificate and Form 8038G 13
Official Statement Certificate 14
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IV. OPINIONS
Approving Opinion of Bond Counsel
Opinion of Attorney General of Texas with
Certificate of Comptroller of Public Accounts
Opinion of Counsel to the Bond Insurer
V. MISCELLANEOUS
Receipt and Cross -Receipt
Registrar's Receipt
Winning Bid
Rating Letters
Specimen Insurance Policy
Bond Review Board Questionnaire
Specimen Bond
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Amy Lewis
Associate Vice President
Public Finance - -• •
Phone (713) 651-3387
Fax (713) 651-3347
May 6, 2002
Ms. Deri Ward
Wells Fargo Bank Texas,N.A.
1000 Louisiana, Ste. 640
Houston, TX 77002
First City Tower, Suitt 400
1001 Fannin
Houston, TX 77002
(713) 651-3346
(713) 651-3347 Fax
(800) 727-7391 Toll Free
Re: $25,000,000 City of Pearland Permanent Improvement
Bonds, Series 2002
Dear Deri:
The delivery of the above captioned bonds (the "Bonds") is scheduled for Wednesday, May 8, 2002, at
10:00 A.M. at your bank. Mr. Rick Witte of Andrews & Kurth L..L.P., Houston, Texas, Bond Counsel, will
handle all legal matters relating to the closing. RBC Dain Rauscher Inc., the City's Financial Advisor, will
provide the Good Faith Check at closing. The Good Faith Check is to be endorsed by the City and
returned to UBS PaineWebber, Inc. 1285 Avenue of the Americas, 10th Flr., New York, New York 10019
Attn: Mike Azzinaro (212-713-2880) via ovemight courier.
At or prior to dosing, USB PaineWebber, Inc. ("PaineWebber") will wire $25,027,636.64 in immediately
available funds to:
Wells Fargo Bank
ABA Routing Number 091000019
Credit a/c 6355060501 G 0 Bond Administration
For further credit: the City of Pearland
Attn: Deri Ward 713-319-1658
The funds are calculated as follows:
Principal Amount of the Bonds
Plus: Premium
Accrued Interest
Total Amount to be Wired
$25,000,000.00
1,697.75
25.938.89
$25.027.636.64
Upon receipt of the total amount, Wells Fargo Bank Texas, N. A. ("Wells Fargo") will wire the immediately
available funds to the City's depository bank, Pearland State Bank, ABA 113123573, City of Pearland
Account No. 743542 representing $25,938.89 accrued interest, $1,697.75 premium on the bonds, and
$25,000,000.00 for construction and cost of issuance purposes.
Member NYSE • SIPC
rw
Ms. Deri Ward
May 6, 2002
Page 2
In addition, PaineWebber purchased optional insurance from Financial Guaranty Insurance Company
("FGIC"). PaineWebber will separately wired the insurance premium in the amount of $97,200.00 prior to
closing according to information provided by FGIC.
If I may be of further assistance, please do not hesitate to contact me at 713-651-3387.
Sincerely,
Amy Lewis
Associate Vice President
cc: Rick Witte, Andrews & Kurth L.L.P.
Marcus Deitz, Andrews & Kurth L.L.P.
Michael Azzinaro, USB PaineWebber, Inc.
Jim Causey, City of Pearland
Tara Thurkettle, RBC Dain Rauscher Inc.
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CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
§
§
We, the undersigned officers of the City of Pearland, Texas (the "City"), hereby certify as
follows:
1. The City Council of the City convened in a regular meeting on April 8, 2002, at
the regular meeting place thereof, within the City, and the roll was called of the duly constituted
officers and members of the City Council, to wit:
Tom Reid Mayor
Larry Marcott Mayor Pro Tem
Richard Tetens Council Member
Woody Owens Council Member
Larry Wilkins Council Member
Klaus Seeger Council Member
and all of such persons were present, thus constituting, a quorum. Whereupon, among other
business, the following was transacted at said meeting: a written
ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY
OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS,
SERIES 2002; PRESCRIBING THE TERMS AND FORM THEREOF;
PROVIDING -FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND
INTEREST THEREON; AWARDING THE SALE THEREOF; AUTHORIZING
THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL STATEMENT
TO BE USED IN CONNECTION WITH THE SALE OF THE BONDS;
MAKING OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING
USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT
THERETO; AND DECLARING AN EMERGENCY
(the "Ordinance") was duly introduced for the consideration of the City Council and read in full.
It was then duly moved and seconded that the Ordinance be adopted on first reading; and, after
due discussion, such motion, carrying with it the adoption of the Ordinance, prevailed and
carried by the following vote:
AYES: 5
NAYS: 0 ABSTENTIONS: 0
2 That a true, full and correct copy of the Ordinance adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this certificate; that the
Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above
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and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of
such meeting pertaining to the adoption of the Ordinance; that the persons named in the above
and foregoing paragraph are the duly chosen, qualified and acting officers and members of the
City Council as indicated therein; that each of the officers and members of the City Council was
duly and sufficiently notified officially and personally, in advance, of the date, hour, place and
subject of the aforesaid meeting, and that the Ordinance would be introduced and considered for
adoption at such meeting, and each of such officers and members consented, in advance, to the
holding of such meeting for such purpose; that such meeting was open to the public as required
by law; and that public notice of the date, hour, place and subject of such meeting was given as
required by the Open Meetings Law, Chapter 551, Texas Government Code.
April 8
SIGNED AND SEALED this
City cret
C OF P vi ' AND, EXAS
(SEAL)
, 2002.
�6m
Mayor
CITY OF PEARLAND, TEXAS
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ORDINANCE NO. 1060
ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY
OF .. PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS,
SERIES 2002; PRESCRIBING THE TERMS AND FORM THEREOF;
PROVIDING FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND
INTEREST THEREON; AWARDING THE SALE THEREOF; AUTHORIZING
THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL STATEMENT
TO BE USED IN CONNECTION WITH THE SALE OF THE BONDS;
MAKING OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING
USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT
THERETO; AND DECLARING AN EMERGENCY
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section 1.1: Findings and Determinations. The City Council hereby officially finds and
determines that:
(a) The City of Pearland, Texas (the "City"), acting through its City Council, is
authorized by Section 3.07 of its Home Rule Charter and the Constitution and
laws of the State of Texas, particularly Chapters 1331 of the Texas Government
Code, as amended, to issue bonds for the purpose of making needed public
improvements;
(b) The issuance of the bonds herein authorized was approved by the voters of the
City at an election held for such purpose on November 6, 2001 (the "Election"),
which was called by the City Council pursuant to Resolution No. R2001-116
adopted August 29, 2001;
(c) The City Council canvassed the returns of the Election and by Ordinance
No. 1040, adopted November 12, 2001 declared the results to be in favor of the
issuance of the Bonds;
(d) The City has determined that it is necessary and advisable to authorize, issue and
deliver a first installment of the authorized bonds in an amount of S25,000,000;
(e) The City Council is of the opinion and hereby affirmatively finds that it is in the
best interest of the City to issue bonds in the amounts and for the purposes herein
stated.
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ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions. As used herein, the following terms shall have the meanings
specified, unless the context clearly indicates otherwise:
"Act" shall mean Chapters 1331, Texas Government Code, as amended.
"Attorney General" shall mean the Attorney General of the State of Texas.
"Bond" or "Bonds" shall mean any or all of the City of Pearland, Texas Permanent
Improvement Bonds, Series 2002, authorized by this Ordinance.
"City" shall mean the City of Pearland, Texas and, where appropriate, its City Council.
"City Council" shall mean the governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"Construction Fund" shall mean the Permanent Improvement Bonds, Series 2002
Construction Fund established by the City and described in section 5.3 of this Ordinance.
"Debt Service Fund" shall mean the Permanent Improvement Bonds, Series 2002 Debt
Service Fund established by the City and described in section 5.2 of this Ordinance.
"Election" shall mean the election held November 6, 2001 which authorized the issuance
of S92,500,000 in bonds for necessary public improvements to City streets and bridges and
S22,500,000 in bonds for necessary public improvements to City drainage projects and facilities.
"Fiscal Year" shall mean the City's then designated fiscal year, which currently is the
twelve-month period beginning on the first day of October of a calendar year and ending on the
last day of September of the next succeeding calendar year and each such period may be
designated with the number of the calendar year in which such period ends.
"Interest Payment Date," when used in connection with any Bond, shall mean March 1,
2003, and each March 1 and September 1 thereafter until maturity or earlier redemption of such
Bond.
"Issuance Date" shall mean the date on which the Bonds are delivered to and paid for by
the Purchaser.
"Ordinance" shall mean this Ordinance and all amendments hereof and supplements
hereto.
"Outstanding", when used with reference to the Bonds, shall mean, as of a particular date,
all Bonds theretofore and thereupon delivered pursuant to this Ordinance except: (a) any Bonds
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canceled by or on behalf of the City at or before such date; (b) any Bonds defeased pursuant to
the defeasance provisions of this Ordinance or otherwise defeased as permitted by applicable
law; and (c) any Bonds in lieu of or in substitution for which a replacement Bond shall have been
delivered pursuant to this Ordinance.
"Paying Agent/Registrar" shall mean Wells Fargo Bank Texas, N.A., Houston. Texas,
and its successors in that capacity.
"Paying Agent/Registrar Agreement" shall mean the agreement between the City and the
Paying Agent/Registrar as described more particularly in Section 6.1 hereof.
"Purchaser" shall mean the entity or entities specified in Section 7.1 hereof.
"Record Date" shall mean the close of business on the 15th day of the calendar month
immediately preceding the applicable Interest Payment Date.
"Register" shall mean the registration books for the Bonds kept by the Paying
Agent/Registrar in which are maintained the names and addresses of, and the principal amounts
registered to, each Registered Owner of Bonds.
"Registered Owner" shall mean the person or entity in whose name any Bond is
registered in the Register.
Section 2.2: Interpretations. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles
and headings of the articles and sections of this Ordinance have been inserted for convenience of
reference only and are not to be considered a part hereof and shall not in any way modify or
restrict any of the terms or provisions hereof. This Ordinance and all the terms and provisions
hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the
validity of the Bonds and the validity of the levy of ad valorem taxes to pay the principal of and
interest on the Bonds.
ARTICLE III
TERMS OF THE BONDS
Section 3.1: Amount. Purpose and Authorization. (a) The Bonds shall be issued in fully
registered form, without coupons, under and pursuant to the authority of the City's Home Rule
Charter and the Act in the total authorized aggregate principal amount of TWENTY-FIVE
MILLION AND NO/100 DOLLARS (S25,000,000) for the purpose of providing all or part of
the funds for the following purposes: (i) S8,000,000 for acquiring, constructing and improving
city drainage projects and facilities; and (ii) S17,000,000 for acquiring, constructing, repairing
and improving city streets and bridges. Proceeds of the Bonds also will be used to pay costs of
issuance of the Bonds and other professional services related thereto.
Section 3.2: Designation. Date and Interest Payment Dates. The Bonds shall be
designated as the "City of Pearland, Texas Permanent Improvement Bonds, Series 2002," and
shall be dated May 1, 2002. The Bonds shall bear interest at the rates set forth in Section 3.3
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below, from the later of May 1, 2002 or the most recent Interest Payment Date to which interest
has been paid or duly provided for, calculated on the .basis of a 360-day year of twelve 30-day
months, payable on March 1, 2003, and each March 1 and September 1 thereafter until maturity
or earlier redemption.
If interest on any Bond is not paid on any Interest Payment Date and continues unpaid for
thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record date for the
payment of such interest, to be known as a Special Record Date. The Paying Agent/Registrar
shall establish a Special Record Date when funds to make such interest payment are received
from or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the
date fixed for payment of such past due interest, and notice of the date of payment and the
Special Record Date shall be sent by United States mail, first class, postage prepaid. not later
than five (5) days prior to the Special Record Date, to each affected Registered Owner as of the
close of business on the day prior to mailing of such notice.
Section 3.3: Numbers. Denomination. Interest Rates and Maturities. The Bonds shall
be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates
set forth in the following schedule, and may be transferred and exchanged as set out in this
Ordinance. The Bonds shall mature on March 1 in each of the years and in the amounts set out in
such schedule. Bonds delivered in transfer of or in exchange for other Bonds shall be numbered
in order of their authentication by the Paying Agent/Registrar, shall be in the denomination of
S5,000 or integral multiples thereof and shall mature on the same date and bear interest at the
same rate as the Bond or Bonds in lieu of which they are delivered.
Bond Year of Principal Interest
Number Maturity Amount Rate
R-1 2004 $ 535,000 6.5000%
R-2 2005 560,000 6.5000
R-3 2006 595,000 6.5000
R-4 2007 625,000 5.0000
R-5 2008 660,000 7.0000
R-6 2009 695,000 6.0000
R-7 2010 730,000 7.0000
R-8 2011 770,000 6.0000
R-9 2012 810,000 7.0000
R-10 2013 855,000 5.0000
R-11 2014 900,000 5.0000
R-12 2015 950,000 5.0000
R-13 2016 1,000,000 5.0000
R-14 2017 1,055,000 5.0000
R-15 2018 1,115,000 5.0000
R-16 2019 1,175,000 5.0000
R-17 2020 1,235.000 5.0000
R-18 2021 1,305,000 5.0000
R-19 2022 1,375,000 5.0000
R-20 2023 1,445,000 5.0000
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Bond Year of Principal Interest
Number Maturity Amount Rate
R-21 2025 3.130.000 5.0000
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R-22 2027 3,480,000 5.0000
Section 3.4: Redemption Prior to Maturity. (a) Optional Redemption. The Bonds
maturing on and after March 1, 2013 are subject to redemption prior to maturity. at the option of
the City, in whole or in part, on March 1, 2012, or any date thereafter, at par plus accrued interest
to the date fixed for redemption.
(b) Mandatory Redemption. The Bonds maturing on March 1, 2025 and March 1,
2027 (the "Term Bonds") are subject to mandatory sinking fund in the following
amounts (subject to reduction hereinafter provided) on the following dates, in
each case at a redemption price equal to the principal amount of the Bonds or the
portions thereof so called for redemption plus accrued interest to the date fixed for
redemption:
Term Bonds Maturing March 1, 2025
Mandatory Redemption Dates
March 1, 2024
March 1, 2025 (maturity)
Principal Amounts
S 1,525.000
$1,605,000
Term Bonds Maturing March 1, 2027
Mandatory Redemption Dates
March 1, 2026
March 1. 2027 (maturity)
Principal Amounts
$1.695,000
S1,785,000
The particular Term Bonds to be redeemed shall be selected by the Registrar by
lot or other customary random selection method, on or before January 15 of each
year in which the Term Bonds are to be mandatorily redeemed. The principal
amount of the term bonds to be mandatorily redeemed in each year shall be
reduced by the principal amount of such Term Bonds that have been optionally
redeemed on or before January 15 of such year and which have not been made the
basis for a previous reduction.
(c) Bonds may be redeemed in part only in integral multiples of S5,000. If a Bond
subject to redemption is in a denomination larger than S5,000, a portion of such
Bond may be redeemed, but only in integral multiples of S5,000. In selecting
portions of Bonds for redemption, each Bond shall be treated as representing that
number of Bonds of S5,000 denomination which is obtained by dividing the
principal amount of such Bond by S5,000. Upon presentation and surrender of any
Bond for redemption in part, the Paying Agent/Registrar, in accordance with the
provisions of this Ordinance, shall authenticate and deliver in exchange therefor a
Bond or Bonds of like maturity and interest rate in an aggregate principal amount
equal to the unredeemed portion of the Bond so surrendered.
(d) Notice of any redemption, identifying the Bonds or portions thereof to be
redeemed, shall be sent by United States mail, first class, postage prepaid, to the
Registered Owners thereof at their addresses as shown on the Register, not less
than thirty (30) days before the date fixed for such redemption. By the date fixed
for redemption, due provision shall be made with the Paying Agent/Registrar for
the payment of the redemption price of the Bonds called for redemption. If such
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notice of redemption is given, and if due provision for such payment is made. all
as provided above, the Bonds which are to be so redeemed thereby automatically
shall be redeemed prior to their scheduled maturities, they shall not bear interest
after the date fixed for redemption, and they shall not be regarded as being
Outstanding except for the purpose of being paid with the funds so provided for
such payment.
Section 3.5: Manner of Payment. Characteristics. Execution and Authentication. The
Paying Agent/Registrar is hereby appointed the paying agent for the Bonds. The Bonds shall be
payable, shall have the characteristics and shall be executed, sealed, registered and authenticated.
all as provided and in the manner indicated in the FORM OF BONDS set forth in Article IV of
this Ordinance. If any officer of the City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the authentication of the Bonds or before the delivery
of the Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if such officer had remained in such office.
The approving legal opinion of Andrews & Kurth L.L.P., Houston, Texas, Bond Counsel,
may be printed on the back of the Bonds over the certification of the City Secretary, which may
be executed in facsimile. CUSIP numbers also may be printed on the Bonds, but errors or
omissions in the printing of either the opinion or the numbers shall have no effect on the validity
of the Bonds.
Section 3.6: Authentication. Except for the Bonds to be initially issued, which need not
be authenticated by the Paying Agent/Registrar, only such Bonds as shall bear thereon a
certificate of authentication, substantially in the form provided in Article IV of this Ordinance,
manually executed by an authorized representative of the Paying Agent/Registrar, shall be
entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such
duly executed certificate of authentication shall be conclusive evidence that the Bond so
authenticated was delivered by the Paying Agent/Registrar hereunder.
Section 3.7: Ownership. The City, the Paying Agent/Registrar and any other person
may treat the person in whose name any Bond is registered 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. All payments
made to the person deemed to be the Registered Owner of any Bond in accordance with this
Section shall be valid and effective and shall discharge the liability of the City and the Paying
Agent/Registrar upon such Bond to the extent of the sums paid.
Section 3.8: Registration. Transfer and Exchange. The Paying Agent/Registrar is
hereby appointed the registrar for the Bonds. So long as any Bond remains Outstanding, the
Paying Agent/Registrar shall keep the Register at its office in Houston, Texas in which, subject
to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for
the registration and transfer of the Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the
Registered Owner or his authorized representative in form satisfactory to the Paying
HOU:766452.5
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Agent/Registrar. Upon due presentation of any Bond for transfer, the Paying Agent/Registrar
shall authenticate and deliver in exchange therefor, within seventy-two (72) hours after such
presentation, a new Bond or Bonds, registered in the name of the transferee or transferees. in
authorized denominations and of the same maturity and aggregate principal amount and bearing
interest at the same rate as the Bond or Bonds so presented and surrendered.
All Bonds shall be exchangeable upon the presentation and surrender thereof at the office
of the Paying Agent/Registrar for a Bond or Bonds, maturity and interest rate and in any
authorized denomination, in an aggregate principal amount equal to the unpaid principal amount
of the Bond or Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this
Section. Each Bond delivered by the Paying Agent/Registrar in accordance with this Section
shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or
Bonds in lieu of which such Bond is delivered.
All Bonds issued in transfer or exchange shall be delivered to the Registered Owners
thereof at the office of the Paying Agent/Registrar or sent by United States mail. first class,
postage prepaid.
The City or the Paying Agent/Registrar may require the Registered Owner of any Bond to
pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with the transfer or exchange of such Bond. Any fee or charge of the Paying
Agent/Registrar for such transfer or exchange shall be paid by the City.
The Paying Agent/Registrar shall not be required to transfer or exchange any Bond called
for redemption in whole or in part during the forty-five (45) day period immediately prior to the
date fixed for redemption; provided, however, that this restriction shall not apply to the transfer
or exchange by the Registered Owner of the unredeemed portion of a Bond called for redemption
in part.
Section 3.9: Replacement Bonds. Upon the presentation and surrender to the Paying
Agent/Registrar of a damaged or mutilated Bond, the Paying Agent/Registrar shall authenticate
and deliver in exchange therefor a replacement Bond, of the same maturity, interest rate and
principal amount, bearing a number not contemporaneously outstanding. The City or the Paying
Agent/Registrar may require the Registered Owner of such Bond to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection therewith and any other
expenses connected therewith, including the fees and expenses of the Paying Agent/Registrar
and the City.
If any Bond is lost, apparently destroyed or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and ordinances of the City, and in the absence of notice or
knowledge that such Bond has been acquired by a bona fide purchaser, shall execute, and the
Paying Agent/Registrar shall authenticate and deliver, a replacement Bond of the same maturity,
interest rate and principal amount, bearing a number not contemporaneously outstanding, pro-
vided that the Registered Owner thereof shall have:
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(a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(b) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save and hold them harmless;
paid all expenses and charges in connection therewith, including, but not limited
to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or
other governmental charge that may be imposed; and
(d) met any other reasonable requirements of the City and the Paying
Agent/Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such original
Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement
Bond from the person to whom it was delivered or any person taking therefrom. except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the City or the Paying
Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or
is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Bond, authorize the Paying Agent/Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which
such replacement Bond is delivered.
Section 3.10: Cancellation. All Bonds paid or redeemed in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance herewith, shall be canceled and destroyed upon the
making of proper records regarding such payment or redemption. The Paying Agent/Registrar
shall periodically furnish the City with certificates of destruction of such Bonds.
(c)
ARTICLE IV
FORM OF BONDS
The Bonds, including the Form of Comptroller's Registration Certificate, Form of Paying
Agent/Registrar's Authentication Certificate and Form of Assignment, shall be in substantially
the following forms, with such omissions, insertions and variations as may be necessary or
desirable, and not prohibited by this Ordinance:
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UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT BONDS, SERIES 2002
NUMBER DENOMINATION
R- S
REGISTERED REGISTERED
INTEREST RATE: ISSUE DATE: MATURITY DATE: CUSIP:
May 1, 2002 March 1,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas (the
7 "City"), for value received, hereby promises to pay to the Registered Owner identified above or
its registered assigns, on the maturity date specified above (or on earlier redemption as herein
provided), .upon presentation and surrender of this Bond at the office of Wells Fargo Bank Texas,
7 N.A., Houston, Texas or its successor (the "Paying Agent/Registrar"), the principal amount
identified above (or so much thereof as shall not have been paid or deemed to have been paid
upon prior redemption) payable in any coin or currency of the United States of America which
7 on the date of payment of such principal is legal tender for the payment of debts due to the
United States of America, and to pay interest thereon at the rate shown above, calculated on a
basis of a 360-day year composed of twelve 30-day months, from the later of the Issue Date
L identified above or the most recent interest payment date to which interest has been paid or duly
provided for. Interest on this Bond is payable on March 1, 2003, and each September 1 and
7 March 1 thereafter until maturity or earlier redemption of this Bond, by check sent by United
States mail, first class, postage prepaid, by the Paying Agent/Registrar to the Registered Owner
of record as of the close of business on the 15th day of the calendar month immediately preceding
7 the applicable interest payment date, as shown on the registration books kept by the Paying
Agent/Registrar. Any accrued interest payable at maturity or earlier redemption shall be paid
upon presentation and surrender of this Bond at the office of the Paying Agent/Registrar.
F.
THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Bonds")
in the aggregate principal amount of S25,000,000 issued pursuant to an ordinance adopted by the
r City Council of the City on April 8, 2002 (the "Ordinance") for the purpose of providing funds
L' for permanent public improvements in the City, under and pursuant to the authority of
Chapter 1331, Texas Government Code, as amended, the City's Home Rule Charter, and an
[4 election held on November 6, 2001. Proceeds of the Bonds will also be used to pay costs of
issuance of the Bonds and other professional services related thereto.
7 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE
THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
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THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Bond either (i) is registered by the Comptroller of Public
Accounts of the State of Texas by due execution of the registration certificate endorsed hereon or
(ii) is authenticated by the Paying Agent/Registrar by due execution of the authentication
certificate endorsed hereon.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and this Bond to be signed by the Mayor and countersigned by the
City Secretary by their manual, lithographed or printed facsimile signatures.
(AUTHENTICATION OR CITY OF PEARLAND, TEXAS
REGISTRATION CERTIFICATE)
Mayor
(SEAL)
COUNTERSIGNED:
City Secretary
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[REVERSE OF BOND]
THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity.
Bonds maturing on and after March 1, 2013, in whole or in part, on March 1. 2012. or any date
thereafter, at par plus accrued interest to the date fixed for redemption.
MANDATORY REDEMPTION. The Bonds maturing on March 1, 2025 and March 1,
2027 (the "Term Bonds") .are subject to mandatory sinking fund in the following amounts
(subject to reduction hereinafter provided) on the following dates, in each case at a redemption
price equal to the principal amount of the Bonds or the portions thereof so called for redemption
plus accrued interest to the date fixed for redemption:
Term Bonds Maturing March 1, 2025
Mandatory Redemption Dates
March 1, 2024
March 1, 2025 (maturity)
Principal Amounts
51.525.000
51.605.000
Term Bonds Maturing March 1, 2027
Mandatory Redemption Dates
March 1, 2026
March 1. 2027 (maturity)
Principal Amounts
51.695.000
51,785.000
The particular Term Bonds to be redeemed shall be selected by the Registrar by lot or
other customary random selection method, on or before January 15 of each year in which the
Term Bonds are to be mandatorily redeemed. The principal amount of the term bonds to be
mandatorily redeemed in each year shall be reduced by the principal amount of such Term Bonds
that have been optionally redeemed on or before January 15 of such year and which have not
been made the basis for a previous reduction.
BONDS MAY BE REDEEMED IN PART only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of $5,000. In selecting portions of Bonds for
redemption, each Bond shall be treated as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount of such Bond by S5,000. Upon
surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with the
provisions of the Ordinance, shall authenticate and deliver in exchange therefor a Bond or Bonds
of like maturity and interest rate in an aggregate principal amount equal to the unredeemed
portion of the Bond so surrendered.
NOTICE OF ANY SUCH REDEMPTION, identifying the Bonds or portions thereof to
be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered
Owners thereof at their addresses as shown on the books of registration kept by the Paying
Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption. By the
date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the
payment of the redemption price of the Bonds called for redemption. If such notice of
redemption is given, and if due provision for such payment is made, all as provided above, the
Bonds which are to be so redeemed thereby automatically shall be redeemed prior to their
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scheduled maturities, they shall not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the purpose of being paid with the funds so
provided for such payment.
THIS BOND IS TRANSFERABLE only upon presentation and surrender at the office of
the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered
Owner or its authorized representative, subject to the terms and conditions of the Ordinance.
THIS BOND IS EXCHANGEABLE at the office of the Paying Agent/Registrar for a
Bond or Bonds of the same maturity and interest rate and in the principal amount of S5,000 or
any integral multiple thereof, subject to the terms and conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange
any Bond called for redemption, in whole or in part, during the forty-five (45) day period
immediately prior to the date fixed for redemption; provided, however, that such limitation shall
not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a
Bond called for redemption in part.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Bond to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with the transfer or exchange of a Bond. Any fee or charge of the Paying
Agent/Registrar for a transfer or exchange shall be paid by the City.
THE REGISTERED OWNER of this Bond by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and
validly issued and -delivered; that all acts, conditions and things required or proper to be
performed, exist and to be done precedent to or in the issuance and delivery of this Bond have
been performed, exist and have been done in accordance with law; that the Bonds do not exceed
any constitutional or statutory limitation; and that annual ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Bond, as such interest comes due and such
principal matures, have been levied and ordered to be levied, within the limits prescribed by law,
against all taxable property in the City and have been irrevocably pledged for such payment.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed
with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered
Owners of the Bonds assent by acceptance of the Bonds.
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FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE
The following form of Comptroller's Registration Certificate shall be attached or affixed
to each of the Bonds initially delivered:
OFFICE OF_THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
REGISTER NO:
I hereby certify that this bond has been examined, certified as to validity and approved by
the Attorney General of the State of Texas, and that this bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
Comptroller of Public Accounts
(SEAL) of the State of Texas
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HOU:766452.5
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FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
The following form of authentication certificate shall be printed on the face of each of the
Bonds:
AUTHENTICATION CERTIFICATE
This Bond is one of the Bonds described in and delivered pursuant to the within
mentioned Ordinance; and, except for the Bonds initially delivered, this Bond has been issued in
exchange for or replacement of a Bond, Bonds, or a portion of a Bond or Bonds of an issue
which originally was approved by the Attorney General of the State of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.
WELLS FARGO BANK TEXAS. N.A.
as Paying Agent/Registrar
By
Authorized Signature
Date of Authentication:
HOU:7666452.5
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FORM OF ASSIGNMENT
The following form of assignment shall be printed on the back of each of the Bonds:
ASSIGNMENT
For . value received, the undersigned hereby sells, assigns and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer such bond on the books kept for
registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company. -
Registered Owner
NOTICE: The signature above must
correspond to the name of the Registered
Owner as shown on the face of this bond in
every particular, without any alteration,
enlargement or change whatsoever.
HOU:766452.5
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STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing
the following provisions with respect to the Bonds, such policy being on file at the principal
office of Wells Fargo Bank Texas, N.A., as paying agent (the "Paying Agent"):
Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the
Bondholders that portion of the principal or accreted value (if applicable) of and interest on the
Bonds which is then due for payment and which the issuer of the Bonds (the "Issuer") shall have
failed to provide. Due for payment means, with respect to principal or accreted value (if
applicable) the stated maturity date thereof, or the date on which the same shall have been duly
called for mandatory sinking fund redemption and does not refer to any earlier date on which the
payment of principal or accreted value (if applicable) of the Bonds is due by reason of call for
redemption (other than mandatory sinking fund redemption), acceleration or other advancement
of maturity, and with respect to interest, the stated date for payment of such interest.
Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written
notice by registered or certified mail, from a Bondholder or the Paying Agent to Financial
Guaranty that the required payment of principal, accreted value or interest (as applicable) has not
been made by the Issuer to the Paying Agent, Financial Guaranty on the due date of such
payment or within one business day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State Street Bank and Trust Company,
N.A., or its successor as its agent (the "Fiscal Agent"), sufficient to make the portion of such
payment not paid by the Issuer. Upon presentation to the Fiscal Agent of evidence satisfactory to
it of the Bondholder's right to receive such payment and any appropriate instruments of
assignment required _to vest all of such Bondholder's right to such payment in Financial
Guaranty, the Fiscal Agent will disburse such amount to the Bondholder.
As used herein the term "Bondholder" means the person other than the Issuer or the borrower(s)
of bond proceeds who at the time of nonpayment of a Bond is entitled under the terms of such
Bond to payment thereof.
The policy is non -cancellable for any reason.
FINANCIAL GUARANTY INSURANCE COMPANY
HOU:766452.5
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ARTICLE V
SECURITY FOR THE BONDS
Section 5.1: Pledge and Levy of Taxes. (a) To provide for the payment of principal of
and interest on the Bonds, there is hereby levied, within the limits prescribed by law, for the
current year and each succeeding year thereafter, while the Bonds or any part of the principal
thereof and the interest thereon remain outstanding and unpaid, an ad valorem tax upon all
taxable property within the _ City sufficient to pay the interest on the Bonds and to create and
provide a sinking fund of not less than 2% of the principal amount of the Bonds or not less than
the principal payable out of such tax, whichever is greater, with full allowance being made for
tax delinquencies and the costs of tax collection, and such taxes, when collected, shall be applied
to the payment of principal of and interest on the Bonds by deposit to the Debt Service Fund and
to no other purpose.
(b) The City hereby declares its purpose and intent to provide and levy a tax legally
sufficient to pay the principal of and interest on the Bonds, it having been
determined that the existing and available taxing authority of the City for such
purpose is adequate to permit a legally sufficient tax. As long as any Bonds
remain outstanding, all moneys on deposit in, or credited to, the Debt Service
Fund shall be secured by a pledge of security, as provided by law for cities in the
State of Texas.
Section 5.2: Debt Service Fund. The Permanent Improvement Bonds, Series 2002 Debt
Service Fund (the "Debt Service Fund") is hereby created as a special fund solely for the benefit
of the Bonds. The City shall establish and maintain such fund at an official City depository and
shall keep such fund separate and apart from all other funds and accounts of the City. Any
amount on deposit in the Debt Service Fund shall be maintained by the City in trust for the
Registered Owners of the Bonds. Such amount, plus any other amounts deposited by the City
into such fund and any and all investment earnings on amounts on deposit in such fund, shall be
used only to pay the principal of, premium, if any, and interest on the Bonds.
Section 5.3: Construction Fund. The Permanent Improvement Bonds, Series 2002
Construction Fund (the "Construction Fund") is hereby created as a special fund of the City.
Money in deposit in the Construction Fund shall be used only for the purposes set forth in
Section 3.1 of this Ordinance. Money on deposit in the Construction Fund may, at the option of.
the City, be invested as permitted by Texas law, provided that all such deposits and investments
shall be made in such manner that the money required to be expended from the Construction
Fund will be available at the proper time or times.
Section 5.4: Further Proceedings. After the Bonds to be initially issued have been
executed, it shall be the duty of the Mayor to deliver the Bonds to be initially issued and all
pertinent records and proceedings to the Attorney General for examination and approval. After
the Bonds to be initially issued shall have been approved by the Attorney General, they shall be
delivered to the Comptroller for registration. Upon registration of the Bonds to be initially
issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller)
shall manually sign the Comptroller's registration certificate prescribed herein to be affixed or
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HOU:766452.5
attached to the Bonds to be initially issued, and the seal of said Comptroller shall be impressed,
or placed in facsimile, thereon.
ARTICLE VI
CONCERNING THE PAYING AGENT/REGISTRAR
Section 6.1: Acceptance. Wells Fargo Bank Texas, N.A., Houston, Texas. is hereby
appointed as the initial Paying Agent/Registrar for the Bonds pursuant to the terms and
provisions of the Paying Agent/Registrar Agreement by and between the City and the Paving
Agent/Registrar. The Paying Agent/Registrar Agreement shall be substantially in the form
attached hereto as Exhibit A, the terms and provisions of which are hereby approved, and the
Mayor is hereby authorized to execute and deliver such Paying Agent/Registrar Agreement on
behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest
thereto and affix the City's seal. Such initial Paying Agent/Registrar and any successor Paying
Agent/Registrar, by undertaking the performance of the duties of the Paying Agent/Registrar
hereunder, and in consideration of the payment of any fees pursuant to the terms of any contract
between the Paying Agent/Registrar and the City and/or the deposits of money pursuant to this
Ordinance, shall be deemed to accept and agree to abide by the terms of this Ordinance.
Section 6.2: Trust Funds. All money transferred to the Paying Agent/Registrar in its
capacity as Paying Agent/Registrar for the Bonds under this Ordinance (except any sums
representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of the City, shall
be the property of the City and shall be disbursed in accordance with this Ordinance.
Section 6.3: Bonds Presented. Subject to the provisions of Section 6.4, all matured
Bonds presented to the Paying Agent/Registrar for payment shall be paid without the necessity of
further instructions from the City. Such Bonds shall be canceled as provided herein.
Section 6.4: Unclaimed Funds Held by the Paving Agent/Registrar. Funds held by the
Paying Agent/Registrar that represent principal of and interest on the Bonds remaining
unclaimed by the Registered Owner thereof after the expiration of three years from the date such
funds have become due and payable (a) shall be reported and disposed of by the Paying
Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as
amended, to the extent such provisions are applicable to such funds, or (b) to the extent such
provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar to
the City upon receipt by the Paying Agent/Registrar of a written request therefor from the City.
171
The Paying Agent/Registrar shall have no liability to the Registered Owners of the Bonds
by virtue of actions taken in compliance with this Section.
Section 6.5: Paving Agent/Registrar Mav Own Bonds. The Paying Agent/Registrar in
its individual or any other capacity, may become the owner or pledgee of Bonds with the same
rights it would have if it were not the Paying Agent/Registrar.
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Section 6.6: Successor Paving Agents/Registrars. The City covenants that at all times
while any Bonds are Outstanding it will provide a legally qualified bank, trust company,
financial institution or other agency to act as Paying Agent/Registrar for the Bonds. The City
HOU:766452.5
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reserves the right to change the Paying Agent/Registrar for the Bonds on not less than sixty (60)
days' written notice to the Paying Agent/Registrar, as long as any such notice is effective not less
than 60 days prior to the next succeeding principal or interest payment date on the Bonds.
Promptly upon the appointment of any successor Paying Agent/Registrar, the previous Paying
Agent/Registrar shall deliver the Register or a copy thereof to the new Paying Agent/Registrar.
and the new.Paying Agent/Registrar shall notify each Registered Owner, by United States mail,
first class, postage prepaid, of such change and of the address of the new Paying Agent/Registrar.
Each Paying Agent/Registrar hereunder, by acting in that capacity, shall be deemed to have
agreed to the provisions of this Ordinance.
ARTICLE VII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF BONDS
Section 7.1: Sale of Bonds: Insurance. The sale of the Bonds to UBS PaineWebber,
Inc., (the "Purchaser") at a price of the par value thereof, plus a cash premium of S1,697.75 plus
accrued interest on the Bonds, is hereby approved, and delivery of the Bonds to the Purchaser
shall be made upon payment therefor in accordance with the terms of sale and the terms and
conditions of the Purchaser's bid. It is hereby found and determined that the Purchaser is the
highest bidder for the Bonds as a result of invitations for competitive bids. It is further officially
found, determined and declared that the Bonds have been sold at public sale to the bidder
offering the lowest net interest cost, which is hereby determined to be a net effective interest rate
of 5.136132%, after receiving sealed bids pursuant to an Official Notice of Sale and Preliminary
Official Statement prepared and distributed in connection with the sale of the Bonds.
The City hereby acknowledges that the Purchaser's bid is contingent upon the issuance of
a policy of municipal bond guaranty insurance from Financial Guaranty Insurance Company
("FGIC") insuring the timely payment of principal of and interest on the Bonds. Such insurance
is to be obtained at the Purchaser's expense. The appropriate officials and representatives of the
City are hereby authorized and directed to execute such documents and certificates and to do any
and all things necessary or desirable to obtain such insurance, and the printing on the Bonds of
an appropriate legend or statement regarding such insurance, as provided by FGIC, is hereby
approved.
Section 7.2: Approval, Registration and Delivery. The Mayor is hereby authorized to
have control and custody of the Bonds and all necessary records and proceedings pertaining
thereto pending their delivery, and the Mayor and other officers and employees of the City are
hereby authorized and directed to make such certifications and to execute such instruments as
may be necessary to accomplish the delivery of the Bonds and to assure the investigation,
examination and approval thereof by the Attorney General and the registration of the initial
Bonds by the Comptroller. Upon registration of the Bonds, the Comptroller (or the Comptroller's
certificates clerk or an assistant certificates clerk lawfully designated in writing to act for the
Comptroller) shall manually sign the Comptroller's Registration Certificates prescribed herein to
be attached or affixed to each Bond initially delivered and the seal of the Comptroller shall be
impressed or printed or lithographed thereon.
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HOU:766452.5
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Section 7.3: Offering Documents; Ratings. The City hereby approves the form and
contents of the Official Notice of Sale, Preliminary Official Statement and the final Official
Statement, dated as of the date hereof, relating to the Bonds, and any addenda. supplement or
amendment thereto, and ratifies and approves the distribution of such Preliminary Official
Statement and Official Statement in the offer and sale of the Bonds and in the reoffering of the
Bonds by the_Purchaser, with such changes therein or additions thereto as the officials executing
same may deem advisable, such determination to be conclusively evidenced by their execution
thereof. The Mayor is hereby authorized and directed to execute, and the City Secretary is hereby
authorized and directed to attest, the final Official Statement. It is further hereby officially found.
determined and declared that the statements and representations contained in the Official Notice
of Sale, Preliminary Official Statement and final Official Statement are true and correct in all
material respects, to the best knowledge and belief of the City Council, and that. as of the date
thereof, the Preliminary Official Statement was an official statement of the City with respect to
the Bonds that was deemed "final" by an authorized official of the City except for the omission
of no more than the information permitted by subsection (b)(1) of Rule 15c2-12 of the Securities
and Exchange Commission.
Further, the City Council hereby ratifies, authorizes and approves the actions of the
Mayor, the City's financial advisor and other consultants in seeking ratings on the Bonds from
Moody's Investors Service, Inc. and Standard & Poor's Ratings Group and such actions are
hereby ratified and confirmed.
Section 7.4: Application of Proceeds of Bonds; Appropriation. Proceeds from the sale
of the Bonds shall, promptly upon receipt by the City, be applied as follows:
(1) Accrued interest and premium in the amount of S27,636.64 shall be
deposited into the Debt Service Fund created in Section 5.2 of this
Ordinance;
(2) S235,500 of the proceeds shall be applied to pay expenses arising in
connection with the issuance of the Bonds;
The remaining proceeds in the amount of S25,000.000 shall be deposited
into the Construction Fund created in Section 5.3 of this Ordinance.
Section 7.5: Tax Exemption. The City intends that the interest on the Bonds shall be
excludable from gross income of the owners thereof for federal income tax purposes pursuant to
Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended, (the
"Code") and all applicable temporary, proposed and final regulations (the "Regulations") and
procedures promulgated thereunder and applicable to the Bonds. For this purpose, the City
covenants that it will monitor and control the receipt, investment, expenditure and use of all
gross proceeds of the Bonds (including all property the acquisition, construction or improvement
of which is to be financed directly or indirectly with the proceeds of the Bonds) and take or omit
to take such other and further actions as may be required by Sections 103 and 141 through 150 of
the Code and the Regulations to cause interest on the Bonds to be and remain excludable from
the gross income, as defined in Section 61 of the Code, of the owners of the Bonds for federal
income tax purposes. Without limiting the generality of the foregoing, the City shall comply with
each of the following covenants:
(3)
HOU:766452.5
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(a) The City will use all of the proceeds of the Bonds to provide funds for the
purposes set forth in Section 3.1 of this Ordinance, including payment of the costs
of issuing the Bonds.
(b) The City will not directly or indirectly take any action or omit to take any action.
which action or omission would cause the Bonds to constitute "private activity
bonds" within the meaning of Section 141 (a) of the Code.
(c) Principal of and interest on the Bonds will be paid solely from ad valorem taxes
collected by the City, investment earnings on such collections, and as available,
proceeds of the Bonds.
(d) Based upon all facts and estimates now known or reasonably expected to be in
existence on the date the Bonds are delivered, the City reasonably expects that the
proceeds of the Bonds will not be used in a manner that would cause the Bonds or
any portion thereof to be an "arbitrage bond" within the meaning of Section 148
of the Code;
(e)
(f)
(g)
At all times while the Bonds are outstanding, the City will identify and properly
account for all amounts constituting gross proceeds of the Bonds in accordance
with the Regulations. The City will monitor the yield on the investments of the
proceeds of the Bonds and, to the extent required by the Code and the
Regulations, will restrict the yield on such investments to a yield which is not
materially higher than the yield on the Bonds. To the extent necessary to prevent
the Bonds from constituting "arbitrage bonds," the City will make such payments
as are necessary to cause the yield on all yield restricted nonpurpose investments
allocable to the Bonds to be less than the yield that is materially higher than the
yield on the Bonds.
The City will not take any action or knowingly omit to take any action, if taken or
omitted, would cause the Bonds to be treated as "federally guaranteed"
obligations for purposes of Section 149(b) of the Code;
The City represents that not more than fifty percent (50%) of the proceeds of the
Bonds was invested in nonpurpose investments (as defined in
Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four
years or more within the meaning of Section 149(g)(3)(A)(ii) of the Code, and the
City reasonably expects that at least eighty-five percent (85%) of the spendable
proceeds of the Bonds will be used to carry out the governmental purpose of the
Bonds within the three-year period beginning on the respective dates of issue of
the Bonds.
(h) The City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the gross proceeds of the Bonds,
if any, be rebated to the federal government. Specifically, the City will
(i) maintain records regarding the receipt, investment, and expenditure of the
- gross proceeds of the Bonds as may be required to calculate such excess arbitrage
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(i)
profits separately from records of amounts on deposit in the funds -and accounts of
the City allocable to other obligations of the City or moneys which do not
represent gross proceeds of any obligations of the City and retain such records for
at least six years after the day on which the last outstanding Bond is discharged,
(ii) account for all gross proceeds under a reasonable, consistently applied method
of accounting, not employed as an artifice or device to avoid in whole or in part,
the requirements of Section 148 of the Code, including any specified method of
accounting required by applicable Regulations to be used for all or a portion of
any gross proceeds, (iii) calculate, at such times as are required by applicable
Regulations, the amount of excess arbitrage profits, if any, earned from the
investment of the gross proceeds of the Bonds and (iv) timely pay, as required by
applicable Regulations, all amounts required to be rebated to the federal
government. In addition, the City will exercise reasonable diligence to assure that
no errors are made in the calculations required by the preceding sentence and, if
such an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter, including payment to the federal
government of any delinquent amounts owed to it, interest thereon and any
penalty.
The City will not directly or indirectly pay any amount otherwise payable to the
federal government pursuant to the foregoing requirements to any person other
than the federal government by entering into any investment arrangement with
respect to the gross proceeds of the Bonds that might result in a reduction in the
amount required to be paid to the federal government because such arrangement
results in smaller profit or a larger loss than would have resulted if such
arrangement had been at arm's length and had the yield on the Bonds not been
relevant to either party.
(j) The City will timely file or cause to be filed with the Secretary of the Treasury of
the United States the information required by Section 149(e) of the Code with
respect to the Bonds on such form and in such place as the Secretary may
prescribe.
(k) The City will not issue or use the Bonds as part of an "abusive arbitrage device"
(as defined in Section 1.148-10(a) of the Regulations). Without limiting the
foregoing, the Bonds are not and will not be a part of a transaction or series of
transactions that attempts to circumvent the provisions of Section 148 of the Code
and the Regulations, by (i) enabling the City to exploit the difference between tax-
exempt and taxable interest rates to gain a material financial advantage, or
(ii) increasing the burden on the market for tax-exempt obligations.
(1) Proper officers of the City charged with the responsibility for issuing the Bonds
are hereby directed to make, execute and deliver certifications as to facts,
estimates or circumstances in existence as of the Issue Date and stating whether
there are facts, estimates or circumstances that would materially change the City's
expectations. On or after the Issue Date, the City will take such actions as are
HOC:766452.5
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necessary and appropriate to assure the continuous accuracy of the representations
contained in such certificates.
The covenants and representations made or required by this Section are for the
benefit of the Bondholders and any subsequent Bondholder, and may be relied
upon by the Bondholder and any subsequent Bondholder and bond counsel to the
City.
In complying with the foregoing covenants, the City may rely upon an unqualified
opinion issued to the City by nationally recognized bond counsel that any action by the City or
reliance upon any interpretation of the Code or Regulations contained in such opinion will not
cause interest on the Bonds to be includable in gross income for federal income tax purposes
under existing law.
Notwithstanding any other provision of this Ordinance, the City's representations and
obligations under the covenants and provisions of this Section 7.5 shall survive the defeasance
and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on
the Bonds from the gross income of the owners for federal income tax purposes.
Section 7.6: Related Matters. In order that the City shall satisfy in a timely manner all
of its obligations under this Ordinance, the Mayor, City Secretary and all other appropriate
officers, agents, representatives and employees of the City are hereby authorized and directed to
take all other actions that are reasonably necessary to provide for the issuance and delivery of the
Bonds, including, without limitation, executing and delivering on behalf of the City all
certificates, consents, receipts, requests, notices, and other documents as may be reasonably
necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and
application of funds_of the City consistent with the provisions of this Ordinance.
ARTICLE VIII
CONTINUING DISCLOSURE UNDERTAKING
Section 8.1: Annual Reports. The City shall provide annually to each NRMSIR and
any SID, within six months after the end of each fiscal year, financial information and operating
data with respect to the City of the general type included in the final Official Statement
authorized by Section 7.3 of this Ordinance, being the information described in Exhibit D hereto.
Any financial statements so to be provided shall be (1) prepared in accordance with the
accounting principles described in Exhibit D hereto and (2) audited, if the City commissions an
audit of such statements and the audit is completed within the period during which they must be
provided. If audited financial statements are not so provided, then the City shall provide audited
financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if
audited financial statements become available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
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The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
Section 8.2: Material Event Notices. The City shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the
Bonds, if such event is material within the meaning of the federal securities laws:
(a) Principal and interest payment delinquencies;
(b) Non-payment related defaults;
(c) Unscheduled draws on debt service reserves reflecting financial difficulties;
(d) Unscheduled draws on credit enhancements reflecting financial difficulties;
(e) Substitution of credit or liquidity providers, or their failure to perform;
(f) Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
(g) Modifications to rights of holders of the Bonds;
(h) Bond calls;
(i) Defeasances; and
(j) Release, substitution, or sale of property securing repayment of the Bonds;
(k) Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely
manner, of any failure by the City to provide financial information or operating data in
accordance with Section 8.1 of this Ordinance by the time required by such Section.
Section 8.3: Limitations, Disclaimers and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Article for so long as, but only for so long as,
the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule,
except that the City in any event will give the notice required by Section 8.2 of any Bond calls
and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Article are for the sole benefit of the holders and beneficial owners
of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal
or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
0
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in accordance with this Article or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Article shall
constitute a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Article may be amended by the City from time to time to adapt the
changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell the Bonds in the primary offering of the Bonds in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well as
such changed circumstances, and (2) either (a) the holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that authorizes
such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holder and beneficial owners of the
Bonds. If the City so amends the provisions of this Article, it shall include with any amended
financial information or operating data next provided in accordance with Section 8.1 an
explanation, in narrative form, of the reasons for the amendment and of the impact of any change
in the type of financial information or operating data so provided. The City may also amend or
repeal the provisions of this Article if the SEC amends or repeals the applicable provisions of the
Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,
and the City also may amend the provisions of this Article in its discretion in any other manner
or circumstance, but in either case only if and to the extent that the provisions of this sentence
would not have prevented an underwriter from lawfully purchasing or selling Bonds in the
primary offering of the Bonds.
Section 8.4: Definitions. As used in this Article, the following terms have the meanings
ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
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"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Defeasance. The City may defease the provisions of this Ordinance and
discharge its obligations to the Registered Owners of any or all of the Bonds to pay the principal
of and interest thereon in any manner permitted by law, including by depositing with the Paying
Agent/Registrar or with the State Treasurer of the State of Texas either:
(a) cash in an amount equal to the principal amount of such Bonds plus interest
thereon to the date of maturity or redemption; or
(b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable
obligations of United States of America, including obligations that are
unconditionally guaranteed by the United States of America; (ii) noncallable
obligations of an agency or instrumentality of the United States, including
obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date the governing body of the issuer adopts or
approves the proceedings authorizing the issuance of refunding bonds, are
rated as to investment quality by a nationally recognized investment rating
firm not less than AAA or its equivalent; or (iii) noncallable obligations of a
state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and that, on the date the governing body of the
issuer adopts or approves the proceedings authorizing the issuance of
refunding bonds, are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent, which, in the case
of (i), (ii) or (iii), may be in book -entry form, and the principal of and interest
on which will, when due or redeemable at the option of the holder, without
further investment or reinvestment of either the principal amount thereof or
the interest earnings thereon, provide money in an amount which, together
with other moneys, if any, held in such escrow at the same time and available
for such purpose, shall be sufficient to provide for the timely payment of the
principal of and interest thereon to the date of maturity or earlier redemption;
provided, however, that if any of the Bonds are to be redeemed prior to their respective dates of
maturity, provision shall have been made for giving notice of redemption as provided in this
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Ordinance. Upon such deposit, such Bonds shall no longer be regarded to be Outstanding or
unpaid. Any surplus amounts not required to accomplish such defeasance shall be returned to
the City.
Section 9.2: Application of Chapter 1208. Government Code. Chapter 1208.
Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by
the City under Section 5.1 of this Ordinance, and such pledge is therefore valid, effective and
perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such
that the pledge of the taxes granted by the City under Section 5.1 of this Ordinance is to be,
subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to
preserve to the Registered Owners of the Bonds the perfection of the security interest in said
pledge, the City agrees to take such measures as it determines are reasonable and necessary
under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce
Code and enable a filing to perfect the security interest in said pledge to occur.
Section 9.3: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Registered Owners from time to time, be binding on the City, and shall not be
amended or repealed by the City so long as any Bond remains Outstanding except as permitted in
this Section. The City may, without the consent of or notice to any Registered Owners, from time
to time and at any time, amend this Ordinance in any manner not detrimental to the interests of
the Registered Owners, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the consent of Registered Owners who own in
the aggregate 51 % of the principal amount of the Bond then Outstanding, amend, add to, or
rescind any of the provisions of this Ordinance; provided that, without the consent of all
Registered Owners of Outstanding Bonds, no such amendment, addition, or rescission shall
(i) extend the time or times of payment of the principal of and interest on the Bonds, reduce the
principal amount thereof, the redemption price, or the rate of interest thereon, or in any other
way modify the terms of payment of the principal of or interest on the Bonds, (ii) give any
preference to any Bond over any other Bond, or (iii) reduce the aggregate principal amount of
Bonds required to be held by Registered Owners for consent to any such amendment, addition,
or rescission.
Section 9.4: Legal Holidays. In any case where the date interest accrues and becomes
payable on the Bonds or principal of the Bonds matures or the date fixed for redemption of any
Bonds or a Record Date shall be in the City a Saturday, Sunday, legal holiday or a day on which
banking institutions are authorized by law to close, then payment of interest or principal need not
be made on such date, or the Record Date shall not occur on such date, but payment may be
made or the Record Date shall occur on the next succeeding day which is not in the City a
Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to
close with the same force and effect as if (i) made on the date of maturity or the date fixed for
redemption and no interest shall accrue for the period from the date of maturity or redemption to
the date of actual payment or (ii) the Record Date had occurred on the fifteenth day of that
calendar month.
Section 9.5: No Recourse Against City Officials. No recourse shall be had for the
payment of principal of or interest on any Bonds or for any claim based thereon or on this
Ordinance against any official of the City or any person executing any Bonds.
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Section 9.6: Further Proceedings. The Mayor, City Secretary and other appropriate
officials of the City are hereby authorized and directed to do any and all things necessary and/or
convenient to carry out the terms of this Ordinance.
Section 9.7: Power to Revise Form of Documents. Notwithstanding any other
provision of this Ordinance, the Mayor is hereby authorized to make or approve such revisions.
additions, deletions, and variations to this Ordinance and in the form of the documents attached
hereto as exhibits as, in the judgment of the Mayor, and in the opinion of Bond Counsel to the
City, may be necessary or convenient to carry out or assist in carrying out the purposes of this
Ordinance, or as may be required for approval of the Bonds by the Attorney General of Texas:
provided, however, that any changes to such documents resulting in substantive amendments to
the terms and conditions of the Bonds or such documents shall be subject to the prior approval of
the City Council.
Section 9.8: Severability. If any Section, paragraph, clause or provision of this
Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such Section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Ordinance.
Section 9.9: Open Meeting. It is hereby found, determined and declared that a
sufficient written notice of the date, hour, place and subject of the meeting of the City Council at
which this Ordinance was adopted was posted at a place convenient and readily accessible at all
times to the general public at City Hall for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this
meeting has been open to the public as required by law at all times during which this Ordinance
and the subject matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and posting
thereof.
Section 9.10: Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 9.11: Declaration of Emergency. It is hereby officially found and determined
that a case of emergency and urgent public necessity exists that requires that this Ordinance be
passed finally and take effect immediately on the date of its introduction, such emergency and
urgent public necessity being that the proceeds from the sale of the Bonds are required as soon as
possible and without delay for the purposes set forth herein.
Section 9.12: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below.
[Remainder of this page intentionally left blank]
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PASSED AND ADOPTED on first and final reading this April 8 , 2002.
Mayor
ATTEST
(SEAL)
Exhibits:
Exhibit A - Paying Agent/Registrar Agreement
Exhibit B - Preliminary Official Statement and Official Notice of Sale
Exhibit C - Official Statement
Exhibit D - Description of Annual Financial Information
HOU:766452.3
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EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
See Tab 5
LM1
EXHIBIT B
PRELIMINARY OFFICIAL STATEMENT
AND
OFFICIAL NOTICE OF SALE
SeeTab3
HOC:766452.5
EXHIBIT C
OFFICIAL STATEMENT
See Tab 4
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EXHIBIT D
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 8.1 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The audited financial statements of the City, but for the most recently
concluded fiscal year, and, to the extent that such statements are not completed and
available, unaudited financial statements for such fiscal year.
2. The quantitative and financial information and operating data with respect
to the City of the general type included under the headings "INVESTMENT
AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY - Investment
Policies," "CITY TAX DEBT" (except for information under the subheading "Estimated
Overlapping Debt"), "TAX DATA - Historical Analysis of Tax Collection," "TAX
DATA - Analysis of Tax Base, "TAX DATA Sales Tax" and "SELECTED
FINANCIAL DATA.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes -to the financial statements referred to in paragraph 1 above.
,,
•
1-1017:/66452s
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USE OF INFORMATION IN OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any
representation other than those contained in this Official Statement, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the City.
This Official Statement_ is not to be used in an offer to sell or the 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.
This Official Statement contains, in part, estimates, assumptions and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates, assumptions or matters of
opinion or as to the likelihood that they will be realized. Any information and expressions of opinion herein
contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the condition of
the City or other matters described herein since the date hereof.
The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters
have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to
investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the
Underwriters do not guarantee the accuracy or completeness of such information.
TABLE OF CONTENTS
Page
USE OF INFORMATION IN OFFICIAL STATEMENT 1 1
INTRODUCTION 3
SALE AND DISTRIBUTION OF THE BONDS 3
Prices and Marketability Securities Laws 34
3
Municipal Bond Ratings
Municipal Bond Insurance 45
4
OFFICIAL STATEMENT SUMMARY 7
INTRODUCTION 7
THE BONDS 7
Description 7
Redemption Provisions 7
Paying Agent/Registrar 7
Successor Paying Agent/Registrar Source of Payment 88
8
Authority for Issuance 8
Use of Proceeds g
Future Debt g
Legal Investments in Texas 9
Remedies in the Event of Default 9
INVESTMENT AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY 9
Legal Investments 10
Investment Policies 10
Current Investments Additional Provisions 10
10
CITY TAX DEBT 1
11
General Bonded Indebtedness Payable from Ad Valorem Taxes 11
11
Pro -Forma Debt Service Schedule 2
13
Estimated Overlapping Debt: 13
Debt Ratios 13
TAX DATA 13
General 13
Property Tax Code and County -Wide Appraisal District
r
SELECTED FINANCIAL DATA
Historical Operations of the City's General Fund19
General Fund and Debt Service Fund Balance for the Past Five Fiscal Years20
Pension Fund 20
Financial Statements 2021
ADMINISTRATION OF THE CITY 21
Mayor and City Council 21
Administration 221
Consultants 22
LEGAL MATTERS 22
Legal Opinions 22
No -Litigation Certificate 23
No Material Adverse Change 23
TAX EXEMPTION 23
TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT AND PREMIUM BONDS 4
Discount Bonds 24
25
Premium Bonds 25
CONTINUING DISCLOSURE OF INFORMATION 5
Annual Reports 25
Material Event Notices 6
26
Availability of Information From NRMSIRs and SID 26
Limitations and Amendments 26
Audited Financial Report of the City 27
Compliance With Prior Undertakings 27
GENERAL CONSIDERATIONS 27
Sources and Compilation of Information Certification as to Official Statement 27
27
Updating of Official Statement 29
8
APPENDIX A - ECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE CITY
Tax Rate Limitations 14
Property Subject to Taxation by the City 14
Notice and Hearing Procedures 15
Levy and Collection of Taxes 15
Collection of Delinquent Taxes 15
Historical Analysis of Tax Collection 16
Analysis of Tax Base 17
Estimated Overlapping Taxes 18
Sales Tax 18
19
APPENDIX A - Economic and Demographic Characteristics of the City
APPENDIX B - Audited Financial Statements of the City
APPENDIX C - Form of Bond Counsel Opinion
2
INTRODUCTION
All of the summaries of the statutes, resolutions, ordinances, contracts, audits, engineering, and other related reports
set forth in this Official Statement are made subject to all of the provisions of such documents. These summaries do
not purport to be complete statements of such provisions, and reference is made to such documents, copies of which
are available from the City.
This Official Statement contains, in part, estimates, assumptions, and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates, assumptions, or matters of
opinion, or as to the likelihood that they will be realized. However, the City has agreed to keep this Official
Statement current by amendment or sticker to reflect material changes in the affairs of the City and to the extent that
information actually comes to its attention, the other matters described in this Official Statement until delivery of the
Bonds to the Underwriter and thereafter only as specified in "GENERAL CONSIDERATIONS - Updating of
Official Statement" and "CONTINUING DISCLOSURE OF INFORMATION."
SALE AND DISTRIBUTION OF THE BONDS
After requesting competitive bids for the Bonds, the City has accepted the bid resulting in the lowest net interest
cost, which bid was tendered by a syndicate managed by
("Underwriter") to
purchase the Bonds bearing the interest rates shown on the cover page hereof under PRINCIPAL AMOUNTS,
MATURITIES, INTEREST RATES AND PRICES" at a price of the par value thereof, plus a cash premium of
5 plus accrued interest to the date of delivery. The net effective interest rate on the Bonds is %.
Prices and Marketability
The delivery of the Bonds is conditioned upon the receipt by the City of a certificate executed and delivered by the
Underwriter on or before the date of delivery of the Bonds stating the prices at which a substantial amount of the
Bonds of each maturity have been sold to the public. For this purpose, the term "public" shall not include any
person who is bondhouse, broker or similar person acting in the capacity of underwriter or wholesaler. The City has
no control over trading of the Bonds after a bona fide offering of the Bonds is made by the Underwriter at the yields
specified on the cover page. Information concerning reoffering yields or prices is the responsibility of the
Underwriter.
The prices and other terms respecting the offering and sale of the Bonds may be changed from time to time by the
Underwriter after the Bonds are released for sale, and the Bonds may be offered and sold at prices other than the
initial offering price, including sales to dealers who may sell the Bonds into investment accounts. IN
CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER -ALLOT OR
EFFECT TRANSACTIONS WHICHCH MIGHTABILIZE OR TMIGHT OTHERWISEApREVAITHE LI 11�THE OPEN MT PRICE OF TARKETHE O.S�UCH
AT
A LEVEL ABOVE THAT
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Securities Laws
For purposes of compliance with Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission (the
"SEC"), this document, as may be supplemented or corrected by the City from time to time, may be treated as an
Official Statement with respect to the Bonds described herein "deemed final" by the City as of the date hereof (or of
any such supplement or correction) except for the omission of certain information referred to in the succeeding
dding information
in
other in This document, oens further
uBondsu shall constitute ut by as 'FINAL OFFICIAL1fying the STATEMENT' of t tes and the City with
other information relating to th
respect to the Bonds, as such term is defined in the Rule.
inon statement relating m tioo the $0rov dedbeen
thereunder. The Bonds havunder
e not been reg ste ed or qual fred
amended, reliance upon the ex p P
under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been
registered or qualified under the securities acts of any jurisdiction. The City assumes no responsibility for
ies laws of any
ds may be
offered,
s registration or qualification ofan the Bd. This disclas under imer oftresponsibil responsibility for registration orn in vhich the qualification for sale or
offered, sold or otherwise trans
other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability
of any exemption from securities registration or qualification provision in such jurisdictions.
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- Selected Financial Information -
(Unaudited)
The Bonds:
2001 Certified Assessed Valuation (100% of estimated market value)
Direct Debt:
Outstanding Bonds and Certificates (as of March 1, 2002)
The Bonds
Total Direct Debt
Estimated Overlapping Debt
Direct and Estimated Overlapping Debt
Debt Service Fund Balance (as of March 1, 2002)
Debt Ratios:
Direct Tax Supported Debt
Direct Tax Supported and Estimated
Overlapping Debt
% of 2001 Per
Assessed Capital
Valuation (40,700)
4.65% $2,010.93
12.26% $5,305.07
$1,760,551,863 (a)
$ 56,845,000
25,000,000
$ 81,845,000
$ 134,071.375
$ 215.916.375
$ 2,964,900 (b)
2001 Tax Rate (per $100 of Assessed Valuation) $0.430
Maintenance and Operation 0.256
Debt Service $0.686
Total
• Estimated Annual Debt Service Requirements: $ 4,031,871
Average (Fiscal Years 2002-2027) $ 5,798,001
Maximum (2005)
Tax Collections: 98.31 %
Arithmetic Average, Tax Years (1995/2000) - Current Years 99.62 %
- Current and Prior Years
(a) Certified by the Appraisal District and net of exemption.
(b) Includes the City's remaining debt service requirements due in 2002 on Outstanding Bonds in the amount
of $1,278,741 to be paid September 1, 2002.
6
INTRODUCTION
All of the summaries of the statutes, resolutions, ordinances, contracts, audits, engineering, and other related reports
set forth in this Official Statement are made subject to all of the provisions of such documents. These summaries do
not purport to be complete statements of such provisions, and reference is made to such documents, copies of which
are available from the City.
This Official Statement contains, in part, estimates, assumptions, and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates, assumptions, or matters of
opinion, or as to the likelihood that they will be realized. However, the City has agreed to keep this Official
Statement current by amendment or sticker to reflect material changes in the affairs of the City and to the extent that
information actually comes to its attention, the other matters described in this Official Statement until delivery of the
Bonds to the Underwriter and thereafter only as specified in "GENERAL CONSIDERATIONS - Updating of
Official Statement" and "CONTINUING DISCLOSURE OF INFORMATION."
SALE AND DISTRIBUTION OF THE BONDS
After requesting competitive bids for the Bonds, the City has accepted the bid resulting in the lowest net interest
cost, which bid was tendered by a syndicate managed by
"Underwriter") to
purchase the Bonds bearing the interest rates shown on the cover page hereof under "PRINCIPAL AMOUNTS,
MATURITIES, INTEREST RATES AND PRICES" at a price of the par value thereof, plus a cash premium of
5 plus accrued interest to the date of delivery. The net effective interest rate on the Bonds is %.
Prices and Marketability
The delivery of the Bonds is conditioned upon the receipt by the City of a certificate executed and delivered by the
Underwriter on or before the date of delivery of the Bonds stating the prices at which a substantial amount of the
Bonds of each maturity have been sold to the public. For this purpose, the term "public" shall not include any
person who is bondhouse, broker or similar person acting in the capacity of underwriter or wholesaler. The City has
no control over trading of the Bonds after a bona fide offering of the Bonds is made by the Underwriter at the yields
specified on the cover page. Information concerning reoffering yields or prices is the responsibility of the
Underwriter.
The prices and other terms respecting the offering and sale of the Bonds may be changed from time to time by the
Underwriter after the Bonds are released for sale, and the Bonds may be offered and sold at prices other than the
initial offering price, including sales to dealers who may sell the Bonds into investment accounts. IN
CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER -ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Securities Laws
For purposes of compliance with Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission (the
"SEC"), this document, as may be supplemented or corrected by the City from time to time, may be treated as an
Official Statement with respect to the Bonds described herein "deemed final" by the City as of the date hereof (or of
any such supplement or correction) except for the omission of certain information referred to in the succeeding
sentence. This document, when further supplemented by adding information specifying the interest rates and certain
other information relating to the Bonds shall constitute a "FINAL OFFICIAL STATEMENT" of the City with
respect to the Bonds, as such term is defined in the Rule.
No registration statement relating to the Bonds has been filed with the SEC under the Securities Act of 1933, as
amended, in reliance upon the exemptions provided thereunder. The Bonds have not been registered or qualified
under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been
registered or qualified under the securities acts of any jurisdiction. The City assumes no responsibility for
registration or qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be
offered, sold or otherwise transferred. This disclaimer of responsibility for registration or qualification for sale or
other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability
of any exemption from securities registration or qualification provision in such jurisdictions.
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Municipal Bond Ratings
In connection with the sale of the Bonds, the City has made application to Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's Ratings Services ("S&P") for ratings and the ratings of "" and "",
respectively, have been assigned to the Bonds. An explanation of the significance of such ratings may be obtained
from Moody's and S&P. The ratings reflect only the views of Moody's and S&P, and the City makes no
representation as to the appropriateness of such ratings.
There is no assurance that such ratings will continue for any period of time or that they will not be revised
downward or withdrawn entirely by Moody's and/or S&P, if, in the judgment of Moody's and S&P, circumstances
so warrant. Any such downward revision or withdrawal of the ratings may have an adverse effect on the market
price of the Bonds.
Municipal Bond Insurance
The City has made application for municipal bond insurance under the bidder's option program. The premium for
such insurance, if purchased, will be paid by the Underwriter.
4
OFFICIAL STATEMENT SUMMARY
The following material is a summary of certain information contained herein and is qualified in its entirety by the
detailed information and financial statements appearing elsewhere in this Official Statement. The reader should
refer particularly to sections that are indicated for more complete information.
The Issuer The City of Pearland, Texas (the "City") is a political subdivision and
home rule city of the State of Texas located primarily within Brazoria
County, Texas. See ADMINISTRATION OF THE CITY" and
"APPENDIX A -Economic and Demographic Characteristics of the
City" herein.
The Bonds $25,000,000 Permanent Improvement Bonds, Series 2002 (the
"Bonds"), are dated May 1, 2002 and mature March 1, 2004 through
March 1, 2027. Interest on the Bonds accrues from May 1, 2002, and is
payable March 1, 2003, and on each September 1 and March 1
thereafter until maturity or prior redemption. See "THE BONDS -
Description."
Other Characteristics The Bonds are issued in fully registered form in integral multiples of
$5,000. The Bonds are subject to redemption prior to their scheduled
maturities on March 1, 2012 or any date thereafter at the option of the
City. Upon redemption the Bonds will be payable at a price equal to
the principal amount thereof plus accrued interest to the date of
redemption. See "THE BONDS - Description of the Bonds" and "THE
BONDS - Redemption Provisions."
Paying Agent/Registrar The initial paying agent/registrar is Wells Fargo Bank Texas, N.A.,
Houston, Texas (the "Paying Agent/Registrar"). See "THE BONDS -
Paying Agent/Registrar."
Source of Payment Principal of and interest on the Bonds are payable from the proceeds of
a continuing, direct annual ad valorem tax, levied within the limits
prescribed by law against taxable property located within the City. See
"THE BONDS - Source of Payment."
Use of Proceeds Proceeds from the sale of the Bonds will be used for street and
drainage improvements and pay costs of issuance related hereto. See
"THE BONDS - Use of Proceeds."
Ratings Moody's Investors Service, Inc.
Standard & Poor's Ratings Services
Payment Record The City has never defaulted on the timely payment of principal of and
interest on its obligations.
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USE OF INFORMATION IN OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any
representation other than those contained in this Official Statement, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the City.
This Official Statement is not to be used in an offer to sell or the 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.
This Official Statement contains, in part, estimates, assumptions and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates, assumptions or matters of
opinion or as to the likelihood that they will be realized. Any information and expressions of opinion herein
contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the condition of
the City or other matters described herein since the date hereof.
The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters
have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to
investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the
Underwriters do not guarantee the accuracy or completeness of such information.
TABLE OF CONTENTS
Page
USE OF INFORMATION IN OFFICIAL STATEMENT 13
INTRODUCTION 3
SALE AND DISTRIBUTION OF THE BONDS 3
Prices and Marketability 3
Securities Laws 3
Municipal Bond Ratings Municipal Bond Insurance 45
4
OFFICIAL STATEMENT SUMMARY 7
INTRODUCTION 7
THE BONDS 7
Description 7
Redemption Provisions Paying Agent/Registrar 78
7
Successor Paying Agent/Registrar 8
Source of Payment g
Authority for Issuance g
Use of Proceeds Future Debt g8
8
Legal Investments in Texas 9
Remedies in the Event of Default 9
INVESTMENT AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY 9
Legal Investments 10
Investment Policies 10
Current Investments Additional Provisions 10
10
CITY TAX DEBT 1
11
General Bonded Indebtedness Payable from Ad Valorem Taxes 11
11
Pro -Forma Debt Service Schedule 2
13
Estimated Overlapping Debt: 13
Debt Ratios 13
TAX DATA 13
General 13
Property Tax Code and County -Wide Appraisal District
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Tax Rate Limitations 14
Property Subject to Taxation by the City 14
Notice and Hearing Procedures 15
Levy and Collection of Taxes 15
Collection of Delinquent Taxes 15
Historical Analysis of Tax Collection 16
Analysis of Tax Base 17
Estimated Overlapping Taxes 18
Sales Tax 18
SELECTED FINANCIAL DATA 19
Historical Operations of the City's General Fund19
General Fund and Debt Service Fund Balance for the Past Five Fiscal Years20
Pension Fund 20
Financial Statements 20
ADMINISTRATION OF THE CITY 21
Mayor and City Council 21
Administration 21
Consultants 22
LEGAL MATTERS 22
Legal Opinions 22
No -Litigation Certificate 23
No Material Adverse Change 23
TAX EXEMPTION 23
TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT AND PREMIUM BONDS 24
Discount Bonds 254
Premium Bonds 25
CONTINUING DISCLOSURE OF INFORMATION Annual Reports "25
265
Material Event Notices 26
Availability of Information From NRMSIRs and SID 26
Limitations and Amendments 27
Audited Financial Report of the City 27
Compliance With Prior Undertakings 27
GENERAL CONSIDERATIONS 27
Sources and Compilation of Information Certification as to Official Statement 27
27
Updating of Official Statement 29
8
APPENDIX A - ECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE CITY
APPENDIX A - Economic and Demographic Characteristics of the City
APPENDIX B - Audited Financial Statements of the City
APPENDIX C - Form of Bond Counsel Opinion
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- Selected Financial Information -
(Unaudited)
The Bonds:
2001 Certified Assessed Valuation (100% of estimated market value)
Direct Debt:
Outstanding Bonds and Certificates (as of March 1, 2002)
The Bonds
Total Direct Debt
Estimated Overlapping Debt
Direct and Estimated Overlapping Debt
Debt Service Fund Balance (as of March 1, 2002)
Debt Ratios:
Direct Tax Supported Debt
Direct Tax Supported and Estimated
Overlapping Debt
% of 2001 Per
Assessed Capital
Valuation (40,700)
4.65% $2,010.93
12.26% $5,305.07
$1,760,551,863 (a)
$ 56,845,000
25,000,000
$ 81,845,000
$ 134,071,375
$ 215.916 375
$ 2,964,900 (b)
2001 Tax Rate (per $100 of Assessed Valuation) $0.430
Maintenance and Operation 0.256
Debt Service $0.686
Total
Estimated Annual Debt Service Requirements: $ 4,031,871
Average (Fiscal Years 2002-2027) $ 5,798,001
Maximum (2005)
Tax Collections:
Arithmetic Average, Tax Years (1995/2000)
- Current Years 98.31 %
- Current and Prior Years 99.62 %
(a) Certified by the Appraisal District and net of exemption.
(b) Includes the City's remaining debt service requirements due in 2002 on Outstanding Bonds in the amount
of $1,278,741 to be paid September 1, 2002.
6
INTRODUCTION
This Official Statement and the Appendices hereto provide certain information with respect to the issuance by the
City of Pearland, Texas (the "City") of its $25,000,000 Permanent Improvement Bonds, Series 2002 (the "Bonds").
The Bonds are issued pursuant to the Texas Constitution, the general laws of the State of Texas, and an Ordinance
authorizing issuance of the Bonds (the "Ordinance") adopted by the City Council of the City (the "Council").
This Official Statement describes the Bonds, the plan of financing, and certain information about the City and its
finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by
reference to each such document and speak only as of the date of this Official Statement. Copies of such documents
may be obtained from the City upon request. Certain capitalized terms used in this Official Statement have the same
meanings assigned to such terms in the Ordinance, except as otherwise indicated herein.
THE BONDS
Description
The Bonds are dated May 1, 2002, bear interest from such date at the stated interest rates indicated under
"PRINCIPAL AMOUNTS, MATURITIES, INTEREST RATES AND PRICES," which interest is payable March 1,
2003, and each September 1 and March 1 thereafter until maturity or prior redemption. The Bonds are issued in
fully registered form in denominations of $5,000 of principal amount or any multiple thereof. Principal of the
Bonds is payable at the principal payment office of Wells Fargo Bank Texas, N.A., Houston, Texas (the "Paying
Agent/Registrar"). Interest on the Bonds will be payable by check, dated as of the interest payment date, and mailed
by the Paying Agent/Registrar to registered owners as shown on the records of the Paying Agent/Registrar. See
"THE BONDS - Paying Agent/Registrar."
The Bonds are transferable only on the bond register kept by the Paying Agent/Registrar upon surrender and
reissuance. The Bonds are exchangeable for an equal principal amount of Bonds of the same maturity in any
authorized denomination upon surrender of the Bonds to be exchanged at the principal payment office of the Paying
Agent/Registrar. No service charge will be made for any transfer, but the City may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection therewith.
The record date (the "Record Date") for the interest payable on any interest payment date means the 15th day of the
month next preceding such interest payment date.
It will be required that all transfers be made within three business days after request and presentation.
The City has agreed to replace mutilated, destroyed, lost or stolen Bonds upon surrender of the mutilated Bonds, or
receipt of satisfactory evidence of such destruction, loss or theft, and receipt by the City and the Paying
Agent/Registrar of security or indemnity to keep them harmless. The City may require payment of taxes,
• governmental charges and other expenses in connection with any such replacement.
Redemption Provisions
The Bonds maturing on March 1, 2013 and thereafter are subject to optional redemption prior to maturity, in whole
City
the in part, March
ued 1i ere 201t,torthe date ny te of redemption er, at t If leshe sn of thanal eof the at
are to beual othe redeemed atal any time,
thereof plus accrued interest
the maturities of the Bonds to be redeemed shall be selected by the City.
The Ordinance requires that notice of any redemption, identifying the Bonds or portions thereof to be redeemed,
mustgiven be by the Paying Agent/Registrar to the registered owners thereof by first class mail, postage prepaid, at
least 30 days prior to the redemption date.
Paying Agent/Registrar
re being issued
The initial Paying Agent/Registrar is Wells Fargo Bank Texas, N.A., Housn, Texas. The les of $5 000 of principal amount Interest on the Bonds nds awill
in fully registered form in integral mulytiples be payable
ch
the
semiannually by the Paying
Agent/Registrar
by interest tPaying
Agent/Registrar to the registered weratheast known address as it appears on the PayingAgent/Registrar's
books on the Record Date.
L..
The City has not made any investigations of any other laws, rules, regulations or investment criteria that might affect
the suitability of the Bonds for any of the above purposes or limit the authority of any of the above entities or
persons to purchase or invest in the Bonds.
Remedies in the Event of Default
The Ordinance requires the City to assess and collect ad valorem taxes eacli' year sufficient to pay principal and
interest when due on the Bonds. The Ordinance does not provide any other security for the payment of the Bonds,
or any express remedies in the event of default, makes no provision for acceleration of maturity of the Bonds in the
event of default,and does not provide for a trustee to protect the rights of the holders of the Bonds.
Although a holder of the Bonds could presumably obtain judgment against the City in the event of default in the
payment of principal or interest on the Bonds, such judgment could not be satisfied by execution against any
property of the City. A holder of the Bonds could, in the event of default, ask a court for a mandamus or court order
compelling the City to levy, assess and collect sufficient ad valorem taxes to pay principal of and interest on the
Bonds as it falls due. Such remedy might need to be enforced on a periodic basis. The enforcement of a claim for
payment of principal or interest on the Bonds would be subject to judicial discretion, sovereign police powers and
the applicable provisions of the federal bankruptcy laws and to any other similar laws affecting the rights of political
subdivisions generally.
INVESTMENT AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY
The City invests its investable funds in investments authorized by Texas law in accordance with investment policies
approved by the City Council of the City. Both state law and the City's investment policies are subject to change.
Legal Investments
Current Texas law provides the City with authority to invest in: (1) obligations of the United States or its agencies
and instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities,
(3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States,
the underlying security for which is guaranteed by an agency or instrumentality of the United States, (4) other
obligations, the principal of and interest on which are unconditionally guaranteed or insured by, or backed by the
full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities,
(5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment
quality by a nationally recognized investment rating firm not less than A or its equivalent, (6) certificates of deposit
that are issued by a state or national bank domiciled in the State of Texas, a savings bank domiciled in the State of
Texas, or a state or federal credit union domiciled in the State of Texas and are guaranteed or insured by the Federal
Deposit Insurance Corporation or the National Credit Union Share Insurance Fund or are secured as to principal by
obligations described in the preceding clauses or in any other manner and amount provided by law for City deposits,
(7) fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations
described in clause (1), and are placed through a primary government securities dealer or a financial institution
doing business in the State of Texas, (8) certain bankers' acceptances with the remaining term of 270 days or less, if
the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent by at least
one nationally recognized credit rating agency, (9) commercial paper with a stated maturity of 270 days or less that
is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one
nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a
U.S. or state bank, (10) no-load money market mutual funds registered with the Securities and Exchange
Commission that have a dollar -weighted average stated maturity of 90 days or less and include in their investment
objectives the maintenance of a stable net asset value of $1 for each share, (11) no-load mutual funds registered with
the Securities and Exchange Commission that have an average weighted maturity of less than two years, invest
exclusively in the foregoing obligations and are continuously rated as to investment quality by at least one nationally
recognized investment rating firm of no less than AAA or its equivalent, (12) bonds issued, assumed, or guaranteed
by the State of Israel, and (13) guaranteed investment contracts that have a defined termination date and are secured
by obligations described in clause (1) above in an amount at least equal to the amount of bond proceeds invested
under such contract.
The City may invest in such obligations directly or through government investment pools that invest solely in such
obligations provided that the pools are continuously rated no lower than AAA or AAA-m or an equivalent by at least
one nationally recognized rating service. The City is specifically prohibited from investing in: (1) obligations whose
payment represents the coupon payments on the outstanding principal balance of the underlying mortgage -backed
security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow
9
EA
INTRODUCTION
This Official Statement and the Appendices hereto provide certain information with respect to the issuance by the
City of Pearland, Texas (the "City") of its $25,000,000 Permanent Improvement Bonds, Series 2002 (the "Bonds").
The Bonds are issued pursuant to the Texas Constitution, the general laws of the State of Texas. and an Ordinance
authorizing issuance of the Bonds (the "Ordinance") adopted by the City Council of the City (the "Council").
This Official Statement describes the Bonds, the plan of financing, and certain information about the City and its
finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by
reference to each such document and speak only as of the date of this Official Statement. Copies of such documents
may be obtained from the City upon request. Certain capitalized terms used in this Official Statement have the same
meanings assigned to such terms in the Ordinance, except as otherwise indicated herein.
THE BONDS
Description
The Bonds are dated May 1, 2002, bear interest from such date at the stated interest rates indicated under
"PRINCIPAL AMOUNTS, MATURITIES, INTEREST RATES AND PRICES," which interest is payable March 1,
2003, and each September 1 and March 1 thereafter until maturity or prior redemption. The Bonds are issued in
fully registered form in denominations of $5,000 of principal amount or any multiple thereof. Principal of the
Bonds is payable at the principal payment office of Wells Fargo Bank Texas, N.A., Houston, Texas (the "Paying
Agent/Registrar"). Interest on the Bonds will be payable by check, dated as of the interest payment date, and mailed
by the Paying Agent/Registrar to registered owners as shown on the records of the Paying Agent/Registrar. See
"THE BONDS - Paying Agent/Registrar."
The Bonds are transferable only on the bond register kept by the Paying Agent/Registrar upon surrender and
reissuance. The Bonds are exchangeable for an equal principal amount of Bonds of the same maturity in any
authorized denomination upon surrender of the Bonds to be exchanged at the principal payment office of the Paying
Agent/Registrar. No service charge will be made for any transfer, but the City may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection therewith.
The record date (the "Record Date") for the interest payable on any interest payment date means the 15th day of the
month next preceding such interest payment date.
It will be required that all transfers be made within three business days after request and presentation.
The City has agreed to replace mutilated, destroyed, lost or stolen Bonds upon surrender of the mutilated Bonds, or
receipt of satisfactory evidence of such destruction, loss or theft, and receipt by the City and the Paying
Agent/Registrar of security or indemnity to keep them harmless. The City may require payment of taxes,
• governmental charges and other expenses in connection with any such replacement.
Redemption Provisions
The Bonds maturing on March 1, 2013 and thereafter are subject to optional redemption prior to maturity, in whole
he
on
or inpart, ccinterest ch 1, ,torany the date date
of redemption.hereafter, at If less thanf the
1 of the Bo Bonds are to beual othe redee redeemed atal any time,
thereof plus accrued
the maturities of the Bonds to be redeemed shall be selected by the City.
The Ordinance requires that notice of any redemption, identifying the Bonds or portions thereof osoaberedeemed,
must be given by the Paying Agent/Registrar to the registered owners thereof byfirst class mail, postage
P P
least 30 days prior to the redemption date.
Paying Agent/Registrar
The initial Paying Agent/Registrar is Wells Fargo Bank Texas, N.A., Houston, Texas. The Bonds are being issued
in fully registered form in integral multiples of $5,000 of principal amount. Interest on the Bonds will be payable
semiannually by the Paying Agent/Registrar by check mailed on each interest payment date by the Paying
Agent/Registrar to the registered owner at the last known address as it appears on the Paying Agent/Registrar's
books on the Record Date.
Successor Paying Agent/Registrar
Provision is made in the Ordinance for replacing the Paying Agent/Registrar. If the City replaces the Paying
Agent/Registrar, such Paying Agent/Registrar shall, promptly upon the appointment of a successor, deliver the
Paying Agent/Registrar's records to the successor paying agent/registrar (the "Successor Paying Agent/Registrar"),
and the Successor Paying Agent/Registrar shall act in the same capacity as the previous Paying Agent/Registrar.
Any Successor Paying Agent/Registrar selected by the City shall be a commercial bank or trust company organized
under the laws of the United States or any state and duly qualified and legally authorized to serve and perform the
duties of the Paying Agent/Registrar for the Bonds.
Source of Payment
The Bonds, are payable as to principal and interest from, and secured by, the proceeds of a continuing, direct annual
ad valorem tax, levied within the limits prescribed by law, against taxable property within the City. In the
Ordinance the City covenants that while the Bonds are outstanding, it will levy, assess and undertake to collect such
tax. See "TAX DATA - Tax Rate Limitations" and "THE BONDS - Remedies in the Event of Default."
Authority for Issuance
The Bonds are being issued pursuant to the applicable provisions of the Constitution and laws of the State of Texas,
particularly Chapter 1331, Texas Government Code, as amended, and the provisions of the Ordinance, which
specifically authorizes the sale and issuance of the Bonds. Further reference to the Ordinance is hereby made. The
Bonds are the first installment of $115,000,000 unlimited tax bonds authorized at an election held for that purpose
on November 6, 2001.
The following table illustrates the Bonds authorized, issued, and remaining authorized after the sale of the Bonds.
Purpose
Amount
Authorized
The Bonds
Authorized
But Unissued
Streets and Bridges $ 92,500,000 $17,000,000 $75,500,000
22,500,000 8,000,000 14,500,000
Drainage $115,000,000 $25,000,000 $90,000,000
Use of Proceeds
Proceeds of the Bonds are being used for (1) street improvements, (2) drainage improvements, and (3) to pay the
costs of issuance of the Bonds, including the Financial Advisor's fee and Bond Counsel's fee, both of which is
contingent upon the sale of the Bonds, as well as other administrative costs incurred.
Future Debt
After the issuance of the Bonds the City will have $90,000,000 authorized but unissued bonds. The City plans to
issue such authorized bonds in annual installments over the next five years. Depending on the rate of development
within the City, changes in assessed valuation, and the amounts, interest rates, maturities and time of issuance of
additional bonds or certificates of obligation, increases in the City's annual ad valorem tax rate may be required to
provide for the payment of the principal of and interest on the City's outstanding bonds, the Bonds, and such future
bonds or certificates of obligation.
Legal Investments in Texas
The Public Security Procedures Act provides that the Bonds are negotiable instruments, are investment securities to
which Chapter 8, Texas Business and Commerce Code applies, and are legal and authorized investments for
insurance companies, for fiduciaries or trustees and for a sinking fund of a municipality or other political
subdivision or public agency of the State of Texas.
Texas law further provides that the Bonds are eligible to secure deposits of any public funds of the state, its agencies
or political subdivisions and are lawful and sufficient security for those deposits to the extent of their market value.
Forupolitical subdivisions in the State which have. Government Code, Chapter 2256), the Bonds investment policies and mayelines in have to be assigned awith
rat rating
Public Funds Investment Act (Texas
of "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible
investments for sinking funds and other public funds.
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from the underlying mortgage -backed security and bears no interest; (3) collateralized mortgage obligations that
have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of
which is determined by an index that adjusts opposite to the changes in the market index.
Investment Policies
Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize
safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and
capability of investment management; and that includes a list of authorized investments for City funds, maximum
allowable stated maturity of any individual investment and the maximum average dollar -weighted maturity allowed
for pooled fund groups. All City funds must be invested consistent with a formally adopted "Investment Strategy
Statement" that specifically addresses each fund's investment. Each Investment Strategy Statement will describe its
objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4)
marketability of each investment, (5) diversification of the portfolio, and (6) yield.
Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a
person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not
for speculation, but for investment, considering the probable safety of capital and the probable income to be
derived." At least quarterly, the investment officers of the City shall submit an investment report detailing: (1) the
investment position of the City; (2) the beginning market value, any additions and changes to market value and the
ending market value for each pooled fund group, (3) the book value and market value of each separately listed asset
at the beginning and end of the reporting period, (4) the maturity date of each separately invested asset, (5) the
account or fund or pooled fund group for which each individual investment was acquired, and (6) the compliance of
the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may
invest City funds without express written authority from the City Council.
The City's policies require investments in accordance with applicable state law. The City's Statement of Investment
Policy does not exclude any investments allowable under State law described above under "Legal Investments."
The City generally invests in certificates of deposit, money market accounts and obligations of the United States or
its agencies and instrumentalities.
Current Investments
The City's investment balances on March 1, 2002 were as follows:
Certificates of Deposit
Investment Pool
Total Portfolio
Principal Market Book
Amount Value Value
$ 30,265,607
27,574,110
$ 57,839,717
$ 30,265,607
27,574,110
$ 57,839,717
$ 30,265,607
27,574,110
$ 57,839,717
Additional Provisions
Under Texas law, the City is additionally required to: (1) annually review its adopted policies and strategies; (2)
require any investment officers with personal business relationships or relatives with firms seeking to sell securities
to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the Mayor and
Council; (3) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review
the City's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to
preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4)
perform and annual audit of the management controls on investments and adherence to the City's investment policy;
(5) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (6)
restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase
agreement funds to no greater than the term of the reverse repurchase agreement; (7) restrict the investment in
money market mutual funds in the aggregate to no more than 80% of the City's monthly average fund balance,
excluding bond proceeds and reserves and other funds held for debt service, and further restrict the investment in
non -money market mutual funds to not more than 15% of the City's monthly average fund balance, excluding bond
proceeds and reserves and other funds held for debt service; and (8) require local government investment pools to
confirm to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements.
10
CITY TAX DEBT
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General
The following tables and calculations relate to the Bonds and to all other tax -supported debt of the City. In addition
to outstanding certificates and bonds, the City also has issued revenue bonds and has incurred contractual and other
indebtedness and liabilities which are not included below. The City and various other political subdivisions of
government which overlap all or a portion of the City are empowered to incur debt to be paid from revenues raised
or to be raised by taxation against all or a portion of property within the City.
Bonded Indebtedness Payable from Ad Valorem Taxes
2001 Certified Assessed Valuation (100% of estimated market value)
$1,760,551,863 (a)
Direct Debt:
Outstanding Debt (as of March 1, 2002)
The Bonds
Total Direct Debt
Debt Service Fund Balance (as of March 1, 2002)
$ 56,845,000
25,000,000
$ 81,845,000
$ 2,964,900 (b)
(a) Certified by the Appraisal District and net of exemptions.
(b) Includes the City's remaining debt service requirements due in 2002 on Outstanding Bonds in the amount
of. $1,278,741 to be paid September 1, 2002.
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Estimated Overlapping Debt:
The following table indicates the indebtedness, defined as outstanding obligations payable from ad valorem taxes, of
governmental entities overlapping the City and the estimated percentages and amounts of such indebtedness
attributable to property within the City. This information is based upon data secured from the individual
jurisdictions and/or the Texas Municipal Reports. Such figures do not indicate the tax burden levied by the
applicable taxing jurisdictions for operation and maintenance or for other purposes. The City has not independently
verified the accuracy or completeness of the information shown below except for amounts related to the City.
Debt as of Overlapping
March 1, 2002 Percent Amount
Taxing Jurisdiction
$ 27,199,761 6.97% $ 1,895,823
Brazoria County 7,470,000 25.05 1,871,235
Brazoria County MUD No. 17 3,975,000 99.86 3,969,435
Brazoria County MUD No. 18 5,350,000 99.86 5,342,510
PearlandaCounty MUD No. 19 171,756,247 70.29 120,727,466
Harris
County I D 890,829,545 0.02 178,166
Harris 108,994,629 0.02 21,799
Harris County Flood Control District 324,705,000899 0.02 21,799
Port of Houston Authority$134,061,941
TOTAL ESTIMATED OVERLAPPING 81,071,375
The City $215.916.375
00
Total Direct and Estimated Overlapping Debt
Debt Ratios
Per 2001 Certified Assessed Valuation ($1,760,551,863)
Per Capita (40,700)
TAX DATA
Direct Debt
4.65%
$2,011
Direct and
Overlapping Debt
12.26%
$5,305
General
One of the City's principal sources of operational revenue and its principal source of funds for debt service payments
is the receipts from ad valorem taxation. See "SELECTED FINANCIAL DATA". The following is a rechisal
of (a) the Texas Property Tax Code, including methodology, limitations, remedies and procedures; (b)
analysis of collection and trends of tax receipts and provisions for delinquencies; (c) an analysis of the tax base,
including relative property composition, principal taxpayers and adequacy of the tax base to service debt
requirements; and (d) taxation that may add to the City's taxpayers' tax costs.
Property Tax Code and County -Wide Appraisal District
The Texas Property Tax Code (the "Property Tax Code") establishes for each county in Texas a single appraisal
district with responsibility for recording and appraising property for all taxing units within the county, and a single
appraisal review board, with responsibility for reviewing and equalizing the
of valuesyear, establish
asd om by hethappraiseafteral
district. The Property Tax Code requires the appraisal district, by May
practicable, to prepare appraisal records of property as of January 1 of each year based upon market value. The chief
appraiser must give written notice before May 15, or as soon thereafter as practicable, to each property owner whose
property value is appraised higher than the prior tax year or the value rendered by the property owner or whose
property was not on the appraisal roll the preceding year or whose property was reappraised in the current tax year.
Notice must also be given if ownership of the property changed during the precedinwyear. The ithr the City; appraisal
a sal review
board has the ultimate responsibility for determining the value of all taxable property
er, any
property owner who has timely filed notice with the appraisal review board may appeal a final determination by the
appraisal review board by filing suit in a Texas district court. Prior to such appeal or any tax delinquency date,
however, the property owner must pay the tax due on the value of that portion of the property involved that is not in
dispute or the amount of tax imposed in the prior year, whichever is greater,
ttor thequestt m amount
will of tax e d tedui urmender
the the
by
order from which the appeal is taken. In such event,n addittonue of the property taxing unitsP such ast he City are entitled to challenge
court, or by a jury, if requested by any party.
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certain matters before the appraisal review board, including the level of appraisals of a certain category of property,
the exclusion of property from the appraisal records or the grant in whole or in part of an exemption. A taxing unit
may not, however, challenge the valuation of individual properties.
Although the City has the responsibility for establishing tax rates and levying and collecting its taxes each year,
under the Property Tax Code the City does not establish appraisal standards or determine the frequency of
revaluation or reappraisal. The appraisal district is governed by a board of directors elected by the governing bodies
of the county and all cities, towns, school districts and, if entitled to vote, the conservation and reclamation districts
that participate in the appraisal district. The Property Tax Code requires each appraisal district to implement a plan
for periodic reappraisal of property to update appraised values. Such plan must provide for reappraisal of all real
property in the appraisal district at least once every three years. It is not known what frequency of reappraisals will
be utilized by the Brazoria County Appraisal District or whether reappraisals will be conducted on a zone or
county -wide basis.
Tax Rate Limitations
Article XI, Section 5 of the Texas Constitution, provides for an overall limitation for Home Rule Cities of $2.50 per
$100 assessed valuation. The Attorney General of Texas follows a policy, with respect to Home Rule Cities which
have such a $2.50 limitation, of approving ad valorem tax bonds only to the extent that all of such city's ad valorem
tax debt can be serviced by a debt service tax rate of $1.50 at 90% collection.
Property Subject to Taxation by the City
Except for certain exemptions provided by Texas law, all real and tangible personal property and certain categories
of intangible personal property with a tax situs in the City are subject to taxation by the City; however, no effort is
expected to be made by the Brazoria County Appraisal District to include on the tax roll tangible or intangible
personal property not devoted to commercial or industrial use. Principal categories of exempt property include:
property owned by the State of Texas or its political subdivisions; property 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 producer; certain property owned by charitable organizations, youth development
associations, religious organizations, and qualified schools; designated historical sites; solar and wind -powered
energy devices; most individually -owned automobiles; and property of disabled veterans, only to the extent of
$3,000 of taxable property. In addition, taxpayers who are over 65 years of age are entitled to apply for an
additional exemption from market value of their residential homestead of $25,000. These over 65 exemptions and
disabled veterans exemptions amounted to $39,381,373 from the 2001 tax roll.
The state constitution permits local governments the option of granting homestead exemptions of up to 20% of
market value. The City has not granted such additional homestead exemption for the 2001 tax year.
An eligible owner of agricultural and timberland may apply to have such properties which meet certain requirements
appraised on the basis of productivity value or market value, whichever is less. The loss of value due to property
values based on productivity value on the 2001 tax roll was approximately $1,079,696.
The City has authority to enter into tax abatement agreements to encourage economic development. Under such
agreements, a property owner agrees to construct certain improvements on its property. The City in turn agrees not
to levy a tax on all or part of the increased value attributable to the improvements until the expiration of the
agreement. Such abatement agreement may last for a period of up to 10 years. The City has $14,986,110 of such
property that was subject to abatement on January 1, 2001.
The constitution of the State of Texas authorizes a property tax exemption for certain business personal property.
The City Council had the option to take official action to override the exemption and to continue taxing the property
exempted by the amendment. On December 18, 1989, the City's City Council took such official action not to tax the
property in 1990 and to allow the exemption for 1991 and all future years.
14
CITY TAX DEBT
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General
The following tables and calculations relate to the Bonds and to all other tax -supported debt of the City. In addition
to outstanding certificates and bonds, the City also has issued revenue bonds and has incurred contractual and other
indebtedness and liabilities which are not included below. The City and various other political subdivisions of
government which overlap all or a portion of the City are empowered to incur debt to be paid from revenues raised
or to be raised by taxation against all or a portion of property within the City.
Bonded Indebtedness Payable from Ad Valorem Taxes
2001 Certified Assessed Valuation (100% of estimated market value) $1,760,551,863 (a)
Direct Debt:
Outstanding Debt (as of March 1, 2002) $ 56,845,0006,,000
The Bonds
Total Direct Debt $ 81,845,000
Debt Service Fund Balance (as of March 1, 2002) $ 2,964,900 (b)
(a) Certified by the Appraisal District and net of exemptions.
(b) Includes the City's remaining debt service requirements due in 2002 on Outstanding Bonds in the amount
of $1,278,741 to be paid September 1, 2002.
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Pro -Forma Debt Service Schedule
The following sets forth the principal and interest on the City's Outstanding Debt and the Bonds.
Fiscal Total New Total Debt
Year
& Service
Ending Outstanding Plus: The Bonds (b) PrincipalInterest Requirement
9/30 Debt (a) Principal Interest
2002 $ 3,752,599 $ 3,752,5999
2003 3,766,139 $ 1,750,000 $ 1,750,000 ,,
2004 3,768,761 $ 535,000 1,298,456 1,833,456 5,602,218
2005 3,968,289 560,000 1,269,713 1,829,713 5,798,001
2006 3,953,166 595,000 1,239,394 1,834,394 5,787,560
2007 3,961,276 625,000 1,207,369 1,832,369 5,793,645
2008 3,954,401 660,000 1,173,638 1,833,638 5,788,039
2009 3,772,354 695,000 1,138,069 1,833,069 5,605,423
2010 2,928,834 730,000 1,100,663 1,830,663 4,759,496
2011 2,926,949 770,000 1,061,288 1,831,288 4,758,236
2012 2,936,364 810,000 1,019,813 1,829,813 4,766,176
2013 2,943,141 855,000 976,106 1,831,106 4,774,248
2014 2,954,234 900,000 930,038 1,830,038 4,784,271
2015 2,968,059 950,000 881,475 1,831,475 4,799,534
,534
2016 2,967,268 1,000,000 830,288 1,830,288
2017 1,679,855 1,055,000 776,344 1,831,344 3,511,199
2018 1,683,233 1,115,000 719,381 1,834,381 3,517,614
2019 1,049,500 1,175,000 659,269 1,834,269 2,883,769
5 ,26
2020 1,054,250 1,235,000 596,006 1,831,006 2,882,885,5
1
2021 1,056,500 1,305,000 529,331 1,834,331
1,8
2022 1,066,000 1,375,000 458,981 1,833,981 2,899,9819,98
1,8
2023 1,445,000 384,956 1,829,956 29,956
1,8
2024 1,525,000 306,994 1,831,994 1,991
1,829,
2025 1,605,000 224,831 1,829,831 831
2026 1,695,000 138,206 1,833,206 1,831,206
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2027 1,785,000 46,856 1,831,856
Total $59,111,172 $25,000,000 $20,717,465 $45, 717,465 $104,828,633
(a) Excludes $17,000,000 Certificates of Obligation, Series 1998 which are self-supporting.
(b) Interest estimated at 5.25% for illustration purposes.
Estimated Average Annual Requirements (2002/2027)
Estimated Maximum Annual Requirement (2005)
12
$4,031,871
$5,798,001
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Notice and Hearing Procedures
7 The Property Tax Code establishes procedures for providing notice and the opportunity for a hearing for taxpayers
in the event of certain proposed tax increases and provides for taxpayer referenda which could result in the repeal of
7 certain tax increases. The Property Tax Code also establishes a procedure for notice to property owners of
reappraisals reflecting increased property values over S1,000, appraisals which are higher than renditions, and
appraisals of property not previously on an appraisal roll.
Levy and Collection of Taxes
r The City is responsible for the collection of its taxes, unless it elects to transfer such functions to another
governmental entity. Before the later of September 30 or the 60th day after the date the certified appraisal roll is
7 received by the City, the rate of taxation is set by the City Council based upon the valuation of property within the
City as of the preceding January 1 and the amount required to be raised for debt service, maintenance purposes and
authorized contractual obligations.
all The City Council may under certain circumstances be required to advertise and hold a public hearing within the City
on a proposed tax rate before the City Council can hold a public meeting to vote on the tax rate. If the tax rate
adopted exceeds by more than 8% the rate needed to pay debt service and certain contractual obligations and to
produce, when applied to the property which was on the prior year's roll, the prior year's total taxes levied for
7 purposes other than debt service and such contractual obligations (the "rollback rate"), such excess portion of the
levy may, subject to constitutional restrictions on the impairment of existing obligations, be repealed at an election
within the City held upon petition of 10% of the City's qualified voters and the tax rate adopted for the current year
7 be reduced to the rollback rate.
The City is prohibited from adopting a tax rate that exceeds the lower of the rollback tax rate or 103 percent of the
"effective tax rate" until it has held a public hearing on the proposed tax rate and has otherwise complied with the
7 Property Tax Code. Reference is made to the Property Tax Code for definitive requirements for the levy and
collection of ad valorem taxes and the calculation of the various defined tax rates.
Taxes are due on receipt of the tax bill, and become delinquent after January 31 of the following year, or on the first
7 day of the calendar month next following the expiration of twenty-one (21) days after mailing of the tax bills,
whichever occurs later. A delinquent tax account incurs an initial penalty of six percent (6%) of the amount of the
tax and accrues an additional penalty of one percent (1%) per month up to July 1, at which time the total penalty
becomes twelve percent (12%). In addition, delinquent taxes accrue interest at one percent (1%) per month. If the
7 tax is not paid by July .1, an additional penalty of up to fifteen percent (15%) may under certain circumstances be
imposed by the City. The Property Tax Code also makes provision for the split payment of taxes, discounts for early
payments, partial payments of taxes and the postponement of the delinquency date of taxes under certain
7 circumstances. The City does not permit such payments, except for those property owners who are over the age of
65 as provided in the Property Tax Code.
Collection of Delinquent Taxes
Taxes levied by the City are a personal obligation of the property owner on January 1 of the year for which the tax is
imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties and
interest ultimately imposed for the year on the property. The lien exists in favor of the State and each taxing unit,
,Q including the City, having the power to tax the property. The City's tax lien is on a parity with tax liens of all other
such taxing units. A tax lien on real property has priority over the claim of most creditors and other holders of liens
on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax
lien. In the event a taxpayer fails to make timely payment of taxes due the City, the City may file suit to foreclose its
All lien securing payment of the tax, to enforce personal liability for the tax, or both. Whether a lien of the United
States is on a parity with or takes priority over a tax lien of the City is determined by applicable federal law. In the
absence of such federal law, the City's tax lien takes priority over a tax lien of the United States. The ability of the
City to collect delinquent taxes by foreclosure may be adversely affected by the amount of taxes owed to other
taxing units, the foreclosure sale price attributable to market conditions, the taxpayer's right to redeem the property
within two years of foreclosure, or by bankruptcy proceedings which restrain the collection of a taxpayer's debts.
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Historical Analysis of Tax Collection
- Collection Ratios -
Tax Rate
Per $100 of
Tax Assessed Assessed Adjusted
Year Valuation Valuation Tax Levy
Fiscal
% of Collections Year
Current Current and Ending
Year Prior Years (b) 9-30
1990 $ 575,624,520 $.8000 $ 4,604,996 98.24% 99.99% 1991
1991 617,887,160 .8000 4,943,097 97.80 98.97 1992
1992 654,804,750 .7970 5,218,794 98.53 100.37 1993
1993 730,329,940 .7153 5,224,050 96.11 98.24 1994
1994 763,443,870 .6974 5,316,625 98.37 99.65 1995
1995 844,357,847 .6950 5,869,525 98.65 99.72 1996
1996 875,483,990 .6950 6,343,113 98.31 99.43 1997
1997 1,012,049,410 .6950 7,062,826 98.29 99.45 1998
1998 1,172,298,277 .6950 8,147,473 98.10 99.27 1999
1999 1,322,581,461 .6950 9,174,224 99.13 100.44 2000
2000 1,563,565,809 .6950 10,595,358 98.35 99.65 2001
2001 1,760,551,863 .6860 12,077,586 97.66(a) 99.31(a) 2002
(a) Collections as of March 1, 2002
- Tax Rate Distribution -
2001 2000 1999 1998 1997 1996 1995
Maintenance $0.430 $0.435 $0.440 $0.440 $0.440 $0.440 $0.440
Debt Service 0.256 0.260 0.255 0.255 0.255 0.255 0.255
Total $0.686 $0.695 $0.695 $0.695 $0.695 $0.695 $0.695
- Analysis of Delinquent Taxes -
The following is an analysis, by tax year, of taxes delinquent as of September 30, 2001.
Uncollected Adjusted Percentage
Tax Year As of September 30, 2001 Tax Levy (a) of Tax Levy
2000 $285,091 $10,595,358 2.69%
1999 479,170 9,174,224 5.22
1998 389,445 8,147,473 4.78
1997 293,915 7,062,826 4.16
1996 258,104 6,343,113 4.07
1995 280,499 5,869,525 4.78
1994 383,032 5,316,625 7.20
1993 286,677 5,224,050 5.49
1992 303,983 5,218,769 5.82
1991 278,501 4,943,097 5.63
(a) The total tax levy has been adjusted to reflect additions and deletions from the tax roll for prior years.
- Delinquent Tax Collection Procedures -
In addition to the legal procedures and penalties described under "Levy and Collection of Taxes", the City has
retained a delinquent tax attorney on a contract basis to file suit to collect delinquent taxes due the City. The fees
due such attorney for acting as delinquent tax attorney are payable from an additional penalty imposed upon the
delinquent taxpayer, not to exceed 15% of the tax due.
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Analysis of Tax Base
Type of Property
Residential
Acreage
Vacant Lots/Tracts
Farm & Ranch
Commercial/Industrial
Utilities
Real Inventory
Other
Gross Assessed
Value
Less: Exemption
Net Assessed
Value
(a)
- Tax Base Distribution -
2001 Tax Roll
Amount
$1,319,762,380
67,023,150
66,695,330
4,810,310
398,620,140
39,293,380
3,109,880
4,383,520
$1,903,698,090
(143,146,227)
$1,760,551,863(a)
68.7%
3.6
3.6
.3
20.7
2.1
.4
.6
2000 Tax Roll
Amount
$1,085,401,620
67,239,100
46,888,440
3,826,610
358,489,680
32,500,440
7,180,080
9,643,330
$1,611,169,300
(86,664,421)
$1,524,504,870 (a)
67.4%
4.2
2.9
.2
22.3
2.0
.4
.6
1999 Tax Roll
Amount
$ 969,391,320
57,317,850
27,617,630
3,137,680
300,665,438
30,764,620
8,761,400
7,681,410
$1,405,337,348
(83,951,160)
$1,321,386,188 (a)
Value may differ from those shown elsewhere in this Official Statement due to subsequent adjustments to
the tax roll.
Principal Taxpayer (a)
Weatherford U.S. Inc.
Houston Lighting & Power Co.
Southwestern Bell Telephone
Pearland Enclave Apts.
Albertsons Inc.
Aggreko, Inc.
Lowe's Home Centers
TurboCare
Home Depot USA Inc.
Continental 34 Fund Ltd.
Phillips Petroleum
Pauluhn Electric Manufacture
Texas Windmill Apts.
K-Mart Corp.
Whispering Winds, Ltd.
& Assoc.
American Retirement
Communicties
Total Ten Principal Taxpayers
- Principal Taxpayers -
Type of Property
Oil Field Equipment
Utility
Utility
Apartments
Shopping Center
Mobile Temperature Control
Retail Store
Manufacture
Retail Store
Department Store
Oil Field
Electric Manufacture
Apartments
Shopping Center
Apartments & Townhomes
Retirement Center
Percentage Ten Principal Taxpayers
Comprise of their Respective Tax Rolls
(a) Not a principal taxpayer in such tax year.
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2001
Taxable
Assessed
Valuation
$29,100,820
14,070,710
10,758,360
10,235,020
7,719,520
7,649,420
6,931,600
6,479,410
6,199,660
6,044,420
(a)
(a)
(a)
(a)
(a)
(a)
$105,188,940
1%
2000
Taxable
Assessed
Valuation
$ 29,100,820
14,070,710
10,758,260
10,235,020
7,719,520
7,649,420
6,931,600
(a)
6,199,660
6,044,420
5,998,890
(a)
(a)
(a)
(a)
(a)
69.0%
4.1
2.0
.2
21.4
2.2
.6
.5
1999
Taxable
Assessed
Valuation
$21,449,890
11,361,390
9,108,510
(a)
(a)
9,196,710
(a)
(a)
(a)
6,093,140
(a)
6,173,920
6,108,210
6,087,890
5,968,260
5,300,000
$104,760,320 $86� 20
47Q%
6.57%
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- Tax Adequacy -
Estimated Average Annual Debt Service Requirements $4.031,871
based on Total New Debt Service (2002-2027)
Tax Rate of $0.245 per $100 assessed valuation against $4,097,684
the 2001 Certified Assessed Valuation, at 95% collection, produces
Estimated Maximum Annual Debt Service Requirements $5,798,001
based on Total New Debt Service (in the year 2005)
Tax Rate of $0.35 per $100 assessed valuation against $5.853.835
the 2001 Certified Assessed Valuation, at 95% collection, produces
Estimated Overlapping Taxes
Under Texas law, if ad valorem taxes levied by a taxing authority become delinquent, a lien is created upon the
property which has been taxed, which lien is on a parity with any tax lien on such property in favor of the City. In
addition to ad valorem taxes required to retire the aforementioned direct and estimated overlapping debt, certain
taxing jurisdictions including those mentioned in Estimated Overlapping Debt are also authorized by Texas law to
assess, levy, and collect ad valorem taxes for operation, maintenance, administrative and/or general revenue
purposes.
Set forth below is an estimation of ad valorem taxes levied on a $100,000 single-family residence by such
jurisdictions, assuming the assessments are made at their claimed basis of assessment (100%). Such residence is
further assumed to be located within Brazoria County wherein substantially all of the residential property within the
City is located. No recognition is given to local assessments for civic association dues, fire department
contributions, or other'charges made by other than political subdivisions.
2001 Tax Estimated
Rate/$100 2001 Tax Bill
Taxing Jurisdiction
The City
Brazoria County
Brazoria Drainage District No. 4
Pearland ISD
$0.686000
0.339500
0.125871
1.820000
$ 686.00
339.50
125.87
1.820.00
Estimated Total 2001 Tax Bill:
$2.971.37 (a)
(a) Ad valorem taxes are levied by three separate municipal utility districts ("MUD") on property located
within the specific MUD. These taxes are paid in addition to the above noted City taxes.
Sales Tax
- Authority -
atutes, as amended, which
nts the
The City has adopted the and levy
et y a of 1 % sales taxicle .6c, Vernon's Texas Civil The City has also voted antadd'tional 1/2% sales and use tax for
City the power to impose and le y
economic development under d ele ic5190.ax as6,Vern y Vernon's
for the Texas
BCivil Statutes, as amended. The City may not pledge
the proceeds from the Sales an
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- Collection History -
The State Comptroller, after deduction of a 2% service fee, currently remits the City's portion of sales tax collections
monthly. By statute the Comptroller is required to remit at least twice annually. The following is an analysis of the
collection history of the City's sales and use tax:
Ad Valorem Tax Comparisons
Fiscal Year Sales and Use Equivalent Tax Rate % of Actual
Ended 9-30 Tax Receipts Tax Year Equivalent Tax Levy
1990 $1,460,341 (1989) $0.254 30.71
1991 1,548,190 (1990) 0.269 33.62
1992 1,704,160 (1991) 0.260 32.65
1993 1,733,901 (1992) 0.265 33.22
1994 1,905,741 (1993) 0.261 36.48
1995 2,166,219 (1994) 0.284 40.74
1996 2,298,546 (1995) 0.272 39.16
1997 2,589,918 (1996) 0.298 40.83
1998 2,962,481 (1997) 0.297 41.94
1999 3,415,183 (1998) 0.291 41.92
2000 3,684,676 (1999) 0.279 40.16
2001 4,795,355 (2000)
SELECTED FINANCIAL DATA
Historical Operations of the City's General Fund
The following is a condensed statement of revenues and expenses of the City's General Fund for the past five fiscal
years. The inclusion of the following table is not intended to imply that any revenues of the City, other than receipts
from ad valorem taxes as provided in the Ordinance, are pledged to pay principal and interest on the Bonds.
Fiscal Year Ended September 30
2001 2000 1999 1998 1997
REVENUES
General Property Taxes (a) $ 6,784,591 $ 5,876,495 $ 5,260,551 $ 4,555,749 $ 4,072,782
Sales Taxes 4,795,353 3,697,523 3,426,576 2,973,058 2,589,918
Franchises
2,303,730 2,022,789 1,943,545 1,703,715 1,498,788
Licenses & Permits 1,896,728 1,469,799 955,819 615,808 524,197
ti Charges for Services 3,202,767 3,061,545 2,960,214 2,508,087
1 6548,617
Fines & Forfeitures 856,641 731,959 675,691
Intergovernmental - 0 - 15,000 489,860 345,674 197,764
�f... � Other Revenues
863,457 827,950 655,582 615,016 912,261
Total Revenues $20,703,267 $17,703,060 $16,367,838 $13,893,963 $11,973,479
{ { EXPENDITURES 2,357,621
General Government 4,217,744 $ 3,580,693 $ 3,685,523 $ 2,828,787 $ 4,238,647
Public Safety 6,692,138 5,944,516 5,695,956 5,015,602
Public Works 5,974,667 5,635,397 5,137,708 4,925,693 4,334,123
11 Community Services 2,043,620 1,762,770 1,580,624
1,543,440 1,133,433
Total $18,928,169 $1692 ,376 $16,099,811 $14,313,522 $12,063,824
n
(a) Includes penalties and interest.
Source: City's audited financial statements.
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General Fund and Debt Service Fund Balance for the Past Five Fiscal Years
Fiscal Year Ended September 30
2001 2000 1999 1998
General Fund
Debt Service Fund
$6,563,942 $ 5,205,209 $ 4,457,492 $ 3,468,849
$1,544,987 $ 681,148 $ 208,324 $ 273,742
1997
$ 2,690,296
$ 930,485
Pension Fund
The City participates in the Texas Municipal Retirement System (TMRS), an agency operated by the State of Texas.
Employees of the City who participate in TMRS contribute a fixed percentage, currently 7%, of their gross pay and
the City matching percent is currently 14%. As employees leave municipal employment other than through
retirement, they may withdraw from TMRS those funds they contributed, but forfeit their employer's contributions.
Each municipal employer's requirements for current contributions are offset by the amounts of such forfeitures.
As of January 1, 2002, the City employed 254 full-time employees and 48 part-time and seasonal employees. All
full-time employees are covered by TMRS and the City's contribution for this fiscal year as of September 30, 2001,
amounted to approximately $857,939 which includes amortization of prior service cost over 25 years. The City had
an unfunded pension benefit obligation in the amount of approximately $3,109,399 as of December 31, 2001. The
liability for prior service benefits will be amortized over a period of twenty-five years or less by contributions from
the City which are a level percentage of payroll.
Financial Statements
A copy of the City's Financial Statements for the fiscal year ended September 30, 2001, is attached hereto in the
APPENDIX B. Copies of such statements for preceding years are available, for a fee, upon request.
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ADMINISTRATION OF THE CITY
Mayor and City Council
Policy -making and supervisory functions are the responsibility of and are vested in the Mayor and City Council for
the City, under provisions of the "Charter of the City of Pearland" (the "Charter") approved by the electorate
February 6, 1971. The Council is elected at large on the first Saturday in May. The Mayor and five Council
members serve three-year staggered terms. The Mayor is entitled to vote only in the event of a tie and has no power
to veto Council action. Members of the Council are described below:
Council Members Period Served
Tom Reid 12 Years
Mayor
Larry Marcott 2 Years
Council Member
Mayor Pro Tem
Richard Tetens
Council Member
Woody Owens
Council Member
Larry Wilkins
Council Member
Klaus Seeger
Council Member
(a)
10 Months (a)
2 Years
6 Years
4 Years
Term
Expires May
2002
2003
2004
2003
2002
2004
Occupation
Retired
Management
Retired
Consultant
Eye Care Technician
Engineer
Elected May, 2001, however Councilman Tetens has served two previous terms (6 years) on the City
Council.
Administration
Under provisions of the Charter, the City Council enacts local legislation, adopts budgets, determines policies and
appoints the City Manager, who is charged with the duties of executing the laws and administering the government
of the City. As the chief executive officer and head of the administrative branch of the City government, the City
Manager is given the power and duties to:
Appoint and remove all department heads and all other employees in the administrative service of
the City and may authorize the head of a department to appoint and remove subordinates in his
respective department;
Prepare the budget annually, submit it to City Council, and be responsible for its administration;
Prepare and submit to City Council a complete report on the finances and administrative activities
of the City;
Keep City Council advised of the financial condition and future needs of the City and make
appropriate recommendations; and
Perform such other necessary duties as prescribed by the Charter or required by City Council.
(1)
(2)
(3)
(4)
(5)
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Members of the administrative staff are described below:
Name
Position Period Served
Bill Eisen City Manager
Alan Mueller Deputy City Manager
Tobin Maples Executive Director of Community Services
Jim Causey Director of Finance
Jerry Burns Director of Public Works
Young Lorfin City Secretary
John Hargrove City Engineer
Darrin Coker City Attorney
Ed Hersh Director of Parks & Recreation
Mary Hickling Director of Administrative Services
Christopher Doyle Police Chief
10 Months
5 Years
1 Year
2 Years
4 Years
5 Years
9 Years
4 Years
9 Years
12 Years
23 Years
Consultants
The City has retained several consultants to perform professional services in connection with the independent
auditing of its books and records and other City activities. Several of these consultants are identified below:
Bond Counsel Andrews & Kurth L.L.P.
Houston, Texas
Certified Public Accountants Pattillo, Brown & Hill, P.C.
Waco, Texas
Financial Advisor RBC Dain Rauscher Inc.
Houston, Texas
LEGAL MATTERS
Legal Opinions
The City will furnish the Underwriter a transcript of certain certified proceedings prepared incident to the
authorization and issuance of the Bonds, including a certified copy of the unqualified approving opinion of the
Attorney General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State of
Texas, to the effect that the Bonds, which the Attorney General will have examined, are valid and binding
obligations of the City under the Constitution and laws of the State of Texas. The City also will furnish the
approving legal opinion of Andrews & Kurth L.L.P., Houston, Texas, Bond Counsel, to the effect that, based upon
an examination of such transcript, the Bonds are valid and binding obligations of the City under the Constitution. and
laws of the State of Texas. The legal opinion of Bond Counsel will further state that the Bonds are payable, both as
to principal and interest, from the levy of ad valorem taxes, within the limits prescribed by law, against taxable
property within the City. The opinion of Bond Counsel is expected to be reproduced on the back panel of the Bonds
over a certification by the City Secretary attesting that such legal opinion is dated as of the date of delivery of and
payment for the Bonds and is a true and correct copy of the original opinion. Errors or omissions in the printing of
such legal opinion on the Bonds shall not affect the validity of the Bonds nor constitute cause for the failure or
refusal by the Underwriter to accept delivery of and pay for the Bonds.
Bond Counsel was not requested to participate, and did not take part, in the preparation of the Official Statement,
and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of
the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the
information describing the Bonds in the Official Statement to verify that such description conforms to the provisions
of the Ordinance. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of
the Bonds is contingent upon the sale and delivery of the Bonds. The legal opinion will be printed on the Bonds.
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No -Litigation Certificate
The City will furnish to the Underwriter a certificate, dated as of the date of delivery of the Bonds, executed by
appropriate City officials, to the effect that no litigation of any nature has been filed or is then pending or threatened,
either in state or federal courts, contesting or attacking the validity of the Bonds; restraining or enjoining the
issuance, execution or delivery of the Bonds; affecting the provisions made for the payment of or security for the
Bonds; in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Bonds;
or affecting the validity of the Bonds.
No Material Adverse Change
The obligations of the Underwriter to take and pay for the Bonds, and of the City to deliver the Bonds, are subject to
the condition that, up to the time of delivery of and receipt of payment for the Bonds, there shall have been no
material adverse change in the condition (financial or otherwise) of the City subsequent to the date of sale from that
set forth or contemplated in the Preliminary Official Statement, as it may have been supplemented or amended
through the date of sale.
TAX EXEMPTION
In the opinion of Andrews & Kurth L.L.P., Houston, Texas, Bond Counsel, interest on the Bonds is (1) excludable
under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), from gross income of the
owners thereof for federal income tax purposes and (2) not includable in the alternative minimum taxable income of
individuals or corporations, except as described below.
The foregoing opinions of Bond Counsel are based on the Code and the regulations, rulings and court decisions
thereunder in existence on the date of issue of the Bonds. Such authorities are subject to change and any such
change could prospectively or retroactively result in the inclusion of the interest on the Bonds in gross income of the
owners thereof or change the treatment of such interest for purposes of computing alternative minimum taxable
income.
In rendering its opinions, Bond Counsel has assumed continuing compliance by the City with certain covenants of
the ordinance authorizing the issuance of the Bonds (the "Ordinance) and has relied on representations by the City,
the City's financial advisor, and the Underwriter with respect to matters solely within their knowledge, respectively,
which Bond Counsel has not independently verified. The covenants and representations relate to, among other
things, the use of Bond proceeds and any facilities financed therewith, the source of repayment of the Bonds, the
investment of Bond proceeds and certain other amounts prior to expenditure, and requirements, that excess arbitrage
earned on the investment of Bond proceeds and certain other amounts be paid periodically to the United States and
that the City file an information report with the Internal Revenue Service. If the City should fail to comply with the
covenants in the Ordinance, or if its representations relating to the Bonds that are contained in the Ordinance should
be determined to be inaccurate or incomplete, interest on the Bonds could become taxable from the date of delivery
of the Bonds, regardless of the date on which the event causing such taxability occurs.
Except as stated above and set forth below under "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT AND
PREMIUM BONDS," Bond Counsel will express no opinion as to any federal, state or local tax consequences
resulting from the ownership of, receipt or accrual of interest on or acquisitions or disposition of the Bonds.
Bond Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of
existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City
described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the
matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The
Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an
audit of the Bonds is commenced, under current procedures the Service is likely to treat the City as the "taxpayer,"
and the owners of the Bonds would have no right to participate in the audit process. In responding to or defending
an audit of the tax-exempt status of the interest on the Bonds, the Issuer may have different or conflicting interests
from the owners of the Bonds. Public awareness of future audit of the Bonds could adversely affect the value and
liquidity of the Bonds during the pendency of the audit, regardless of its ultimate outcome.
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Interest on all tax-exempt obligations, such as the Bonds, owned by a corporation (other than an S corporation, a
regulated investment company, a real estate investment trust (REIT), a real estate mortgage investment conduit
(REMIC) or a financial asset securitization investment trust (FASIT)) will be included in such corporation's adjusted
current earnings for purposes of calculating such corporation's alternative minimum taxable income. A corporation's
alternative minimum taxable income is the basis on which the alternative minimum tax imposed by the Code is
computed.
Under the Code, taxpayers are required to provide information on their returns regarding the amount of tax-exempt
interest, such as interest on the Bonds, received or accrued during the year.
Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations, such as the
Bonds, may result in collateral federal income tax consequences to, among others, financial institutions, property
and casualty insurance companies, certain foreign corporations doing business in the United States, certain S
corporations with Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement
benefits, taxpayers who are deemed to have incurred or continued indebtedness to purchase or carry tax-exempt
obligations and individuals otherwise eligible for the earned income credit. Such prospective purchasers should
consult their owner tax advisors as to the consequences of investing in the Bonds.
If a tax-exempt obligation, such as the Bonds, was acquired at a "market discount" and if the fixed maturity of such
obligation is equal to, or exceeds, one year from the date of issue, the Code provides ordinary income tax treatment
of gain recognized upon the disposition of such "market discount bond." A "market discount bond" is one which is
acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of
a bond issued at an original issue discount, the "revised issue price" (i.e., a market discount). Such treatment applies
to "market discount bonds" to the extent the gain from the disposition thereof exceeds the accrued market discount
of such bonds unless a statutory de minimis rule applies. The "accrued market discount" is the amount which bears
the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the
number of days between the acquisition date and the final maturity date. The applicability of the market discount
rules may adversely affect the liquidity or secondary market price of the Bonds. Purchasers should consult their
own tax advisors regarding the potential implications of market discount with respect to the Bonds.
TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT AND PREMIUM BONDS
Discount Bonds
According to representations of the Underwriter, certain of the Bonds may be offered at initial offering prices which
are less than the stated redemption prices at maturity of such Bonds. If the initial offering prices of the Bonds are
lower than the stated' redemption price payable at maturity, the Bonds of that maturity (the "Discount Bonds") will
be considered to have "original issue discount" for federal income tax purposes. An initial owner who purchases a
Discount Bond in the initial public offering of the Bonds at such an initial offering price will acquire such Discount
Bond with original issue discount equal to the difference between (a) the stated redemption price payable at the
maturity of such Discount Bond and (b) the initial offering price to the public of such Discount Bond. Under
existing law, such original issue discount will be treated for federal income tax purposes as additional interest on a
Bond and such initial owner will be entitled to exclude from gross income for federal income tax purposes that
portion of such original issue discount deemed to be earned (as discussed below) during the period while such
Discount Bond continues to be owned by such initial owner. Except as otherwise provided herein, the discussion
regarding interest on the Bonds under the caption "TAX EXEMPTION" generally applies to original issue discount
deemed to be earned on a Discount Bond while held by an owner who has purchased such Bond at the initial
offering price in the initial public offering of the Bonds and that discussion should be considered in connection with
this portion of the Official Statement.
In the event of a redemption, sale, or other taxable disposition of a Discount Bond prior to its stated maturity,
however, any amount realized by such initial owner in excess of the basis of such Discount Bond in the hands of
such owner (increased to reflect the portion of the original issue discount deemed to have been earned while such
Discount Bond continues to be held by such initial owner) will be includable in gross income for federal income tax
purposes.
Because original issue discount on a Discount Bond will be treated for federal income tax purposes as interest on a
Bond, such original issue discount must be taken into account for certain federal income tax purposes as it is deemed
to be earned even though there will not be a corresponding cash payment. Corporations that purchase Discount
Bonds must take into account original issue discount as it is deemed to be earned for purposes of determining
alternative minimum tax. Other owners of a Discount Bond may be required to take into account such original issue
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discount as it is deemed to be earned for purposes of determining certain collateral federal tax consequences of
owning a Bond. See "TAX EXEMPTION" for a discussion regarding the alternative minimum taxable income
consequences for corporations and for a reference to collateral federal tax consequences for certain other owners.
The characterization of original issue discount as interest is for federal income tax purposes only and does not
otherwise affect the rights or obligations of the owner of a Discount Bond or of the City. The portion of the
principal of a Discount Bond representing original issue discount is payable upon the maturity or earlier redemption
of such Bond to the registered owner of the Discount Bond at that time.
Under special tax accounting rules prescribed by existing law, a portion of the original issue discount on each
Discount Bond is deemed to be earned each day. The portion of the original issue discount deemed to be earned
each day is determined under an actuarial method of accrual, using the yield to maturity as the constant interest rate
and semi-annual compounding.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Discount
Bonds by an owner that did not purchase such Bonds in the initial public offering and at the initial offering price
may be determined according to rules which differ from those described above. All prospective purchasers of
Discount Bonds should consult their tax advisors with respect to the determination for federal, state and local
income tax purposes of interest and original issue discount accrued upon redemption, sale or other disposition of
such Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase,
ownership, redemption, sale or other disposition of such Discount Bonds.
Premium Bonds
According to representations of the Underwriter, certain of the Bonds may be offered at initial offering prices which
exceed the stated redemption prices payable at the maturity of such Bonds. If any of the Bonds of such maturities
are sold to members of the public (which for this purpose excludes bond houses, brokers and similar person or
organizations acting in the capacity of wholesalers or underwriters) at such initial offering prices, each of the Bonds
of such maturities ("Premium Bonds") will be considered for federal income tax purposes to have "bond premium"
equal to the amount of such excess. The basis for federal income tax purposes of a Premium Bond in the hands of
an initial purchaser who purchases such Bond in the initial offering must be reduced each year and upon the sale or
other taxable disposition of the Bond by the amount of amortizable bond premium. This reduction in basis will
increase the amount of any gain (or decrease the amount of any loss) recognized for federal income tax purposes
upon the sale or other taxable disposition of a Premium Bond by the initial purchaser. Generally, no corresponding
deduction is allowed for federal income tax purposes, for the reduction in basis resulting from amortizable bond
premium. The amount of bond premium on a Premium Bond which is amortizable each year (or shorter period in
the event of a sale or disposition of a Premium Bond) is determined under special tax accounting rules which use a
constant yield throughout the term of the Premium Bond based on the initial purchaser's original basis in such Bond.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition by an owner
of Bonds that are not purchased in the initial offering or which are purchased at an amount representing a price other
than the initial offering prices for the Bonds of the same maturity may be determined according to rules which differ
from those described above. Moreover, all prospective purchasers of Bonds should consult their tax advisors with
respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other
disposition of Premium Bonds.
CONTINUING DISCLOSURE OF INFORMATION
In the Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of
the Bonds. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay
the Bonds. Under the agreement, the City will be obligated to provide certain updated financial information and
operating data annually, and timely notice of specified material events, to certain information vendors. This
information will be available to securities brokers and others who subscribe to receive the information from the
vendors.
Annual Reports
The City will provide certain updated financial information and operating data to certain information vendors
annually. The information to be updated includes all quantitative financial information and operating data with
respect to the City of the general type included in this Official Statement under the headings "CITY TAX DEBT"
(excluding "- Estimated Overlapping Debt"), "TAX DATA — Property Subject to Taxation by the City,"
Historical Analysis of Tax Collection," "- Analysis of Tax Base," "SELECTED FINANCIAL DATA," and in
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Appendix "B". The City will update and provide this information within six months after the end of each fiscal year
ending in or after 2002. The City will provide the updated information to each nationally recognized municipal
securities information repository ("NRMSIR") and to the Texas Municipal Advisory Council, the state information
depository ("SID") designated by the State of Texas and approved by the staff of the United States Securities and
Exchange Commission (the "SEC").
The City may provide updated information in full text or may incorporate by reference certain other publicly
available documents, as permitted by SEC Rule 15c2-12, as amended and in effect from time to time (the "Rule").
The updated information will include audited financial statements, if the City commissions an audit and it is
completed by the required time. If audited financial statements are not commissioned or are not available by the
required time, the City will provide unaudited financial statements and audited financial statements when and if they
become available. Any such financial statements will be prepared in accordance with the accounting principles
described in Appendix "B" or such other accounting principles as the City may be required to employ from time to
time pursuant to state law or regulation.
The City's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31
in each year, beginning March 31, 2003, unless the City changes its fiscal year. If the City changes its fiscal year, it
will notify each NRMSIR and the SID of the change.
Material Event Notices
The City will also provide timely notices of certain events to certain information vendors. The City will provide
notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or
sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled
draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements
reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6)
adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of
the Bonds; (8) calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds;
and (11) rating changes. Neither the Bonds nor the Ordinance makes any provision for debt service reserves or
liquidity enhancement. In addition, the City will provide timely notice of any failure by the City to provide
information, data, or financial statements in accordance with its agreement described above under "Annual Reports."
The City will provide each notice described in this paragraph to the SID and to either each NRMSIR or the
Municipal Securities Rulemaking Board.
Availability of Information From NRMSIRs and SID
The City has agreed to provide the foregoing information only to NRMSIRs and the SID. The information will be
available to holders of and beneficial owners of the Bonds only if the holders comply with the procedures and pay
the charges established by such information vendors or obtain the information through securities brokers who do so.
The Municipal Advisory Council of Texas has been designated by the State of Texas as a SID and has been
approved as such by the SEC staff. The address of the Municipal Advisory Council is 600 West 8th Street, P.O.
Box 2177, Austin, Texas 78768-2177, and its telephone number is 512/476-6947.
Limitations and Amendments
The City has agreed to update information and to provide notices of material events only as described above. The
City has not agreed to provide other information that may be relevant or material to a complete presentation of its
financial results of operations, condition, or prospects or agreed to update any information that is provided, except as
described above. The City makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell Bonds at any future date. The City disclaims any contractual or tort
liability for damages resulting in whole or in part from any breach, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, of its continuing disclosure agreement or from any statement made pursuant to its
agreement. Holders or beneficial owners of Bonds may seek as their sole remedy a writ of mandamus to compel the
City to comply with its agreement. No default by the City with respect to its continuing disclosure agreement shall
constitute a breach of or default under the Ordinance for purposes of any other provision of the Ordinance. Nothing
in this paragraph is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal
and state securities laws. The City's undertakings and agreements are subject to appropriation of necessary funds
and to applicable legal restrictions.
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The City may amend its continuing disclosure agreement to adapt to changed circumstances that arise from a change
in legal requirements, a change in law, or a change in the identity, nature, status or type of operations of the City if,
but only if (i) the agreement, as so amended, would have permitted a purchaser to purchase or sell the Bonds in the
offering made hereby in compliance with the Rule, taking into account any amendments or interpretations of the
Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the holders of a
majority in aggregate amount of the outstanding Bonds consent to such amendment or (b) a person unaffiliated with
the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the
interests of the holders and beneficial owners of the Bonds. The City may also amend or repeal the agreement if the
SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such
provisions are invalid, and the City may amend the agreement in its discretion in any other circumstance or manner,
but in either case only to the extent that its right to do so would not prevent the Underwriters from purchasing the
Bonds in the offering described herein in compliance with the Rule. If the City amends the agreement, it has agreed
to include with any financial information or operating data next provided in accordance with its agreement described
above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact
of any change in the type of financial information and operating data so provided.
Audited Financial Report of the City
The City presently requires that an annual audit be performed by an independent public accounting firm in
accordance with generally accepted auditing standards for governmental units. The most recent audit, and additional
financial information are available for public inspection, or copies may be obtained by written request, to the extent
permitted by law, addressed to the City, with such fee, if any, for copies as may from time to time be authorized by
the City.
Compliance With Prior Undertakings
The City has complied in all material respects with its prior continuing disclosure agreements made in accordance
with the Rule.
GENERAL CONSIDERATIONS
Sources and Compilation of Information
The information contained in this Official Statement has been obtained primarily from the City and from other
sources believed to be reliable. No representation is made as to the accuracy or completeness of the information
derived from sources other than the City. The summaries of the statutes, orders, ordinances and other related
documents are included herein subject to all of the provisions of such documents. These summaries do not purport to
be complete statements of such provisions and reference is made to such documents for further information.
The information contained in this Official Statement in the section entitled "APPENDIX B - Audited Financial
Statements of the City" has been provided by Null - Lairson, P.C., Houston, Texas and has been included herein in
reliance upon their' authority as an expert in the fields of auditing and accounting. Bond Counsel has reviewed the
information herein contained under the captions "THE BONDS" (except for sections captioned "Future Debt" and
"Use of Proceeds"), "LEGAL MATTERS - Legal Opinions," "TAX EXEMPTION," "TAX TREATMENT OF
ORIGINAL ISSUE DISCOUNT AND PREMIUM BONDS," and "CONTINUING DISCLOSURE OF
INFORMATION (except for the section captioned "Compliance With Prior Undertakings")," solely to determine
whether such information fairly and accurately describes the Bonds, the Ordinance, and the law set out therein.
Bond Counsel has neither independently verified other factual information contained in this Official Statement nor
conducted an investigation of the affairs of the City for the purpose of passing upon the accuracy or completeness of
this Official Statement. No person is entitled to rely upon the limited participation of such firms as an assumption of
responsibility for, or an expression of opinion of any kind with regard to, the accuracy or completeness of any of the
other information contained herein.
Neither this Official Statement nor any statement that may have been made orally or in writing is to be constructed
as or as part of a contract with the original purchasers or subsequent owners of the Bonds.
Certification as to Official Statement
At the time of payment for and delivery of the Bonds, the City will furnish the Underwriter a certificate, executed by
the City Secretary and Mayor, acting in their official capacities, to the effect that to the best of their knowledge and
belief: (a) the descriptions and statements of or pertaining to the City contained in this Official Statement, on the
date thereof and on the date of delivery were and are true and correct in all material respects; (b) insofar as the City
27
and its affairs, including its financial affairs, are concerned, this Official Statement did not and does not contain an
untrue statement of a material fact or omit to state a material fact required to be stated herein or necessary to make
the statements herein, in the light of the circumstances under which they were made, not misleading; and (c) insofar
as the descriptions and statements, including financial data contained in this Official Statement, of or pertaining to
entities other than the City and their activities are concerned, such statements and data have been obtained from
sources which the City believes to be reliable and that the City has no reason to believe that they are untrue in any
material respect.
Updating of Official Statement
The City will keep the Official Statement current by amendment or sticker to reflect material changes in the affairs
of the City and, to the extent that information comes to its attention, in the other matters described in the Official
Statement, until the delivery of the Bonds.
This Official Statement was duly authorized and approved by the City Council of the City of Pearland, Texas as of
the date specified on the first page hereof.
ATTEST:
Is/
/s/
Mayor
City of Pearland
City Secretary
City of Pearland
28
APPENDIX A - ECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE CITY
The following information has been derived from various sources, including the Texas Almanac, Texas Municipal
Reports, U.S. Census data, "Sales Management Survey of Buying Power", Texas Workforce Commission, and City
officials. While such sources are believed to be reliable, no representation is made as to the accuracy thereof.
- City Economics -
The City of Pearland is a commercial center located in the northeast corner of Brazoria County, bordering the City
of Houston to the north. The City is traversed by State Highway 35 and Farm -to -Market Road 518. The City's 2000
census was 37,640,increasing 98.87% since 1990. Because of the City's proximity to Houston, the area has
experienced continuing growth in residential, commercial and some light industrial development. At present there
are numerous subdivisions either developed or under construction with homes ranging in value from $90,000 to
$250,000, the average being approximately $125,000.
Building Permits
(Source - City of Pearland)
Residential Commercial Other *
Total Value Total Value Total Value Total Value
1982 113 8,240,600 28 3,353,835 309 5,588,377 450 17,182,812
1983 300 23,873,350 19 6,760,800 279 4,117,281 598 34,751,431
1984 231 18,135,848 31 6,314,418 328 12,329,177 590 36,779,443
1985 139 18,018,608 41 2,781,094 300 3,424,632 480 24,224,334
1986 129 11,738,284 45 3,128,100 540 3,262,872 714 18,129,256
1987 58 6,062,000 11 364,832 155 522,330 224 6,949,162
1988 403 16,537,601 59 1,725,431 119 566,734 581 18,829,766
1989 372 15,493,010 47 2,022,386 138 20,791,944 557 38,307,340
1990 670 35,378,197 90 2,947,222 119 931,546 879 39,256,965
1991 382 36,416,253 12 2,503,500 402 5,507,501 496 44,427,254
1992 402 37,249,884 15 1,849,000 456 16,768,978 873 55,867,862
1993 481 39,236,381 15 6,475,570 863 5,961,881 1,359 51,673,832
1994 362 25,173,050 12 2,997,021 582 7,425,514 956 35,595,585
1995 340 34,734,829 13 3,762,900 528 7,799,090 881 46,296,819
1996 479 38,302,146 19 5,189,850 286 3,180,826 784 46,672,822
1997 415 43,712,441 30 10,785,050 402 50,083,171 847 104,535,662
1998 506 60,691,036 23 12,696,415 422 40,739,357 951 114,126,808
1999 536 64,525,679 22 13,847,245 532 48,265,402 1,090 126,638,326
2000 818 202,745,755 17 23,942,580 601 21,340,292 1,436 248,078,672
2001
* Includes Apartments.
Manufacturing and Commerce
Employment in Brazoria County (the "County") is provided by the extensive petroleum -chemical industry. Also
adding to the general economy of the County are fishing, tourism and recreation activities and agribusiness. The
Gulf Intracoastal Waterway comes through the lowlands near Surfside Beach and is an important waterway in
America with reported annual tonnage compared to the Panama Canal and Suez Canal.
(Source: Texas Municipal Report and Brazosport Industrial Committee.)
Major Employers
Industrial activities within the area include the manufacturing of pipe, concrete building materials, mining
equipment, lighting fixtures, large storage tanks and the fabrication and forging of steel. According to the Texas
Workforce Commission, the following is a list of employers located within the area with employment numbers
above 50.
Name
Albertson's
Associated Equipment Co.
Baker Atlas
Bell Bottom Foundation
Bredero Price Co.
Cactus Grill Steakhouse
Casa Ole
Cpi Sales Inc.
Dailey Pool Care & Repair
Davis -lynch Inc.
Driver Pipeline Co.
General Petro-chem Ind. Inc.
Gingos Mexican Cafe
HEB Pantry Foods
Kmart
Key Energy
Kroger Food Store
Packaging Service Co.
Palais Royal
Pauluhn Electric Mfg. Co.
Pearland State Bank
Randalls Food Market
Reactor Services Int'1. Inc.
Solvents & Chemicals Inc.
Tele-flow Inc.
Texas Honing Inc.
Product
Grocery store
Metalworking machinery
Oil & gas field services
Miscellaneous special trade contractor
Other metal services
Restaurant
Restaurant
Miscellaneous fabricated metals
Miscellaneous special trade contractor
Construction/related equipment
Heavy construction
General building contractor
Restaurant
Grocery store
Department store
Oil & gas field services
Grocery store
Miscellaneous chemical products
Department store
Miscellaneous fabricated metals
Bank
Grocery store
Industrial inorganic chemicals
Chemicals/allied products & petroleum/petroleum
products
Plastic products, refrigeration/comm. Vending,
misc. manufacturing industry
Other metal services
Employment
50-99
100-499
50-99
50-99
50-99
50-99
50-99
50-99
100-499
100-499
50-99
100-499
50-99
50-99
50-99
50-99
100-499
100-499
50-99
100-499
50-99
100-499
50-99
50-99
50-99
50-99
Brazoria County
Brazoria County is a Gulf Coast County comprising the Brazoria Primary Metropolitan Statistical Area, which is a
component of the Houston-Galveston-Brazoria CMSA. The economy is based on extensive petroleum and chemical
industry, fishing, tourism and agribusiness. In 2000, the County had a population of 241,767, an increase of 50,060
since 1990. According to the "2002-2003 Texas Almanac," the County was created in 1836 and organized in 1837
from the Municipality of Brazoria, name derived from the Brazos River.
U.S. Census of Population
ECONOMIC AND GROWTH INDICATORS
City of Pearland Brazoria County
Number % Change Number % Change
1930 --- 23,054 +11.84
1940 27,069 +17.42
1950 46,549 +71.96
1960 1,497 76,204 +63.71
1970 6,444 +330.46 108,312 +42.13
1980 13,248 +105.59 169,587 +56.57
1990 18,927 +42.87 191,707 +13.04
2000 37,640 +98.87 241,767 +26.11
Marketing Survey of Buying Power *
Population (1-1-00) (000's)
Total Population
%18-24
%25-34
%35-49
%50-Over
Number of Households
Houston -Galveston
Brazoria CMSA Brazoria County
4,740.0
8.9
15.7
25.3
20.9
1,711.8
245.5
8.0
15.3
24.7
22.5
84.3
Retail Sales By Store Group (2001) (000's)
Total Retail Sales $62,935,214 $2,446,343
Food & Beverage Stores 7,990,566 404,852
Food & Beverage Stores Estab. 6,243,487 173,078
General Merchandise 7,394,123 427,028
Furnit. & Home Furnish. and Electron. & Appin. 4,095,540 59,981
Motor Vehicle & Parts Dealers $20,149,346 $ 776,452
Total EIB ($000) $97,689,086 $4,075,790
Median Household EBI 45,345 42,477
$20,000 - $34,999 18.4 20.8
$35,000 - $49,999 15.7 17.4
$50,000 and Over 45.5 41.4
Buying Power Index 1.7837 0.0763
*
Statistical data from "Sales & Marketing Management - 2001 Survey of Buying Power", copyright in 2001
Sales Management Survey of Buying Power: Further reproduction is forbidden.
APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended September 30, 2001
Prepared By:
Finance Department
INTRODUCTORY SECTION
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To the Honorable Mayor, Members
of City Council, and Citizens of
the City of Pearland
Pearland, Texas:
The comprehensive annual financial report of the City of Pearland, Texas (the "City") for the fiscal year
ended September 30, 2001, is hereby submitted. Responsibility for both the accuracy of the data, and the
completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of
our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a
manner designed to present fairly the financial position and results of operations of the various funds and
account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the
City's financial activities have been included.
The comprehensive annual financial report is presented in three sections: Introductory, Financial, and
Statistical Section. The Introductory Section includes this transmittal letter, the City's organizational chart,
and a list of principal officials. The Financial Section includes the general-purpose financial statements and
the combining and individual fund and account group financial statements and schedules, as well as the
auditor's report on the financial statements and schedules. The Statistical Section includes selected financial
and demographic information, generally presented on a multi -year basis.
The financial reporting entity (the "City") includes all the funds and account groups of the primary
government (i.e., the City of Pearland as legally defined), as well as all of its Component Units. Component
Units are legally separate entities for which the primary government is financially accountable. The City
provides the full range of municipal services contemplated by statute or charter. This includes police and
fire protection, health and social services, public improvements, planning and zoning, and general
administrative services. The City also provides water, sewer, and sanitation services. Additionally, the City
has an Economic Development Corporation, designed to attract and retain jobs and more fully develop the
local ad valorem tax base.
Discretely presented and blended component units are reported in a separate column in the combined
financial statements to emphasize that they are legally separate from the primary government and to
differentiate their financial position, results of operations, and cash flows from those of the primary
government. The Economic Development Corporation is reported as a discretely presented component unit
as well as TIRZ #1 and TIRZ #2.
ECONOMIC CONDITION AND OUTLOOK
"1', The City of Pearland lies fifteen miles southeast of downtown Houston and ten miles from the Texas
Medical Center in the northeast corner of Brazoria County, with small areas within Harris and Fort Bend
Counties. Pearland is accessible by way of four major highways and is six miles from Houston Hobby
Airport.
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Sales tax receipts have shown favorable increases for the last several years. Permits for more than 1,000
single-family residences were issued in 2001. The Pearland Economic Development Corporation (PEDC)
awarded incentive packages to either attract new businesses or allow existing businesses to expand.
MAJOR INITIATIVES
The Pearland City Council sets its goals each year in a strategic planning workshop. Some of the
highlighted goals include:
• Enhance the transportation network to improve the efficiency of traffic movements.
• Update land use and development standards and practices to reflect the goals of the Comprehensive Plan.
• Create recreational opportunities to meet the needs of the citizens.
• Maintain and enhance Pearland's high standards of public safety.
• Reduce the frequency and severity of flooding through a comprehensive storm water management policy.
• Ensure adequate water supply and wastewater treatrnent capacity for growth.
• Ensure the City is financially sound and fiscally responsible.
FUTURE OUTLOOK
Brazoria County's current population is just under 228,000. It is estimated that this will increase to over
330,000 in the next ten to fifteen years. According to the Brazoria County Partnership, job growth will be
focused in four primary areas: 1) aerospace/high technology, 2) transportation and distribution, 3)
petrochemical and downstream petrochemical companies, and 4) tourism.
In late 1998, the City of Pearland created a Tax Increment Reinvestment Zone (TIRZ #2). This involved the
annexation of over 3,000 acres west of the State Highway 288 (SH 288) corridor. The city limit now
extends to portions of Fort Bend County. The proposed development, Shadow Creek Ranch, has the
potential to develop the acreage over a fifteen to twenty year time frame. It is estimated that 7,000 new
single-family homes, 1,800 assisted living units, and 3,900 multi -family units could be developed. More
than two billion dollars worth of value would be added over the next twenty years.
Shadow Creek Ranch will not only improve roads in the area, but will also bring in sewer and drainage,
water, and major landscaping to the area. The added population poises SH 288 for major retail and
commercial development that could eventually include major office buildings, a hospital, and hotels.
DEPARTMENT FOCUS
Finance: The Finance Department continues to improve in multiple major areas. Additional staff has
allowed for enhanced interest earnings and improved financial projections. The department continues to
submit winning GFOA awards for budget presentation and financial audit reporting. Purchasing procedures
have allowed the city to streamline and centralize its purchasing function.
FINANCIAL INFORMATION
Management of the City is responsible for establishing and maintaining an internal control structure
designed to ensure that the assets of the City are protected from loss, theft or misuse, and to ensure that
adequate accounting data are compiled to allow for the preparation of financial statements in conformity
with generally accepted accounting principles. The internal control structure is designed to provide
reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance
recognizes that (1) the cost of controls should not exceed the benefits expected to be derived and (2) the
evaluation of costs and benefits requires estimates and judgments by management.
Accounting Controls. We believe that the City's accounting controls provide reasonable assurance that
errors or irregularities that could be material to the financial statements are prevented or would be detected
within a timely period by employees in the normal course of performing their assigned function.
Budgeting Controls. In addition, the City maintains budgetary controls. The objective of these budgetary
controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved
by the City's governing body. Activities of the General, Debt Service, and Enterprise Funds are included in
the annual appropriated budget. The level of budgetary control (the level at which expenditures cannot
legally exceed the appropriated amount) is the total approved budget for each department.
As demonstrated by the statements and schedules included in the financial section of this report, the City
continues to meet its responsibility for sound financial management.
General Government Functions. The revenue from the general, special revenue, and debt service funds, and
the amount and percentage of increases and decreases in relation to prior year revenue, is summarized in the
following schedule:
Revenue Source
Property taxes and penalties
Sales and hotel/motel taxes
Franchise and gross receipts taxes
Licenses and permits
Fines and forfeitures
Intergovernmental
Charges for services
Interest
Other
2001 2000
2001 Percent 2000 Percent Increase
Amount of Total Amount of Total (Decrease)
10,833,292 41.4 9,272,373 42.5
4,862,571 18.6 3,745,460 17.2
2,303,730 8.8 2,022,789 9.3
1,896,728 7.2 1,469,799 6.7
856,641 3.3 731,959 3.4
333,677 1.3 318,631 1.5
3,202,767 12.2 3,061,545 14.0
416,572 1.6 488,484 2.2
1,491,941 5.7 687,003 3.2
26,197,919 100.0 21,798,043 100.0
1,560,919
1,117,111
280,941
426,929
124,682
15,046
141,222
(71,912)
804,938
4,399,876
Percent of
Increase
(Decrease)
16.8
29.8
13.9
29
17
.47
.046
(14.7)
117
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The most significant percentage increase in revenue was derived from Licenses and Permits. This was due
primarily to the continued growth of the city and related building permits. The percentage changes between
the "interest" and "other" line items offset each other.
Allocations of property tax levy by purpose for 1999-2000 fiscal year and the preceding two fiscal years are
as follows (amount per $100/assessed value):
Purpose
2001 2,000
1,999
General Fund
General Obligation Debt
Total Tax Rate
0.435
0.260
0.695
0.440
0.255
0.695
0.440
0.255
0.695
The expenditures for the general, special revenue, and debt service funds and the amount, and percentage of
increases and decreases in relation to the prior year expenditures, are summarized in the following schedule.
Function
General
Government
Public Safety
Public Works
Community
Services
Debt service
2001
Amount
$ 4,235,344
6,692,138
5,974,667
2,662,369
2001
Percent of
Total
18.5
29.3
26.2
11.7
2000
Amount
$ 3,971,691
5,952,191
5,635,397
1,781,610
2000
Percent of
Total
19.1
28.6
27.1
8.6
Increase Percent of
(Decrease) Increase
(Decrease)
$ 263,653 6.6
739,947 12.4
339,270 6.0
870,759 4.9
3,275,682 14.3 3,436,061 16.5 160,379 4.7
Enterprise Operations.
System.
7
.0%
Water and Sewer System Operatingi rease in towth and annexotaled 0ationscompared
Comparative6,031 last year, a d to for the past increase. The increase is due
fiscal years are presented in the following schedule.
2000-01 1999-00
The govemment's enterprise operations are comprised of the Water and Sewer
Operating revenues
Operating expenses (before
depreciation)
Operating income (before
depreciation)
Number of customers
$ 7,453,484
4,946,621
2,806,863
11,780
$ 7,146,031
3,899,289
3,246,742
11,000
Debt Administration. The ratio of net debt to assessed valuation and the amount of bonded debt per capita
are useful indicators of the City's debt position to municipal management, citizens, and investors. These
data for the City of Pearland at September 30, 2001, are presented in the statistical section of this report.
t"
The City's assigned "insured" bond ratings on its most recent issue were as follows:
Mom Standard & Poors
Revenue Bonds AAA AAA
Tax Bonds AAA AAA
Cash Management. Cash, temporarily idle during the year, was invested in certificates of deposit ranging
from 60 to 365 days to maturity. Certificate of deposit and cash amounts which exceed FDIC coverage are
collateralized by securities owned by the City's depository. All investments held by the City during the year
and at September 30, 2001, are classified in the category of lowest credit risk as defined by the
Governmental Accounting Standards Board.
Risk Management. During 2000-01, the City continued an aggressive risk management program for
worker's compensation. Various risk control techniques, including employee accident prevention training,
have been emphasized during the year in order to minimize accident -related losses.
OTHER INFORMATION
Independent Audit. The City Charter requires an annual audit of the books of account, financial records,
and transactions of all administrative departments of the City by an independent certified public accountant.
The accounting firm of Pattillo, Brown and Hill, L.L.P. was selected by the City Council to perform this
years audit. This requirement has been complied with, and the auditors' opinion has been included in this
report.
Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Pearland for its
Comprehensive Annual Financial Report for the fiscal year ended September 30, 2000. This was the twenty
fourth consecutive year that the City has received this prestigious award.
In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable
and efficiently organized comprehensive annual financial report, whose contents conform to program
standards. Such reports must satisfy both generally accepted accounting principles and applicable legal
requirements.
7 A Certificate of Achievement is valid for a period of one year only. We believe our current report continues
L to conform to Certificate of Achievement Program requirements and we are submitting it to GFOA to
determine its eligibility for another certificate.
_i; In addition, the
government
also received the GFOA's Award for Distinguished Budget Presentation, the
fourteenth consecutive year for its annual appropriated budget dated September 13, 2000. In order to qualify
for the Distinguished Budget Presentation Award, the government's budget document was judged to be
i proficient in several categories including policy documentation, financial planning, and organization.
044
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Acknowledgments. We would like to express our appreciation to all members of the Finance and
Administration Department who assisted and contributed to its preparation. We would also like thank the
Mayor, members of the City Council, and City Manager for their interest and support in planning
conducting the financial operations of the City in a responsible and progressive mariner.
Re • ectfully submitted,
y Caus
ctor of j nance
March 15, 2001
C
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pearland,
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2000
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in govemment accounting
and financial reporting.
/4114lt°
Pr sident
Executive Director,
CITIZENS
t'
(MUNICIPAL JUDGES
ECONOMIC
DEVELOPMENT
CITY COUNCIL
CITY MANAGER
CITY ATTORNEY
FINANCE
ACCOUNTING H
PURCHASING I -
(UTILITY BILLING -
INFORMATION
SYSTEMS
FIRE MARSHAL/
EMERGENCY
MANAGEMENT
FIRE
EMERGENCY
MEDICAL
SERVICES
PARKS &
RECREATION
RECREATION
L' PARKS/ BUILDING MAINTENANCE
f
COMMUNITIY
CENTER
KNAPP BUILDING
CUSTODIAL
DEPUTY CITY
MANAGER
ENGINEERING
PROJECTS
PUBLIC WORKS
FLEET
MAINTENANCE
STREETS AND I
DRAINAGE
WATER
PRODUCTION
AND
WASTEWATER
TREATMENT
WATER AND
WASTEWATER
DISTRIBUTION
AND
COLLECTION
WATER AND
WASTEWATER
CONSTRUCTION
POLICE
CRIMINAL
INVESTIGATION
DIVISION
CIVILIAN
COMMUNITY
SERVICE
PATROL
EXECUTIVE
DIRECTOR OF
ADMINISTRATIVE
SERVICES
SECRETARY
HUMAN 1
RESOURCES
I MUNICIPAL
COURT
COMMUNITY
Il DEVELOPMENT
ANIMAL
CONTROL
BUILDING
INSPECTION
CODE
ENFORCEMENT
PLANNING AND
ZONING
GRANTS/PUBLIC
AFFAIRS
CITY OF PEARLAND, TEXAS
List of Principal Officials
As of September 30, 2001
Elected Officials
Tom Reid Mayor
Larry Marcott (Position 4) Council Member,
Mayor Pro Tem
Richard Tetens (Position 1) Council Member
Woody Owens (Position 2) Council Member
Larry Wilkins (Position 3) Council Member
Klaus Seeger (Position 5) Council Member
Appointed Officials
Bill Eisen City Manager
Young Lorfing City Secretary
Darrin Coker City Attorney
Page 1 of 2
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CITY OF PEARLAND, TEXAS
List of Principal Officials
As of September 30, 2001
Page 2 of 2
Executive Managers
Vacant Executive Director of P.E.D.C.
Jimmy Causey Director of Finance
Chris Doyle Police Chief
Larry Steed Fire Marshal/Emergency
Management Director
Tobin Maples Manager of Administrative Serv.
Ed Hersh Director of Parks & Recreation
Glenn Chaney Municipal Court Judge
Roy Simmons Municipal Court Judge
Edward Sillas Municipal Court Judge
Floyd Myers Municipal Court Judge
tlymi
re-
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and Members
of the City Council
City of Pearland, Texas
We have audited the accompanying general purpose financial statements of the City of Pearland,
Texas, as of and for the year ended September 30, 2001, as listed in the table of contents. These general
purpose financial statements are the responsibility of the City's management. Our responsibility is to
express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general
purpose financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall general purpose financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all
material respects, the financial position of the City of Pearland, Texas, as of September 30, 2001, and the
results of its operations and the cash flows of its proprietary fund type for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the general purpose financial
statements taken as a whole. The combining and individual fund and account group financial statements
and schedules listed in the table of contents are presented for purposes of additional analysis and are not a
required part of the City's general purpose financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion,
is fairly presented in all material respects in relation to the general purpose financial statements taken as a
whole.
401 WEST HIGHWAY 6 ■ P.O. BOX 20725 • WACO, TX 76702-0725 ■ (254) 772-4901 ■ FAX: (254) 772-4920 Is www.pbbcpa.com
AFFIi.1ATE OFFICES: BROWNS E, TX
(951 )5 4 7' 78 IN ■ LSBOR O, TX (254) (505) 898• 5 TEMPLE, TX (254) 791-3460
GENERAL PURPOSE FINANCIAL STATEMENTS
CITY OF PEARIAND TEXAS
COMBINED BALANCE SHEE -ALL FUND TYPES,
ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT
September 30,2001
wtth comparative totals for September 30, 2000
General
Assets and Other Debits
Proprietary
Governmental Fund Types Fund Type
Special Debt Capital Enterprise
Revenue Service Projects Fund
Assets
Cash and cash equivalents 7,013,997 800,021 1,579,418 2,757,104 25,017,902
Investments
Receivables: 186,326Propertytaxers 364,222
Accounts Receivable 230,060 162,917 - 187,841 1,313,490
Less:Allowance for estimated uneollectibles (65,590) - (115,883)
Taxes 1.937,737 41,649
Accrued interest
Due from other fiords 251,721 104,605 1,541,676 31,549
Inventories 51,915
Restricted assets 444,949
Cashand cash equivalents ,949
Deferred charges 11,444657,287
Construction under progress
Fixed assets (net where applicable 24�23,738
of accumulated depreciation)
Other Debits
Amount available for debt service
Amount to be provided for retirement of
general long-term debt 1,765,744 4,486 621 63,138,458
Total Assets and Other Debits 9,784,068 • 1,067,544
Liabilities, Equity, and Other Credits
Liabilities
Accounts payable 565,962 1,066 34,432 675320,991
,225
24,032 - 132,292
Accrued liabilities 192,163 141,676 63,008
Due to other fiords 1,486,769 ,913
Security deposits 62- - 623,913
Accrued compensated absences 551,048 -
Deferred revenue 592,314 13,631 186,326 15.966
- 52,002
Deferred issurance cost 645
,00
0
Current portion - revenue bonds
Certificates of obligation 32 495,000
Revenue bonds -less current portion
Obligaticrns under capital leases
General obligation bonds
Total Liabilities 3,220,125 206,860 220,758 832,867 34,563.3
Equity and Other Credits 22 233,110
Contributed capital
Investment in general fixed assets 6 341,950
Retained earnings
Frmd Balances: 961,855
Reserved forenatmbrances 471,659
Reserved for inventories and prepaid items
Unreserved: 1,544 987
Designated for debt service 860 684 2,691,899
Designated for subsequent years' expenditures
- Undesignated 6,092,283
Total Equity and Other Credits 6,563942 860,684 1,544,987 3,653,754 28,575,060
Total Liabilities, Equity, and Other Credits
See Notes to Financial Statements.
9,784,068 1,067,544
1,765,744 4,486,621 63,138,458
Exhibit 1
Totals
Primary Discretely
Account Groups Government Presented Totals
General General Long- (Memorandum Component (Memorandum Only)
Fixed Assets Term Debt Only) Units Sept. 30,2001 Sept 30.2000
54,639,165
54,639,165
54,639,165
1,544,987
28,308,383
29,853,370
54,639,165
54,639,165
1,488,646
15,680,000
74,724
12,610,000
29,853,370
37.168,443
550,548
1,894,309
(181,473)
1,937,737
41,649
1,929,551
51,915
444,949
657,777
11,423,287
78,962,903
1,544,987
28,308,383
4,064,935
479,643
271,274
55,403
4,668,528
164,734,970 9,539,783
29,853,370
1,597,675
156,324
1,883,616
623,913
2,270,886
808,237
52,002
645,000
15,680,000
32,495,000
74,724
12,610,000
68,897,378
22,233,111
54,639,165
6,341950
1,433,514
1,544,987
3,552,583
6,092,283
41,233,378 44,192,053
550,548
2,373,952
(181,473)
1,937,737
41,649
2,200,825
51,915
444,949
657,777
11,423,287
79,018,306
1,544,987
32,976,911
479,170
1,614,714
(147,611)
242,178
195.096
674,041
51,678
425,136
503,652
78,269,995
681,148
35,638,251
174,274,748 162,819,511
8,544 1,606,219 2,601,686
9,996 166,320 344,235
271,274 2,154.890 674,041
623,913 528,630
18,528 2,289,414 1,559,010
808,237 510,736
52,002
645,000 680,000
15,680,000 16,210,000
32,495,000 33,140,000
74,724 381,250
4,650,000 17,260,000 18,410,000
4,958,342 73,855,720 75,039,588
55,403
4,526,038
95,837,593 4,581,441
164,734,970 9,539,783
22,233,111 18,054,250
54,694,568 49,389,680
10,867,988 5,207,320
1,433,514 2,555,094
1,544,987 681,148
3,552,583 3,456,988
6,092,283 8.435,443
100,419,034 87,T19,923
174,274,748 162,819,511
CITY OF PEARLAND. TEXAS
COMBINED STATEMENT OF REVENUES, EXPENDITURES. AND
CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
Year Ended September 30, 2001
with comparative totals for Year Ended September 30, 2000
Governmental Fund Types
General
Spedal Debt Capes
Revenue Service Projects
Revenues
Property taxes and panties 6,784,591 4,048,701
Othertatee 4,810,098 52,473
Licenses and permits 1,896,728
Fines and forfeitures 856,641
Frmcbise fees 2,303,730
Charges for services 3,202,767
revenues 333,677
Other revenues 848,712 454,629 90,820 567,146
Total Revenues 20,703,267 840,779 4,139,521 567,146
Expenditures
Current:
General went 4,217,744 17,600
Public safety 6,692,138
Public works 5,974,667
Minty services 2,043,620 618,749
Economic Development
4,516,726
Capital Outlay
Debt Service
Principal retirement 1,680,000
lnterest and fiscal charges 1,595,682
TotalExpenditmes 18,928,169 636,349 3,275,682 4,516,726
Revenues Over (Under) Expenditures 1,775,098 204,430 863,839 (3,949,580)
Other Financing Sources (Uses)
Operating tranafots infirm enterprisefunds 700,000
Opasting transfers (out) (2,427,285) 52,794 2,388,132
Operating transfers in from component unit (P.E.D.C.) 110,000 212,768
Operating transfers/transfer to enterprises fund
Proceeds from lease financing
Grant
Total Other Financing Solaces (Uses)
Revenues and Other Financing Sources
Over (Under) Expenditures and
Other Financing (Uses)
Fund Balancers -Beginning
Prior Period Adjustment
Fund Balances - Ending
(1,617,285)
157,813
5,205,209
1,200,920
30,000
52,794 2,630,900
257,224
603,462
863,839 (1,318,679)
681,148 5,114,075
6,563,942 860,684 1,544,987 3.653,754
Totab Discretely
(Memorandum Only) Pntsented
Primary Government Component units
10,833,292
4,862,571
1,896,728
856,641
2,303,730
3,202,767
333,677
1,961,306
26,250,713
4,235,344
6,692,138
5,974,667
2,662,369
4,516,726
1,680,000
1,595,682
27,356,926
(1,106,214)
700,000
13,641
322,768
Total Reporting Entity
(Memorandum Only)
2001
Eshlblt 2
2000
2,397,275
407,317
1,036,409
(69,805)
11,603,894
1,200,920
2,804,592
1,079,177
403,722
370,616
11,534,089
1,853,515
951,077
(322,761)
10,833,292
7,259,846
1,896,728
856,641
2,303,730
3,202,767
333,677
2,368,623
(322,761)
628,309
3,524,782
372,948
29,055,305
4,235,344
6,692,138
5,974,667
2,662,369
1,079,177
4,920,448
2,050,616
1,595,682
29,210,441
4,526,038
(155,137)
700,000
13,641
7
9,272,373
5,587,378
1,469,799
731,959
2,022,789
3,061,545
318,631
2,684,796
- 713,648
558,504
15,128,676
1,573,868
25,149,270
3,971,691
5,952,191
5,635,397
1,781,610
531,969
2,380,880
1,695,000
1,741,061
23,689,799
1,459,471
16,060,127
1,575,967
(922,967)
223,880
876,880
Z336,351
12,792,321
15,128,672
Arvenues
Property taxes and penalties
Other taxes
Lioenscs end permits
Finn and forfeitures
Franchise fees
Charges for services
Iatergovenunenulrevenues
Other revenues
Tout Revenues
grY OF PEARLAND. TFXAI
=INED STATEMENT OF REVENUES. EXPENDITURES. AND
MANGES IN FUND BALANCES - BUDGET AND ACTUAL -
GE'NERALANA DEBT SERVICE FUNDS
Year Ended September 30, 2001
General Fund
Variance
Favorable
Bud et Actual (Unfavorable)
7,013,350 6,784.591 (228,759)
4,237,100 4,110,098 572,298
1,097.500 1,696,72g 799.228
759,700 156,641 96.941
2,012,000 2,303,730 291.730
3.273,550 3,202.767 (70.763)
130,000 (130,000)
639,775 848,712 208.937
19,163,675 20,703,267 1,539,592
Expenditures
Current:
General government 4,115,321 4,217,744
Public safety 7,019,360 6,692,138
Public works 6,122,015 5,974,667
Community services 2,033,143 2,043,620
Debt Savior:
Principal retirement
Interest and fiscal agent foe
Tout Expenditures 19,359,912 _ 11.921.169
Other Financing Sources
Operating Vandars in 700,000 700,000
Operating tratnfen (out) (974,491) (2,427.285)
Operating in front component unit (P.E.D.C.) 110,000 110,000
Total Other Financing Sourea(Usea) (164,491) (1,617,295)
Revalues and Other Financing
Souroos Over (Ut+ )
Expenditures
Fund Balances - Beginning
Prior Period Adjustment
Fund Balances - Ending
See Nola to Financial Statements,
(360.728)
5405,209
157,813
5,205,209
1,200,920
(32,420)
327,222
147,411
(10,477)
431,743
(1,452,794)
(1,452,794)
518,541
1,200,920
1,719,161
4,944.481 6,563,942 ��
Debt >ierelce Fund
Budget Actual
4,153,1156 4,041,701
•
53,000 90,1120
4.206 156 4,139,521
1,680,000
2.409,600
1.6110,000
1,595,682
4,089,600 3,275,682
50,000
50,000
167,256
681,148
863.139
681,148
1rSM,9l7
Variance
Favorable
(Unfavorable)
(105,155)
37,120
67,335)
813,918
813.918
(50,000)
746,583
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CITY OF PEARLAND. TEXAS
COMBINED STATEMENTS OF REVENUE& EXPENSES, AND
CHANGES IN RETAINED EARNINGS -
PROPRIETARY FUND TYPES (ENTERPRISE FUND)
Year Ended September 30, 3001
Oce(jnp¢Bevenues
Water & sewer sales and services
Other revenue
Total Operating Revenues
Opera tlnsagperues
Production and wastewater
Distribution and oolloction
Accounting and collection;
Other requirements
Construction
Total Operating Exper:aes
Operating Income Bef re Depreciation
Depreciation
Operating Income
Non -Opera tin= Revenue
Earnings on investments
ln/etrol and "'cal charges
Total Non -Operating Revenues (Expenses)
Operating Transfers In (041
Operating transfers in
Operating transfers (out)
Net transfer in (out)
Net Income
Retained Earnings - Beginning
Prior Period Adjustment
Retained Earnings - Ending
! " See Notes to Financial Statements.
i
Enterprise
Exhibit 4
7,360,207
93.277
7,453,484
2.636,816
699.535
366.716
245.082
998,472
4,946.621
2,506,863
1.080,173
1,426,690
(282.596)
400,774
(700.000)
(299.226)
844,869
5,207.320
289,759
S
6,341,950
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CITY OF PEARLAND, TEXAS
COMBINED STATEMENTS OF CASH FLOWS -
PROPRIETARY FUND TYPES (ENTERPRISE FUND)
Year Ended September 30, 2001
Exhibit 5
Enterprise
Cash Flows from Operating Activities
1.426,690
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation expense 1,080,173
Changes in Assets and Liabilities:
(increase) in accounts receivable (111,059)
Increase (decrease) in due from other fund 528,915
Increase in customer deposits 95,283
Increase (decrease) in accounts payable (1,238,258)
Increase (decrease) in accrued compensated absences 59,517
(Decrease) in accrued liabilities 41,592
Net Cash Provided by Operating Activities 1,882,854
Cash Flows from Noncapital Financing Activities
400,774
Operating transfers in (700,000)
Operating transfers (out)
(299,226)
Cash Flows from Capital and Related F'mancine Activities
Contributed capital - impact fees
Purchase of fixed assets
Revenue bond principal payments
Capital lease principal payments
Deferred issurance cost
Cash Flows from Investing Activities
Interest on investments
Interest payments on revenue bonds
Prior period adiustment
Net (decrease) in cash
Cash and Cash Equivalents - Beginning
Cash and Cash Equivalents - Ending
Cash
Restricted Cash
Cash and Cash Equivalents - Ending
See Notes to Financial Statements.
4,178,860
(7,946,883)
(585,000)
(102,123)
(4,455,146)
1,374,843
(1,556,331)
(181,488)
289,759
(2,763,247)
28,226,104
5 25,462,851
25,017,902
444,949
5 25,462,851
L
1,1
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Pearland, Texas, was incorporated in December 1959 and adopted the "Home Rule Charter"
February 6, 1971, pursuant to the laws of the State of Texas. The City operates under a "Council -Manager"
form of government and provides services authorized by its charter. Presently, these services include police
and fire protection, water and sewer services, drainage, sanitation, building and code inspection, planning,
zoning, engineering, street repair and maintenance, park maintenance, recreational activities for citizens, and
general administrative services.
The financial statements of the City of Pearland have been prepared in conformity with generally accepted
accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards
Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial
reporting principles. The more significant of the City's accounting policies are described below:
A. Reporting Entitv
The City is an independent political subdivision of the State of Texas, governed by an elected mayor and
five member council, and is considered a primary government. As required by generally accepted
accounting principles, these general purpose financial statements have been prepared based on
considerations regarding the potential for inclusion of other entities, organizations, or functions as part
of the City's financial reporting entity. The Pearland Economic Development Corporation (PEDC.) has
been included in the City's financial reporting entity as a discretely presented component unit. The City
is considered a primary government for fmancial reporting purposes and its activities are not considered
a part of any other governmental or other type of reporting entity.
Considerations regarding the potential for inclusion of other entities, organizations, or functions in the
City's financial reporting entity, are based on criteria prescribed by generally accepted accounting
principles. These same criteria are evaluated in considering whether the City is a part of any other
governmental or other type of reporting entity. The overriding elements associated with prescribed
criteria considered in determining that the City's financial reporting entity status is that of a primary
government are that it has a separately elected governing body; it is legally separate; and it is fiscally
independent of other state and local governments. Additional prescribed criteria under generally
accepted accounting principles include considerations pertaining to organizations for which the primary
government is financially accountable; and considerations pertaining to other organizations for which
the nature and significance of their relationship with the primary government are such that exclusion
would cause the reporting entity's financial statements to be misleading or incomplete.
As required by generally accepted accounting principles, the fmancial statements of the reporting entity
include those of the City of Pearland (the primary government) and its component units, entities for
which the City is considered to be financially accountable. Blended component units, although legally
separate entities, are, in substance, part of the government's operations and so data for these units would
be combined with data of the City. The City has no blended component units. The City's discretely
presented component unit is reported in a separate column in the combined financial statements.
r
i
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
A. Reporting Entity (continued)
Discretely Presented Component Unit:
The component units in the combined financial statements include the financial data of the City's
component units. They are reported in a separate column to emphasize they are legally separate from
the City. The City Council appoints the board members for the Pearland Economic Development
Corporation. The City Council appoints several members to the Tax Increment Reinvestment Zones
with the remaining members being appointed in accordance with state law.
1. The Pearland Economic Development Corporation (PEDC) is responsible for economic
development with the City's jurisdiction. The PEDC is fiscally dependent upon the government
because, besides appointing the board, the City Council also must approve the PEDC's budget
and any debt issuances.
2. The two Tax Increment Reinvestment Zone's (TIRZ #1 and TIRZ #2) provide tax assisted
property development and/or redevelopment in specific geographic areas in accordance with
applicable state laws. Besides appointing board members, the City Council must also approve
the TIRZ's budgets and any debt issuances.
The following page presents condensed financial statements for each of the three discretely presented
component units. Additional financial information may be obtained from their respective administrative
offices at the following address:
Pearland Economic Development Corporation
Or
Tax Increment Reinvestment Zones
3519 Liberty Drive
Pearland, Texas 77581-5416
OF EAR ND, TE CA
NOTES O FINAN STATEME 1LTS
September 30, 2001
J4OTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cogtinuedd
Condensed financial statements of each discretely presented component unit are as follows:
Economjc Tax Increment Tax Increment
Development Reinvestment Reinvestment
Corporation Zone #1 Zone 02 Totsb
Condensed Balsnse Sheet
Assets:
Current Assets 4,046,262 18,673 4,064,935
Accouts Receivable 479,643 - 479,643
Due from other fiord 271,274 271,274
Fixed assets 55,403 - 55,403
Amount to be provided for
retirement of long -tent debt 4,668,528 4 668,528
Total Assets 9,521,110 18,673 9,539,7113_
liabilities:
Current Liabilities 37,068 37,068
Due to other fund .. 271,274 271,274
General long-term debt 4,650,000 - 4,650,000
Total liabilities 4,687,068 271,274 4,958,342
Fund Equity:
investment in fixed assets 55,403 - 55,403
Fund balance, unreserved 4,778,639 18,673 (271,274) 4,526,038
Total Equity 4,834,042 18,673 (271,274) 4,581,441
Total Liability and Equity 9,521,110
Revenues
18,673 9,539,783
Condensed Statements of avenues. E:uoendltures. and Cha in Eual�
2,563,091 175,137 66,364
2,804,592
Expenditures
Current 537,625 225,000 316,552 1,079,177
Capital outlay 403,722 - - 403,722
Debt service 370,616 370,616
Total expenses 1,311,963 225,000 316,552 1,853 15
Excess (Deficiency) of Revenues
Over(Under) Expenditures 1,251,128 (49,863) (250,188) 951,077
Other Financing uses
Operating transfers out to
primary government (322,768) _ (322,768)
Excess of Revenues and Other
Sources Over Expenditures and Other uses 928,360 49,863) (250,188) 628,309
Fund Equity, Beginning of Year 3,477,332 68,536 (21,086) 3,524,782
Prior period adjustment
Fund Equity, End of Year
372,948
s..s. 4'778,639
372,948
18,673 (271,274) 4,526,037
[11
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
B. Fund Accounting
The City uses funds and account groups to report on its financial position and the results of its
operations. Fund accounting is designed to' demonstrate legal compliance and to aid financial
management by segregating transactions related to certain government functions or activities.
A fund is a separate accounting entity with a self -balancing set of accounts. An account group, on the
other hand, is a financial reporting device designed to provide accountability for certain assets and
liabilities that are not recorded in the funds because they do not directly affect net expendable available
financial resources. The following is a description of the various funds and account groups:
Governmental Fund Types
General Fund
The General Fund is used to account for all financial transactions not properly includable in other
funds. The principal sources of revenues of the General Fund are property taxes, sales and use
taxes, franchise fees, permit fees, and fines and forfeitures. Expenditures are for general
government, finance, public safety, public works, park maintenance and recreation, municipal court,
planning and zoning, and engineering.
Special Revenue Funds
The Special Revenue Funds are used to account for all financial transactions for the Regional
Detention, Hotel/Motel Tax, Police, Federal Police, Community Service Funds, and special grant
revenues where the funds are for specific uses.
Debt Service Fund
The Debt Service Fund is used to account for the payment of interest and principal on all general
obligation debts of the City. The primary source of revenue for debt service is local property taxes.
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B. Fund Accounting (continued)
Capital Projects Funds
The Capital Projects Funds are used to account for the proceeds from the sale of general obligation
bonds and certificates of obligation and expenditures of these proceeds for the acquisition of fixed
assets as designated in each bond issue.
Proprietary Fund Types
Enterprise Fund
The Enterprise Fund is used to account for those operations that are financed and operated in a
manner similar to private business or where the Council has decided that the determination of
revenues eamed, costs incurred, and/or net income is necessary for management accountability. The
Enterprise Fund is used to account for the City's water and sewer service operations.
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
Account Groups
General Fixed Assets Account Group
General fixed assets are not capitalized in the funds used to acquire or construct them. Instead,
capital acquisition and construction are reflected as expenditures in governmental funds, and the
related assets are reported in the general fixed asset account group. All purchased fixed assets are
valued at cost. Donated fixed assets are valued at their estimated fair market value on the date
received.
The costs of normal maintenance and repairs that do not add to the value of the asset, or materially
extend asset lives, are not capitalized. Improvements to fixed assets are capitalized. Assets in the
general fixed asset group are not depreciated. Interest is not capitalized on general fixed assets
acquired through the issuance of tax exempt debt. Public domain (infrastructure) general fixed
assets, consisting of roads, bridges, curbs and gutters, streets, and drainage systems, are capitalized.
General Long -Term Debt Account Group
This account group is used to account for the City's long-term liabilities, which include general
obligation bonds, certificates of obligation and obligations under capital leases due at varying dates
through 2020, and the long-term liability for employees' accrued compensated absences.
C. Basis of Accounting
The accounting and financial reporting treatment applied to a fund is determined by its measurement
focus. All governmental funds are accounted for using a current financial resources measurement focus.
As such, only current assets and current liabilities generally are included on the balance sheet.
Operating statements of these funds present increases (revenues and other financing resources) and
decreases (expenditures) in net current assets.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Basis of Accounting (continued)
The proprietary fund type and component unit are accounted for on a flow of economic resources
measurement focus. With this measurement focus, all assets and all liabilities associated with the
operation of the funds are included on the balance sheet. Fund equity (net total assets) is segregated into
contributed capital, if applicable, and retained earnings components. Proprietary fund -type operating
statements present increases (revenues) and decreases (expenses) in net total assets.
The modified accrual basis of accounting is used by the governmental fund types. Under the modified
accrual basis of accounting, revenues are recognized when susceptible to accrual (when they become
both measurable and available). "Measurable" means the amount of the transaction can be determined
and "available" means collectible within the current period or soon enough thereafter to be used to pay
liabilities of the current period. The City considers the majority of its major revenues as available when
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
collected. Expenditures are recorded when the related fund liability is incurred. Principal and interest
on general long-term debt are recorded as liabilities when due.
Those revenues susceptible to accrual under the modified accrual basis are property taxes and other
taxes (primarily sales taxes), franchise fees, intergovernmental revenue, and interest revenue. Licenses
and permits and fines and forfeitures revenues are not susceptible to accrual because generally they are
not measurable until received in cash.
The City recognized deferred revenue on its balance sheet. Deferred revenue arises when potential
revenue does not meet both the "measurable" and "available" criteria for recognition in the current
period.
The accounts of the proprietary fund type and component unit are maintained, and the financial
statements have been prepared, on the accrual basis of accounting. Under this basis, revenues are
recognized when they are earned and expenses are recognized when they are incurred. The proprietary
fund type and component unit follow generally accepted accounting principles prescribed by the
Governmental Accounting Standards Board (the GASB) and all Financial Accounting Standards Board's
standards issued prior to November 30, 1989. Subsequent to this date, the City accounts for its
proprietary fund type and component unit as prescribed by the GASB.
D. Budgets
Annual budgets are adopted for the General and Debt Service Funds. The City does not legally adopt an
annual budget for the Special Revenue and Capital Project Funds. The City adopts project budgets for
the Capital Projects and Special Revenue Funds, which are revised annually.
These budgets are created by ordinance and include all sources and uses of funds as approved by
Council. All annual budgets are prepared on a basis consistent with generally accepted accounting
principles (GAAP).
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D. Budgets (continued)
Encumbrance accounting is utilized in all governmental fund types. Encumbrances for materials, other
goods, and purchased services are documented by purchase orders or contracts. Encumbrances
outstanding at year-end do not constitute expenditures or liabilities. The City generally honors these
commitments, and it has been the City's practice to increase the subsequent year's appropriations to
complete these transactions. At year-end, the City reserved a portion of fund balance for outstanding
encumbrances of $254,410 in the General Fund and $2,123,466 in the Capital Projects Fund.
E. Cash and Temporary Investments
Cash and temporary investments consist of amounts in an interest bearing time deposit account, petty
cash funds, Texpool and Lone Star Investment Pool. Texpool and Lone Star Investment Pool are
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
external investment pools established by interlocal contract under state law. Investments are stated at
fair value based on quoted market prices at September 30, 2001. The net increase or decrease in the fair
value of investments is recorded as investment earnings. Investments are generally held to maturity.
The City pools cash resources of its various funds to facilitate the management of cash. Cash applicable
to a particular fund is readily identifiable. The balance in the pooled cash accounts is available to meet
current operating requirements. Cash in excess of current requirements is invested in various interest -
bearing securities and disclosed as part of the City's investments. The City pools excess cash of the
various individual funds to purchase investments. These pooled investments are reported in the
combined balance sheet as investments in each fund based on each fund's share of the pooled
investments. Interest income is allocated to each respective individual fund monthly based on its
respective share of pooled investments.
F. Receivables
All trade receivables are shown net of an allowance for uncollectibles.
Property taxes are recorded as revenue when levied for the current year and due, payable, and collected
in the current year. Uncollected amounts at year end are reported as deferred revenue. Property taxes
collected within sixty days subsequent to September 30, 2001, were not considered, material.
G. Interfund Receivables and Pavables
During the course of operations, transactions occur between individual funds for specified purposes.
These receivables and payables are classified as "due from other funds" or "due to other funds" on
the combined balance sheet.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
H. Use of Estimates
The preparation of financial statements, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues, expenditures, and expenses during the reporting period. Actual results
could differ from those estimates.
I. Use of Estimates
Inventory, which consists of gasoline and auto parts for use in the City's vehicles, is stated at cost (first -
in, first -out method). Expenditures are recognized as the fuel and auto parts are used.
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
J. Restricted Assets
Certain proceeds of Enterprise Fund revenue bonds, as well as certain resources set aside for their
repayment, are classified as restricted assets on the combined balance sheet because their use is limited
by applicable bond covenants.
K. Compensated Absences
Compensated absences, which include unpaid vacation, sick, and other employee benefit amounts, are
accumulated during employment. Amounts accumulated are paid to employees upon separation from
City service. Under the modified accrual basis of accounting, such amounts are recorded in the General
Long -Term Debt Account Group net of amounts expected to be liquidated with expendable available
financial resources at the end of the fiscal year, which are recorded as expenditures of the General Fund.
Compensated absences are accrued when incurred in the proprietary funds and recorded as a fund
liability.
L. Fund Equity
Contributed capital is recorded in Proprietary Funds that have received capital grants or contributions
from developers, customers, or other funds. Reserves represent those portions of fund equity not
available for expenditure or legally segregated for a specific future use. Designations of fund balance
represent tentative management plans that are subject to change.
M. Cash and Cash Equivalents
For the purpose of the Statement of Cash Flows, the Proprietary Fund Type and component unit
consider all investments with original maturities of three months or less from the date of acquisition to
be cash equivalents.
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
N. Total Columns on Combined Statements
Total columns on the combined statements are captioned (Memorandum Only) to indicate that they are
presented only to facilitate financial analysis. Data in these columns do not present financial position or
results of operations for the City as a whole in conformity with generally accepted accounting
principles.
NOTE 2 - BUDGETARY COMPLIANCE
The City Manager, on or before the tenth day of July of each year, shall submit to Council a proposed
budget. The Council shall review the proposed budget and revise as deemed appropriate prior to
circulation for public hearing.
After the public hearing, the Council may adopt the budget with or without amendment. In amending
the budget, Council may add or increase programs or amounts and may delete or decrease any amount,
except expenditures required by law or for debt or for estimated cash deficits, provided no amendments
to the budget shall increase the authorized expenditures to an amount greater than the total of estimated
income plus funds available from prior years.
The Council shall adopt the budget by the 15th of September of each year. Adoption of the budget shall
constitute appropriation of the amounts specified therein as expenditures and shall constitute a levy of
the property tax therein proposed.
Every appropriation lapses at the close of the fiscal year to the extent it has not been expended. Any
encumbered appropriation lapses at year-end but is generally reappropriated as part of the subsequent
year's budget. Expenditures may not legally exceed appropriations at the fund level. At any time during
the fiscal year, the City Manager may request Council to transfer by ordinance any unencumbered
appropriation balance between funds.
No significant supplemental appropriations were necessary during the year.
NOTE 3 - DEPOSITS (CASA) AND INVESTMENTS
The City's cash and investments are classified as cash and cash equivalents, investments, and restricted
cash and investments. The cash and cash equivalents include cash on hand, deposits with financial
institutions, short term investments in extemal public funds investment pool accounts Texpool and Lone
Star and other investments which have maturities at purchase date of less than three months. The
restricted cash includes cash on deposit with financial institutions. For better management of cash, the
City pools the cash, based on the City's needs, into either deposits in the bank, in short term investments
with Texpool, and Lone Star, or in longer -term investments in commercial paper or US Government
securities. However, each fund's balance of cash and investments is maintained in the books of the City.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 3 - DEPOSITS (CASH) AND INVESTMENTS (continued)
The Council has adopted a written investment policy regarding the investment of its funds as defined by
the Public Funds Investment Act (Chapter 2256 Texas Government Code). The investments of the City
are in compliance with the Council's investment policies. It is the City's policy to restrict its investments
to direct obligations of the U.S. Government, commercial paper, fully collateralized certificates of
deposit and other interest -bearing time and demand deposits, and other instruments and investments in
public funds investment pools such as the Texas Local Government Investment Pool (Texpool), and
Lone Star, special purpose trust companies authorized by the Texas Legislature in 1986. State law
provides that collateral pledged as security for bank deposits must have a market value of not less than
the uninsured amount of the deposits and must consist of (1) obligations of the United States of its
agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other
obligations, the principal and interest on which are unconditionally guaranteed or insured by the State of
Texas; and/or (4) obligations of states, agencies, counties, cities, and other political subdivisions of any
state having been rated as to investment quality by a nationally recognized investment rating firm and
having received a rating of not less than A or its equivalent.
Cash and Cash equivalents
At year-end, the City had cash on hand, bank deposits, deposits with Texpool ($24,166,199) and Lone
Star ($468) as follows:
Cash - Note 3
Cash
Cash Bank Equivalent
On Hand Deposits Investments Total
General 1,375 693,725 6,318,897 7,013,997
Special Revenue 785,021 15,000 800,021
Debt Service 84,577 1,494,841 1,579,418
Capital Projects 1,611,913 1,145,191 2,757,104
Enterprise 800 3,217,885 22,244,176 25,462,851
P.E.D.C. 623,324 3,441,611 4,064,935
$ 2,175 $ 7,016,445 $ 34,659,716 S 41,678,325
Credit Risk Categorization for Deposits
It is the City's policy for deposits to be 100% secured by collateral valued at market or par, whichever is
lower, less the amount of the Federal Deposit Insurance Corporation insurance. The City's pooled and
non -pooled deposits are categorized to give an indication of the level of risk assumed by the City at
September 30, 2001. The categories are described as follows:
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 3 - DEPOSITS (CASH) AND INVESTMENTS (continued)
Credit Risk Categorization for Deposits (continued)
Category 1- Deposits which are insured or collateralized with securities held by the City or by
its agent in the City's name.
Category 2- Deposits which are collateralized with securities held by the pledging financial
institution's trust department or agent in the City's name.
Category 3- Deposits which are not collateralized or collateralized with securities held by the
pledging financial institution or by its trust department or agent but not in the City's
name.
The City's deposits in banks of $6,827,728 at year-end were entirely covered by federal depository
insurance or by acceptable collateral held by the City's agent in the City's name.
The deposits in Texpool and Lone Star are not evidenced by securities that exist in physical or book
entry form and, accordingly, are not categorized by risk. However, the nature of these funds requires
that they be used to purchase investments authorized by the Public Funds Act. The primary objective of
these investment pools is to provide a safe environment for the placement of public funds in short-term,
fully collateralized investments.
n The State Comptroller of Public Accounts exercises oversight responsibility over Texpool, the Texas
' Local Government Investment Pool. Oversight includes the ability to significantly influence operations,
designation of management and accountability for fiscal matters. Additionally, the State Comptroller
has established an advisory board composed of both participants in Texpool and other persons who do
L. not have a business relationship with Texpool. The Advisory Board members review the investment
policy and management fee structure. Finally, Texpool is rated AAAm by Standard & Poors, as well as
the office of the Comptroller of Public Accounts for review.
Texpool and Lone Star operate in a mariner consistent with the SEC's Rule 2a7 of the Investment
Company Act of 1940. The pools amortized cost rather than market value to report net assets to
compute share prices. Accordingly, the fair value of the position in Texpool is the same as the value of
Texpool shares.
Fair value of investments are based on quoted market prices in accordance with GASB Statement No.
31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools.
The amount of increase or decrease in the fair value of investments during the year ended September 30,
2001 was not significant.
NOTE 4 - PROPERTY TAXES
Property taxes for each year are required to be levied by September 15 and are due upon receipt of the City's
tax bill and become delinquent on February 1 of the following year. On January 1 of each year, a tax lien is
attached to the property to secure the payment of all taxes, penalties, and interest. The lien exists in the favor
of the State and each taxing unit. Appraised values are established by the Central Appraisal District (CAD)
of Brazoria County, Texas, through procedures established by the Texas Legislature. The Pearland
Independent School District bills and collects the City's property taxes.
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30. 2001
NOTE 4 - PROPERTY TAXES (continued)
The procedure for collection of delinquent taxes is to send out delinquent notices and a letter and then
refer the delinquent accounts to the Tax Attorney for legal action. The Home Rule Charter requires the
foreclosure proceedings no later than two years after taxes first become delinquent.
A penalty of 7% is added to delinquent taxes on February 1 and increases 2% each month through
September. An additional penalty of 15% is added in July for attorney costs. There are no discounts
allowed in taxes.
The City is permitted, by Article XI, Section 5, of the State of Texas Constitution and the City Charter,
to levy property taxes up to $2.50 per $100 of assessed valuation for general governmental services.
Within the $2.50 maximum levy, there is no legal limit upon the amount of property taxes, which can be
levied for debt service. The property tax rates to finance general governmental services and debt service
for the 2000-2001 tax year were $.43500 and $.26000, respectively, per $100 of assessed valuation. The
2000 assessed value and total tax levy as adjusted through September 30, 2001, were $1,524,504,879
and $1,320,032,285, respectively.
The following is an analysis of the September 30, 2001, delinquent tax balances in the General and Debt
Service Funds, by year of levy.
General Debt Service
Year of Levy
Fund Fund Total
2000 175,429 78,967 254,396
1999 71,794 40,139 111,933
1998 31,569 17,650 49,219
1997 16,248 9,084 25,332
1996 9,665 5,404 15,069
1995 9,691 5,418 15,110
1994 12,389 7,376 19,765
1993 9,107 5,422 14,528
1992 2,901 1,727 4,628
1991 3,454 2,056 5,510
1990 and prior
21,975 13,083 35,058
$364,222
$186,326 $550,458
The City has enacted an ordinance providing for the exemption of $25,000 of the assessed value of
residential homesteads of persons 65 years of age or older from property taxes. This is provided by
Section 1-b(a) of Article 8 of the Constitution of Texas. Additionally, the market value of agricultural
land is reduced to agricultural value for purposes of the City's tax levy calculation.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 4 - PROPERTY TAXES (continued)
The 2000 assessed values, reduced by exempt property, exemptions, and reduction in market value of
agricultural land, were as follows:
Assessed valuation:
Real property
Personal property
Total Asessed valuation
1,615,785,700
181,888,920
1,797,674,620
Exempt property 126,057,730
Other Exemptions:
Over 65 homestead 41,735,614
Disabled veterans 1,461,190
Freeport
7,293,440
House Bill 366 5,060
Abatement
4,537,540
Pollution 45,510
• Prorated Exempt Property 313,593
Homestead Cap Adjustment 18,026,110
Agricultural use and historical exemptions 34,495,740
107,913,797
Net assessed valuations
$ 1,563,703,093
NOTE 5 - CHANGES IN FIXED ASSETS
The following is a summary of changes in general fixed assets for the year ended September 30, 2001:
Balance Balance
Oct 1, 2000 Additions Deletions Sept. 30, 2001
Land 1,513,277 93,809 1,607,086
Buildings
9,888,234 - - 9,888,234
Construction in progress 2,339,349 9,803,510 (6,181,313) 5,961,546
Improvements other than buildings
25,417,328 205,969 25,623,297
Machinery and equipment 10,176,089 1,382,913 11,559,002
49,334,277 11,486,201 (6,181,313) 54,639,165
Totals
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 5 - CHANGES IN FIXED ASSETS (continued)
The following is a summary of changes in the Enterprise Fund fixed assets for the year ended September 30,
2001:
Balance Balance
Oct. 1, 2000 Additions Deletions Sept. 30, 2001
Land 189,071 189,071
Equipment
2,324,538 262,411 - 2,586,949
Buildings and Improvements 28,429,956 4,406,107 32,836,063
Construction in Progress 8,144,921 6,676,394 (3,398,028) 11,423,287
39,088,486 11,344,912 (3,398,028) 47,035,370
Less allowance for 11,288
depreciation (10,208,171) (1,080,173) (11,288,344)
Totals 28,880,315 10,264,739 (3,398,028) 35,747,026
Depreciation on Enterprise Fund fixed assets is recorded using the straight-line method over the following
estimated useful lives of the assets:
Description Estimated Useful Lives
Equipment 5 to 10 years
Buildings and infrastructure 3 to 50 years
NOTE 6 - LONG-TERM DEBT
A. General Long -Term Debt
The following is a summary of general long-term debt transactions for the year ended September 30, 2001:
Balance
Balance
October 1, September 30,
2000 Additions Retirements 2001
Certificates of Obligation
16,210,000 (530,000) 15,680,000
General Obligation Bonds
13,760,000 (1,150,000) 12,610,000
Capital Leases
74,724 74,724
Compensated Absences
1,215,529 273,117 1,488,646
31,260,253 273,117 (1,680,000) 29,853,370
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
A. General Long -Term Debt (continued)
Certificates of Obligation and General Obligation Bonds
Certificates of obligation and general obligation bonds at September 30, 2001, are comprised of the
following individual issues
Issue
$2,125,000 Tax
and Revenue
Bonds, Series 1991
$5,000,000 Public
Works
Series 1995
$6,250,000 Tax
and Revenue
Series 1997
$5,500,000 Tax
and Revenue
Series 1997 A
10,830,000
Refunding Bonds
Series 2000
$2,000,000 Street
Improvement Bonds
Series 1992
$6,510,000
Refunding Bonds
Series 1993
Principal
Payment Interest
Interest Net Effective Date/ Payment Debt
Rates Interest Rate Maturity Dates Outstanding
6.30% to March 1/ Marchl/
7.80% 6.335% 2006 Septemberl 170,000
5.00% to March 1/ March 1/
7.00% 2014 Septemberl 4,260,000
5.25% to March 1/ March 1/
7.25% 2016 Septemberl 5,950,000
5.20% to March 1/ March 1/
7.20% 2018 Septemberl 5,300,000
7.10% to March 1/ March 1/
7.35% 4.6480% 2009 Septemberl 10,830,000
6.00% to March 1/ March 1/
8.00% 4.7613% 2009 Septemberl 255,000
2.65%to March 1/ March 1/
4.63% 4.3623% 2003 Septemberl 1,525,000
Total General Obligation Bonds 28,290,000
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
The annual requirements to amortize all certificates of obligation and general obligation bonds outstanding
as of September 30, 2001 are as follows:
Year Ending
Sept. 30, 2001 Total Interest Principal
2002 3,030,946 1,450,946 1,580,000
2003 3,008,517 1,363,517 1,645,000
2004 3,003,738 1,273,738 1,730,000
2005 3,206,766 1,176,766 2,030,000
2006-2016 27,578,808 6,273,808 21,305,000
39,828,775 11,538,775 28,290,000
There is $1,544,987 available in the Debt Service Fund to service the above obligations and the City's
obligations under capital leases.
Obligations Under Capital Leases
Capital leases bear interest rates ranging from 4.38% to 5.85% and mature in 2002. Requirements to satisfy
these obligations follow:
Year Ending
September 30, 2001 Total Interest Principal
2002 76,360 1,636 74,724
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
Compensated Absences
Employees earn vacation leave at the rate of fifteen days per year from one to fifteen years, twenty days per
year for service of sixteen to nineteen years, and twenty-five days per year for service of twenty years or
more. Employees are required to take their earned vacation. Employees who are unable to use their
vacation, for various reasons, may, with the City Manager's approval, carry over fifty percent of the unused
portion of the vacation, or, receive compensation for a maximum of forty hours.
City employees receive eleven paid holidays per year. Employees may be paid or may elect to receive
compensatory time off for the holiday. Overtime is earned at one and one-half times the regular rate of pay.
Employees may be paid or receive compensatory time. The maximum accrual for overtime is 160 hours,
except for employees involved in public safety, who can accrue up to 320 hours.
The liability for compensated absences at September 30, 2001, is comprised of the following components:
Beginning Addition Retirement Ending
Balance Balance
Vacation 139,827 29,804 169,631
Sick 911,501 181,543 - 1,093,044
Compensatory Time 164,201 61,770 225,971
1,215,529 273,117 1,488,646
B. Enterprise Fund Debt
The following is a summary of Enterprise Fund long-term debt transactions of the City for the year ended
September 30, 2001:
Balance Balance
October 1, September 30,
2000 Additions Retirement 2001
Certificates of Obligations 17,050,000 (50,000) 17,000,000
Water & Wastewater
Revenue Bonds 16,675,000 (535,000) 16,140,000
Capital Leases 59,002 (59,002)
Total 33,784,002 (644,002) 33,140,000
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
B. Enterprise Fund Debt (continued)
Revenue Bonds and Certificates of Obligation
A summary of the terms of revenue and certificates of obligation bonds recorded in the Enterprise Fund as
of September 30, 2001, is a follows:
Principal
Payment Interest
Date/ Payment Debt
Interest Rates Maturity Dates Outstanding
$1,115,000
Water & Sewer
Revenue Bonds
Series 1996 A
$8,870,000
Water & Sewer
Revenue Bonds
Series 1996 B
S8,000,000
4.5%to Sept. 1/ March 1/
5.20% 2002 September 1 200,000
2.9 % to Sept. 1/ March 1/
5.20% 2016 September 1 8,090,000
4.90%
Sept. 1/ March 1/
Water & Sewer 2020 September 1 7,850,000
Revenue Bonds
Series 1999
$17,100,000
Certificates of
Obligation
Series 1998
Subtotal Water & Sewer Revenue Bonds 16,140,000
March 1/ March 1/
2.6% to 2018 September l 17,000,000
3.8%
Subtotal Water & Sewer Certificates of Obligation 17,000,000
TOTAL
33,140,000
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
B. Enterprise Fund Debt (continued)
Revenue Bonds and Certificates of Obligation (continued)
The annual requirements to amortize all revenue and certificates of obligation bonds outstanding as of
September 30, 2001, are as follows:
Year Ending
Sept. 30, 2001 Total Interest Principal
2002 1,999,323 1,354,323 645,000
2003 2,000,770 1,325,770 675,000
2Q04 2,013,573 1,298,573 715,000
2005 2,748,336 1,258,336 1,490,000
2006 2,749,531 1,204,531 1,545,000
2007-2020 37,106,257 9,036.257 28,070,000
48,617,790
15,477,790 33,140,000
C. Component Unit Debt
The following is a summary of Component Unit long-term debt transactions for the year ended
September 30, 2001.
Balance Balance
October 1, September 30,
2,000 Additions Retirements 2001
Sales Tax Revenue
4,745,000 (95,000) 4,650,000
Total 4,745,000
4,650,000
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
C. Component Unit Debt (continued)
The terms of Sales Tax Revenue Bonds recorded in the Economic Development Corporation Fund, as of
September 30, 2001, are as follows:
Sales Tax Revenue Bonds
Principle
Payment Interest
Interest Date/ Payment
Issue Rates Maturity Dates
Debt
Outstanding
Sales Tax
Revenue
Bonds 5.2% to Sept 1 March 1/ 4,650,000
Series 1997 7% 2016 September 1
Total
4,650,000
Annual requirements to amortize all Sales Tax Revenue Bonds outstanding as of September 30, 2001, or
as follows:
Year Ending
Sept. 30, 2001
2002
2003
2004
2005
2006-2016
Total
367,570
445,370
447,050
442,650
5,386,630
7,089,270
Interest Principal
267,570 100,000
260,370 185,000
247,050 200,000
232,650 210,000
1,431,630 3,955,000
2,439,270 4,650,000
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 6 - LONG-TERM DEBT (continued)
D. Annual Debt Service Requirements
The annual requirements to amortize all long-term debt outstanding at September 30, 2001, including
interest payments and excluding compensated absences, are as follows:
General Enterprise Total Component
Year Ending Long -Term Fund Primary Unit Fund
September 30 Debt Debt Government Debt
Total
2002 3,030,946 1,999,323 5,030,269 367,570 5,397,839
2003 3,008,517 2,000,770 5,009,287 445,370 5,454,657
2004 3,003,738 2,013,573 5,017,311 447,050 5,464,361
2005 3,206,766 2,748,336 5,955,102 442,650 6,397,752
2006-2020 27,578,808 39,855,788 67.434,596 5,386,630 72,821,226
39,828,775 48,617,790 88,446,565 7,089,270 95,535,835
Less interest (11,538,775) (15,477,790) (27,016,565) (2,439,270) (29,455,835)
S 28,290,000 $33,140,000 $ 61,430,000 $ 4,650,000 $ 66,080,000
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30. 2001
NOTE 7 — OPERATING TRANSFERS BETWEEN FUNDS
For the year ended September 30, 2001, operating transfers between funds consisted of the following:
Fund
General Fund
Special Revenue
Capital Projects
Enterprise Fund
General Fund
Enterprise Fund
Component Unit (P.E.D.C.)
Transfers in (out) from Transfers in Transfers out
Enterprise fund 700,000
Component Unit PEDC 110,000
Subtotal 810,000
General Fund 52,794
General 2,246,491
Component Unit PEDC 212,768
Subtotal 2,459,259
General 128,000
TIRZ #1 194,674
TIRZ #2 78,100
Subtotal 400,774
(Capital Projects)
(Enterprise fund)
(Special Revenue Services)
Subtotal
(General Fund)
(General Fund)
(Capital Projects)
(Enterprise funds)
(Capital Projects)
Subtotal
(2,246,491)
(128,000)
(52,794)
(2,427,285)
(700,000)
(110,000)
(212,768)
(194,674)
(78,100)
(595,542)
Totals
3,722,827 (3,722,827)
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 8 - FUND EQUITY
The City's Capital Project Fund equity at September 30, 2001, has been designated for subsequent years'
expenditures. Tentative plans for the expenditure of these resources are as follows:
Drainage improvements
Transportation improvements
NOTE 9 — CONTRIBUTED CAPITAL
A summary of changes in contributed capital is as follows:
978,573
2,675,180
Enterprise Fund
3,653,753
18.054,250
Beginning Balance
4,178,860
Impact Fees
22,233,110
Ending Balance
NOTE 10 - PENSION PLAN
Plan Description
The City provides pension benefits for all of its full-time employees through a nontraditional, joint
contributory, hybrid, defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS),
one of 745 administered by TrvIRS, an agent multiple -employer public employee retirement system.
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City -
financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for
service rendered before the plan began of a theoretical amount equal to two times what would have been
contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service
since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions. In
addition, the City can grant, as often as annually, another type of monetary credit referred to as an updated
service credit which is a theoretical amount which, when added to the employee's accumulated contributions
and the monetary credits for service since the plan began, would be the total monetary credits and employee
contributions, accumulated with interest, if the current employee contribution rate and City matching percent
had always been in existence; and if the employee's salary had always been the average of his salary in the
te. At
the benefit is
s if the
last three yeaes at are one yeacontributions, before the effective with interest, andt,the employer -financed calculated
onetary
sum of the employees accumulated
credits, with interest, were used to purchase an annuity.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 10- PENSION PLAN (continued)
Plan Description (continued)
Members can retire at age 60 and above with 10 or more years of service or with 20 years of service
regardless of age. A member is vested after 10 years. The plan provisions are adopted by the governing
body of the City, within the options available in the state statutes governing TMRS and within the actuarial
constraints also in the statutes.
Contributions
The contribution rate for the employees is 7% and the City matching ratio is currently 2 to 1, both as
adopted by the governing body of the City. Under the state law goveming TMRS, the actuary annually
determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior
service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The
normal cost contribution rate finances the currently accruing monetary credits due to the City matching
percent, which are the obligation of the City as of an employee's retirement date, not at the time the
employee's contributions are made. The normal cost contribution rate is the actuarially determined percent
of payroll necessary to satisfy the obligation of the City to each employee at the time his/her retirement
becomes effective. The prior service contribution rate amortizes the unfunded (overfunded) actuarial
liability (asset) over the remainder of the plan's 25-year amortization period. When the City periodically
adopts updated service credits and increases its annuities in effect, the increased unfunded actuarial liability
is to be amortized over a new 25-year period. The unit credit actuarial cost method is used for determining
the City contribution rate. Both the employees and the City make contributions monthly. Since the City
needs to know its contribution rate in advance to budget for it, there is a one-year delay between the
actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. (i.e.
December 31, 2000, valuation is effective for rates beginning January 2000).
Because the actuary determines contribution rates on an annual basis and the City pays the calculated rate
each month, the City will always have a net pension obligation (NPO) of zero at the beginning and end of
the period, and the annually required contributions (ARC) will always equal contributions made. Trend
information regarding ARC and NPO is shown below.
Net Pension Obligation (NPO) at the
beginning of the period
Annual Pension Costs
Annual Required Contribution
(ARC)
Contributions Made
2001
2000 1999
857,939
(857,939)
736,702 629,516
(736,702) (629,516)
NPO at the End of the Period
% Annual Pension Cost Contributed 100% 100% 100%
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 10- PENSION PLAN (continued)
Contributions (continued)
A schedule of funding progress for TMRS for the three most recent actuarial valuations may be found in the
required supplementary information section of the City's Comprehensive Annual Financial Report.
Information as to the latest actuarial valuation follows:
Valuation Date 12/31/2000
Actuarial Cost Method Unit Credit
Amortization Method Level Percent of Payroll
Remaining
Amortization Period 25 Years
Asset Valuation
Method Amortized Cost
Amortization Period
Actuarial Assumptions
Open
Investment Rate of Return 8%
Projected Salary Increases None
Includes Inflation At None
Cost -of -living Adjustments None
The City is one of 745 municipalities having its benefit plan administered by TMRS. Each of the 745
municipalities has an annual, individual actuarial valuation performed. All assumptions for the December
31, 2000, valuations are contained in the 2000 TMRS Comprehensive Annual Financial Report, a copy of
which may be obtained by writing to P.O. Box 149153, Austin, Texas 78714-9153.
NOTE 11 - RISK MANAGEMENT
The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City's risk management program
mainly encompasses obtaining property and liability insurance through Texas Municipal League (TML-
IRP), an Intergovernmental Risk -Pool and through commercial insurance carriers. The City purchases
commercial general insurance through the Texas Municipal League, an unincorporated association of
political subdivisions of the State of Texas. This policy encompasses general liability, incidental, medical
malpractice, automobile liability, law enforcement liability, errors and omissions liability, property,
automobile vehicle liability, and damages with limits of liability for each occurrence. The City has not had
any significant reduction in insurance coverage, and the amounts of insurance settlements have not exceeded
insurance coverage for any of the last three years. The participation of the City in the TML-IRP is limited to
payment of premiums. At year-end, the City did not have any significant claims pending.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 11 - RISK MANAGEMENT (continued)
Workers' Compensation
The City is a member of the Texas Municipal League (TML) Workers' Compensation Intergovernmental
Risk Pool, an unincorporated association of political subdivisions of the State of Texas. The fund contracts
with a third party administrator for administration, investigation, and adjustment services in the handling of
claims. Premiums are based on the estimated City payroll by risk factor and rates. The premiums are
adjusted by the City's experience modifier. All loss contingencies, including claims incurred but not
reported, if any, are recorded and accounted for by the TML Pool. The City's liability is limited to the
payment of premiums as assessed by TML.
NOTE 12 - FEDERAL TAX COMPLIANCE (ARBITRAGE) FOR LONG-TERM DEBT
In accordance with provisions of Section 148 of the Internal Revenue Code of 1986, as amended, (the
"Code") the City's long-term debt obligations must meet certain minimum criteria to be considered and
continue to be considered "tax exempt". This "tax exempt" status means that interest income earned by
purchasers of the City's long-term debt instruments is not subject to federal income taxes. Related Treasury
Regulations promulgated under section 148 of the Code generally provide that the determination of whether
these obligations are tax exempt is made as of the date such obligations are issued based on a reasonable
expectations regarding the use of the proceeds of the bonds issued. Long-term debt that does not meet and
continue to meet the minimum criteria of Section 148 of the Code and the related Treasury Regulations
described above are considered "arbitrage bonds" and are not considered "tax exempt" as described above.
Rebate
Obligations will become arbitrage bonds (as described above) if certain arbitrage profits are not paid to the
federal government as rebate under section 148(f) of the Code. The City's obligations to calculate and make
rebate payments (if any) will continue as long as there are gross proceeds allocable to outstanding debt
issues. The City has performed calculations required under section 148(f) of the Code and has no present
liability nor has the City ever been required to make rebate payments for issued debt in past years.
Unexpended Debt Issuance Proceeds (Yield Restriction Requirements)
Section 148 of the Code also provides that in order for debt not to be considered arbitrage bonds (as
described above), proceeds of such debt must be invested at a yield that is not materially higher than the
yield on the debt issued starting on the third anniversary of the issue date of such debt. Accordingly, any
unexpended proceeds of debt issued by the City that remain unexpended more than three years after such
debt was issued should be yield restricted. The yield restriction may be accomplished by making yield
reduction payments pursuant to Treas. Reg. Section 1.148-5(c). The City is currently pursuing compliance
with these yield restriction requirements and does not anticipate associated significant noncompliance
issues. The City is continuing to proceed with reasonable diligence to expend any remaining unexpended
debt issuance proceeds on qualifying projects.
NOTE 13 — SUBSEQUENT EVENT
On November 26, 2001, the city received a FEMA Grant in the amount of $3,756,862 to repurchase homes
that are in the flood plan.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
NOTE 14 — PRIOR PERIOD ADJUSTMENTS
The following fund balances from FY2000 were adjusted for sales tax receivables and bond amortization
costs, as follows:
General Fund $1,200,920
PEDC Fund 372,949
Debt Service Fund 41,376
NOTE 15 — FUND DEFICIT
The fund balance in TIRZ #2 fund is a negative $271,274, also the Capital Projects Fund has a negative
balance of $70,838. These deficits will be funded by future revenues.
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HOUSTON
wASHINGTON, D.C.
DALLAS
LOS ANGELES
New YORK
THE woodlands
LONDON
APPENDIX C - FORM OF BOND COUNSEL OPINION
Andrews & KURTH L.L.P.
ATTORNEYS
600 Travis, Suite 4200
Houston, TX 77002
May , 2002
TELEPHONE : 713.220.4200
FACS IMI LE : 713.220.4285
WE HAVE ACTED as Bond Counsel for the City of Pearland, Texas (the "City"), in
connection withanissue of bonds (the "Bonds") described as follows:
CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS,
( SERIES 2002, dated May 1, 2002, in the aggregate principal amount of
$25,000,000, maturing on March 1 in each year from 2004 through and including
2027. The Bonds are issuable in fully registered form only, in denominations of
$5,000 or integral multiples thereof, bear interest and may be transferred and
exchanged as set out in the Bonds and in the ordinance (the "Bond Ordinance")
adopted by the City Council of the City authorizing their issuance.
WE HAVE ACTED as Bond Counsel for the sole purpose of rendering an opinion with
respect to the legality and validity of the Bonds under the Constitution and laws of the State of
Texas and with respect to the exclusion of interest on the Bonds from gross income under federal
income tax law. In such capacity we have examined the Constitution and laws of the State of
Texas; federal income tax law; and a transcript of certain certified proceedings pertaining to the
issuance of the Bonds, as described in the Bond Ordinance. The transcript contains certified
copies of certain proceedings of the City; certain certifications and representations and other
material facts within the knowledge and control of the City, upon which we rely; and certain
other customary documents and instruments authorizing and relating to the issuance of the
Bonds. We have also examined executed Bond No. R-1 of this issue.
WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified,
any original proceedings, records, data or other material, but have relied upon the transcript of
certified proceedings. We have not assumed any responsibility with respect to the financial
condition or capabilities of the City or the disclosure thereof in connection with the sale of the
Bonds. Our role in connection with the City's Official Statement prepared for use in connection
with the sale of the Bonds has been limited as described therein.
BASED ON SUCH EXAMINATION, it is our opinion as follows:
(1) The transcript of certified proceedings evidences complete legal
authority for the issuance of the Bonds in full compliance with the Constitution
and laws of the State of Texas presently in effect; the Bonds constitute valid and
%e%ally binding obligations of the City enforceable in accordance with the terms
ma'sltlot s theteoi, except to the extent that the rights and teediee of the.
owners of the Bonds may be limited by laws heretofore or hereafter enacted
relating to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors of political subdivisions and the exercise of
judicial discretion in appropriate cases; and the Bonds have been authorized and
delivered in accordance with law; and
(2) The Bonds are payable, both as to principal and interest, from, and
secured by, the proceeds of a continuing, direct annual ad valorem tax, levied
within the limits prescribed by law, against taxable property within the City,
which taxes have been pledged irrevocably to pay the principal of and interest on
the Bonds.
ALSO BASED ON OUR EXAMINATION AS DESCRIBED ABOVE, it is our further
opinion that, subject to the restrictions hereinafter described, interest on the Bonds is excludable
from gross income of the owners thereof for federal income tax purposes under existing law and
is not subject to the alternative minimum tax on individuals or, except as hereinafter described,
corporations. The opinion set forth in the first sentence of this paragraph is subject to the
condition that the City comply with all requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order
that interest thereon be, or continue to be, excluded from gross income for federal income tax
purposes. The City has covenanted in the Bond Ordinance to comply with each such
requirement. Failure to comply with certain of such requirements may cause the inclusion of
interest on the Bonds in gross income for federal income tax purposes to be retroactive to the
date of issuance of the Bonds. The Code and the existing regulations, rulings and court decisions
thereunder, upon which the foregoingresult ns of n the inond clusion lus on of unsel arebased,
anterest on the Bondsct to
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which could prospectively or retroactively
gross income of the owners thereof for federal income tax purposes.
INTEREST ON all tax-exempt obligations, including the Bonds, owned by a corporation
(other than an S corporation, a regulated investment company, a real estate investment trust
(REIT) or a real estate mortgage investment conduit (REMIC)) will be included in such
corporation's adjusted current earnings for purposes of calculating such corporation's alternative
minimum taxable income. A corporation's alte he alternative
mum computed.taxable Purchasers the basis on
of Bonds are
which the alternative minimum tax imposed by
directed to the discussion entitled "TAX EXEMPTION" set forth in the Official Statement.
UNDER EXISTING LAW and based upon the assumptions stated in the Official
Statement prepared for use in connection with the sale of the Bonds, it is also our opinion as
follows: (1) the difference between (a) the stated redemption price at maturity of each Bond
maturing in the years through , inclusive (the "Discount Bonds"), and (b) the initial
offering price at which a substantial amount of such Discount Bonds of the same maturity were
sold to the public, as described in the Official Statement, constitutes original issue discount with
respect to each such Discount Bond in the hands of an owner who purchased such Discount.
Bond at the initial offering price in the initial public offering of the Bonds; and (2) such initial
owner is entitled to exclude from gross income for federal income tax purposes with respect to
such Discount Bond that portion of the original issue discount deemed to be earned for federal
income tax purposes during the period that such Discount Bond continues to be owned by such
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owner. In the event of the redemption, sale or other taxable disposition of such Discount Bond
prior to its stated maturity, however, any amount realized by such owner in excess of the basis of
such Discount Bond in the hands of such owner (adjusted upward by the portion of the original
issue discount deemed to be earned during the period for which such Discount Bond was held by
such initial owner) is includable in gross income for federal income tax purposes.
PURCHASERS OF DISCOUNT BONDS in the initial public offering are directed to the
discussion entitled "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT AND PREMIUM
OBLIGATIONS" set forth in the Official Statement for purposes of determining the portion of
the original issue discount which is deemed to be earned for federal income tax purposes during
the period such Bonds are held by an initial owner. The federal income tax consequences of the
purchase, ownership and redemption, sale or other taxable disposition of Discount Bonds which
are not purchased in the initial public offering at the initial offering price may be determined
according to rules which differ from those described above and in the Official Statement.
EXCEPT AS DESCRIBED ABOVE, we express no opinion as to any federal, state or
local tax consequences resulting from the ownership of, receipt or accrual of interest on, or the
acquisition or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware
that the ownership of tax-exempt obligations, such as the Bonds, may result in collateral federal
income tax consequences to, among others, financial institutions, property and casualty insurance
companies, certain foreign corporations doing business in the United States, certain S
corporations with Subchapter C earnings and profits, individual recipients of Social Security or
Railroad Retirement benefits, taxpayers who are deemed to have incurred or continued
indebtedness to purchase or carry tax-exempt obligations and individuals otherwise qualified for
the earned income credit. Such prospective purchasers should consult their tax advisors as to the
consequences of investing in the Bonds.
****/****
Respectfully submitted,
ANDREWS & KURTH L.L.P.
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This Official Notice of Sale does not alone constitute an offer to sell but is merely notice of sale of the Bonds
described herein. The offer to sell such Bonds is being made by means of this Official Notice of Sale, the Official
Bid Form and the Preliminary Official Statement.
OFFICIAL NOTICE OF SALE
CITY OF PEARLAND, TEXAS
(Brazoria and Harris Counties, Texas)
$25,000,000
PERMANENT IMPROVEMENT BONDS
SERIES 2002
Sealed Bids Will Be Received
Monday, April 8, 2002 at 5:00 P.M.
Central Daylight Saving Time
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This Official Notice of Sale does not alone constitute an invitation for bids but is merely notice of sale of the Bonds
described herein. The invitation for bids on such Bonds is being made by means of this Official Notice of Sale, the
Official Bid Form and the Official Statement. Prospective purchasers are urged to carefully examine all the
documents to determine the investment quality of the Bonds.
OFFICIAL NOTICE OF SALE
$25,000,000
CITY OF PEARLAND, TEXAS
(Brazoria and Harris Counties, Texas)
PERMANENT IMPROVEMENT BONDS,
SERIES 2002
THE SALE
BONDS OFFERED FOR SALE AT COMPETITIVE BID. The City Council (the "Council') of The City of
Pearland, Texas (the "City") is offering for sale at competitive bid its $25,000,000 Permanent Improvement Bonds,
Series 2002 (the "Bonds").
PLACE AND TIME OF SALE. The Council will receive bids at the City Hall, 3519 Liberty Drive, Pearland,
Texas 77581 until 5:00 P.M., C.D.S.T., Monday, April 8, 2002, and the bids will be publicly read at 7:00 P.M.
Bids, which must be submitted in duplicate on the Official Bid Form and plainly marked "Bid for Bonds," are to be
addressed to "Mayor and City Council, City of Pearland, Texas." All bids must be delivered at the above address
prior to the above -scheduled time. Any bid received after such scheduled time for bid opening will not be accepted
and will be returned unopened.
ET ,RCTRONIC BIDDING PROCEDURE; Any prospective bidder that intends to submit an electronic bid must
submit its electronic bid through the facilities of PARITY. Bidders must submit, prior to Monday, April 8, 2002,
SIGNED' Official Bid Forms, in duplicate, to Frank Ildebrando, RBC Dain Rauscher Inc., 1001 Fannin, Suite 400,
Houston, Texas 77002. Subscription to the i-Deal's BIDCOMP Competitive Bidding System is required in order to
submit an electronic bid. The City will neither confirm any subscription nor be responsible for the failure of any
prospective bidder to subscribe. Electronic bids must be received via PARITY in the manner described below, until
5:00 p.ni., C.D.S.T., on Monday, April 8, 2002.
Electronically bids must be submitted via PARITY in accordance with this Official Notice of Sale, until 5:00 p.m.,
C.D.S.TL, but no bid will be received after the time for receiving bids specified above. An electronic bid made through
the facilities of PARITY shall be deemed an irrevocable offer to purchase the Bonds on the terms provided in the
Official Notice of Sale, and shall be binding upon the bidder as if made by a signed, sealed bid delivered to the City.
The City shall not be responsible for any malfunction or mistake made by, or as a result of the use of the facilities of,
PARITY, the use of such facilities being the sole risk of the prospective bidder.
If any provisions of the Official Notice of Sale shall conflict with information provided by PARITY as the approved
provider of electronic bidding services, this Official Notice of Sale shall control. Further information about PARITY,
including any fee charged, may be obtained from i-Deal, 395 Hudson Street, New York, New York 10014, (212) 806-
8304.
For purposes of both the written bid process and the electronic bidding process, the time as maintained by
PARITY shall constitute the official time. For information purposes only, bidders are requested to state in their
electronic bids the true interest cost to the City, as described under "CONDITIONS OF THE SALE - Basis of Award"
below. All electronic bids shall be deemed to incorporate the provisions of this Official Notice of Sale and the Official
Bid Form.
RIDS RY TRT.RPHONE OR FACSIMILE: Bidders must submit, prior to Monday, April 8, 2002, SIGNED Official
Bid Forms to Frank Ildebrando, RBC Dain Rauscher Inc., 1001 Fannin, Suite 400, Houston, Texas 77002 and submit
their bid by telephone or facsimile (fax) on the date of sale by 5:00 p.m., C.D.S.T.
Frank Ildebrando of RBC Dain Rauscher Inc. will call telephone bidders who have submitted SIGNED Official Bid
Forms prior to the date of the sale. Fax bids must be received by 5:00 p.m., C.D.S.T., on the date of the sale. Contact
Frank Ildebrando of RBC Dain Rauscher Inc. on the day of the sale to obtain the fax phone numbers.
RBC Dain Rauscher Inc. will not be responsible for the submission of any bids received after the above
deadlines. RBC Dain Rauscher Inc. assumes no responsibility or liability with respect to any irregularities
associated with the submission of any bids.
AWARD OF THE RONDS_ The Council will take action to award the Bonds (or reject all bids) at a regular
meeting of the City Council on the date of the bid opening, and will adopt an ordinance authorizing the Bonds and
approving the Official Statement (the "Ordinance"). The City reserves the right to reject any or all bids and to waive
any irregularities.
THE BONDS
pESCRTPTTON: The Bonds will be dated May 1, 2002 and interest will be calculated on the basis of a 360-day
year of twelve 30-day months. Interest on the Bonds will be paid on March 1, 2003, and semiannually on March 1
and September 1 of each year thereafter until maturity or prior redemption. The Bonds maturing on or after
March 1, 2013 are subject to redemption prior to their scheduled maturities on March 1, 2012, or any date thereafter,
at the option of the City. Upon redemption the Bonds will be payable at a price equal to the principal amount thereof
plus accrued interest to the date of redemption. The Bonds will be issued in fully registered form in principal
amounts of $5,000 or any integral multiple thereof. Principal and semiannual interest will be paid by Wells Fargo
Bank Texas, N.A., Houston, Texas, the Paying Agent/Registrar. Interest will be paid by check dated as of the
interest payment date and mailed on or before each interest payment date by the Paying Agent/Registrar to the
registered owner appearing on the Paying Agent/Registrar's books on the Record Date (hereinafter defined).
Principal will be paid to the registered owners at maturity upon presentation of the Bonds to the Paying
Agent/Registrar. The Bonds will mature March 1 in each year as follows:
Maturity Principal Maturity Principal
Date Amount Date Amount
March 1, 2004 $ 535,000 March 1, 2016 $1,000,000
March 1, 2005 560,000 March 1, 2017 1,055,000
March 1, 2006 595,000 March 1, 2018 1,115,000
March 1, 2007 625,000 March 1, 2019 1,175,000
March 1, 2008 660,000 March 1, 2020 1,235,000
March 1, 2009 695,000 March 1, 2021 1,305,000
March 1, 2010 730,000 March 1, 2022 1,375,000
March 1, 2011 770,000 March 1, 2023 1,445,000
March 1, 2012 810,000 March 1, 2024 1,525,000
March 1, 2013 855,000 March 1, 2025 1,605,000
March 1, 2014 900,000 March 1, 2026 1,695,000
March 1, 2015 950,000 March 1, 2027 1,785,000
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PAVING AGENT/RRGTSTRAR: The initial Paying Agent/Registrar shall be Wells Fargo Bank Texas, N.A.,
Houston, Texas (see "THE BONDS - Paying Agent/Registrar" in Official Statement).
,SOITRCF. OF PAYMENT: The Bonds are direct obligations of the City, and the principal thereof and interest
thereon are payable solely from the proceeds of an annual ad valorem tax levied upon all taxable property within the
City, within the limits prescribed by law.
CONDITIONS OF THE SALE
TYPES OF RIDS ANT) INTEREST RATES: The Bonds will be sold in one block on an "All or None" basis, and
at a price of not less than their par value plus accrued interest to the date of delivery of the Bonds. Bidders are
invited to name the rate(s) of interest to be borne by the Bonds provided that each rate bid must be in a multiple of
1/8 of 1% or 1/20 of 1% and the net effective interest rate for the Bonds (calculated in the manner required by
Section 1204, Texas Government Code, as amended) must not exceed 15%. The highest rate bid may not exceed the
lowest rate bid by more than 2% in rate. No limitation is imposed upon bidders as to the number of rates or changes
which may be used. All Bonds of one maturity must bear one and the same rate. No bids involving supplemental
interest rates will be considered. Each bidder shall state in his bid the total interest cost in dollars and the net
effective interest rate determined hereby, which shall be considered informative only and not as a part of the bid.
RASTS OF AWARD: For the purpose of awarding sale of the Bonds, the interest cost of each bid will be computed
by determining at the rate(s) specified therein, the total dollar cost of all interest on the Bonds from the date thereof
to their respective maturities, using the table of Bond Years herein, and deducting therefrom the premium bid, if any.
Subject to the City's right to reject any or all bids and to waive any irregularities, the Bonds will be awarded to the
bidder (the "Purchaser") whose complying bid, based on the above computation, produces the lowest net interest cost
to the City.
GOOD FAITH DEPOSIT: A Good Faith Deposit, payable to the "City of Pearland" in the amount of $500,000 is
required. Such Good Faith Deposit shall be in the form of a Cashier's Check, which is to be retained uncashed by the
City pending the Purchaser's compliance with the terms of his bid and the Official Notice of Sale and Bidding
Instructions. The Good Faith Deposit may accompany the Official Bid Form or it may be submitted separately. If
submitted separately, it shall be made available to the City prior to the opening of the bids, and shall be accompanied
by instructions from the bank on which drawn which authorize its use as a Good Faith Deposit by the Purchaser who
shall be named in such instructions. Unless otherwise agreed, the Good Faith Deposit will be returned to the
purchaser of the Bonds on the date of delivery of the Bonds. No interest will be allowed on the Good Faith
Deposit. In the event the Purchaser should fail or refuse to take up and pay for the Bonds in accordance with its bid,
then said check shall be cashed and accepted by the City as full and complete liquidated damages. The checks
accompanying bids other than the winning bid will be returned immediately after the bids are opened, and an award
of the Bonds has been made.
FTNANCIAI. ADVISOR'S RIGHT TO RID: The City has given RBC Dain Rauscher Inc., the Financial Advisor,
the right to bid on the Bonds.
JNITTAL OFFERING PRICE. CERTIFICATE: To provide the City with information to enable it to comply with
certain conditions of the Internal Revenue Code of 1986 relating to the exclusion of interest on the Bonds from gross
income for federal income tax purposes, the successful bidder will be required to complete, execute, and deliver to
the City, at the time that the Bonds are awarded, a certification regarding "issue price" substantially in the form
attached hereto. If the successful bidder will not reoffer the Bonds for sale or has not sold a substantial amount of
the Bonds of any maturity by the date of delivery, such certificate may be modified in a manner approved by the City
and Bond Counsel (as hereinafter defined). In no event will the City fail to deliver the Bonds as a result of the
successful bidder's inability to certify actual sales of Bonds at a particular price prior to delivery. Each bidder, by
submitting its bid, agrees to complete, execute, and deliver such a certificate by the date of the award of the Bonds, if
its bid is accepted by the City. It will be the responsibility of the successful bidder to institute such syndicate
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reporting requirements, to make such investigation, or otherwise to ascertain the facts necessary to enable it to make
such certifications with reasonable certainty. Any questions concerning such certification should be directed to Bond
Counsel.
DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS
The delivery of the Bonds is subject to receipt of the opinion of Andrews & Kurth L.L.P., Houston, Texas, Bond
Counsel for the City, as hereinafter described.
CUSIP NUMBERS. It is anticipated that CUSIP identification numbers will appear on the Bonds, but neither the
failure to print or type such number on any Bonds nor any error with respect thereto shall constitute cause for a
failure or refusal by the Purchaser toaccept delivery of and pay for the Bonds in accordance with the terms of this
Official Notice of Sale and the terms of the Official Bid Form. All expenses in relation to the printing or typing of
CUSIP numbers on the Bonds shall be paid by the City; provided, however, that the CUSIP Service Bureau fee for
the assignment of the numbers shall be the responsibility of and shall be paid for by the Purchaser.
JNITTAL DELIVERY OF INITIAL BONDS. Initial delivery will be accomplished by the issuance of registered
Bonds in the aggregate principal amount of $25,000,000, payable to the Purchaser, signed by the manual or facsimile
signature of the Mayor and City Clerk of the City, approved by the Attorney General, and registered by the
Comptroller of Public Accounts. Initial delivery will be at the corporate trust office of the Paying Agent/Registrar.
Payment for the Bonds must be made in immediately available funds for unconditional credit to the City, or as
otherwise directed by the City. The Purchaser will be given five (5) business days' notice of the time fixed for
delivery of the Bonds. It is anticipated that initial delivery of the Initial Bonds can be made on or about May 8,
2002, and it is understood and agreed that the Purchaser will accept delivery and make payment for Initial Bonds by
10:00 A.M., on May 8, 2002, or thereafter on the date the Bonds are tendered for delivery, up to and including June
12, 2002. If for any reason the City is unable to make delivery on or before June 12, 2002, then the City shall
immediately contact the Purchaser and offer to allow the Purchaser to extend his offer for an additional fifteen (15)
days. If the Purchaser does not elect to extend his offer within six (6) days thereafter, then his Good Faith Deposit
will be returned, and both the City and the Purchaser shall be relieved of any further obligation. In no event shall the
City be liable for any damages, whether direct, consequential or otherwise, by reason of its failure to deliver the
Bonds.
pR!JVRRY OF DEFINITIVE BONDS; Upon payment for the Initial Bonds at the time of the initial delivery, the
Paying Agent/Registrar shall cancel the Initial Bonds, provided registration instructions have been received by the
Paying Agent/Registrar, and shall register and deliver the registered definitive Bonds, in any integral multiple of
$5,000 for any one maturity, in accordance with written instructions received from the Purchaser and/or members of
the Purchaser's syndicate account. It shall be the duty of the Purchaser and/or members of the Purchaser's syndicate
account to furnish to the Paying Agent/Registrar, at least five business days prior to the initial delivery, final written
instructions designating the names in which the Bonds, are to be registered, the addresses of the registered owners,
the maturities, interest rates and denominations. The Paying Agent/Registrar will not be required to accept
registration instructions after the fifth business day prior to initial delivery. If such instructions are not received
within the specified time period, the cancellation of the Initial Bonds and delivery of registered definitive Bonds will
be delayed until such instructions are received.
CONDITIONS TO DELIVERY: The obligation of the Purchaser to take up and pay for the Bonds is subject to the
Purchaser's receipt of (a) the legal opinion of Andrews & Kurth L.L.P., Houston, Texas, Bond Counsel ("Bond
Counsel"), (b) a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain
the issuance and delivery of the Bonds, and (c) the certification as to the Official Statement, all as further described
in the Official Statement.
J,FGAT, OPINION: The City will furnish the Purchaser a transcript of certain certified proceedings held incident to
the authorization and issuance of the Bonds, including a certified copy of the unqualified approving opinion of the
Attorney General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State of
Texas, to the effect that the Bonds, which the Attorney General will have examined, are valid and binding
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obligations of the City under the Constitution and laws of the State of Texas. The City also will furnish the approving
legal opinion of Andrews & Kurth L.L.P., Houston, Texas, Bond Counsel, to the effect that, based upon an
examination of such transcript, the Bonds are valid and binding obligations of the City under the Constitution and
laws of the State of Texas. The legal opinion of Bond Counsel will further state that taxable property in the City is
subject to the levy of a continuing, direct annual ad valorem tax, within the limits prescribed by law, to pay the
Bonds and interest thereon. The opinion of Bond Counsel is expected to be reproduced on the back panel of the
Bonds over a certification by the City Clerk of the City attesting that such legal opinion was dated as of the date of
delivery of and payment for the Bonds and is a true and correct copy of the original opinion. Errors or omissions in
the printing of such legal opinion on the Bonds shall not affect the validity of the Bonds nor constitute case for the
failure or refusal by the Purchaser to accept delivery of and pay for the Bonds.
REGISTRATION: The Bonds are transferable only on the bond register kept by the Paying Agent/Registrar upon
surrender and reissuance. The Bonds are exchangeable for an equal principal amount of Bonds of the same maturity
in any authorized denomination upon surrender of the Bonds to be exchanged at the principal office of the Paying
Agent/Registrar. No service charge will be made for any transfer or exchange, but the City may require payment of a
sum sufficient to cover any tax or governmental charge payable in connection therewith.
NO -LITIGATION CERTIFICATE: The customary closing papers, including a certificate to the effect that no
litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Bonds, or, which
would affect the provisions made for their payment or security, or in any manner questioning the validity of said
Bonds will also be furnished.
NO MATF.RTA!, AT)VF.RSF. CHANGE: The obligations of the Initial Purchaser to take and pay for the Bonds,
and of the City to deliver the Bonds, are subject to the condition that, up to the time of delivery of and receipt of
payment for the Bonds, there shall have been no material adverse change in the condition (financial or otherwise) of
the City subsequent to the date of sale from that set forth or contemplated in the Preliminary Official Statement, as it
may have been supplemented or amended through the date of sale.
CHANGE. TN TAX EXEMPT STATUS: At any time before the Bonds are tendered for delivery, the Purchaser
may withdraw its bid if the interest received by private holders on bonds of the same type and character as the Bonds
shall be declared to be taxable income under present federal income tax laws, either by ruling of the Internal
Revenue Service or by.a decision of any Federal court, or shall be declared taxable or be required to be taken into
account in computing any federal income taxes, by the terms of any federal income tax law enacted subsequent to the
date of this Official Notice of Sale.
CONTINI TING DISCLOSURE AGREEMENT: The City will agree in the Ordinance authorizing the Bonds to
provide certain periodic information and notices of material events in accordance with the Securities and Exchange
commission Rule 15c-12, as described in the Preliminary Official Statement under "Continuing Disclosure." The
Purchaser's obligation to accept and pay of the Bonds is conditioned upon delivery to the Purchaser or its agent of a
certified copy of the Ordinance containing the agreement described under such heading.
GENERAL CONSIDERATIONS
FINANCTAT: ADVISOR. RBC Dain Rauscher Inc. is employed as Financial Advisor to the City in connection with
the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is
contingent upon the issuance and delivery of the Bonds. RBC Dain Rauscher Inc., in its capacity as Financial
Advisor, has not verified and does not assume any responsibility for the information, covenants and representations
contained in any of the legal documentation with respect to the federal income tax status of the Bonds.
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BLUE SKY TAWS: By submission of its bid, the Purchaser represents that the sale of the Bonds in states other
than Texas will be made only pursuant to exemptions from registration or, where necessary, the Purchaser will
register the Bonds in accordance with the securities law of the states in which the Bonds are offered or sold. The
City agrees to cooperate with the Purchaser, at the Purchaser's written request and expense, in registering the Bonds
or obtaining an exemption from registration in any state where such action is necessary, but the City will not consent
to service of process in any such state.
MUNICIPAL RONTI INSURANCE. The City has submitted an application for municipal bond insurance under
the bidder option program. The premium for such insurance, if any, will be paid by the Purchaser.
OFFICIAL STATEMENT
By accepting the winning bid, the City agrees to the following representations and covenants to assist the Purchaser
in complying with Rule 15c2-12 of the Securities and Exchange Commission ("SEC").
FINAT. OFFICIAL STATEMENT: The City has prepared the accompanying Official Statement for dissemination
to potential purchasers of the Bonds, but will not prepare any other document or version for such purpose except as
described below. The Purchaser will be responsible for informing the City of the initial offering yields. The City
will prepare a final Official Statement describing these offering yields, the interest rates on the Bonds, the selling
compensation, the final debt service schedule, the ratings assigned to the Bonds (if not currently included), and the
terms of and obligor on any policy of municipal bond insurance. Accordingly, the City deems the accompanying
Official Statement to be final as of its date, within the meaning of SEC Rule 15c2-12(b)(1), except for the omission
of the foregoing items. By delivering the final Official Statement or any amendment or supplement thereto to the
Purchaser on or after the sale date, the City represents the same to be complete as of such date, within the meaning of
SEC Rule 15c2-12(e)(3). Notwithstanding the foregoing, the only representations concerning the absence of
material misstatements or omissions from the Official Statement which are or will be made by the City are those
described in the Official Statement under "GENERAL CONSIDERATIONS - Certification as to Official Statement."
CHANGES TO OFFICIAL STATEMENT: If, subsequent to the date of the Official Statement, the City learns,
through the ordinary course of business and without undertaking any investigation or examination for such purposes,
or is notified by the Purchaser of any adverse event which causes the Official Statement to be materially misleading,
and unless the Purchaser elects to terminate its obligation to purchase the Bonds, as described above under
"DELIVERY AND ACCOMPANYING DOCUMENTS - Conditions to Delivery," the City will promptly prepare
and supply to the Purchaser an appropriate amendment or supplement to the Official Statement satisfactory to the
Purchaser; provided, however, that the obligation of the City to do so will terminate when the City delivers the
Bonds to the Purchaser, unless the Purchaser notifies the City on or before such date that less than all of the Bonds
have been sold to ultimate customers, in which case the City's obligations hereunder will extend for an additional
period of time (but not more than 90 days after the date the City delivers the Bonds) until all of the Bonds have been
sold to ultimate customers.
pET.TVERY OF OFFICIAL. STATEMENTS: The City will furnish to the Purchaser (and to each other
participating purchaser of the Bonds, within the meaning of SEC Rule 15c2-12(a), designated by the Purchaser),
within seven days after the sale date, up to 200 copies of the Official Statement. The City will also furnish to the
Purchaser a like number of any supplement or amendment prepared by the City for dissemination to potential
purchasers of the Bonds as described above as well as such additional copies of the Official Statement or any
supplement or amendment as the Purchaser may request prior to the 90th day after the end of the underwriting period
referred to in SEC Rule 15c2-12(e)(2). The City will pay the expense of preparing up to 200 copies of the Official
Statement and up to 200 copies of any supplement or amendment issued on or before the delivery date, but the
Purchaser must pay for all other copies of the Official Statement or any supplement or amendment thereto.
OFFICIAL STATEMENT: Upon the award of the sale of the Bonds, the Preliminary Official Statement will be
amended to conform to the terms of the Purchaser's bid and, if necessary, to make certain other changes. In
connection therewith, the Purchaser will be required to furnish information concerning the initial resale offering
prices and yields of the Bonds as well as the names of the members of the underwriting syndicate. The Purchaser
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will be furnished with such copies of the Official Statement for distribution to purchasers from the Purchaser as it
may reasonably request. Copies in excess of 200 or additional copies will be made available at the Purchaser's
request and expense. The City assumes no responsibility or obligation for the distribution or delivery of any copies
of the Official Statement to anyone other than the Purchaser.
ADDTTIONAI, COPIES OF NOTICE_ RID FORM ANT) STATEMENT: A limited number of additional copies
of this Official Notice of Sale, the Official Bid Form and the Official Statement, as available over and above the
normal mailing, may be obtained at the offices of RBC Dain Rauscher Inc., 1001 Fannin, Suite 400, Houston, Texas,
77002, Financial Advisor to the City.
On the date of the sale, the City Council will, in the Ordinance authorizing the issuance of the Bonds, confirm its
approval of the form and content of the Official Statement, and any addenda, supplement or amendment thereto, and
authorize its use in the reoffering of the Bonds by the Purchaser.
March 27, 2002
/s/ Tom Reid
Mayor
City of Pearland, Texas
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CERTTFTCATF. RF.C,ART)TNCT TSSTTF. PRTCF,
The undersigned hereby certifies with respect to the sale of $25,000,000 City of Pearland, Texas (the "Issuer"),
Permanent Improvement Bonds, Series 2002 (the "Bonds"):
1. The undersigned is the underwriter or the manager of the syndicate of underwriter (the
"Underwriters") which has purchased the Bonds at competitive sale. In this capacity, the undersigned is familiar
with the facts stated herein.
2. The term "Initial Offering Prices" means the respective initial offering prices for the Bonds
(expressed as a dollar amount, yield percentage, or percentage of principal amount and exclusive of accrued interest)
as set forth in the following table:
Principal Principal
Amount Year of Offering Amount Year of Offering
Maturing Maturity Price Maturing Maturity Price
$ 535,000 March 1, 2004 % $1,000,000 March 1, 2016 %
560,000 March 1, 2005 % 1,055,000 March 1, 2017
595,000 March 1, 2006 % 1,115,000 March 1, 2018 %
625,000 March 1, 2007 % 1,175,000 March 1, 2019
660,000 March 1, 2008 % 1,235,000 March 1, 2020
695,000 March 1, 2009 % 1,305,000 March 1, 2021
730,000 March 1, 2010 % 1,375,000 March 1, 2022
770,000 March 1, 2011 % 1,445,000 March 1, 2023
810,000 March 1, 2012 % 1,525,000 March 1, 2024 %
855,000 March 1, 2013 % 1,605,000 March 1, 2025 %
900,000 March 1, 2014 % 1,695,000 March 1, 2026
950,000 March 1, 2015 % 1,785,000 March 1, 2027
3. The term "Sale Date" means the first day on which there was a binding contract in writing for the
sale of the Bonds by the Issuer to the Underwriters on specific terms that were not later modified or adjusted in any
material respect. In the case of the Bonds, the Sale Date is April 8, 2002.
4. The term "Issue Date" means the first day on which there is physical delivery of the written
evidence of the Bonds in exchange for the purchase price (but not earlier than the day interest on the Bonds begins to
accrue for federal income tax purposes). In the case of the Bonds, the Issue Date is May 8, 2002.
5. The term "Public" shall not include bond houses, brokers, and similar persons or organizations
acting in the capacity of wholesalers or underwriters.
6. Based on the actual facts and reasonable expectations in existence on the Sale Date, the Initial
Offering Price for each Bond:
a. Represented the price (payable in cash, with no other consideration being included, and
exclusive of accrued interest), at which the Underwriters reasonably expected, as of the Sale Date, each
such Bond would be sold to the Public; and
b. Did not exceed what the Underwriters believed to be the respective fair market value of
each such Bond.
7. The Underwriters have purchased the Bonds for contemporaneous sale to the Public and not for
investment for their own account. Each of the Bonds has actually been offered to the Public at its respective Initial
Offering Price in a bona fide offering of all the Bonds, and, as of the Issue Date, a substantial amount of the Bonds
(at least 10 percent) of each maturity has been sold to the Public in arm's length transactions for cash prices (with no
other consideration being included). Of the Bonds sold, none were sold at prices other than the respective Initial
Offering prices for such Bonds, plus accrued interest.
8. The accrued interest on the Bonds as of the. Issue Date is $ . The aggregate of the
respective Initial Offering Prices of all of the Bonds, without adjustment for any costs of issuance, is $
9. The Underwriter [has] [has not] purchased bond insurance or another form of credit enhancement
("Guarantee") from securing the payment of the principal of, or interest on, any of the Bonds. With respect to the
Guarantee,
a. The fee or premium paid to the Guarantor for the Guarantee is $ (the
"Premium"). The Premium is set forth in the Guarantor's commitment, does not exceed a reasonable charge
for the transfer of the credit risk provided, and does not include any direct or indirect payment or
compensation for any service other than the transfer of such credit risk. The Guarantor has not provided
any service other than the Guarantee, except for any such service for which the Guarantor has charged a
reasonable arm's length price which will be in addition to, and stated separately from, the Premium. No
portion of the Premium is refundable upon the redemption or defeasance of any of the Bonds.
b. As a result of the Guarantee, the interest rates on the Bonds, as set forth above, are less
than those which would have been necessary in order to sell the bonds at the respective Initial Offering
Prices without the Guarantee. As of the Issue Date, the present value of such interest savings expected to
result from the Guarantee is greater than the present value of the Premium, using the yield on the Bonds
(computed for this purpose by treating the Premium as additional interest on the Bonds) as the discount rate.
We understand that the Issuer will rely on the above in making certain representations to Andrews & Kurth L.L.P.,
Houston, Texas, Bond Counsel, and in complying with the conditions of the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations in effect thereunder, necessary for interest on the Bonds to be and remain
excludable from gross income for federal income tax purposes.
EXECUTED and DELIVERED this , 2002.
(Name of Underwriter or Manager)
By:
Title:
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OFFICIAL BID FORM
Mayor and City Council
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Gentlemen:
April 8, 2002
Subject to the terms of your Official Notice of Sale and Official Statement, dated March 27, 2002, which are
incorporated herein by reference, we hereby submit the following bid for the $25,000,000 THE CITY OF
PEARLAND, TEXAS, PERMANENT IMPROVEMENT BONDS, SERIES 2002, dated May 1, 2002. This offer is
being made for all said Bonds and for not less than all.
For said legally issued Bonds, we will pay you the par value thereof, plus accrued interest from their date to the date
of delivery to us, plus a cash premium of $ for the Bonds maturing and bearing interest per annum as
follows:
Maturity Principal Interest Maturity Principal Interest
Date Amount Rate Date Amount Rate
March 1, 2004(a) $ 535,000 % March 1, 2016(a)(b) $1,000,000 %
March 1, 2005(a) 560,000 % March 1, 2017(a)(b) 1,055,000 %
March 1, 2006(a) 595,000 % March 1, 2018(a)(b) 1,115,000 %
March 1, 2007(a) 625,000 % March 1, 2019(a)(b) 1,175,000 %
March 1, 2008(a) 660,000 % March 1, 2020(a)(b) 1,235,000 %
March 1, 2009(a) 695,000 % March 1, 2021(a)(b) 1,305,000 %
March 1, 2010(a) 730,000 % March 1, 2022(a)(b) 1,375,000 %
March 1, 2011(a) 770,000 % March 1, 2023(a)(b) 1,445,000 %
March 1, 2012(a) 810,000 % March 1, 2024(a)(b) 1,525,000 %
March 1, 2013(a)(b) 855,000 % March 1, 2025(a)(b) 1,605,000 %
March 1, 2014(a)(b) 900,000 % March 1, 2026(a)(b) 1,695,000 %
March 1, 2015(a)(b) 950,000 % March 1, 2027(a)(b) 1,785,000 %
(a) At the option of the Initial Purchaser, any or all of such serial maturities may be designated as term bonds
subject to mandatory sinking fund redemption as follows; provided that the mandatory sinking fund amount
in each year shall equal the amounts shown above as maturing in such year.
Term Bonds Years of First
Maturity Date Mandatory
(March 1) Redemption
Principal Amount
of Term Bonds
$
Interest
Rate
(b) Subject to optional redemption and payment, at the option of the City, in whole or, from time to time, in
part, on March 1, 2012, or on any date thereafter at a price equal to the principal amount thereof, plus
accrued interest to the date fixed for redemption.
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Interest cost, in accordance with the above bid, is:
Total Interest Cost from May 1, 2002 $
Less: Premium $
NET INTEREST COST $
NET EFFECTIVE INTEREST RATE
The Initial Bonds shall be registered in the name of (syndicate manager). We will
advise Wells Fargo Bank Texas, N.A., in Houston, Texas the Paying Agent/Registrar, on forms to be provided by the
Paying Agent/Registrar and on registration instructions at least five business days prior to the date set for initial
delivery.
Cashier's Check of the Rank, , Texas, in the amount of $500,000 which
represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening of this
Bid), and is submitted in accordance with the terms as set forth in the "Official Notice of Sale" and "Official
Statement."
We agree to accept delivery of and make payment for the Initial Bonds in immediately availahle fiends at the
Corporate Trust Office, Wells Fargo Bank Texas, N.A., in Houston, Texas not later than 10:00 A.M., on May 8,
2002, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Official
Notice of Sale.
The undersigned agrees to complete, execute and deliver to the City, by the date of delivery of the Bonds, a
certificate relating to the "issue price" of the Bonds in the form and to the effect attached to or accompanying the
Official Notice of Sale, with such changes thereto as may be acceptable to the City and its Bond Counsel.
Respectfully submitted,
By
Authorized Representative
ACCEPTED this 8th day of April, 2002, by the City Council, City of Pearland, Texas.
Mayor
ATTEST:
City Clerk
(For your information you will find attached a list of the group of purchasers associated with us in this proposal)
OFFICIAL BID FORM
Mayor and City Council
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Gentlemen:
April 8, 2002
Subject to the terms of your Official Notice of Sale and Official Statement, dated March 27, 2002, which are
incorporated herein by reference, we hereby submit the following bid for the $25,000,000 THE CITY OF
PEARLAND, TEXAS, PERMANENT IMPROVEMENT BONDS, SERIES 2002, dated May 1, 2002. This offer is
being made for all said Bonds and for not less than all.
For said legally issued Bonds, we will pay you the par value thereof, plus accrued interest from their date to the date
of delivery to us, plus a cash premium of $ for the Bonds maturing and bearing interest per annum as
follows:
Maturity Principal Interest Maturity Principal Interest
Date Amount Rate Date Amount Rate
March 1, 2004(a) $ 535,000 % March 1, 2016(a)(b) $1,000,000 %
March 1, 2005(a) 560,000 % March 1, 2017(a)(b) 1,055,000 %
March 1, 2006(a) 595,000 % March 1, 2018(a)(b) 1,115,000 %
March 1, 2007(a) 625,000 % March 1, 2019(a)(b) 1,175,000 %
March 1, 2008(a) 660,000 % March 1, 2020(a)(b) 1,235,000 %
March 1, 2009(a) 695,000 % March 1, 2021(a)(b) 1,305,000 %
March 1, 2010(a) 730,000 % March 1, 2022(a)(b) 1,375,000 %
March 1, 2011(a) 770,000 % March 1, 2023(a)(b) 1,445,000 %
March 1, 2012(a) 810,000 % March 1, 2024(a)(b) 1,525,000 %
March 1, 2013(a)(b) 855,000 % March 1, 2025(a)(b) 1,605,000 %
March 1, 2014(a)(b) 900,000 % March 1, 2026(a)(b) 1,695,000 %
March 1, 2015(a)(b) 950,000 % March 1, 2027(a)(b) 1,785,000 %
(a) At the option of the Initial Purchaser, any or all of such serial maturities may be designated as term bonds
subject to mandatory sinking fund redemption as follows; provided that the mandatory sinking fund amount
in each year shall equal the amounts shown above as maturing in such year.
Term Bonds Years of First
Maturity Date Mandatory
(March 1) Redemption
Principal Amount
of Term Bonds
Interest
Rate
(b) Subject to optional redemption and payment, at the option of the City, in whole or, from time to time, in
part, on March 1, 2012, or on any date thereafter at a price equal to the principal amount thereof, plus
accrued interest to the date fixed for redemption.
Interest cost, in accordance with the above bid, is:
Total Interest Cost from May 1, 2002 $
Less: Premium $
NET INTEREST COST $
NET EFFECTIVE INTEREST RATE
The Initial Bonds shall be registered in the name of (syndicate manager). We will
advise Wells Fargo Bank Texas, N.A., in Houston, Texas the Paying Agent/Registrar, on forms to be provided by the
Paying Agent/Registrar and on registration instructions at least five business days prior to the date set for initial
delivery.
Cashier's Check of the Rank , Texas, in the amount of $500,000 which
represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening of this
Bid), and is submitted in accordance with the terms as set forth in the "Official Notice of Sale" and "Official
Statement."
We agree to accept delivery of and make payment for the Initial Bonds in immediately available fiends at the
Corporate Trust Office, Wells Fargo Bank Texas, N.A., in Houston, Texas not later than 10:00 A.M., on May 8,
2002, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Official
Notice of Sale.
The undersigned agrees to complete, execute and deliver to the City, by the date of delivery of the Bonds, a
certificate relating to the "issue price" of the Bonds in the form and to the effect attached to or accompanying the
Official Notice of Sale, with such changes thereto as may be acceptable to the City and its Bond Counsel.
Respectfully submitted,
By
Authorized Representative
ACCEPTED this 8th day of April, 2002, by the City Council, City of Pearland, Texas.
Mayor
ATTEST:
City Clerk
(For your information you will find attached a list of the group of purchasers associated with us in this proposal)
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Dated: May 1, 2002
BOND YEARS
Years
Due: As shown below
Cumulative
Year Amount Bond Years Bond Years
March 1, 2004 $ 535,000 980.8333 980.8333
March 1, 2005 560,000 1,586.6667 2,567.5000
March 1, 2006 595,000 2,280.8333 4,848.3333
March 1, 2007 625,000 3,020.8333 7,869.1667
March 1, 2008 660,000 3,850.0000 11,719.1667
March 1, 2009 695,000 4,749.1667 16,468.3333
March 1, 2010 730,000 5,718.3333 22,186.6667
March 1, 2011 770,000 6,801.6667 28,988.3333
March 1, 2012 810,000 7,965.0000 36,953.3333
March 1, 2013 855,000 9,262.5000 46,215.8333
March 1, 2014 900,000 10,650.0000 56,865.8333
March 1, 2015 950,000 12,191.6667 69,057.5000
March 1, 2016 1,000,000 13,833.3333 82,890.8333
March 1, 2017 1,055,000 15,649.1667 98,540.0000
March 1, 2018 1,115,000 17,654.1667 116,194.1667
March 1, 2019 1,175,000 19,779.1667 135,973.3333
March 1, 2020 1,235,000 22,024.1667 157,997.5000
March 1, 2021 1,305,000 24,577.5000 182,575.0000
March 1, 2022 1,375,000 27,270.8333 209,845.8333
March 1, 2023 1,445,000 30,104.1667 239,950.0000
March 1, 2024 1,525,000 33,295.8333 273,245.8333
March 1, 2025 1,605,000 36,647.5000 309,893.3333
March 1, 2026 1,695,000 40,397.5000 350,290.8333
March 1, 2027 1,785,000 44,327.5000 394,618.3333
AVERAGE MATURITY —15.765 YEARS
PAYING AGENT/REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT dated as of April 8, 2002
(together with any amendments or supplements hereto, the "Agreement") is entered into by and
between the . CITY OF PEARLAND, TEXAS (the "Issuer"), and WELLS FARGO BANK
TEXAS, N.A., HOUSTON, TEXAS, as paying agent/registrar (together with any successor in
such capacity, the "Bank").
WITNESSETH:
WHEREAS, the Issuer has duly authorized and provided for the issuance of its City of
Pearland, Texas Permanent Improvement Bonds, Series 2002 (the "Bonds") in the aggregate
principal amount of S25,000,000 to be issued as fully registered bonds.
WHEREAS, all things necessary to make the Bonds the valid obligations of the Issuer, in
accordance with their terms, will be done upon the issuance and delivery thereof;
WHEREAS, the Issuer and the Bank wish to provide the terms under which the Bank will
act as Paying Agent to pay the principal of, redemption premium, if any, and interest on the
Bonds, in accordance with the terms thereof, and under which the Bank will act as Registrar for
the Bonds; and
WHEREAS, the Issuer and the Bank have duly authorized the execution and delivery of
this Agreement; and all things necessary to make this Agreement the valid agreement of the
parties, in accordance with its terms, have been done.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I.
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.1. Appointment.
The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to
pay to the Registered Owners of the Bonds, in accordance with the terms arid provisions of this
Agreement and the ordinance authorizing the issuance of the Bonds (the "Ordinance"), the
principal of, redemption premium, if any, and interest on all or any of the Bonds.
The Issuer hereby appoints the Bank as Registrar with respect to the Bonds.
The Bank hereby accepts its appointment, and agrees to act as Paying Agent and
Registrar with respect to the Bonds.
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Section 1.2. Compensation.
In consideration of the deposits of funds required to be made with the Bank by the Issuer
pursuant to the provisions of the Ordinance, the Bank agrees to abide by and accept the terms
hereof and of the Ordinance relating to the duties of the Paying Agent/Registrar.
ARTICLE II.
DEFINITIONS
Section 2.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Bank" means Wells Fargo Bank Texas, N.A., Houston, Texas, a commercial bank duly_
organized and existing under the laws of the -United States of America.
"Bond" or "Bonds" means any one or all of the "City of Pearland, Texas Permanent
Improvement, Series 2002" authorized by the Bond Ordinance.
"Issuer" means the City of Pearland, Texas.
"Ordinance" means the Bond Ordinance.
"Paying Agent" means Wells Fargo Bank Texas, N.A., Houston, Texas.
"Person" means any individual, corporation, partnership, joint venture, associations, joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government or any entity whatsoever.
"Registrar" means the Bank when it is performing the function of registrar.
"Registered Owner" means the Person in whose name any Bond is registered in the books
of registration maintained by the Bank under this Agreement.
All other capitalized terms shall have the meanings assigned to them in the Ordinance.
ARTICLE III.
DUTIES OF THE BANK
Section 3.1. Initial Delivery of the Bonds.
The Bonds will be initially registered and delivered by the Bank to the purchaser
designated by the Issuer as set forth in the Ordinance. If such purchaser delivers a written
request to the Bank not later than five business days prior to the date of initial delivery, the Bank
HOU: 77652 .1
will, on the date of initial delivery, exchange the Bonds initially delivered for Bonds of
authorized denominations, registered in accordance with the instructions in such request and the
Ordinance.
Section 3.2. Duties of Paving Agent.
As Paying Agent, the Bank shall, provided adequate funds have been provided to it for
such purpose by or on behalf of the Issuer, timely pay on behalf of the Issuer the principal of and
interest on each Bond in accordance with the provisions of the Ordinance.
If the issue is to be Depository Trust Company (DTC) eligible, the Paying Agent will
comply with all eligibility requirements as outlined and agreed upon in the eligibility
questionnaire.
Section 3.3. Duties of Registrar.
The Bank shall provide for the proper registration of the Bonds and the timely exchange,
replacement and registration of transfer of the Bonds in accordance with the provisions of the
Ordinance. Any changes to Registered Owners for such exchange. replacement and registration
shall be made by the Bank only in accordance with the Ordinance. The Bank will maintain the
books of registration in accordance with the Bank's general practices and procedures in effect
from time to time; provided, however, that the Bank agrees to maintain books of registration for
the Bonds at the City Secretary's office in City of Pearland, Texas, which books of registration
may be a copy of the register which shall be kept current by the Bank.
Section 3.4. Unauthenticated Obligations.
The Issuer shall provide an adequate inventory of unauthenticated Bonds to facilitate
transfers. The Bank covenants that it will maintain such unauthenticated Bonds in safekeeping
and will use reasonable care in maintaining such Bonds in safekeeping, which shall be not less
than the care it maintains for debt securities of other government entities or corporations for
which it serves as registrar, or which it maintains for its own bonds.
Section 3.5. Reports.
Upon request of the Issuer, the Bank will provide the Issuer reports which will describe in
reasonable detail all transactions pertaining to the Bonds and the books of registration for the
period of time specified by the Issuer. The Issuer may also inspect and make copies of the
information in the books of registration and such other documents related to the Bonds and in the
Bank's possession at any time the Bank is customarily open for business, provided that
reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information
into written form.
The Bank will not release or disclose the content of the books of registration to any
person other than to, or at the written request of, an authorized officer or employee of the Issuer,
except upon receipt of a subpoena, court order or as otherwise required by law. Upon receipt of
a subpoena, court order or other lawful request, the Bank will notify the Issuer immediately so
that the Issuer may contest the subpoena, court order or other request if it so chooses.
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Section 3.6. Canceled Obligations.
All Bonds surrendered for payment, redemption, transfer, exchange or replacement. if
surrendered to the Bank, shall be promptly canceled by it and, if surrendered to the Issuer, shall
be delivered to the Bank and, if not already canceled, shall be promptly canceled by the Bank.
The Issuer may at any time deliver to the Bank for cancellation any Bonds previously
authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and
all Bonds so delivered shall be promptly canceled by the Bank. All canceled Bonds held by the
Bank shall be destroyed and evidence of such destruction shall be furnished to the Issuer.
Section 3.7. Reliance on Documents, Etc.'
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer.
(b) The Bank shall not be liable to the Issuer for actions taken under this Agreement
as long as it acts in good faith and exercises due diligence, reasonableness and care, as prescribed
by law, with regard to its duties hereunder.
(c) This Agreement is not intended to require the Bank to expend its own funds for
performance of any of its duties hereunder.
(d) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys.
Section 3.8. Money Held by Bank.
Money held by the Bank hereunder shall be held in trust for the benefit of the Registered
Owners of the Bonds.
EThe Bank shall be under no obligation to pay interest on any money received by it
hereunder.
L All money deposited with the Bank hereunder shall be secured in the manner and to the
fullest extent required by law for the security'of funds of the Issuer.
1_1 Any money deposited with the Bank for the payment of the principal of or interest on any
Bonds and remaining unclaimed by the Registered Owner after the expiration of three years from
[7,
the date such funds have become due and payable shall be reported and disposed of by the Bank
in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the
Texas Property Code, as amended. To the extent such provisions of the Property Code do not
apply to the funds, such funds shall be paid by the Bank to the Issuer upon receipt of a written
request therefor from the Issuer. The Bank shall have no liability to the Registered Owners of
the Bonds by virtue of actions taken in compliance with the foregoing_provision.
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ARTICLE IV.
MISCELLANEOUS PROVISIONS
Section 4.1. Mav Own Bonds.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the
Bonds.
Section 4.2. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereof.
Section 4.3. Assignment.
This Agreement may not be assigned by either party without the prior written consent of
the other.
Section 4.4. Notices.
Any request, demand, authorization, direction, notice, consent. waiver or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses shown herein. or such other
address as may have been given by one party to the other by 15 days' written notice.
Section 4.5: -Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 4.6. Successors and Assigns.
All covenants and agreements herein by the Issuer and the Bank shall bind their
successors and assigns, whether so expressed or not. This Agreement shall not be assigned by
the Bank without the prior written consent of the Issuer.
Section 4.7. Severability.
If any provision of this Agreement shall be invalid or unenforceable, the validity and
enforceability of the remaining provisions hereof shall not in any way be affected or impaired.
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Section 4.8. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder, any benefit or any legal or equitable right, remedy or claim
hereunder.
Section 4.9. Ordinances Govern Conflicts.
This Agreement and the Ordinance constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent and Registrar and if any conflict exists
between this Agreement and the Ordinance, the Ordinance shall govern. The Bank agrees to be
bound by the terms of the Ordinance with respect to the Bonds.
Section 4.10. Term and Termination.
This Agreement shall be effective from and after its date and may be terminated for any
reason by the Issuer or the Bank at any time upon 60 days' written notice; provided, however,
that no such termination shall be effective until a successor has been appointed and has accepted
the duties of the Bank hereunder. In the eventof early termination, regardless of circumstances,
the Bank shall deliver to the Issuer or its designee all funds, Bonds and all books and records
pertaining to the Bank's role as Paying Agent and Registrar with respect to the Bonds, including,
but not limited to, the books of registration.
Section 4.11. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
Section 4.12. Governing Law.
This Agreement shall be construed in accordance with and shall be governed by the laws
of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
ATTEST:
ATTEST:
By:
Title:
(SEAL)
CITY OF PEARLAND, TEXAS
By:
Tom Reid, Mayor
ADDRESS: 3519 Liberty Drive
Pearland, Texas 77581
WELLS FARGO BANK TEXAS, N.A.
By:
Title:
ADDRESS:
Attn: Corporate Trust Department
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
ATTEST:
Young Lorfmg, City Secretary
(SEAL)
ATTEST:
Vire
CITY OF PEARLAND, TEXAS
By:
Tom Reid, Mayor
ADDRESS: 3519 Liberty Drive
Pearland, Texas 77581
WELLS FARGO BANK TEXAS, N.A.
By: /kijLuLLL
Title: Vice President
ADDRESS:
1000 Louisiana St Snit'. 640
Houston. TX 77007
Attn: Corporate Trust Department
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EXHIBIT A
City of Pearland, Texas
Permanent Improvement Bonds, Series 2002
Fee Schedule
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CITY OF PEARLAND
$25,000.000
PERMANENT IMPROVEMENT BONDS SERIES 2002
FOR SERVICES OF PAYING AGENT AND REGISTRAR
Acceptance Fee: Waived
This is a one-time fee, payable at closing, which covers the review of the Paying
Agent Agreement and other supporting documents and setting up the necessary
accounts and records, and attendance at closing (when required). Legal fees and
/or travel expenses, if incurred, are not included in the acceptance fee and will be
billed at cost.
E. Annual Fee: Registered Certificates $550
For maintenance of registered bond holder accounts, including transferring of
securities, placing stop transfers, responding to bondholder correspondence.
processing legal transfers, payment of interest, payment of principal. settling
securities at maturity, generating semi-annual bondholder lists if requested, and
preparing and filing federal and state tax information.
III. Reimbursable Charges:
Wells Fargo shall request reimbursement at the rate of $25 per disbursement for
cost of issuance payments. In addition, we reserve the right to bill for all out-of-
pocket expenses such as, but not limited to, professional services (such as
attorneys and accountants): postage, courier services, insurance, stationary
printing, long distance telephone, publication costs, disclosure, travel, etc.
However, typically these additional out of pocket expenses will -not be billed
unless they become excessive.
IV. Extraordinary Services:
The fees quoted in this schedule are intended to cover standard services and
accordingly are subject to change should the circumstances warrant. Fees for
performing services not included in this schedule or not contemplated at the time
of issuance, will be determined by an analysis of the particular service to be
performed, expense incurred and responsibility assumed. The fees quoted do not
include any costs of secondary market disclosure.
Billings more than 30 days past due are subject to a 1.5% per month late fee.
Compliance items more than 30 days past due are subject to a late fee of $50.00
per item for each two -week period delinquent.
This fee proposal is subject to our review and acceptance of the
documentation governing the transaction and final determination of our
duties and responsibilities.
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RESOLUTION NO. R2001-116
A RESOLUTION CALLING A SPECIAL ELECTION TO BE HELD ON TUESDAY.
NOVEMBER 6, 2001, FOR THE PURPOSE OF SUBMITTING TO THE QUALIFIED
ELECTORS OF THE CITY OF PEARLAND, TEXAS: PROPOSITIONS FOR THE
ISSUANCE OF PUBLIC IMPROVEMENT BONDS FOR VARIOUS PURPOSES:
AND MAKING OTHER PROVISIONS RELATED TO THE SUBJECT
* * *
WHEREAS. the City Council of the City of Pearland. Texas (the "City"). has
determined that an election should be held in the City on two propositions of issuing City
bonds payable from ad valorem taxes for the purposes hereinafter set forth: and
WHEREAS. the City Council wishes to proceed with the ordering of such
election and the City Council has determined that holding such election on a uniform
election date is in the public interest:
NOW. THEREFORE. BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PEARLAND, TEXAS:
Section 1. (a) It is hereby resolved that a special election (the "Election") shall be
held in and throughout the City on Tuesday, November 6. 2001. between the hours of
seven o'clock a.m. and seven o'clock p.m. at which election the propositions set forth in
Exhibit A hereto for the issuance of bonds for permanent public improvements for the
City, and the levy of taxes for payment thereof, shall be submitted to the qualified
electors of the City.
(b) The Election shall be held under the provisions of the Charter of the City.
the Constitution and laws of the State of Texas and of this Resolution. All qualified
voters residing in the City shall be allowed to vote at the Election: and each voter shall
vote in the election precinct in which such voter resides.
Section 2. (a) The election precincts for the Election shall include the county
election precincts located within the limits of the City and such precincts. the polling
places and the precinct judges are hereby established and shall be as described in Exhibit
B hereto.
(b) Each Presiding Judge shall appoint the necessary clerks to assist her which
shall not be less than two (2) nor more than six (6) clerks. Notice of appointment of the
Presiding Judges shall be in accordance with Section 32.009 of the Texas Election Code.
as amended.
(c) In the event the Mayor shall find that the polling place listed on Exhibit B
shall have become unavailable or unsuitable for use at the Election or if any person or
persons appointed herein do not appear or are unable to perform their duties. he is hereby
HOU:681339.5
authorized to designate substitute polling places and appoint substitute personnel. giving
such notice as he deems appropriate.
Section 3. In accordance with the Texas Election Code. it is hereby determined
that electronic voting systems shall be used for the Election for all voting. including early
voting by personal appearance and by mail. The City Secretary is hereby authorized and
directed 'to prepare the ballots and provide and furnish all necessary election supplies to
conduct the election in accordance with the provisions of the Texas Election Code. On
such ballots shall appear propositions corresponding to the propositions set forth in
Exhibit A to this Resolution. Such propositions shall be as described in Exhibit C hereto
with provision to vote "FOR THE ISSUANCE OF BONDS" or "AGAINST THE
ISSUANCE OF BONDS."
Section 4. (a) Cheryl Barnett is hereby appointed Presiding Judge of the Early
Voting Ballot Board for the Election. The Mayor shall appoint a substitute presiding
judge for the Early Voting Ballot Board. if necessary. The Presiding Judge of the Early
Voting Ballot Board is hereby directed to appoint at least two (2) other members to the
Early Voting Ballot Board in the same manner as precinct election clerks are appointed.
(b) Young Lorfing is hereby appointed Clerk for early voting and Melinda
Welsh and Lisa Jones are hereby appointed Deputy Clerks for early voting. Early voting
shall be conducted at the main early voting place on the dates and at the times indicated
on Exhibit D hereto. The mailing address to which ballot applications and ballots voted
by mail may be sent is as follows: Early Voting Clerk, City of Pearland. 3519 Liberty
Drive, Pearland, Texas 77581. Late voting by sick or disabled voters after the close of
the regular early voting period shall be in accordance with Chapter 102 of the Texas
Election Code, as amended.
(c) Early voting in person or by mail for such elections shall be by electronic
voting system. An early ballot box shall be provided in accordance with Sections 51.031
and 85.032 of the Texas Election Code, as amended. Early votes shall be canvassed and
returned by the Early Voting Ballot Board.
(d) Early voting shall also be conducted on the dates and at the times and
temporary branch polling places indicated on Exhibit E hereto.
Section 5. This Resolution shall constitute the election order for the Election and
shall constitute the notice of the Election. and the Mayor is hereby authorized and
directed by the provisions of Section 4.003(c) of the Texas Election Code. as amended.
and Section 1251.003(d) of the Texas Government Code. as amended, to cause a copy of
this Resolution to be (1) published on the same day in each of two (2) successive weeks
in a newspaper of general circulation in the City of Pearland, Texas. the first such
publication to be made not less than fourteen (14) days before the date of the election;
and (2) posted. not later than twenty-one (21) days before the date of the election. in three
(3) public places within the City .of Pearland and at City Hall. The Mayor and City
Secretary are authorized to give such other notice as may be required by law.
HOU:681339.5
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The City Secretary is further directed to cause all notices, ballots, instructions and
other election materials to be provided in both English and Spanish languages in
accordance with the laws of the State of Texas and the United States of America.
Section 6. In the event such propositions are authorized at the Election, all
matters relating to the issuance of such bonds within the terms of the respective
propositions shall be determined by the City Council, and such bonds may be issued at
one time, or in installments from time to time as it may determine. Likewise, bonds for
different purposes may be issued separately, or combined in single multi -purpose issues,
or issued in any other lawful manner, in the discretion of the City Council.
Section 7. Each Presiding Judge and Alternate Presiding Judge appointed herein
shall be compensated for services rendered at the respective polling places at the rate of
$12.00 per hour and for services rendered in delivering election records at the rate of
$25.00 per hour, and any clerks appointed pursuant to this Resolution shall be
compensated for services rendered at the respective polling places at the rate of $10.00
per hour.
Section 8. It is further found and determined that a sufficient written notice of the
date, hour, place and subject of this meeting of the City Council was posted at a place
convenient to the public at the City Hall of the City for the time required by law
preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas
Government Code; and that this meeting has been open to the public as required by law at
all times during which this Resolution and the subject matter thereof has been discussed,
considered and formally acted upon. The City Council further ratifies, approves and
confirms such written notice and the contents and posting thereof.
APPROVED AND ADOPTED this Aid 2P , 2001.
APPROVED AS TO FORM:
City Attorney
Darrin M. Coker
Mayor
Tom Reid
HOU:681339.5
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EXHIBIT A
PROPOSITION 1
Shall the City Council of the City of Pearland, Texas be authorized to issue bonds
of the City in the amount of $92,500.000 maturing serially or otherwise at such times as
may be fixed by the City Council not to exceed 40 years from their date or dates and
bearing interest at any rate or rates, either fixed, variable or floating, according, to any
clearly stated formula, calculation or method not exceeding the maximum interest rate
now or hereafter authorized by law as shall be determined within the discretion of the
City Council at the time of issuance, and to levy a tax upon all taxable property in the
City sufficient to pay the interest on the bonds, and to provide a sinking fund for the
payment of the bonds as they mature, for the purpose of making permanent public
improvements as follows: acquisition. construction. repair and improvement of city
streets and bridges, and all matters necessary or incidental thereto?
PROPOSITION 2
Shall the City Council of the City of Pearland. Texas be authorized to issue bonds
of the City in the amount of $22.500.000 maturing serially or otherwise at such times as
may be fixed by the City Council not to exceed 40 years from their date or dates and
bearing interest at any rate or rates. either fixed. variable or floating. according to any
clearly stated formula, calculation or method not exceeding the maximum interest rate
now or hereafter authorized by law as shall be determined within the discretion of the
City Council at the time of issuance, and to levy a tax upon all taxable property in the
City sufficient to pay the interest on the bonds. and to provide a sinking fund for the
payment of the -bonds as they mature, for the purpose of making permanent public
improvements as follows: acquisition. construction and improvement of city drainage
projects and facilities. and all matters necessary or incidental thereto?
HOU:681339.5
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EXHIBIT B
City of Pearland Precinct #1
Voting for Brazoria County Precincts #28. 46. 51 and 61: and Harris County
Precincts #0537 and 0654 shall be held at the following polling place:
Melvin Knapp Activity Building
2425 S. Grand Boulevard
Pearland, Texas 77581
Presiding Judge: Cheryl Barnett
Alternate Judge: Susan Cullen
City of Pearland Precinct #2
Voting for Brazoria County Precincts #12..21. 26, 29, 36, 40. 47. 58 and 62;
Harris County Precincts #0131 and 0630; and Fort Bend County Precinct #2003 shall be
held at the following polling place:
Epiphany Lutheran Church Gymnasium
5515 W. Broadway
Pearland, Texas 77581
Presiding Judge: Helen Horton
Alternate Judge: Joanne Parisher
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EXHIBIT C
PROPOSITION 1
[BALLOT LANGUAGE]
FOR THE ISSUANCE OF BONDS
The proposed issuance of $92,500,000 City of Pearland, Texas. Permanent
Improvement Bonds for the acquisition, construction. repair and improvement of city
streets and bridges, and the levy of taxes to provide for the payment thereof and
interest thereon.
AGAINST THE ISSUANCE OF BONDS
PROPOSITION 2
[BALLOT LANGUAGE]
FOR THE ISSUANCE OF BONDS
The proposed issuance of $22,500.000 City of Pearland, Texas, Permanent
Improvement Bonds for the acquisition, construction and improvement of city
drainage projects and facilities, and the levy of taxes to provide for the payment
thereof and interest thereon.
AGAINST THE ISSUANCE OF BONDS
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EXHIBIT D
CITY OF PEARLAND. TEXAS
NOVEMBER 6.2001 BOND ELECTION
MAIN EARLY VOTING PLACE
Location
Pearland City Hall
City Secretary's Office
3 519 Liberty Drive
Pearland, Texas 77581
Polls
Date Open
(Monday — Friday)
October 22.2001 through
November 2,2001
(Saturday)
October 20, 2001
October 27.2001
(Sunday)
October 28, 2001
7:30 a.m. -
5:30 p.m.
9:00 a.m. —
3:00 p.m.
9:00 a.m. -
5:00 p.m.
12:00 p.m. -
4:00 p.m.
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EXHIBIT E
CITY OF PEARLAND. TEXAS
NOVEMBER 6, 2001 BOND ELECTION
TEMPORARY BRANCH POLLING PLACES
Polls
Date Open
Epiphany Lutheran Church (Monday — Friday)
Gymnasium
5515 W. Broadway. October 22.2001 through
Pearland, Texas 77581 November 2, 2001
(Saturday)
October 27.2001
(Sunday)
October 28.2001
8:00 a.m. -
5:00 p.m.
9:00 a.m. -
5:00 p.m.
12:00 p.m. -
4:00 p.m.
Pearland High School (Friday) 6:00 p.m. —
Stadium November 2, 2001 10:00 p.m.
3419 Oiler Drive
Pearland, Texas
HOU:681339.5
CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
§
§
We, the undersigned officers of the City of Pearland. Texas (the "City"). hereby
certify as follows:
1. The City Council of the City convened in a special meeting on August 29.
2001, at the regular meeting place thereof. within the City, and the roll was called of the
duly constituted officers and members of the City Council, to wit:
Tom Reid Mayor
Klaus Seeger Council Member
Woody Owens Council Member
Richard Tetens Council Member
Larry Wilkins Council Member
Larry Marcott Council Member
and all of such persons were present, thus constituting a quorum. Whereupon. among
other business. the following was transacted at said meeting: a written
A RESOLUTION CALLING A SPECIAL ELECTION TO BE HELD ON TUESDAY.
NOVEMBER 6. 2001, FOR THE PURPOSE OF SUBMITTING TO THE QUALIFIED
ELECTORS OF_ THE CITY OF PEARLAND, TEXAS, PROPOSITIONS FOR THE
ISSUANCE OF PUBLIC IMPROVEMENT BONDS FOR VARIOUS PURPOSES:
AND MAKING OTHER PROVISIONS RELATED TO THE SUBJECT
(the "Resolution") was duly introduced for the consideration of the City Council and read
in full. It was then duly moved and seconded that the Resolution be adopted; and. after
due discussion, such motion, carrying with it the adoption of the Resolution. prevailed
and carried by the following vote:
AYES: 5 NAYS: 0
2. That a true, full and correct copy of the Resolution adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this certificate:
that the Resolution has been duly recorded in the City Council's minutes of such meeting:
that the above and foregoing paragraph is a true. full and correct excerpt from the City
Council's minutes of such meeting pertaining to the adoption of the Resolution: that the
persons named in the above and foregoing paragraph are the duly chosen. qualified and
acting officers and members of the City Council as indicated therein; that each of the
officers and members of the City Council was duly and sufficiently notified officially and
personally, in advance, of the date, hour, place and subject of the aforesaid meeting. and
that the Resolution would be introduced and considered for adoption at such meeting. and
HOU:681339.5
that the Resolution would be introduced and considered for adoption at such meeting, and
each of such officers and members consented, in advance, to the holding of such meeting
for such purpose; that such meeting was open to the public as required by law; and that
public notice of the date, hour, place and subject of such meeting was given as required
by the Open Meetings Law, Chapter 551, Texas Government Code, as amended.
(SEAL)
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SIGNED AND SEALED this �esr (o , 2001.
Mayor
City of Pearland, Texas
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24 REPORTER NEWS, October 3, 2001
LEGALS
• Prbidr4' Oct. 3 A Od. 10,
2001
WITICLCIFILLMN
WHEREAS. Ire C1Y Caxd
ol the City ol P*rYnd,
Ten (the 'MI has
Niemand Ids n Median
should beheld nnetCryn
two propellors d Issuing
City bade payable tam ad
valorem Naas la Me pur-
poses hran0W trl lost;
and
WHEREAS, IN Cly Caxd
wishes to proceed with IN
ordering ol surds election
end the City Co'sd has
delermnd the1 holding
web electon on a uniform
diction dale is n IN pubic
NOW, THEREFORE, BE IT
RESOLVED BY THE CITY
COUNCIL OF THE CITY Of
PEARLAND, TEXAS:
,Sn11an_L (a) n s 1aaby
resolved deal a special elec.
lion phi 'Election') stall be
held in and throughout the
Coy on Tuesday. ► ovenber
6. 2001. between Me hours
d sewn °doci a.m. and
sawn °dock p m al •115:h
No (2) der mambas b
the Ends Voting Bads
Board In the soma norm
as pednd Median dirks
are sue. •
(b) Young Loring is hereby
' padded Clerk be early
young and eland. WWI
Mai Lisa Jae an hereby
.ppired Deputy Clerks br
wit acing. Eady n0
Mull be andued el Ile
mein sr/ voting pdss on
the dads and el Ile limes
kldaed on EsI18 D hers-
b. The reefing address b
whet bald Applegate
and ballots waled by anal
may be sae e as lobe*
Ear/ Voting Perk City ol
Pesrland, 3519 Liberty
Drive, Portend, Tens
77581. (ere wing by sick
Qr.pled veers alter le
dose a IN Mau ell
voting period shall be In
accordance well Chapter
102 ol the Texas Election
Cade, as amended.
(c) Early damp in pets*, a
by man W such elections
sail be by electronic voting
system An eddy bald box
Mel be provided In wax -
dance with Sedans 51.031
and 85.032 al the Texas
Eamon Code, as wended.
Cly Card not b axaed
40 yeas lam 1810 die a
dads led bearing Inbred sl
any ran or rife, elRm
Axed, variable or lying.
eaerdng to any d*rty
dated l nn ls, WMalnlo°
or method nd ecndrg b
madman leered rag now
or heralds 4Mnrlrid by
Inv u ,het be determined
.Mil h dleadon d M
CSy Card al tie ems d
Ieuenre, and b levy a la
upon d Waite plop.*/ h
Ile Cly .*Minn b prey h
hued an Ile bolds, end b
poAde a •ideg lud Ion
Ise pawned d Me bads u
Rey mature, Fa 10 papa,
d coaling gamma p,blc
Iprovlmn1 as Idlad:
acquisition, canl:tram.
Hoek and Improvement d
city sheets atd bridge., W14
all matters reasalry a
tridental Masao?
PROPOSITION 2
Shell de City Canal ol the
City ol Pesriend, Texas be
authorized 1* issue bads d
Me City in Ire amount d
322.500,000 mdumg mid-
dy a dhrwlse at each
lens as may be toned by Ihe
Cry Council nd b uca.d
40 yeas ion Moe der or
I;
RYE
CITY OF PEARLA D,
TBAS
NOVEMBER 6, 2001
BOND ELECTION
MAM EARL'{ VOTING
PLACE
LarjU(gp; Poland Gty
Hat, Cly Secatininl Moos,
3519 ' Llpe V Della,
Pentad, Texas 77511
Data to PcBa 17aa0:
Oct 23
20oi tine Nov. 2, 2001,
7:30 e.R1.' 9 5:30 p.m.;
(81Ynd.y) Oct 20 2001.
RLD..gl. - 300 pin 104
27, 2001, Rd)0 am. - 5:00
p.m.: (Sunday) Oct. 28,
2001,12-00 p.m. -1-00 p.m.
OW E
CITY OF PEARl10D,
TEXAS
NOVEMBER 6, 2001
BOND ELECTION
TEMPORARY BRANCH
POLLING PLACES
L30IL Epiphany
Lutheran Church
Gymnasium. 5515 W.
6 o'dwey, Puned, Tor
n581
Date L !d1 Qa.e:
pond. • Friday) Od 22,
,bane Rnlo.rlee dsbed
ear de scwrdo can a
derSoacb.r30w06 d4. C6doo
Rion, • Innrildar.
(c) En .1 iv0141 qul .1
-plo. met
radha.n
yt
M add! 8 M lamas no
disponible o Indiaudo
pars w two en {a El.od%o
el spans Riau o pr-
ams Wa•du *gel no
sPaM o I ao e1llrt
a.pgnblu pets elector
51r Weer, y 1M1 maul
I doltnd° a
coned° de
'bp
1n
auid.
perdue
substitute, 4}do notids
cane b seems apops..
%pan/ De araeed° cal
al adgo de Ow:dene d.
T.)u, al aqui dslumnsd°
quo M vole de sigma Osa-
ka.* dabere sr undo
pa' la Ebcdbn pus bolo.
los Mos, 1ldlyud1 sobs
Ignorance en person' y poi
comer. El Swaa mi° de le
Ciudad sill ere u.alzado
y dripdtaward les Del
btu de vd'dbn y prow.
lodes bs m alerlds mew-
1 pus conduct, is semen
de wad° an ds pool -
WWI. del C1Wpo Elidorel
... tries En caches Adores
LEGALS
Secdbn 4.0031c) del ed coo
der EIgabnss de Ts)r,
none a nsodedo, y
Sudan 1251.0030) del
Cbdlgo de Goblrno de
Tiju, oomo 1rnm4Ndo, a
pruner uo egN's(a isle
Reebdbn pre Qua w (I )
plblada en M m4n10 dr
nada'wdados (2)
*darn reteehie a1 err
palbdioo de dratecl6m
general an Ig Cbdad . de
Naiad, Tej*, la Onus
4 Mu pubiadaos sari
hider pn no nano, de
calory (14) dew iris del
as d r shorten; y (2) b-
rda, no mi.Irde Quo sab-
Yin (21) dial flee del da
delu.pddm,n1r(3)
kora piNoos denim de
Is Ciudad de Peadad y de
I Seta des Ayurea lab. EI
A5 ald. y M Saadnlo da r
Cidsd son a latradoe a
dr °ern rntidas all cane
bee. rgmlds. WO/Y.
E1 Ssaelrb de Is Ciudad
ea Wends dilpdo a
prover lochs as nolriu.
ballads, inslruccion.s y
otos mwlends de b elan
don a be labourites de
tripes y EspMbl de eared°
cm ea eye des Estado de
T.)'e y de los E*.edos
ludo. de Amlrlc..
darned, er brclds, W-
ed.& o 'diode ro wee
dodo it Ida matins de
bards shoo clbep&
✓ darizads pa Y b aero
e ri dermio.do date de
✓ dead1n del Camp de
Is Ciudad M largo de su
widen. y e riser., tin
krpm s. soles lode la
prapedd guise. a Wpm.
an l Ciudad edldsde pre
paper 11 Marie de ds
Dorso, 511 paw ern Fonda
Poi dsi$ Pis M psg° da
b bona coma dos =kr
on, con el propose° de
Noel mega* pirbfcas w-
msmnN none slow:
adgeeld-n, oorrel*odba y
mejae dal eleerm de
dens. de N dodad past•
bs a eddsdorse y lodes
leg Inns sujeios 1ne*ea-
bs a nddarraes a des?
BIIBIT B
Cludsd de Posted
PneYdo e 1
Voednn pate Plecinlos des
Corded° de Brunie 628,
46, 51, y 01; y P1edrd0s des
Coded° cis Harr, e0537 y
0654 wain mdoridni en
el alguiene cornice) sic -
local de volaodn:
Melvin Knapp Edilkdo de
Activdades. 2425 S Gland
8aleaerd, Pundit'. Texas
LEGALS
2031y 1200 del nedo4M •
4-00 de I tads
ESE
C1lDAD DE PEARIARD,
TEXAS
NOVIEIBRE 6, DEL AND
2001 ELECCION
DE BOtioS
SUCAIRSALES
TEMPORARIAS DE
CONDOS
ELECTORALES
DE VOTACION
TEIIPRA►M
1l61raridD:Vain Ems'
my Wham Gkaeae), 5515
W. Broadway, Penland,
Tsju 77581
Eisha I tAmkba ls
16 i41Apl.>*1; (Erne
• Menus) attire 22, 2001
Imasta • Noviembre 2, 2001,
BOO der manse • 5,00 de
X end,; (Slbado) Octlde
27, 2001, 6 00 de a
rmsnana • 5 00 de Is Igrde;
(Domingo) Octubee 28,
2001, 12.00 des meddia -
4:00demWde
IIbk0ldn: Estado de le
facade Secundaro de
PSalad, 3119 Oda Drive.
Pearled, Te1as 775e1
EsterA_J;blakIQI . da
Mika ___.Metal;
(Fraley) NovtrMne 2.
2411, Fax 2111.1656764
Written questions may be
submitted by Taira
addressed b 1he Enabler
a1713.266 8971. Rudd d
ill Waimea by IN
E7gisr may be vs,Med by
calling 713421-0410. All
Iscslmea osmmunIcWorr
Mad be warmed by mill-
ing le oigami con.appn-
dno. b 110 done address
Published ed Oct 3, 2001
NOTICE TO MEIN
The CFI' d Portend, lug
will receive compel*.
sealed bids who moor
. e In the Purchasing
Deadmanl 0111as, 3rd
Flea. City Hd. 3519 Liberty
W m. Pea end, Texas end
the do.ig one Ind der
shown Specialism and
boryprrposel Forma we avail
abl. n the Purchasing
Mos during maim brai-
ned' taus 6 12 and 1 5
Monday Ivo* 11W y The
Cly egvessfy resonate so
rpm to accept reject, can
cal or modify snly old a pa
Pa5ii
IMP: 200t-021
Facilities a RIgin d Wry
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AFFIDAVIT OF POSTING NOTICE OF ELECTION
THE STATE OF TEXAS
§
COUNTY OF
BEFORE ME, the undersigned authority, on this day personally appeared
you,. E ,Lcl.' �✓G , the (- S<c r--v of the City of Pearland. Texas (the "City").
who being by me duly sworn, upon oath, deposes and says:
I hereby certify that the City complied with the provisions of Sec. 1251.003(d),
Texas Government Code, as amended, with respect to the bond election (the "Election")
held on November 6, 2001, as follows:
1. I posted the attached notice of election applicable to the Election at the
Pearland City Hall and at the following three public places, covering each election
precinct, within the City not later than October 16, 2001:
Sze c� �c!sc� n�c`c-e( e4- esT<<n� �Le C (ecTt0c
Such notice was posted continuously through Election Day.
SWORN TO AND SUBSCRIBED BEFORE ME, this 2 L( day of ,R (`
2001. 2,
:)2uA K. WELSH
Ic, State of Texas
My Commission Expires:
02/20/2005
Notary Public, State of Texas
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AFFIDAVIT OF POSTING NOTICE OF ELECTION
THE STATE OF TEXAS
COUNTY OF /fi��?e,e�p,
1/ BEFORE ME, the undersigned authority, on this day personally appeared
I ovr✓G' , the aiy S�cR--tozy of the City of Pearland, Texas (the "City"),
who being by me duly sworn, upon oath, deposes and says:
I hereby certify that the City complied with the provisions of Sec. 1251.003(d),
Texas Government Code, as amended, with respect to the bond election (the "Election")
held on November 6, 2001, as follows:
1. I posted the attached notice of election applicable to the Election at the
Pearland City Hall and at the following three public places, covering each election
precinct, within the City not later than October 16, 2001:
Se_attached Record of Pnsti ng Notir•a pf FlP1.tipn
2. Such notice was posted continuously through Election Day.
SWORN TO AND SUBSCRIBED BEFORE ME, this2A day of A-e r,
200X.'L
MELINDA K. WELSH
NPublic, State
Expires:20/2005
Notary Public, State of Texas
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Prescribed by Secretary of State
Section 4.005 V.T.C.A., Election Code
1/86
RECORD OF POSTING NOTICE OF ELECTION
I, the undesigned do hereby state that the notice of election for the November 6, 2001,
Special (Bond) Election was posted on the following dates and locations:
Date of Posting Location of Posting
October 1, 2001 City Hall Bulletin Board
October 1, 2001 Pearland School District Bulletin Board
October 1, 2001 Pearland/Brazoria Library
October 1, 2001 Community Center Bulletin Board
October 1, 2001 Service Center Bulletin Board
October 1, 2001 Neighborhood Center Bulletin Board
October 1, 2001 Melvin Knapp Activity Bldg. Front Doors
October 1, 2001 H.C. Carleston Elementary School
October 1, 2001 Sam Jamison Middle School
October 1, 2001 Epiphany Lutheran Church
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NOTICE OF ELECTION
WHEREAS, the City Council of the City of Pearland. Texas (the "City"). has
determined that an election should be held in the City on two propositions of issuing City
bonds payable from ad valorem taxes for the purposes hereinafter set forth; and
WHEREAS, the City Council wishes to proceed with the ordering of such
election and the City Council has determined that holding such election on a uniform
election date is in the public interest;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PEARLAND, TEXAS:
Section 1. (a) It is hereby resolved that a special election (the "Election") shall be
held in and throughout the City on Tuesday, November 6, 2001, between the hours of
seven o'clock a.m. and seven o'clock p.m. at which election the propositions set forth in
Exhibit A hereto for the issuance of bonds for permanent public improvements for the
City, and the levy of taxes for payment thereof, shall be submitted to the qualified
electors of the City.
(b) The Election shall be held under the provisions of the Charter of the City.
the Constitution and laws of the State of Texas and of this Resolution. All qualified
voters residing in the City shall be allowed to vote at the Election; and each voter shall
vote in the election precinct in which such voter resides.
Section 2. (a) The election precincts for the Election shall include the county
election precincts located within the limits of the City and such precincts, the polling
places and the precinct judges are hereby established and shall be as described in Exhibit
B hereto.
(b) Each Presiding Judge shall appoint the necessary clerks to assist her which
shall not be less than two (2) nor more than six (6) clerks. Notice of appointment of the
Presiding Judges shall be in accordance with Section 32.009 of the Texas Election Code,
as amended.
(c) In the event the Mayor shall find that the polling place listed on Exhibit B
shall have become unavailable or unsuitable for use at the Election or if any person or
persons appointed herein do not appear or are unable to perform their duties, he is hereby
authorized to designate substitute polling places and appoint substitute personnel, giving
such notice as he deems appropriate.
Section 3. In accordance with the Texas Election Code, it is hereby determined
that electronic voting systems shall be used for the Election for all voting, including early
voting by personal appearance and by mail. The City Secretary is hereby authorized and
directed to prepare the ballots and provide and furnish all necessary election supplies to
conduct the election in accordance with the provisions of the Texas Election Code. On
such ballots shall appear propositions corresponding to the propositions set forth in
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Exhibit A to this Resolution. Such propositions shall be as described in Exhibit C hereto
with provision to vote "FOR THE ISSUANCE OF BONDS" or "AGAINST THE
ISSUANCE OF BONDS."
Section 4. (a) Cheryl Barnett is hereby appointed Presiding Judge of the Early
Voting Ballot Board for the Election. The Mayor shall appoint a substitute presiding
judge for the Early Voting Ballot Board, if necessary. The Presiding Judge of the Early
Voting Ballot Board is hereby directed to appoint at least two (2) other members to the
Early Voting Ballot Board in the same manner as precinct election clerks are appointed.
(b) Young Lorfing is hereby appointed Clerk for early voting and Melinda
Welsh and Lisa Jones are hereby appointed Deputy Clerks for early voting. Early voting
shall be conducted at the main early voting place on the dates and at the times indicated
on Exhibit D hereto. The mailing address to which ballot applications and ballots voted
by mail may be sent is as follows: Early Voting Clerk, City of Pearland. 3519 Liberty
Drive, Pearland, Texas 77581. Late voting by sick or disabled voters after the close of
the regular early voting period shall be in accordance with Chapter 102 of the Texas
Election Code, as amended.
(c) Early voting in person or by mail for such elections shall be by electronic
voting system. An early ballot box shall be provided in accordance with Sections 51.031
and 85:032 of the Texas Election Code, as amended. Early votes shall be canvassed and
returned by the Early Voting Ballot Board.
(d) Early voting shall also be conducted on the dates and at the times and
temporary branch polling places indicated on Exhibit E hereto.
Section 5. This Resolution shall constitute the election order for the Election and
shall constitute the notice of the Election, and the Mayor is hereby authorized and
directed by the provisions of Section 4.003(c) of the Texas Election Code, as amended,
and Section 1251.003(d) of the Texas Government Code, as amended, to cause a copy of
this Resolution to be (1) published on the same day in each of two (2) successive weeks
in a newspaper of general circulation in the City of Pearland, Texas, the first such
publication to be made not less than fourteen (14) days before the date of the election;
and (2) posted, not later than twenty-one (21) days before the date of the election, in three
(3) public places within the City of Pearland and at City Hall. The Mayor and City
Secretary are authorized to give such other notice as may be required by law.
The City Secretary is further directed to cause all notices, ballots, instructions and
other election materials to be provided in both English and Spanish languages in
accordance with the laws of the State of Texas and the United States of America.
Section 6. In the event such propositions are authorized at the Election, all
matters relating to the issuance of such bonds within the terms of the respective
propositions shall be determined by the City Council, and such bonds may be issued at
one time, or in installments from time to time as it may determine. Likewise, bonds for
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different purposes may be issued separately, or combined in single multi -purpose issues,
or issued in any other lawful manner, in the discretion of the City Council.
APPROVED AND ADOPTED this August 29, 2001.
ATTEST:
/s/ Young Lorfing
City Secretary
Young Lorfing
APPROVED AS TO FORM:
/s/ Darrin M. Coker
City Attorney
Darrin M. Coker
s," Tom Reid
Mayor
Tom Reid
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EXHIBIT A
PROPOSITION 1
Shall the City Council of the City of Pearland, Texas be authorized to issue bonds
of the City in the amount of $92,500,000 maturing serially or otherwise at such times as
may be fixed by the City Council not to exceed 40 years from their date or dates and
bearing interest at any rate or rates, either fixed, variable or floating, according to any
clearly stated formula, calculation or method not exceeding the maximum interest rate
now or hereafter authorized by law as shall be determined within the discretion of the
City Council at the time of issuance, and to levy a tax upon all taxable property in the
City sufficient to pay the interest on the bonds, and to provide a sinking fund for the
payment of the bonds as they mature, for the purpose of making permanent public
improvements as follows: acquisition, construction, repair and improvement of city
streets and bridges, and all matters necessary or incidental thereto?
PROPOSITION 2
Shall the City Council of the City of Pearland, Texas be authorized to issue bonds
of the City in the amount of $22,500,000 maturing serially or otherwise at such times as
may be fixed by the City Council not to exceed 40 years from their date or dates and
bearing interest at any rate or rates, either fixed, variable or floating, according to any
clearly stated formula, calculation or method not exceeding the maximum interest rate
now or hereafter authorized by law as shall be determined within the discretion of the
City Council at the time of issuance, and to levy a tax upon all taxable property in the
City sufficient to pay the interest on the bonds, and to provide a sinking fund for the
payment of the bonds as they mature, for the purpose of making permanent public
improvements as follows: acquisition, construction and improvement of city drainage
projects and facilities, and all matters necessary or incidental thereto?
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EXHIBIT B
City of Pearland Precinct #1
Voting for Brazoria County Precincts #28, 46. 51 and 61; and Harris County Precincts
#0537 and 0654 shall be held at the following polling place:
Melvin Knapp Activity Building
2425 S. Grand Boulevard
Pearland, Texas 77581
Presiding Judge: Cheryl Barnett
Alternate Judge: Susan Cullen
City of Pearland Precinct #2
Voting for Brazoria County Precincts #12, 21, 26, 29, 36, 40, 47, 58 and 62; Harris
County Precincts #0131 and 0630; and Fort Bend County Precinct #2003 shall be held at the
following polling place:
Epiphany Lutheran Church Gymnasium
5515 W. Broadway
Pearland, Texas 77581
Presiding Judge: Helen Horton
Alternate Judge: Joanne Parisher
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EXHIBIT C
PROPOSITION 1
[BALLOT LANGUAGE]
FOR THE ISSUANCE OF BONDS
The proposed issuance of $92,500,000 City of Pearland, Texas, Permanent Improvement
Bonds for the acquisition, construction, repair and improvement of city streets and bridges.
and the levy of taxes to provide for the payment thereof and interest thereon.
AGAINST THE ISSUANCE OF BONDS
PROPOSITION 2
[BALLOT LANGUAGE]
FOR THE ISSUANCE OF BONDS
The proposed issuance of $22,500,000 City of Pearland, Texas, Permanent Improvement
Bonds for the acquisition, construction and improvement of city drainage projects and
facilities, and the levy of taxes to provide for the payment thereof and interest thereon.
AGAINST THE ISSUANCE OF BONDS
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EXHIBIT D
CITY OF PEARLAND, TEXAS
NOVEMBER 6, 2001 BOND ELECTION
MAIN EARLY VOTING PLACE
Location
Pearland City Hall
City Secretary's Office
3519 Liberty Drive
Pearland, Texas 77581
Date
(Monday — Friday)
October 22, 2001 through
November 2,2001
(Saturday)
October 20, 2001
October 27, 2001
(Sunday)
October 28, 2001
Polls
Open
7:30 a.m. -
5:30 p.m.
9:00 a.m. —
3:00 p.m.
9:00 a.m. -
5:00 p.m.
12:00 p.m. -
4:00 p.m.
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11.
EXHIBIT E
CITY OF PEARLAND, TEXAS
NOVEMBER 6, 2001 BOND ELECTION
TEMPORARY BRANCH POLLING PLACES
Location
Epiphany Lutheran Church
Gymnasium
5515 W. Broadway,
Pearland, Texas 77581
Pearland High School
Stadium
3419 Oiler Drive
Pearland, Texas
Date
(Monday — Friday)
October 22, 2001 through
November 2, 2001
(Saturday)
October 27, 2001
(Sunday)
October 28, 2001
(Friday)
November 2, 2001
Polls
Open
8:00 a.m. -
5:00 p.m.
9:00 a.m. -
5:0Q p.m.
12:00 p.m. -
4:00 p.m.
6:00 p.m. —
10:00 p.m.
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NOTIFICACION DE LA ELECCION
MIENTRAS QUE, El Consejo de la Ciudad de Pearland, Tejas (la '`Ciudad''). ha
determinado que una eleccion debera ser conducida en la Ciudad en dos proposiciones de
emitir bonos de la Ciudad pagaderos de la recaudacion de impuestos sobre el valor de la
propiedad para los propositos establecidos de aca en adelante; y
MIENTRAS QUE, El Consejo de la Ciudad desea proceder con la ordenacien de
dicha eleccion y el Consejo de la Ciudad ha determinado que mantener dicha eleccion en
una fecha de eleccion uniforme es en el interes publico;
AHORA, POR LO TANTO, ES RESUELTO POR EL CONSEJO DE LA
CIUDAD DE PEARLAND, TEJAS:
Seccion 1. (a) Es aca resuelto que una eleccion especial (la "Eleccion") sera
conducida en y a traves de la Ciudad el Martes 6 de Noviembre del ano 2001, entre las
horas de siete de la manana y siete de la noche en la cual eleccion las proposiciones
descriptas en el Exhibit A aqui adjunto para la emision de bonos para mejoras publicas
permanentes para la Ciudad, y el gravamen de impuestos para el pago de ellos, debera ser
sometido a los electores calificados de la Ciudad.
(b) La Eleccion debera ser conducida bajo las provisiones de las Reglas de la
Ciudad, la Constitucion y las leyes del Estado de Tejas y de esta Resolucion. Todos los
votantes calificados que residen en la Ciudad deberan ser permitidos votar en la Eleccion:
y cada votante debera votar en el precinto electoral en el cual resida.
Seccion 2. (a) Los precintos electorales para la Eleccion deberan incluir los
condados de precintos electorales ubicados dentro de los limites de la Ciudad y dichos
precintos, los lugares de comicio electoral de votacion y los jueces del precinto estan aca
establecidos y reran descriptos en el Exhibit B aqui adjunto.
(b) Cada Jueza Presidenta debera nombrar los secretarios necesarios para
asistirla a ella los cuales no seran menos de dos (2) tampoco mas de seis (6) secretarios.
Noticia del nombramiento de los Jueces Presidentes debera ser de acuerdo con la Seccion
32.009 del Codigo de Elecciones de Tejas, como enmendado.
(c) En el evento que el Alcalde encontrase que el comicio electoral listado en
el Exhibit B se tornase no disponible o inadecuado para su use en la Eleccion o si alguna
persona o personas nombradas aqui no aparecen o no estan disponibles para efectuar sus
tareas, el esta aqui autorizado a designar un comicio de votacion substituto y nombrar
personal substituto, dando noticia como to estime apropiado.
Seccion 3. De acuerdo con el Codigo de Elecciones de Tejas, es aqui determinado
que el voto de sistema electronico debera ser usado para la Eleccion para todos los votos,
incluyendo votos tempranos en persona y por correo. El Secretario de la Ciudad esta aca
autorizado y dirigido a preparar las ballotas de votacion y proveer todos los materials
necesarios para conducir la eleccion de acuerdo con las provisiones del Codigo Electoral
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de Tejas. En dichas ballotas deberan aparecer las proposiciones correspondientes a las
proposiciones detalladas en el Exhibit A a esta Resolucion. Dichas proposiciones deberan
ser descriptas en el Exhibit C adjunto aqui con la provision de votar " PARA LA
EMISION DE BONOS" o " CONTRA LA EMISION DE BONOS"
Seccion 4. (a) Cheryl Barnett es aqui nombrada Jueza Presidenta de la Junta
Directiva de Ballotas de Votacion Temprana para la Eleccion. El Alcalde debera nombrar
a un Juez presidente substituto para la Junta Directiva de Ballotas de Votacion Temprana,
si fuese necesario. La Jueza Presidenta de la Junta Directiva de Votacion Temprana es
aqui dirigida a nombrar al menos dos (2) otros miembros a la Junta Directiva de Ballotas
de Votacion Temprana en la misma manera como son nombrados los secretarios de los
precintos electorales.
(b) Young Lorfing es aqui nombrado Secretario para votacion temprana y
Melinda Welsh y Lisa Jones son aqui nombradas Secretarias Ayudantes para votacion
temprana. La votacion temprana debera ser conducida en el lugar principal de votacion
temprana en las fechas y a las horas indicadas en el Ehibit D aqui adjunto. La direccion
de correo a la cual las aplicaciones para ballotas y a donde las ballotas de votacion por
correo podrian ser enviadas es la siguiente: Secretario de Votacion Temprana, Ciudad de
Pearland, 3519 Liberty Drive, Pearland, Tejas 77581. Voto tarde de personas enfermas o
disabilitadas despues del periodo de horas de votacion temprana sera de acuerdo con el
Capitulo 102 del Codigo de Elecciones de Tejas, como enmendado.
(c) Votacion temprana en persona o por correo para dichas elecciones debera
ser por el sistema de votacion electronico. Una temprana caja de ballotas debera
proveerse de acuerdo con las Secciones 51.031 y 85.032 del Codigo de Elecciones de
Tejas, como enmendado. Votos tempranos deberan ser solicitados para su posicion r
retornados por la Junta Directiva de las Ballotas de Votacion Temprana.
(d) Votacion temprana tambien debera ser conducida en las fechas y tiempos
y en los lugares de sucursales temporarias de comicios electorales de votacion indicados
en el Exhibit E adjunto aqui.
Seccion 5. sta Resolucion debera constituir la orden de la eleccion para la
Eleccion y debera constituir la noticia de la Eleccion, y el Alcalde es aqui autorizado y
dirigido por las provisiones de la Seccion 4.003(c) del Codigo de Elecciones de Tejas,
como enmendado, y Seccion 1251.003(d) del Codigo de Gobierno de Tejas, como
enmendado, a proveer una copia de esta Resolucion para que sea (1) publicada en el
mismo dia en cada una de dos (2) semanas sucesivas en un periodico de circulacion
general en la Ciudad de Pearland, Tejas, la primera de esas publicaciones sera hecha por
no menos de catorce (14) dias antes del dia de la eleccion; y (2) listada, no mas tarde que
veintiun (21) dias antes del dia de la eleccion, en tres (3) lugares ptiblicos dentro de la
Ciudad de Pearland y de la Sala del Ayuntamiento. El Alcalde y el Secretario de la
Ciudad son autorizados a dar otras noticias asi como fuesen requeridas por la ley.
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El Secretario de la Ciudad es ademas dirigido a .proveer todas las noticias.
ballotas, instrucciones y otros materials de la eleccion en los lenguajes de Ingles v
Espanol de acuerdo con las leyes del Estado de Tejas y de los Estados Unidos de
America.
Seccion 6. En el evento que dichas proposiciones sean autorizadas en la Eleccion.
todos los temas relacionados a la emision de dichos bonos dentro de los terminos de las
respectivas proposiciones deberan ser determinados por el Consejo de la Ciudad. y dichos
bonos podrian ser emitidos a un tiempo, o en cuotas de tiempo en tiempo como seria
determinado. Asimismo, bonos para diferentes propositos podrian ser emitidos
separadamente, o combinados en iinicos multi-proposito sujetos, o emitidos en cualquier
otra manera legal, en la discrecion del Consejo de la Ciudad.
APROBADO Y ADOPTADO este 29 de Agosto, 2001
ATESTIGOA:
/s/ Young Lorfing
Secretario de la Ciudad
Young Lorfing
APPROBADO COMO FORMA:
/s/ Darrin M. Coker
Abogado de la Ciudad
Darrin M. Coker
/s/ Tom Reid
Alcalde
Tom Reid
HOU:686553.1
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EXHIBIT A
PROPOSICION 1
Debera el Consejo de la Ciudad de Pearland, Tejas ser autorizado a emitir bonos
de la Ciudad en la cantidad de $ 92,500,000 madurando serialmente o de otra manera a
los tiempos que se podrian fijar por el Consejo de la Ciudad no excediendo 40 anos de su
fecha o fechas y dando interes a tasa o tasas, fijas, variables o flotantes, de acuerdo a
cualquier formula claramente establecida, calculacion o metodo no excediendo la tasa
maxima de interes ahora o despues autorizada por la ley como sera determinado dentro de
la discrecion del Consejo de la Ciudad al tiempo de su emision, y a recaudar un impuesto
sobre toda la propiedad sujeta a impuesto en la Ciudad suficiente para pagar el interes de
los bonos, y a proveer un fondo por debajo para el pago de los bonos como ellos
maduran, con el proposito de hacer mejoras publicas permanents como sigue:
adquisicion, construccion, reparar y mejorar las calles de la ciudad y los puentes, y todas
las otras cosas necesarias e incidentales a ellas?
PROPOSICION 2
Debera el Consejo de la Ciudad de Pearland, Tejas ser autorizado a emitir bonos
de la Ciudad en la cantidad de $ 22,500,000 madurando serialmente o de otra manera a
los tiempos que se podrian fijar por el Consejo de la Ciudad no excediendo 40 anos de su
fecha o fechas y dando interes a tasa o tasas, fijas, variables o flotantes, de acuerdo a
cualquier formula claramente establecida, calculacion o metodo no excediendo la tasa
maxima de interes ahora o despues autorizada por la ley como sera determinado dentro de
la discrecion del Consejo de la Ciudad al tiempo de su emision, y a recaudar un impuesto
sobre toda la propiedad sujeta a impuesto en la Ciudad suficiente para pagar el interes de
los bonos, y a proveer un fondo por debajo para el pago de los bonos como ellos
maduran, con el proposito de hacer mejoras publicas permanents como sigue:
adquisicion, construccion y mejoras del sistema de drenaje de la ciudad projectos e
instalaciones, y todos los temas sujetos necesarios e incidentales a ellos?
A-1
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EXHIBIT B
Ciudad de Pearland Precinto # 1
Votacion para Precintos del Condado de Brazoria # 28, 46, 51, y 61; y Precintos
del Condado de Harris #0537 y 0654 seran conducidas en el siguiente comicio electoral
de votacion:
Melvin Knapp Edificio de Actividades
2425 S. Grand Boulevard
Pearland, Texas 77581
Jueza Presidenta: Cheryl Barnett
Jueza Alternativa: Susan Cullen
Ciudad de Pearland Precinto # 2
Votacion para los Precintos del Condado de Brazoria # 12, 21, 26, 29, 36, 40, 47.
58 y 62; Precintos del Condado de Harris #0131 y 0630; y Precintos del Condado de Fort
Bend #2003 deberan ser conducidas en el siguiente comicio electoral de votacion:
Gimnasio de la Iglesia
Epiphany Lutheran
5515 W. Broadway
Pearland, Texas 77581
Jueza Presidenta: Helen Horton
Jueza Alternativa: Joanne Parisher
HOU:686553.1
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EXHIBIT C
PROPOSICION 1
[LENGUAJE DE BALLOTA]
PARA LA EMISION DE BONOS
La propuesta emision de $ 92,500,000 Ciudad de Pearland, Tejas. Bonos de
Mejoras Permanentes para la adquisicion, construccion, reparacion y mejorar las
calles y puentes de la ciudad, y recaudar los impuestos para proveer para el pago e
interes de ellos.
CONTRA LA EMISION DE BONOS
PROPOSICION 2
[LENGUAJE DE BALLOTA]
PARA LA EMISION DE LOS BONOS
La propuesta emision de $ 22,500,000 Ciudad de Pearland, Tejas. Bonos de
Mejoras Permanentes para la adquisicion, construccion, reparacion y mejorar el
sistema de drenaje de la ciudad, projectos e instalaciones, y recaudar impuestos
para proveer para el pago e interes de ellos.
CONTRA LA EMISION DE BONOS
HOU:686553.1
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Votacion
Ubicacion
EXHIBIT D
CIUDAD DE PEARLAND, TEJAS
6 DE NOVIEMBRE DEL ASVO 2001 ELECCION DE BONOS
LUGAR PRINCIPAL DE VOTACION TEMPRANA
Fecha
Comicios de
Abiertos
Ayuntamiento de la (Lunes — Viernes)
Ciudad de Pearland
Oficina del Secretario
De la Ciudad
3519 Liberty Drive Octubre 22, 2001 hasta 7:30 de la maiiana -
Pearland, Tejas 77581 Noviembre 2, 2001 5:30 de la tarde
(Sabado)
Octubre 20, 2001
Octubre 27, 2001
(Domingo)
9:00 de la maiiana —
3:00 de la tarde
9:00 de la maiiana
5:00 de la tarde
Octubre 28, 2001 12:00 del mediodia —
4:00 de la tarde
HOU:686553.1
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EXHIBIT E
CIUDAD DE PEARLAND, TEJAS
NOVIEMBRE 6, DEL ANO 2001 ELECCION DE BONOS
SUCURSALES TEMPORARIAS DE COMICIOS ELECTORALES DE VOTACION
TEMPRANA
Ubicacion
Iglesia Epiphany Lutheran
Gimnasio
5515 W. Broadway,
Pearland, Tejas 77581
Estadio de la Escuela Secundaria
de Pearland
3419 Oiler Drive
Pearland, Tej as
Comicios de Votacion
Fecha Abiertos
(Lunes — Viernes)
Octubre 22, 2001 hasta
Noviembre 2, 2001
(Sabado)
Octubre 27, 2001
(Domingo)
8:00 de la maiiana —
5:00 de la tarde
9:00 de la manana —
5:00 de la tarde
Octubre 28, 2001 12:00 del mediodia —
4:00 de la tarde
(Friday)
Noviembre 2, 2001 6:00 de la tarde -
10:00 de la noche
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HOU:686553.1
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CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
§
§
We, the undersigned officers of the City of Pearland, Texas (the "City"), hereby certify as
follows:
1. The City Council of the City convened in a regular meeting on November 12.
2001. at the regular meeting place thereof, within the City, and the roll was called of the duly
constituted officers and members of the City Council, to wit:
Tom Reid Mayor
Larry Marcott Mayor Pro Tem and Council Member
Woody Owens Council Member
Klaus Seeger Council Member
Richard Tetens Council Member
Larry Wilkins Council Member
and all of such persons were present, thus constituting a quorum. Whereupon. among other
business, the following was transacted at said meeting: a written
ORDINANCE CANVASSING RETURNS AND DECLARING
RESULTS OF SPECIAL BOND ELECTION
(the "Ordinance") was duly introduced for the consideration of the City Council and read in full.
It was then duly moved and seconded that the Ordinance be adopted; and, after due discussion,
such motion, carrying with it the adoption • of the Ordinance, prevailed and carried by the
following vote:
AYES: 5 NAYS: 0
2. That a true. full and correct copy of the Ordinance adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this certificate; that the
Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above
and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of
such meeting pertaining to the adoption of the Ordinance; that the persons named in the above
and foregoing paragraph are the duly chosen. qualified and acting officers and members of the
City Council as indicated therein; that each of the officers and members of the City Council was
duly and sufficiently notified officially and personally, in advance, of the date. hour. place and
subject of the aforesaid meeting, and that the Ordinance would be introduced and considered for
adoption at such meeting, and each of such officers and members consented, in advance. to the
holding of such meeting for such purpose; that such meeting was open to the public as required
HOU:701925.2
by law; and that public notice of the date, hour, place and subject of such meeting was given as
required by the Open Meetings Law, Chapter 551, Texas Government Code.
SIGNED AND SEALED this
(SEAL)
, 2001.
HOU:701925.1
ORDINANCE NO. 1040
ORDINANCE CANVASSING RETURNS AND DECLARING
RESULTS OF SPECIAL BOND ELECTION
STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
WHEREAS, on November 6, 2001, there was held within and throughout the
territory of the City of Pearland, Texas (the "City") a special election (the "Election") at
which there was submitted to the resident, qualified electors of the City the following
propositions, to -wit:
PROPOSITION 1
Shall the City Council of the City of Pearland, Texas be authorized to issue bonds
of the City in the amount of $92,500,000 maturing serially or otherwise at such times as
may be fixed by the City Council not to exceed 40 years from their date or dates and
bearing interest at any rate or rates, either fixed, variable or floating, according to any
clearly stated formula, calculation or method not exceeding the maximum interest rate
now or hereafter authorized by law as shall be determined within the discretion of the
City Council at the time of issuance, and to levy a tax upon all taxable property in the
City sufficient to pay the interest on the bonds, and to provide a sinking fund for the
payment of the bonds as they mature, for the purpose of making permanent public
improvements as follows: acquisition, construction, repair and improvement of city
streets and bridges, and all matters necessary or incidental thereto?
PROPOSITION 2
Shall the City Council of the City of Pearland, Texas be authorized to issue bonds
of the City in the amount of $22,500,000 maturing serially or otherwise at such times as
may be fixed by the City Council not to exceed 40 years from their date or dates and
bearing interest at any rate or rates, either fixed, variable or floating, according to any
clearly stated formula, calculation or method not exceeding the maximum interest rate
now or hereafter authorized by law as shall be determined within the discretion of the
City Council at the time of issuance, and to levy a tax upon all taxable property in the
City sufficient to pay the interest on the bonds, and to provide a sinking fund for the
payment of the bonds as they mature, for the purpose of making permanent public
improvements as follows: acquisition, construction and improvement of city drainage
projects and facilities, and all matters necessary or incidental thereto?
HOU:701903.2
WHEREAS, the Election was called and held in all respects under and in strict
compliance with the Constitution and laws of the State of Texas and the United States of
America;
WHEREAS, the tabulation of the results of the Election was as follows:
PROPOSITION 1
1926 Votes FOR THE ISSUANCE OF BONDS
954 Votes AGAINST THE ISSUANCE OF BONDS
PROPOSITION 2
2588 Votes FOR THE ISSUANCE OF BONDS
579 Votes AGAINST THE ISSUANCE OF BONDS
IT IS THEREFORE ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS THAT:
Section 1. (a) The Election was duly called and notice thereof given in
accordance with law; the Election was held in the manner required by law; only resident,
qualified electors of the City voted at the Election; a written return of the election results was
made to the City in accordance with the Election Code; and a majority of the resident, qualified
electors of the City voting in the Election, including absentee voting, voted for Proposition 1 and
a majority of the resident, qualified electors of the City voting in the Election, including absentee
voting, voted for Proposition 2.
(b) It is hereby officially found and determined that a case of emergency and urgent
public necessity exists that requires that this Ordinance be passed finally and take effect
immediately on the date of its introduction, such emergency and urgent public necessity being
that the proceeds from the sale of the bonds as described herein are required as soon as possible
and without delay for the purposes set forth herein.
Section 2. The official returns shall be delivered to the City Secretary, who is hereby
directed to enter in the Election register the tabulation of the votes cast for and against
Proposition 1 and Proposition 2 and to preserve such tabulations as required by law.
Section 3. Notice of Meeting. The City Council officially finds, determines, recites
and declares that written notice of the date, hour, place and subject of the meeting at which this
Ordinance is adopted was posted on a bulletin board located at a place convenient to the public at
2
HOU:701903.2
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Pearland City Hall for at least 72 hours preceding the scheduled time of the meeting; that a
telephonic or telegraphic notice of such meeting was given to all news media who have
consented to pay any and all expenses incurred by the City in connection with providing such
notice, both as required by Chapter 551, Texas Government Code; and that such meeting was
open to the public as required by law at all times during which this Ordinance and the subject
matter thereof was discussed, considered and formally acted upon.
Section 4. Authorization to Execute. The Mayor is authorized to execute and the
City Secretary is authorized to attest and seal this Ordinance on behalf of the City Council.
Section 5. Effective Date. This Ordinance is effective immediately upon its passage
and approval.
PASSED AND APPROVED MoUe11.10— Iz , 2001.
ATTEST:
(SEAL)
Mayor
City of Pearland, Texas
HOU:701903.1
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EXHIBIT C
PROPOSICION 1
[LENGUAJE DE BALLOTA]
PARA LA EMISION DE BONOS
La propuesta emision de $ 92,500,000 Ciudad de Pearland, Tejas. Bonos de
Mejoras Permanentes para la adquisicion, construccion, reparacion y mejorar las
calles y puentes de la ciudad, y recaudar los impuestos para proveer para el pago e
interes de ellos.
CONTRA LA EMISION DE BONOS
PROPOSICION 2
[LENGUAJE DE BALLOTA]
PARA LA EMISION DE LOS BONOS
La propuesta emision de $ 22,500,000 Ciudad de Pearland, Tejas. Bonos de
Mejoras Permanentes para la adquisicion, construccion, reparacion y mejorar el
sistema de drenaje de la ciudad, projectos e instalaciones, y recaudar impuestos
para proveer para el pago e interes de ellos.
CONTRA LA EMISION DE BONOS
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Votacion
Ubicacion
EXHIBIT D
CIUDAD DE PEARLAND, TEJAS
6 DE NO.VIEMBRE DEL AN. O 2001 ELECCION DE BONGS
LUGAR PRINCIPAL DE VOTACION TEMPRANA
Fecha
Comicios de
Abiertos
Ayuntamiento de la (Lunes — Viernes)
Ciudad de Pearland
Oficina del Secretario
De la Ciudad
3519 Liberty Drive Octubre 22, 2001 hasta 7:30 de la maiiana -
Pearland, Tejas 77581 Noviembre 2, 2001 5:30 de la tarde
(Sabado)
Octubre 20, 2001
Octubre 27, 2001
(Domingo)
9:00 de la manana —
3:00 de la tarde
9:00 de la manana
5:00 de la tarde
Octubre 28, 2001 12:00 del mediodia —
4:00 de la tarde
HOU:686553. I
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EXHIBIT E
CIUDAD DE PEARLAND, TEJAS
NOVIEMBRE 6, DEL ANO 2001 ELECCION DE BONOS
SUCURSALES TEMPORARIAS DE COMICIOS ELECTORALES DE VOTACION
TEMPRANA
Ubicacion
Iglesia Epiphany Lutheran
Gimnasio
5515 W. Broadway,
Pearland, Tejas 77581
Estadio de la Escuela Secundaria
de Pearland
3419 Oiler Drive
Pearland, Tejas
HOU:686553.1
Comicios de Votacion
Fecha Abiertos
(Lunes — Viernes)
Octubre 22, 2001 hasta
Noviembre 2, 2001
(Sabado)
Octubre 27, 2001
(Domingo)
8:00 de la maiiana —
5:00 de la tarde
9:00 de la manana —
5:00 de la tarde
Octubre 28, 2001 12:00 del mediodia —
4:00 de la tarde
(Friday)
Noviembre 2, 2001 6:00 de la tarde -
10:00 de la noche
E-1
U.S. Department of Justice
Civil Rights Division
JDR:MSR:AS:nj
DJ 166-012-3
2001-2722
Margo M. Madole, Esq.
Andrews & Kurth
600 Travis, Suite 4200
Houston, Texas 77002
Dear Ms. Madole:
Toting Section
P.O. Box 66126 .
Washington. DC 2003-5-6125
October 24, 2001
This refers to the procedures for conducting the November 6,
2001, special bond election, which including the additional polling
place, branch early voting locations, and early voting hours, for the
City of Pearland in Brazoria and Harris Counties, Texas, submitted to
the Attorney General pursuant to Section 5 of the Voting Rights Act,
42 U.S.C. 1973c. We received your submission on September 4, 2001.
The Attorney General does not interpose any objection to the
specified changes. However, we note that Section 5 expressly
provides that the failure of the Attorney General to object does
not bar subsequent litigation to enjoin the enforcement of the
chances. See the Procedures for the Administration of Section 5
(28 C.F.R. 51.41) .
Sincerely,
2tedrigi. vi‘-x-E#4/
Joseph D. Rich
Chief., Voting Section
GENERAL CERTIFICATE
STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
§
§
We, the undersigned officers of.the City of Pearland, Texas (the "City"), do hereby make
and execute this certificate for the benefit of the Attorney General of the State of Texas and all
other persons interested in the City's $25,000,000 CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT BONDS, SERIES 2002, dated as of May 1, 2002 (the
"Bonds"), now in the process of issuance, as follows:
(1) The City is a home rule municipality operating under its own charter, which has
not been amended, repealed, changed or altered since November 8, 2001, the date of approval by
the Attorney General of the State of Texas of the City of Pearland, Texas General Obligation
Refunding Bonds, Series 2001, dated December 1, 2001, which are the last obligations issued by
or on behalf of the City.
(2) The Bonds are being issued to provide funds for (i) purchasing, improving,
equipping and constructing drainage improvements, equipment and facilities: (ii) purchasing,
constructing and improving streets and bridges; and (iii) paying costs of issuance of the Bonds
and other professional services related thereto. The total amount of bonds approved at the City's
election held November 6, 2001, the amount previously issued and the amount remaining are as
follows:
Purpose
Drainage projects and
facilities
Streets and bridges
Authorized
$22,500,000
Less
Prior Bonds The Bonds
$ 0 - S8,000,000
92.500,000 0
$115,000,000 $ 0
17,000,000
$25,000,000
Authorized
But Unissued
S 14,500,000
75,500,000
$90,000,000
(3) The Bonds were sold at a price equal to S25,001,697.75 (representing the par
amount of the Bonds plus a cash premium of S1,697.75) plus accrued interest, by means of a
competitive sale to UBS PaineWebber, Inc.
(4) That the Election authorizing the issuance of the Bonds, which was held in the
City for that purpose on November 6, 2001, was held in accordance with the Voting Rights Act
of 1965 and the Texas Election Code, as amended.
HOU:776372.2
(5) From April 8, 2002 to the date hereof, the following individuals have been the
duly elected and qualified Mayor and City Council of the City holding the offices opposite their
names:
Tom Reid Mayor
Larry Marcott Council Member and Mayor Pro Tem
Richard Tetens Council Member
Woody Owens Council Member
Larry Wilkins Council Member
Klaus Seeger Council Member
(6) From April 8, 2002, to the date hereof, Young Lorfing has been the duly
appointed and qualified City Secretary of the City.
(7) Attached to this certificate as Exhibit A is a true, full and correct debt service
schedule for the Bonds and for all presently outstanding obligations of the City which are
payable from ad valorem taxes. Attached to this certificate as Exhibit B is a list of each issue of
bonded debt presently outstanding.
(8) The currently effective ad valorem tax appraisal roll of the City (the "Tax Roll")
is the Tax Roll prepared and approved during the calendar year 2001, being the most recently
approved Tax Roll of the City; the taxable property in the City has been appraised. assessed and
valued as required and provided by the Texas Constitution and Property Tax Code (collectively,
"Texas law"); the Tax Roll for the year has been submitted to the City Council of the City as
required by Texas law, and has been approved and recorded by the City Council; and according
to the Tax Roll for the year, the net aggregate taxable value of taxable property in the City (after
deducting the amount of all applicable exemptions required or authorized under Texas law),
upon which the annual ad valorem tax of the City has been or will be imposed or levied, is
S1,760,551,863.
(9) All of the meetings held by the City Council of the City, pursuant to which any
proceedings were passed, adopted and approved in connection with the Bonds, were meetings
open to the public for which public notice had been given, all as required by law and particularly
as required by the Open Meetings Law, Chapter, 551, Texas Government Code, as amended.
[Signature Page Follows]
HOU:776372.2
SIGNED AND SEALED this ' th day of t`r10,. , 2002.
CITY OF PEARLAND, TEXAS
4\
By: rn�t
Tom Reid, Mayor
J
ADDRESS: 3519 Liberty Drive
Pearland, Texas 77581
ATTEST:
[Signature Page]
HOU:776372.1
EXHIBIT A
CITY OF PEARLAND PERMANENT
IMPROVEMENT BONDS, SERIES 2002
DEBT SERVICE SCHEDULE
HOU:776372.2
Dated Dalu = 05/01/2002
City of Pearland
Nov: Bonds Series 1002
Delivery Date 7- 05/08/2002
Dates
Term Bond Band
MetUrilie5 Radom
Proceeds
Coupon
Rate Yield Price
Interest Total
Amount Debt Service
Flsca1Year
Debt Service
DetttService
to Cell
.
03/01/2303
- -
-
-
-
-
1.111,666.57
1,111,666.67
-
1,111,66087
657,00000
09/1/1/2003
-
-
-
-
667,000.00
657.000.00
1.778,656.67
03101/20134
-
531000.00
558.056.45
6.500
2.680000
109.347000
667,000.00
1,202,000 00
-
1,202,000.00
649,612.50
U9!3112004
-
-
-
649,612.50
649612.50
1,851,61250
1.209,612 50
D3/01/2005
560.000 113
507,426.40
8.500
3320000
108.459000
649,612.50
1.2011,612.50
-
-
-
-
631,412,50
631,41250
1,1341,025.00
831,41250
1 50
09.'0112005
03/01/2006
-
505.000 00
655,356.15
6 500
3.580009
110.317000
631,412 50
1.226,412 5D
-
226,412
612,075.00
09/0120115
-
-
-
-
-
612,075.00
612.075.00
1,538,487.50
1,237.075.00
03101/2007
-
625,000.00
658268.76
5.000
3.850000
105.003000
612,075.00
1,237,075.00
-
1,833,525 00
596,45100
09/01/2007
-
-
-
-
-
-
536,450.03
506,450 00
03:01/2006
_
-
650.000.00
7513,432.40
7.000
4.090000
114,914003
598,45100
1.255,450.00
-
1.2513,450.00
573,350.60
09/01/2000
-
-
-
-
573,350.00
573,350 00
1,529.800.03
1,258,350.03
0301E2069
-
605,000.00
767,975.1.11)
6.000
4.210000
110 500000
573,350.00
1,268.350.00
552,500.00
09/01/2003
-
-
-
-
-
552,503.00
552,500.00
1,020,85000
1,282,500.00
0310112010
-
730.600.00
856.39950
7.000
4.360000
117.315000
552,500.00
1,282,500.00
.
00101/2010
-
-
-
-
-
526,650.03
526,950.03
1.809.450.00
526,950.00
1286,050 00
03/31/2011
-
770,000.00
857,957.10
6.000
4 420000
111.42300D
526,050.00
1,295,950 CO
503,85000
09/012011
-
-
-
-
-
-
503,850.00
503,650.00
1.800,800.00
20,333,85100
0310112012
-
510,003.00
086.313.130
7.000
4.540000
119.298000
503,850.00
1,313,550.00
00
o91n 1nD12
-
-
-
475,503.00
475,500 00
1.789 350
0311,11/2013
-
055,030,03
•
882,385.65
5.000
4.580030
103.203000
475,500.03
1,330,500 03
09101/2013
-
-
-
-
-
-
454,125.03
454,125.00
1,784 625.0D
63101/2014
-
900,00100
•
921,631.00
5,000
4.690000
102.409000
454,125.00
1.354,125.00
09/0112014
-
-
-
-
-
431.625.00
431,625.00
1,785,750.03
03/012015
950,000.00
•
953,176.50
5(100
4.820000
101.387000
431,625.00
1,351,625.00
1.780,500.00
-
-
-
-
-
407,675.00
407,875.00
091012015
-
03/01/2010
-
1,000,000.00
•
1.003,770,03
5.000
4.950000
100.377000
407,875.00
1,407,875.00
1,700,750.00
D9/01/2016
-
-
-
382,875.00
352,87500
03/01/2017
-
1,055,000.00
"
1,045.374.00
5.030
5.06000D
89.372000
382,875.00
1,437,875.00
1.794,375.00
09/01/2017
-
• -
-
-
-
355,500.00
356,503.00
-
031012018
-
1,115,000.00
•
1,099,334.25
5.000
5-130003
95.595000
355,500.00
1,471,500.00
991012018
-
-
-
-
-
-
328,625.00
326,625 03
1,800.125.00
D3/01/2019
-
1,175,000.00
'
1,151.359110
5.003
5.180000
07.968000
328,625.00
1,503.625so
00/01/2019
-
-
-
-
•
-
291250.00
299.250.00
1,802.875,00
03/01/2020
1,235.000.00
'
1,202,235.45
5.000
5.230000
97.347000
296,25100
1,534,250.0D
09/0112020
-
-
-
-
-
-
268,375.00
265,375.00
1.802,625.00
03101E2021
-
1,305.000.00
•
1,264,675.50
5.000
5.260030
95.9I0000
268,375.00
1,573,375.00
1,803,125.00
09/012021
-
-
-
-
'
235,750.60
235,750.00
03101/2022
-
1,375,00100
'
1,326,297,50
5.000
52900013
96.458000
235,750.00
1,610,750.00
-
00
09/0112022
-
-
-
-
-
-
201,375.00
201,375.00
1,812,125
201,375.00
1,646.375.00
-
03/01/2023
-
1.445,050.00
•
1,3137,058.55
5.000
5.320003
95.993000
091012023
-
-
-
-
•
-
165,250.00
165,250.00
1,811,025.00
-
-
-
03/012024
- (1)
1,525,000.00
•
1,455.017.75
5.000
5.356558
85.411000
165,250.00
1,690,250.00
00
0910112024 '
-
-
-
-
-
-
127,125.00
127,125.00
1,817,375
3,130,000.00 (11
1,605.000.00
'
1,531,346.55
5.000
5.350065
95.411000
127,125.00
1,732,125.00
-
03/01/2025
09rp12025
-•
-
-
-
67,000.00
87,000 03
1,819,125.00
-
031012028
• 12)
1,695,03000
•
1,8119438.40
5000
5377827
84,952000
87.030.00
1,782,000.00
-
-
091012023
-
-
-
-
-
-
44.625 03
44,625.00
1,826,625.03
-
03/012027
3,4d0,00000 (2)
1,785,00000
'
1,894,893.20
5.000
5-370007
94.552003
44,825.00
1,829,625.00
1,829,62500
Total
6,610,000.00
25,000 000.00
25,237,197.75
20,269,816.87
45,269,816.67
45,269,818.67
36,738,066.67
-
Acc Int
-
-25,938.89
-26,93s 85
-
36.738066
:rand Totals
6,610 000 00
25,000,000.80
26,237.197.75
21243,1377.78
46,243,877.78
45,269,816.67
67-
Term Bond Bond
Dales Maturities Redemptions
• - Bcnds calletk ... 03/01r2C12 g 100.000
TIC (Ina. el; expenses) .... 5.1694094B% Average Coupon ...... 5 13955233% Net Efk. Int. Rata (Texas Vernon's) = 5.076024:: (with Ad!stmet of -1.697.75).
IC (Arbil aze lie) 5.1148530B% Average life (yrs) ... 15.7B IRS Form 80384 NIC = 5154e28°% (with Adjsttnnl of 80 CO).
Build Ycols ,....... 394 618.39 WAI.1 Nis) 15 378702 NIC = 5.076024% (with Adislmr.l of •1,897.75).
PEARC9T: NEW2O02 Od/Z5/2002 18:20 v5.61
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EXHIBIT B
DEBT SERVICE SCHEDULE FOR ALL OF THE CITY'S OUTSTANDING
TAX- SUPPORTED DEBT
The following sets forth the principal and interest on the City's Outstanding Debt and the Bonds.
Fiscal
Year
Ending
9/30
Outstanding
Debt
2002 S3.752,599
2003 3,766,139
2004 3,768,761
2005 3,968,289
2006 3,953,166
2007 3,961,276
2008 3,954,401
2009 3,772,354
2010 2,928,834
2011 2,926,949
2012 2,936,364
2013 2,943,141
2014 2,954,234
2015 2,968,059
2016 2,967,268
2017 1,679,855
2018 1,683,233
2019 1,049,500
2020 1,054,250
2021 1,056,500
2022 1,066,000
2023
2024
2025
2026
2027
Total S59.111,172
Total New Total Debt
Plus: The Bonds Principal & Service
Principal Interest Interest Requirement
S 3,752,599
S 1,778,667 $1.778.667 5.544,806
S 535,000 1,316,613 1,815,613 5,620,374
560,000 1,281,025 1,841,025 5.809,314
595,000 1,243,488 1,838,488 5,791,654
625,000 1,208,525 1,833,525 5,794,801
660,000 1,169,800 1,829,800 5,784,201
695,000 1,125,850 1,820,850 5,593,204
730,000 1,079,450 1,809,450 4,738,264
770,000 1,030,800 1,800,800 4,727,749
810,000 979,350 1,789,350 4,725,714
855,000 929,625 1,784,625 4,727,766
900,000 885,750 1,785,750 4,739,984
950,000 839,500 1,789,500 4,757,599
1,000,000 790,750 1,790,750 4,758,018
1,055,000 739,375 1,794,375 3.474,230
1,115,000 685,125 1,800,125 3,483,358
1,175,000 627,875 1,802,875 2,852,375
1,235,000 567,625 1,802,625 2,856,875
1,305,000 504,125 1,809,125 2,865,625
1,375,000 437,125 1,812,125 2,878,125
1,445,000 366,625 1,811,625 1,811,625
1,525,000 292,375 1,817,375 1,817,375
1,605,000 214,125 1,819,125 1,819,125
1,695,000 131,625 1,826,625 1,826,625
1,785,000 44,625 1,829,625 1,829,625
S25,000,000 S20.269,818 S45.269,818 S104.380.990
(a) Excludes S17,000,000 Certificates of Obligation, Series 1998 which are self supporting.
Estimated Average Annual Requirements (2002/2027) S4,014,653
Estimated Maximum Annual Requirement (2005) S5,089,314
HOU:776372.2
SIGNATURE IDENTIFICATION AND
NO -LITIGATION CERTIFICATE
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
§
§
We, the undersigned officers of the City of Pearland, Texas (the "City"), certify that we
officially signed, by our manual or facsimile signatures, on behalf of the City, the following
described bonds, to wit:
CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS,
SERIES 2002, dated May 1, 2002, and aggregating 825,000,000 (the "Bonds").
That the Bonds have been duly and officially executed by the undersigned with their
manual or facsimile signatures in the same manner appearing hereon, and the undersigned hereby
adopt and ratify their respective signatures in the manner appearing on each of the Bonds,
whether in manual or facsimile form, as the case may be, as their own signatures.
That on the date of such signing and on the date hereof, we were and are the duly chosen,
qualified and acting officers authorized to execute the Bonds, and holding the official titles set
forth below opposite such signatures.
We further certify that no litigation is pending or, to our knowledge, threatened in any
court to restrain or enjoin the issuance or delivery of the Bonds, or the levy, collection or
application of the ad valorem taxes or revenues pledged or to be pledged to pay the principal of
and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity
of the Bonds, the ordinance dated April 8, 2002, authorizing the issuance, sale and delivery of
the Bonds (the "Bond Ordinance"), or contesting the powers of the City or the authorization of
the Bonds or the Bond Ordinance, or contesting in any way the accuracy, completeness or
fairness of the Official Statement.
We further certify that the seal that has been impressed, or placed in facsimile, upon each
of the Bonds is the legally adopted, proper and only official seal of the City, such official seal
being impressed upon this certificate.
We further certify that no petition or other request has been filed with or presented to any
official of the City requesting that any of the proceedings authorizing the Bonds be submitted to
a referendum or other election.
HOU:776.374.1
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We further certify that Bill Eisen is the City Manager of the City and that his signature as
set forth below is genuine.
City Manager, City of Pearland, Texas
We further certify that the information and data contained in the General Certificate dated
Apr i 1 8 , 2002, remain true and correct as of this date.
[Signature Page Follows]
HOU:776474.1
2002.
WITNESS OUR HANDS AND THE SEAL OF THE CITY this g okay e
SIGNATURES TITLE OF OFFICE
Tom Reid, Mayor
City of Pearland, Texas
Young Lorfing, City Secretary
City of Pearland, Texas
(CITY SEAL)
Before me, on this day personally appeared the foregoing individuals, known to me to be
the persons whose names were subscribed in my presence to the foregoing instrument.
Given under my hand and seal of office this P�ti' i 1 I (7 (.CO .
MELINDA K. WELSH ha
Notary Public, State of Yews
My Commission Ettpirea:
Sea/2
0/2005
Notary Public
Typed or Printed Name:
rne__ t i \NJ 2j
My Commission Expires:
O 24a61 gOO S
HOU:776474.1
FEDERAL TAX CERTIFICATE
CITYOF PEARLAND, TEXAS.
PERMANENT IMPROVEMENT BONDS, Series 2002
I, the undersigned officer of the City of Pearland of Brazoria County. Texas. a political
subdivision of the State of Texas (together with any successor to its duties and functions, the
"City") make this certification for the benefit of all persons interested in the exclusion from gross
income and certain other treatment for federal income tax purposes of the interest to be paid on
the City's Permanent Improvement Bonds, Series 2002 (the "Bonds") in the aggregate principal
amount of S25,000,000, which are being issued and delivered simultaneously with the delivery
of this certificate (the "Certificate"). I do hereby certify as follows:
1. General. I am the duly chosen, qualified and acting officer of the City for the
office shown below my signature. In such capacity, I am charged, along with others, with
responsibility for issuing the Bonds. I am familiar with the facts, estimates and expectations
certified herein, and I am duly authorized to execute and deliver this Certificate. I am familiar
with the provisions of the Ordinance adopted on April 8, 2002, authorizing the issuance of the
Bonds (the "Ordinance"), and particularly the provisions thereof relating to the treatment of the
Bonds and the interest thereon for federal income tax purposes. I am aware of the provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 103 and 141
through 150 thereof, and the Treasury Regulations (the "Regulations") promulgated under the
Code. This Certificate is being executed and delivered pursuant to the relevant provisions of the
Code and Sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, 1.149(d), 1.149(g)-1,
1.150-1 and 1.150-2 of the Regulations. Certain terms used herein have the same meanings as
given to those terms in the Code and the Regulations. Capitalized terms used in this Certificate
(unless otherwise indicated herein) shall have the meanings ascribed to them in the Ordinance.
2. Reasonable Expectations. As an officer of the City responsible for issuing the
Bonds, the undersigned hereby certifies, in good faith, that the City's expectations, as of the
Issue Date (as defined herein), regarding the amount and use of the gross proceeds of the Bonds
and other matters relevant to the treatment of interest on the Bonds for federal income tax
purposes are accurately and completely stated herein, that all of such expectations are reasonable
and are based on the facts and estimates stated in this Certificate, that all of the facts and
estimates stated in this Certificate are accurate. The undersigned has relied on certain
representations made by UBS PaineWebber, Inc. the Initial Purchaser, with respect to the Bonds
(the "Initial Purchaser") in the Certificate Regarding Issue Price, attached hereto as Exhibit A
and certain representations of RBC Dain Rauscher, the Financial Advisor to the City, in the
Certificate of Financial Advisor, attached hereto as Exhibit B. The undersigned is aware of no
other facts, estimates or circumstances which would indicate that any of the expectations stated
herein are not reasonable.
3. Description of Governmental Purposes. The City is issuing the Bonds pursuant
to the Ordinance to provide funds, which will be used to finance:
HOU:2004070.1
C
(a) the purchase, improvement and construction of (a) drainage
improvements, equipment and facilities and (b) streets and bridges located in the City
(the "Project"); and
(b) the costs of issuing the Bonds.
4. Proceeds of the Bonds. The sales proceeds from the sale of the Bonds is
S25,237,197.75, which represents the aggregate principal amount of the Bonds of
S25,000,000.00 plus net original issue premium of $237,197.75.
5. Use of Proceeds of the Bonds. The sales proceeds from the sale of the Bonds
will be expended and applied by the City as follows:
(a) The amount of S24,896,697.75 will be used by the City to pay costs of the
Project.
(b) The amount of approximately $105,000.00 will be used by the City to pay
costs of issuance of the Bonds.
(c) The amount of $138,300.00 represents the underwriter's fee and will be
retained by the Initial Purchaser from the sales proceeds as a cost to the City of issuing
the Bonds.
(d) Proceeds of the Bonds in the amount of $97,200.00 will be disbursed on
the date hereof to pay the insurance premium for the Bonds.
6. Pre -Issuance Accrued Interest In addition to the sale proceeds described in
paragraph 5, the City -will receive, upon the issuance of the Bonds, the amount of $25,938.89
representing interest on the Bonds accruing during the period from May 1, 2002, to the date
hereof. Such amount will be deposited in the City's Permanent Improvement Bonds, Series 2002
Debt Service Fund (the "Debt Service Fund") and, along with all investment earnings therefrom,
will be disbursed to pay interest on the Bonds on March 1, 2003, the first interest payment date
on the Bonds. Because the amount of $25,938.89 represents accrued interest on the Bonds for a
period of less than one year and will be used to pay interest on the Bonds within one year from
the Issue Date, such amount constitutes pre -issuance accrued interest on the Bonds and, as such,
is not considered proceeds.
7. Investment Proceeds. The City has estimated the total amount of investment
proceeds to be received with respect to the Bonds. Earnings on the investment of proceeds of the
Bonds described in paragraph 5(a) will be used in addition to the amounts described in
paragraph 5(a) to pay costs associated with the Project. The total cost of the Project is expected
to equal or exceed the sum of the amount described in paragraph 5(a) and the investment
earnings thereon which are to be used to pay costs of the Project. Earnings on the investment of
proceeds of the Bonds described in paragraph 5(b) will be used in addition to the amounts
described in paragraph 5(b) to pay the costs of issuance of the Bonds. The City will have no
investment earnings on the amount described in paragraph 5(c) as such amount will be retained
by the Initial Purchaser as a cost to the City of issuing the Bonds. Earnings on the investment of
L
HOU:2004070.1
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proceeds of the Bonds described in paragraphs 5(d) will be used for the purposes described in
paragraphs 5(d).
8. Replacement Proceeds. There are no amounts on hand, and there are no
amounts expected to be received, other than amounts identified herein as proceeds of the Bonds
and amounts to be held in the Debt Service Fund for the payment of debt service on the Bonds
(as discussed in paragraphs 6 and 12) which have or will have at any time a sufficiently direct
nexus to the Bonds or to any governmental purpose of the Bonds to conclude that such amounts
would have been used for that governmental purpose if the proceeds of the Bonds were not used
or to be used for that governmental purpose. More specifically --
(a) Sinking Funds and Pledged Funds. Other than the Debt Service Fund
and the amounts and investments on deposit therein from time to time, there are not now
and will not be at any time while the Bonds are outstanding --
(i) any debt service fund, reserve fund, replacement fund, any similar
fund, or any amount or investment reasonably expected to be used, directly or
indirectly (such as, by the generation of income to be used), to pay principal or
interest on the Bonds; and
(ii) any fund, amount, or investment that is directly or indirectly
pledged to pay principal or interest on the Bonds. A pledge includes, but is not
limited to, any arrangement, regardless of its form, which provides reasonable
assurance that the amount will be available to pay principal or interest, even if the
City encounters financial difficulty. A pledge to a guarantor or an agreement to
maintain an amount at a particular level or balance for the direct or indirect
benefit of bondholder or a guarantor would constitute a pledge for this purpose.
(b) No Other Replacement Proceeds. There will be no other replacement
proceeds allocable to the Bonds. Based on the reasonable expectations of the City as of
the date hereof, the term of the Bonds is not longer than, and the City will not allow the
Bonds to remain outstanding longer than, is reasonably necessary for the governmental
purposes for which the Bonds are being issued. The weighted average maturity of the
Bonds does not exceed 120 percent of the reasonably expected economic life of the
capital projects being financed by the Bonds, determined in the same manner as provided
under Section 147(b) of the Code. In addition, none of the proceeds of the Bonds will be
used to finance working capital expenditures.
9. No Overissuance Based on the expectations set forth in the preceding
paragraphs, the amount of the proceeds from the issuance of the Bonds, plus all investment
proceeds to be received with respect to the Bonds, does not exceed by any amount, the amount
required for the governmental purposes for which the Bonds are being issued, as described in
paragraph 3 above.
10. Temporary Period Requirements for the Bonds.
(a) Pre -Issuance Accrued Interest. The amount described in paragraph 6
represents pre -issuance accrued interest on the Bonds for a period not in excess of one
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HOU:2004070.1
redemption date for such Bond; and (v) no Bond subject to optional redemption bears interest at
a rate that increases during the term of the Bond.
The insurance premium (the "Insurance Premium") paid to insure the Bonds, constitutes
a fee for a qualified guarantee; thus the Insurance Premium in the amount of S97,200.00 will be
treated as additional interest on the Bonds for the purpose of calculating the yield on the Bonds.
The Insurance Premium represents a fee for a qualified guarantee based on the representations
set forth below and included in the Certificate of Financial Advisor, Exhibit B hereto.
(a) Interest Savings. The present value of the interest savings expected to be
realized as a result of such guarantee exceeds the present value of the Insurance Premium
discounted at a rate equal to the yield on the Bonds which results assuming recovery of
the Insurance Premium.
(b) Guarantee In Substance. The guarantee imposes secondary liability on
Financial Guaranty Insurance Company ("FGIC") that unconditionally shifts
substantially all of the credit risk for all or part of the payments on the Bonds. FGIC is
not a co -obligor and does not expect to make any payments other than payments for
which it will be reimbursed immediately. FGIC and related parties thereto will not use
more than ten percent of the gross proceeds of the Bonds that are guaranteed by FGIC.
(c) Reasonable Charges. The Insurance Premium does not exceed a
reasonable arms -length charge for the transfer of credit risk. The Insurance Premium is
separately stated from all other fees and payments payable by the City to FGIC for any
other direct or indirect services other than transfer of the credit risk. The Insurance
Premium does not include payment for the cost of underwriting or remarketing the Bonds
or for the cost of casualty insurance for property financed or refinanced by the Bonds.
The Insurance Premium is not refundable upon redemption of the Bonds prior to
maturity.
The Term Bonds due 2025 and 2027 (the "Term Bonds") are subject to mandatory
redemption. The yield on the Term Bonds is calculated by treating the outstanding stated
principal amounts payable on the mandatory redemption dates as payments on such dates based
on representations of the Financial Advisor that the stated redemption price at maturity of such
Term Bonds does not exceed the issue price of such Term Bonds by more than one-fourth of one
percent multiplied by the product of the stated redemption price at maturity and the number of
years to the date of the weighted average maturity (determined by taking into account the
mandatory redemption schedule) of such Term Bonds.
The yield on the Bonds, calculated in this manner and as stated in the Certificate of
Financial Advisor attached hereto as Exhibit B, is 5.114853 percent.
15. Other Issues. There are no obligations issued by the City or any related party of
the City which (a) are sold at the same time as the Bonds (within 15 days), (b) are reasonably
expected to be paidfrom the same source of funds as the Bonds and (c) have been or will be sold
pursuant to the same plan of financing as the Bonds.
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HOU:2004070.1
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16. No Other Sinking Funds. Other than the Debt Service Fund, there are no other
funds or accounts comprised of investment property established by and on behalf of the City (a)
which are expected to be used, or expected to generate earnings to be used, to pay debt service
on the Bonds, or which are reserved or pledged as collateral for payment of debt service on the
Bonds and (b) for which there is reasonable assurance that amounts therein will be available to
pay debt service on the Bonds if the City encounters financial difficulties. Use of amounts in the
Debt Service Fund is described above. There is no other fund established, or to be created or
established, which would be treated as a sinking fund with respect to the Bonds.
17. Minor Portion. The City expects that the gross proceeds of the Bonds. including
all proceeds received with respect to the Bonds and all investment proceeds received on such
amounts, and all other amounts pledged or anticipated to be used to pay principal of and interest
on the Bonds, other than amounts representing a portion of the Bona Fide Portion of the Debt
Service Fund, will be expended in accordance with paragraphs 5 and 10 above. To the extent
that such amounts remain unexpended or are otherwise on hand following the periods set forth in
paragraph 10 above exceeds the amount specified in this paragraph 17, the City will invest such
amounts, other than a minor portion in an amount not exceeding the lesser of 5 percent of the
sale proceeds of the Bonds or $100,000 in the aggregate, at a yield not materially higher than the
yield on the Bonds.
18. Compliance with Rebate Requirements The City has covenanted in the
Ordinance that, unless the Bond meet an exception to the rebate requirement, it will take all
necessary steps to comply with the requirement that rebatable arbitrage earnings on the
investment of the gross proceeds of the Bond, within the meaning of Section 148(f) of the Code,
be rebated to the federal government. Specifically, the City will (i) maintain separate records
regarding the amount and timing of disbursements of proceeds of the Bond (ii) maintain records
regarding the investment of the gross proceeds of the Bond as may be required to calculate the
amount earned on the investment of the grossproceeds of the Bond which are part of a
reasonably required reserve or replacement fund separately from records of amounts in other
funds or accounts maintained for the Bond amounts on deposit in the funds and accounts of the
City allocable to other bond issues of the City or moneys which do not represent gross proceeds
of any Bond of the City (iii) calculate at such times as required by applicable Regulations, the
rebatable amount earned from the investment of the gross proceeds of any Bond of the City, (iv)
calculate at such times as required by applicable Regulations, the rebatable amount earned from
the investment of the gross proceeds of the Bond which are part of a reasonably required reserve
or replacement fund, and (v) pay, not less often than every fifth anniversary date of the delivery
of the Bond or on such other dates as permitted or required by applicable Regulations, all
amounts required to be rebated and all penalties required to be paid to the federal government.
The City acknowledges that the purposes of compliance with Section 148 of the Code, gross
proceeds of the Bond must be accounted for on the basis of a reasonable, consistently applied
method of accounting, not employed in whole or in part as an artifice or device. The City will
employ accountants or other persons with expertise in performing the rebate calculations as is
necessary to insure compliance with the Code. The City will employ legal counsel as is
necessary to resolve the interpretive issues involved in complying with the rebate requirements
of the Code. Further, the City will not indirectly pay any amount otherwise payable to the
federal government pursuant to the foregoing requirements to any person other than the federal
government by entering into any investment arrangement with respect to the gross proceeds of
HOU:2004070.1
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the Bond. In the event that the City fails to comply with the rebate requirements of the Code. the
City agrees to take all steps available under the Code to bring the Bond into compliance with the
Code; such steps include paying any penalty, interest or other amounts which will allow the City
to return to compliance with the rebate requirements of the Code. If the City is required to pay
rebate or other amounts, such as penalties and interest, to the United States with respect to the
Bond pursuant to Section 148(f) of the Code in order to prevent the Bond from constituting
arbitrage bonds or being otherwise classified or treated such that interest on the Bond would not
be excludable from the gross income of the holders thereof for federal income tax purposes, the
City will timely make such payments from available funds of the City and the City reasonably
expects that it will have the ability to make such payments from available funds of the City in the
event such payments become necessary. The undersigned reasonably expects that the City will
fulfill its covenants and representations in this regard.
19. Not a Refunding. No portion of the proceeds of the Bonds are expected to be
used to pay any interest on or principal of any issue of governmental obligations other than the
Bonds.
20. Not a Reimbursement. Except for those expenditures described in the
Resolutions of the City adopted on January 14, 2002 (attached hereto as Exhibit C) regarding
certain expenditures already paid by the City with respect to the Project prior to the date hereof,
none of the proceeds of the Bonds will be allocated to, or otherwise used, to reimburse any
expenditure paid, either actually or constructively, by the City prior to the Issue Date.
21. Not a Hedge Bond. Not more than 50 percent of the proceeds of the Bonds will
be invested in non -purpose investments (as defined in Section 148(f)(6)(A) of the Code) having a
substantially guaranteed yield for four years or more within the meaning of
Section 149(g)(3)(A)(ii) of the Code, and the City reasonably expects that at least 85 percent of
the spendable proceeds of the Bonds will be used to carry out the governmental purposes of the
Bonds within the three-year period beginning on the date the Bonds were issued.
22. No Change In Use. The City does not expect to dispose of any portion of the
Project related to the Bonds, or to change the use of the proceeds of the Bonds while any of the
Bonds are outstanding.
23. No Abusive Arbitrage Device. The Bonds are not and will not be a part of an
issue in which an abusive arbitrage device (as defined in Section 1.148-10(a) of the Regulations)
is used. Without limiting the foregoing, the Bonds are not and will not be a part of a transaction
or series of transactions that attempts to circumvent the provisions of Section 148 of the Code
and the Regulations, by (i) enabling the City to exploit the difference between tax-exempt and
taxable interest rates to gain a material financial advantage, and (ii) increasing the burden on the
market for tax-exempt obligations. In this regard, the City issued the Bonds for the primary
purpose of accomplishing the bona fide governmental purposes set forth in paragraph 3 of this
Certificate. Based on all the facts and circumstances, the City has not issued the Bonds in an
amount higher than is reasonably necessary to accomplish the governmental purposes of the
Bonds, the City has not issued the Bonds earlier than is reasonably necessary to accomplish the
governmental purposes of the Bonds and the City is not allowing the Bonds to remain
outstanding longer than is reasonably necessaryto accomplish the governmental purposes of the
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HOU:2004070.1
Bonds. The City would have issued the Bonds regardless of any arbitrage benefit, which it may
realize in connection with the Bonds. In fact, the City reasonably expects that even if the Bonds
were not tax-exempt obligations and if market rates of interest on taxable and tax-exempt
obligations were equal to each other and to the rates at which the Bonds are in fact now being
issued, the City would have issued the Bonds, notwithstanding the loss of any opportunity to
borrow at lower tax-exempt rates and invest at higher taxable rates.
(a) No Impermissible Sinking Fund. No portion of the Bonds has a
maturity determined .primarily for the purpose of creating a sinking fund with respect to
the Bonds the yield on which will be blended with the yield on the investment of other
proceeds of the Bonds to reduce the negative arbitrage related to such investment.
(b) No Working Capital. Except for an amount that does not exceed 5
percent of the Sale Proceeds of the Bonds (and that is directly related to capital
expenditures financed by the Bonds), the City will only expend proceeds of the Bonds for
(i) costs that would be chargeable to the capital accounts of the Project if the City's
income were subject to federal income taxation and (ii) interest on the Bonds in an
amount that does not cause the aggregate amount of interest paid on all of the Bonds to
exceed that amount of interest on the Bonds that is attributable to the period that
commences on the date hereof and ends on the later of (A) the date that is three years
from the issue date of the Bonds or (B) the date that is one year after the date on which
the Project is placed in service.
(c) No Sale of a Conduit Loan. No portion of the gross proceeds of the
Bonds has been or will be used to acquire, finance or refinance a conduit loan.
24. Allocations and Accounting. The proceeds of the Bonds will be allocated to
expenditures not later than 18 months after the later of the date the expenditure is made or the
date the Project is placed in service, but in no event later than the date that is 60 days after the
fifth anniversary of the date hereof or the retirement of the last Bonds, if earlier. The allocation
of proceeds will be made by employing the direct -tracing method of accounting, unless the City
elects otherwise.
25. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances,
it is expected that the proceeds of the Bonds will not be used in a manner that would cause any of
the Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code and the
Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts,
estimates or circumstances that would materially change such expectations.
26. No Private Use, Payments or Loan Financing.
(a) General. The City reasonably expects, as of the date hereof, that no
action or event during the entire stated term of the Bonds will cause either the "private
business tests" or the "private loan financing test," as such terms are defined in the
Regulations, to be met.
(i) No portion of the proceeds of the Bonds will be used in a trade or
business of a nongovernmental person. For purposes of determining use, the City
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HOU:2004070.1
year and will be expended within one year; therefore, such amount may be invested at an
unrestricted yield.
(b) Expenditure Test. The City expects at least 85 percent of the net sale
proceeds of the Bonds will have been expended prior to May 8, 2005 for costs of the
Project. All net sale proceeds of the Bonds not expended prior to May 8. 2005 will be
invested on and after such date until final expenditure at a yield (as defined in
paragraph 14) which is not materially higher than the yield on the Bonds, except as set
forth in paragraph 1.7 below.
(c) Time Test. The City has incurred or will incur within six months of the
date hereof a substantial binding obligation to a third party pursuant to which the City is
obligated to expend at least five percent of the net sale proceeds of the Bonds on the
Proj ect.
(d) Due Diligence. The City expects that the Project will proceed with due
diligence to completion and that the net sale proceeds of the Bonds will be expended on
the Project with reasonable dispatch.
(e) Investment Proceeds. The City expects that all amounts derived from the
investment of monies received from the sale of the Bonds and from the reinvestment of
such investment proceeds will be expended within three years from the date hereof or
within one year after receipt of such investment income, whichever is later. All
investment proceeds of the Bonds not expended prior to such date will be invested on and
after such date until final expenditure at a yield which is not materially higher than the
yield on the Bonds, except as provided in paragraph 17 below.
The term "net sale proceeds" shall mean any amount actually or constructively received
from the sale of the Bonds, including amounts constituting the underwriter's discount or
compensation and accrued interest, other than pre -issuance accrued interest, less amounts
invested as part of a reasonably required reserve or replacement fund or as part of a minor
portion for the Bonds.
11. Flow of Funds. Under the Bonds, the City is obligated to levy, assess and collect
certain taxes on property located in the City in an amount sufficient to pay debt service on the
Bonds. All taxes levied, assessed and collected by the City for and on account of the Bonds will
be deposited into the Debt Service Fund (as defined below).
12. Debt Service Fund. The City created pursuant to the Ordinance the Debt Service
Fund (as defined above) to be used primarily to achieve a proper matching, of revenues and debt
service on the Bonds within each bond year. The City expects that the taxes levied, assessed and
collected each year, and amounts received from investment of moneys held in the Debt Service
Fund, will be sufficient to pay debt service each year on the Bonds. The City will adjust the
annual tax rates as necessary, taking into account other moneys available or to be available for
the payment of debt service on the Bonds. The portion of the Debt Service Fund which will be
depleted by the payment of debt service on the Bonds at least once each bond year, except for a
reasonable carryover amount not to exceed the greater of (a) one year's earnings on the Debt
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HOU:2004070.1
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will apply rules set forth in applicable Regulations and Revenue Procedures
promulgated by the Internal Revenue Service, including, among others. the
following rules: (A) any activity carried on by a person other than a natural person
or a state or local governmental unit will be treated as a trade or business of a
nongovernmental person; (B) the use of all or any portion of the proceeds, of the
Bonds is treated as the direct use of proceeds; (C) a nongovernmental person will
be treated as a private business user of proceeds of the Bonds as a result of
ownership, actual or beneficial use of the proceeds pursuant to a lease, or a
management or incentive payment contract, or certain other arrangements such as
a take -or -pay or other output -type contract; and (D) the private business use test is
met if a nongovernmental person has special legal entitlements to use directly or
indirectly the proceeds of the Bonds.
(ii) The City has not taken and will not take any deliberate action that
would cause or permit the use of any portion of the proceeds of the Bonds to
change such that such portion will be deemed to be used in the trade or business
of a nongovernmental person for so long as any of the Bonds remain outstanding
(or until an opinion of nationally recognized bond counsel is received to the effect
that such change in use will not adversely affect the excludability from gross
income for federal income tax purposes of interest payable on the Bonds). For
this purpose any action within the control of the City is treated as a deliberate
action. A deliberate action occurs on the date the City enters into a binding
contract with a nongovernmental person for use of the proceeds of the Bonds that
is not subject to any material contingencies.
(iii) No portion of the proceeds of the Bonds will be directly or
indirectly used to make or finance a loan to any person other than a state or local
governmental unit.
(b) Dispositions of Personal Property in the Ordinary Course.
Dispositions of personal property financed with any portion of the proceeds of the Bonds
will occur in the ordinary course of an established governmental program and will satisfy
the following requirements:
(i) The weighted average maturity of the portion of the Bonds
financing personal property is not greater than 120 percent of the reasonably
expected actual use of such personal property for governmental purposes;
(ii) The reasonably expected fair market value of such personal
property on the date of disposition will be not greater than 25 percent of its cost;
(iii) Such personal property will no longer be suitable for its
governmental purposes on the date of disposition; and
(iv) The City is required to deposit amounts received from such
disposition in a commingled fund with substantial tax or other governmental
HOU:2004070.1
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revenues and the City reasonably expects to spend such amounts on governmental
programs within 6 months from the date of commingling.
27. Weighted Average Maturity. As calculated in the manner described below by
the Financial Advisor and set forth in the Certificate of Financial Advisor, Exhibit B hereto. the
Weighted Average Maturity of the Bonds is 15.379 years which is the sum of the products of the
Issue Price of each group of identical Bonds and the number of years to maturity (determined
separately for each group of identical Bonds and taking into account mandatory redemptions),
divided by the aggregate sale proceeds of the Bonds.
[SIGNATURE PAGE FOLLOWS]
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WITNESS MY HAND, this 8th day of May, 2002.
CITY OF PEARLAND, TEXAS
B
EXHIBIT A — Certificate Regarding Issue Price
EXHIBIT B — Certificate of Financial Advisor
EXHIBIT C —Reimbursement Resolutions
EXHIBIT D — Rebate Elections
y Cause
irector of ^i ance
HOU:2004070.1
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EXHIBIT A
CERTIFICATE REGARDING ISSUE PRICE
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HOC:2004070.1
('FRTIFIC'4TF RF(AR.f)INCI [SCUP PRIC'F
The undersigned hereby certifies with respect to the sale of 525.000.000 City of Pearland. Texas (the "Issuer").
Permanent Improvement Bonds. Series 2002 (the "Bonds"):
1. The undersigned is the underwriter or the manager of the syndicate of underwnter (the
"Underwriters") which has purchased the Bonds at competitive sale. In this capacity. the undersigned is familiar
with the facts stated herein.
2. The term "Initial Offering Prices" means the respective initial offering prices for the Bonds
(expressed as a dollar amount, yield percentage. or percentage of principal amount and exclusive of accrued interest►
as set forth in the following table:
Principal Principal
Amount Year of Offering Amount Year of Offering
Maurine Maturity Price Maturine Maturity Price
$ 535,000 March 1, 2004 Z . IF % 51,000.000 March 1. 2016 J' %
560,000 Match 1, 2005 3 3 Z % 1,055,000 March 1, 2017 Set %
595,000 March 1, 2006 ?. S % 1,115,000 March 1, 2018 S. /3 %
625,000 March 1, 2007 3 df % 1.175,000 March 1, 2019 S• i? %
660,000 March 1, 2008 `/• 09 % 1.235,000 March 1, 2020 •23
695,000 March 1, 2009 4/.7-/—% 1,305.000 March 1, 2021 $. . 2G
730,000 March 1, 2010 `ri• 36 % 1,375,000 March 1, 2022�.--- _V._—%
770,000 March 1, 2011 6/02.. % '1,445,000 March 1, 2023 .. 3 Z %
810,000 March 1, 2012 S! s Si % 1.525,000 March 1, 2024 s 3f %
855,000 March 1, 2013 ` . J % 1,605.000' March 1, 2025 s 3J- %
900,000 March 1, 2014 cc % 1,695,000 March 1, 2026 s• s r %
950,000 March 1, 2015 `771?"--- % 1,785,000 March 1, 2027 s 37 %
3. The term "Sale Date" means the first day on which there was a binding contract in writing for the
sale of the Bonds by the Issuer to the Underwriters on specific terms that were not later modified or adjusted in any
material respect. In the case of the Bonds. the Sale Date is April 8, 2002.
4. The term "Issue Date" means the first day on which there is physical delivery of the written
evidence of the Bonds in exchange for the purchase price (but not earlier than the day interest on the Bonds begins to
accrue for federal income tax purposes). In the case of the Bonds, the Issue Date is May 8, 2002.
5. The term "Public" shall not include bond houses, brokers, and similar persons or organizations
acting in the capacity of wholesalers or alderwritem.
6. Based on the actual facts and reasonable expectations in existence on the Sale Date, the Initial
Offering Price for each Bond:
a. Represented the price (payable in cash. with no other consideration being included. and
exclusive of accrued interest), at which the Underwriters reasonably expected, as of the Sale Date, each
such Bond would be sold to the Public; and
b. Did not exceed what the Underwriters believed to be the respective fair market value of
each such Bond.
EXHIBIT B
CERTIFICATE OF FINANCIAL ADVISOR
The undersigned hereby certifies with respect to the sale of S25.000,000 City_ of Pearland,
Texas Permanent Improvement Bonds, Series 2002 (the "Bonds"), as follows:
1. The undersigned is a duly authorized representative of RBC Dain Rauscher, the
financial advisor (the "Financial Advisor") to City of Pearland, Texas (the "City") in connection
with the sale and delivery of the Bonds. In this capacity, the undersigned is familiar with the
facts stated herein.
2. The term "yield" shall have the meaning ascribed to it in Section 148(h) of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. In the
case of the Bonds, the term "yield" means that interest rate which when used as a discount factor
in computing the present value as of the date hereof of all scheduled payments of principal of
and interest on the Bonds produces an amount equal to the Issue Price of the Bonds, plus
pre -issuance accrued interest. No underwriters' discount, issuance costs, or costs of carrying or
repaying the Bonds has been taken into account for purposes of computing the yield on the
Bonds. For purposes hereof, yield shall be calculated on the basis of a 360-day year with interest
compounded semi-annually.
The yield ,with respect to the Bonds subject to optional redemption is computed by
treating each Bond as retired at the stated redemption price on the final maturity date because (i)
the City -has no present intention to redeem prior to maturity the Bonds which are subject to
optional redemption, (ii) no Bond is subject to optional redemption at any time for a price less
than the retirement price at final maturity plus accrued interest, (iii) no Bond is subject to
optional. redemption within five years of the. Issue Date, (iv) no Bond subject to optional
redemption is issued at an Issue Price that exceeds the stated redemption price at maturity of
such Bond by more than one-fourth of one percent multiplied by the product of the stated
redemption price at maturity of such Bond and the number of complete years to the first optional
redemption date for such Bond; and (v) no Bond subject to optional redemption bears interest at
a rate that increases during the term of the Bond.
The Term Bonds due 2025 and 2027 (the "Term Bonds"), are subject to mandatory
redemption. The yield on the Term Bonds is calculated by treating the outstanding stated
principal amounts payable on the mandatory redemption dates as payments on such dates
because the stated redemption price at maturity of such Term Bonds does not exceed the issue
price of such Term Bonds by more than one-fourth of one percent multiplied by the product of
the stated redemption price at maturity and the number of years to the date of the weighted
average maturity (determined by taking into account the mandatory redemption schedule) of
such Term Bonds.
The yield on the Bonds, calculated in this manner and based on an amount equal to
S25,263,136.64, which represents the Issue Price of the Bonds of S25,237,197.75 as set forth in
the Certificate Regarding Issue Price, attached as Exhibit A, plus pre -issuance accrued interest of
S25,938.89, is 5.11485 percent.
B-1
HOU:2004070.1
3. The Weighted Average Maturity of the Bonds is 15.379 years which is the sum of
the products of the Issue Price of each group of identical Bonds and the number of years to
maturity (determined separately for each group of identical Bonds andtaking into account
mandatory redemptions), divided by the aggregate sale proceeds of the Bonds.
4. With respect to the issuance of the Bonds, the representations set forth in
paragraph_23 of the Federal Tax Certificate are, to the best of our knowledge, true, correct and
complete.
The Financial Advisor hereby authorizes the City to rely on the statements made herein in
connection with making the representations set forth in the Federal Tax Certificate to which this
Certificate is attached and in connection with compliance by the City with the provisions of the
Code regarding the exclusion from gross income of the interest on the Bonds. Further, we hereby
authorize Andrews & Kurth L.L.P., Bond Counsel to the City to rely on the statements made
herein in connection with its opinion that interest on the Bonds is excludable from gross income
for federal income tax purposes.
EXECUTED and DELIVERED as of and on May 8, 2002.
RBC DAIN RAUSCHER
By:
Frank J. Ildebrando
Managing Director
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HOU:2004070.1
EXHIBIT. C
REIMBURSEMENT RESOLUTIONS
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RESOLUTION NO. R20n7-13
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PEARLAND DECLARING INTENTION
TO REIMBURSE PROJECT EXPENDITURES
WHEREAS. the members of the City Council have previously approved. and the City of
Pearland (the "City") is proceeding with the City's property tax supported capital improvement
Project (herein. the "Project"), the general purpose and function of which is to provide for the
acquisition. construction. repair and improvement of City drainage projects and facilities and the
maximum aggregate cost of which is expected to be approximately S22.500.000.00:
WHEREAS. the City anticipates providing funds to finance the capital costs of the Project
by issuing after the date hereof its Permanent Improvement Bonds. Series 2002. which are currently
expected to have a maximum aggregate principal amount of $7.500.000 (herein. the "Bonds"). all of
which is expected to be used for the Project and cost of issuance:
1.14 WHEREAS. no funds of the City are. or are reasonably expected to be. allocated. reserved.
or otherwise set aside in the City's budget on a long-term basis to pay the cost of the Project:
1 WHEREAS, the Bonds will be payable from taxes levied, assessed and collected by the City
for the Bonds:
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WHEREAS. the City anticipates that after the date hereof and prior to the issuance of the
Bonds. it will be obligated to pay certain costs constituting expenditures properly chargeable to a
capital account (under general federal income tax principles) in connection with the Project in the
aggregate amount of not more than $1.000.000 (herein, the "Expenditures");
WHEREAS. the money to be used to pay the Expenditures set forth in this Resolution is in
the City's General Fund (herein. the "Fund"). the general purpose and function of which is to pay
for certain capital projects and such money is not appropriated for any other purpose;
WHEREAS. the City reasonably expects that it will be reimbursed for the Expenditures
with proceeds of the Bonds: and
WHEREAS. after the issuance of the Bonds. it will: (1) evidence each allocation of
proceeds of the Bonds to the reimbursement of the Expenditures with an entry in its books and
records maintained with respect to the Bonds. and (2) identify in such entry the actual prior
Expenditure being reimbursed or the fund from which the Expenditure was made.
NOW. THEREFORE. BE IT RESOLVED BY THE MEMBERS OF THE CITY
COUNCIL OF THE CITY THAT:
HO[ 706462 4
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Section 1. The City Council hereby adopts the findings set out in the preamble hereof
and hereby states that this Resolution is a "declaration of official intent" pursuant to and within the
meaning of Treasury Regulation § 1.150-2. as promulgated under the Internal Revenue Code of
1986. as amended. and declares its intent to issue not more than $7.500.000 in principal amount of
Bonds to pay the costs of the Project. of which a maximum amount of $1.000.000 is expected to be
used to reimburse the City for capital expenditures paid in connection with the Project prior to the
issuance of the Bonds.
Section 2. The City will maintain this Resolution at the office of the City where such
records are generally kept and make it continuously available for inspection by the general public
during normal business hours on business days beginning within 30 days after the date of this
Resolution.
PASSED AND APPROVED this 14 day of January. 2002.
ors.
Mayor
City of Pearland. Texas
(SEAL)
HOU:706462.4
THE STATE OF TEXAS
CITY OF PEARLAND
CERTIFICATE FOR RESOLUTION
§
§
We. the undersigned officers of City of Pearland. Texas (the -City-). hereby certify as
follows:
1. The City Council of the City convened in a regular meeting on January 14
2002. at the regular meeting place thereof. within the City. and the roll was called of the duly
constituted officers and members of the City Council. to wit:
Tom Reid
Richard Tetens
Woody Owens
Larry Wilkins
Larry Marcott
Klaus Seeger
Mayor
Councilmember.
Councilmember.
Councilmember,
Councilmember.
Councilmember.
Position 1
Position 2
Position 3
Mayor Pro-Tem
Position 5
and all of such persons were present except . thus constituting a
quorum. Whereupon. among other business. the following was transacted at said meeting: a
written
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PEARLAND DECLARING INTENTION
TO REIMBURSE PROJECT EXPENDITURES
(the "Resolution") was duly introduced for the consideration of the City Council and read in full.
It was then duly moved and seconded that the Resolution be adopted: and. after due discussion.
such motion. carrying with it the adoption of the Resolution, prevailed and carried by the
following vote:
AYES: 5
NAYS: 0 ABSTENTIONS:
2. That a true. full and correct copy of the aforesaid Resolution adopted . at the
meeting described in the above and foregoing paragraph is attached to and follows this
certificate: that such Resolution has been duly recorded in the City's minutes of such meeting:
that the above and foregoing paragraph is a true. full and correct excerpt from the City's minutes
of such meeting pertaining to the adoption of such Resolution: that the persons named in the
above and foregoing paragraph are the duly chosen. qualified and acting officers and members of
the City as indicated therein: that each of the officers and members of the City was duly and
sufficiently notified officially and personally. in advance. of the date. hour. place and purpose of
the aforesaid meeting. and that the Resolution would be introduced and considered for adoption
at such meeting. and each of such officers and members consented. in advance. to the holding of
such meeting for such purpose: that such meeting was open to the public as required by law: and
HOI.:706462.4
that public notice of the date. hour. place and subject of such meeting was given as required b%
Chapter 551. Texas Government Code. as amended.
SIGNED AND SEALED this January 14 . 2002.
CITY OF PEARLAND. TEXAS
By: l�-
Mayor
EAL)
HOU:706462 4
EXHIBIT D
REBATE ELECTIONS
The City hereby makes the following elections with respect to the proceeds of the Bonds:
DO NOT
ELECT ELECT N/A
0 0 ® 1. To use actual facts to apply the
provisions of paragraphs (e) through (m) of section
1.148-7 of the Regulations.
0 0 ® 2. To exclude earnings on a reasonably
required reserve or replacement fund from the
definition of "available Constructions Proceeds" for
purposes of the spending requirements. Section
1.148-7(i)(2) of the Regulations.
0 ® 3. To treat the portion of the Bond that is
not a refunding issue as two, and only two, separate
issues, one of which (a) meets the definition of a
construction issue and (b) is reasonably expected as
of the date hereof to finance all of the construction
expenditures to be financed by the Bonds. Section
1.148-7(j)(1) of the Regulations.
0 0 ® 4. To pay a penalty (the "1-1/2" penalty)
to the United States in lieu of the obligation to pay
arbitrage rebate on available Construction Proceeds in
the event that the Bonds fail to satisfy any of the
semiannual spending requirements for the two-year
rebate exception. Section 1.148-7(k)(1) of the
Regulations.
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HOU:2004070.1
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Form 8038-G
(Rev. November 2000)
Department of tar Treasury
internal Revenue Serves
Information Return for Tax -Exempt Governmental Obligations
► Under Internal Revenue Cods section 149(e)
► See separate Instructions.
Caution: !f the issue pnce is under S100.000. use Form 8038-GC.
EZZIF-13ortin_g Authority
1 Issuers name
City of Pearland, Texas
3 Number and street (or P.O. box if mail is not delivered to street address)
3519 Liberty Drive
5 City, town, or post office, state, and ZIP code
Pearland, • -TX 77581
7 Name of issue
City of Pearland, Texas Permanent Improvement Bonds Series
OMB No 1545-C72:
If Amended Return. check Here ►
2. Issuer's empioyer identification number
74-6028909
Room/suite
4 Report number
3 2002-01
6 Date of issue
' Mav 8. 2002
8 CUSIP number
200 1704862RK9
9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representauve
Kathryn V. Garner
Part II
(713) 220-3948
Type of Issue (check applicable box(es) and enter the issue price)
11 0 Education
12 0 Health and hospital
13 ❑ Transportation
14 ❑ P• ublic safety
15 ❑ E• nvironment (including sewage bonds)
16 ❑ H• ousing
17 0 Utilities
See Instructions and attach scneduie
11
12
13I.
14
15 1
16 1
17
1,8
18 = Other. Describe ► drainage improvements and street repair
19 If obligations are TANs or RANs, check box ► ❑ If obligations are BANS, check box ► ❑
20 If obligations are in the form of a lease or installment sale, check box . ► LJ
Description of Obligations. (Complete for the entire issue for which this form is being filed.)
Pa II
N/A
N/A
N/A
N/A
N/A
N/A
N/A
25,237,197.75
21
(a) Final maturity date
(b) Issue oncepnce
(c) Stated redemption
at matunty
(d) Weighted (e) Yield
average matunty
03/01/2027 $ 25,237,197.75
$ 25,000,000.00
15.379 years1 5.114853
Part IV
Uses of Proceeds of Bond Issue (including underw
22 Proceeds used for accrued interest
23 Issue price of entire issue (enter amount from line 21, column (b))
24 Proceeds used for bond issuance costs (including underwriters' discount)
25 Proceeds used for credit enhancement
26 Proceeds allocated to reasonably required reserve or replacement fund
27 Proceeds used to currently refund prior issues
28 Proceeds used to advance refund prior issues
29 Total (add lines 24 through 28)
30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ... 30 I 24.896.697.75
Description of Refunded Bonds (Complete part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded ►
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ►
33 Enter the last date on which the refunded bonds will be called . ►
34 Enter the date(s) the refunded bonds were issued P. N/A
24
243,300.00
22 1 25,938.89
23
25,237,197.75
25
97,200.00
26 N/A
27
N/A
28
N/A
29
340,500.00
Part V
N/A years
N/A years
N/A
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 135 1 N/A
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a 1 N/A
b Enter the final maturity date of the guaranteed investment contract ►
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other govemmental units 37a N/A
b If this issue is a loan made, from the proceeds of anothertax-exempt issue, check box .. I.❑ and enter the name of the
issuer ► and the date of the issue ► ❑
I III small issuer exception), check box ►
38 If the issuer has designated the issue under section 265(b)(3)(B)(')( ) ( P ) I. 0
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ' 0
40 If the issuer has identified a hedge, check box .
Under pe - es of perjury, 1 declare the ave examined this return and axompanymg schedules and statements. and to the nest of my knowledge
and bel' ey are true, correct. and fete.
Part VI
Sign
Here
ature of tssu= s authonzed representauv
For Paperwork Reduction ct Notice, see page 2 • the Instructions.
Jimmy Causey
Director of Finance
/ ' Type or punt name and title
Cat. No. 63773S Form 8038-G (Rev. 11-2000)
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OFFICIAL STATEMENT CERTIFICATE
$25.000.000 CITY OF PEARLAND. TEXAS
PERMANENT IMPROVEMENT BONDS
SERIES 2002
STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
§
§
We, the undersigned, Mayor and City Secretary, respectively, of the City of Pearland.
Texas (the "City"), acting solely in our official capacity as such. hereby certify with respect to
the City's $25.000,000 Permanent Improvement Bonds, Series 2002 (the "Bonds"). as follows:
That. to the best of our knowledge and belief:
(a) the descriptions and statements of or pertaining to the City. contained in its
Official Statement. on the date thereof and on the date of delivery. were and are
true and correct in all material respects.
(b) insofar as the City and its affairs, including its financial affairs. are concerned.
such Official Statement did not and does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under
which_they were made, not misleading.
(c) insofar as the descriptions and statement. including financial data contained in
such Official Statement, of or pertaining to entities other than the City and their
activities are concerned, such statements and data have been obtained from
sources which the City believes to be reliable and that the City has no reason to
believe that they are untrue in any material respect.
(d) there has been no material adverse change in the financial condition of the City since
September 30, 2001, the date of the last audited financial statements of the City
appearing in the Official Statement.
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EXECUTED this May I , 2002 the date of payment for and delivery of the Bonds.
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Mayor
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ATTEST:
City
CitIf Pe. and, Texas
(SEAL)
City of Pearland, Texas
HOU:776611.1
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HOUSTON
WASHINGTON. D.C.
DALLAS
LOS ANGELES
NEW YORK
THE WOODLANDS
LONDON
ANDREWS & KURTH L.L.P.
ATTORNEYS
G00 TRAVIS, SUITE 4200
TELEPHONE: 713.220.4200
HOUSTON. TX 77002 FACSIMILE: 713.220.4285
May 8, 2002
WE HAVE ACTED as Bond Counsel for the City of Pearland, Texas (the "City"), in
connection with an issue of bonds (the "Bonds") described as follows:
CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS,
SERIES 2002, dated May 1, 2002, in the aggregate principal amount of
$25,000,000, maturing on March 1 in each year from 2004 through and including
2023, and March 1, 2025 and March 1, 2027. The Bonds are issuable in fully
registered form only, in denominations of $5,000 or integral multiples thereof,
bear interest and may be transferred and exchanged as set out in the Bonds and in
the ordinance (the "Bond Ordinance") adopted by the City Council of the City
authorizing their issuance.
WE HAVE ACTED as Bond Counsel for the sole purpose of rendering an opinion with
respect to the legality and validity of the Bonds under the Constitution and laws of the State of
Texas and with respect to the exclusion of interest on the Bonds from gross income under federal
income tax law. In such capacity we have examined the Constitution and laws of the State of
Texas; federal income tax law; and a transcript of certain certified proceedings pertaining to the
issuance of the Bonds, as described in the Bond Ordinance. The transcript contains certified
copies of certain proceedings of the City; certain certifications and representations and other
material facts within the knowledge and control of the City, upon which we rely; and certain
other customary documents and instruments authorizing and relating to the issuance of the
Bonds. We have also examined executed Bond No. R-1 of this issue.
WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified,
any original proceedings, records, data or other material, but have relied upon the transcript of
certified proceedings. We have not assumed any responsibility with respect to the financial
condition or capabilities of the City or the disclosure thereof in connection with the sale of the
Bonds. Our role in connection with the City's Official Statement prepared for use in connection
with the sale of the Bonds has been limited as described therein.
BASED ON SUCH EXAMINATION, it is our opinion as follows:
(1) The transcript of certified proceedings evidences complete legal
authority for the issuance of the Bonds in full compliance with the Constitution
and laws of the State of Texas presently in effect; the Bonds constitute valid and
legally binding obligations of the City enforceable in accordance with the terms
HOU:770818.1
and conditions thereof, except to the extent that the rights and remedies of the
owners of the Bonds may be limited by laws heretofore or hereafter enacted
relating to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors of political subdivisions and the exercise of
judicial discretion in appropriate cases; and the Bonds have been authorized and
delivered in accordance with law; and
(2) The Bonds are payable, both as to principal and interest, from, and
secured by, the proceeds of a continuing, direct annual ad valorem tax, levied
within the limits prescribed by law, against taxable property within the City,
which taxes have been pledged irrevocably to pay the principal of and interest on
the Bonds.
ALSO BASED ON OUR EXAMINATION AS DESCRIBED ABOVE, it is our further
opinion that, subject to the restrictions hereinafter described, interest on the Bonds is excludable
from gross income of the owners thereof for federal income tax purposes under existing law and
is not subject to the alternative minimum tax on individuals or, except as hereinafter described,
corporations. The opinion set forth in the first sentence of this paragraph is subject to the
condition that the City comply with all requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order
that interest thereon be, or continue to be, excluded from gross income for federal income tax
purposes. The City has covenanted in the Bond Ordinance to comply with each such
requirement. Failure to comply with certain of such requirements may cause the inclusion of
interest on the Bonds in gross income for federal income tax purposes to be retroactive to the
date of issuance of the Bonds. The Code and the existing regulations, rulings and court decisions
thereunder, upon which the foregoing opinions of Bond Counsel are based, are subject to change,
which could prospectively or retroactively result in the inclusion of the interest on the Bonds in
gross income of the owners thereof for federal income tax purposes.
INTEREST ON all tax-exempt obligations, including the Bonds, owned by a corporation
(other than an S corporation, a regulated investment company, a real estate investment trust
(REIT) or a real estate mortgage investment ' conduit (REMIC)) will be included in such
corporation's adjusted current earnings for purposes of calculating such corporation's alternative
minimum taxable income. A corporation's alternative minimum taxable income is the basis on
which the alternative minimum tax imposed by the Code is computed. Purchasers of Bonds are
directed to the discussion entitled "TAX EXEMPTION" set forth in the Official Statement.
UNDER EXISTING LAW and based upon the assumptions stated in the Official
Statement prepared for use in connection with the sale of the Bonds, it is also our opinion as
follows: (1) the difference between (a) the stated redemption price at maturity of each Bond
maturing in the years 2017 through 2023, inclusive, and in the years 2025 and 2027 (the
"Discount Bonds"), and (b) the initial offering price at which a substantial amount of such
Discount Bonds of the same maturity were sold to the public, as described in the Official
Statement, constitutes original issue discount with respect to each such Discount Bond in the
hands of an owner who purchased such Discount Bond at the initial offering price in the initial
public offering of the Bonds; and (2) such initial owner is entitled to exclude from gross income
for federal income tax purposes with respect to such Discount Bond that portion of the original
2
HOU:770818.1
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issue discount deemed to be earned for federal income tax purposes during the period that such
Discount Bond continues to be owned by such owner. In the event of the redemption, sale or
other taxable disposition of such Discount Bond prior to its stated maturity, however, any
t amount realized by such owner in excess of the basis of such Discount Bond in the hands of such
owner (adjusted upward by the portion of the original issue discount deemed to be earned during
C the period for which such Discount Bond was held by such initial owner) is includable in gross
income for federal income tax purposes.
PURCHASERS OF DISCOUNT BONDS in the initial public offering are directed to the
discussion entitled "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT AND PREMIUM
OBLIGATIONS" set forth in the Official Statement for purposes of determining the portion of
the original issue discount which is deemed to be earned for federal income tax purposes during
the period such Bonds are held by an initial owner. The federal income tax consequences of the
purchase, ownership and redemption, sale or other taxable disposition of Discount Bonds which
are not purchased in the initial public offering at the initial offering price may be determined
L according to rules which differ from those described above and in the Official Statement.
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EXCEPT AS DESCRIBED ABOVE, we express no opinion as to any federal, state or
local tax consequences resulting from the ownership of, receipt or accrual of interest on, or the
acquisition or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware
that the ownership of tax-exempt obligations, such as the Bonds, may result in collateral federal
income tax consequences to, among others, financial institutions, property and casualty insurance
companies, certain foreign corporations doing business in the United States, certain S
corporations with Subchapter C earnings and profits, individual recipients of Social Security or
Railroad Retirement benefits, taxpayers who are deemed to have incurred or continued
indebtedness to purchase or carry tax-exempt obligations and individuals otherwise qualified for
the earned income credit. Such prospective purchasers should consult their tax advisors as to the
consequences of investing in the Bonds.
7867/7866
HOU:770818.1
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OFFICE OF THE ATTORNEY GENERAL • STATE OF TEXAS
JOHN CORNYN
May 6, 2002
THIS IS TO CERTIFY that the City of Pearland, Texas (the "Issuer"),
has submitted to me City of Pearland, Texas Permanent Improvement
Bonds, Series 2002 (the "Bonds"), in the aggregate principal amount of
$25,000,000 for approval. The Bonds are dated May 1, 2002, numbered R-
1 through R-22, and were authorized by Ordinance No. 1060 of the Issuer
passed on April 8, 2002.
I have examined the law and such certified proceedings and other papers as I
deem necessary to render this opinion.
As to questions of fact material to my opinion, I have relied upon representations
of the Issuer contained in the certified proceedings and other certifications of public
officials furnished to me without undertaking to verify the same by independent
investigation.
I express no opinion relating to any official statement or any other offering material
relating to the Bonds.
Based on my examination, I am of the opinion, as of the date hereof and under
existing law, as follows:
(1) The Bonds have been issued in accordance with law and are valid and
binding obligations of the Issuer.
(2) The Bonds are payable from the proceeds of an annual ad valorem tax
levied, within the limits prescribed by law, against all taxable property in the
Issuer.
Therefore, the Bonds are approved.
r.No. 37620
Book No. 2002E
MAA
(7:1-1Z/YL-ty'
Attorney General of the Sta a of Texas
POST OFFICE Box 12548, AUSTIN, TEXAS 78711-2548 TEL: (512)463-2100 WEB: WWW.OAG.STATE.TX.US
An Equal Employment Opportunity Employer • Printed on Recycled Paper
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OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS
I, CAROLE KEETON RYLANDER, Comptroller of Public Accounts of the
State of Texas, do hereby certify that the attachment is a true and correct copy of the
opinion of the Attorney General approving the:
City of Pearland, Texas Permanent Improvement Bonds, Series 2002
numbered R-1 /R-22, of the denomination of $ various, dated May 1, 2002, as
authorized by issuer, interest various percent, under and by authority of which said
bonds/certificates were registered electronically in the office of the Comptroller, on
the 6th day of May. 2002, under Registration Number 65546.
Given under my hand and seal of office, at Austin, Texas, the 6th day of
May. 2002.
CAROLE KEETON RYLANDER
Comptroller of Public Accounts
of the State of Texas
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OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS
I, Melissa Mora, Bond Clerk ❑X Assistant Bond Clerk in the office of the Comptroller of the State
of Texas, do hereby certify that, acting under the direction and authority of the Comptroller on the
6th day of May, 2002, I signed the name of the Comptroller to the certificate of registration endorsed
upon the:
City of Pearland. Texas Permanent Improvement Bonds. Series 2002,
numbered R-1/R-22. d el May 1, 2002, and that in signing 'e certificate of registration I used the
following signature:
IN WITNESS ate this the 6th day of May. 2002.
I, Carole Keeton Rylander, Comptroller of Public Accounts of the State of Texas, certify that
the person who has signed the above certificate was duly designated and appointed by me under
authority vested in me by Chapter 403, Subchapter H, Government Code, with authority to sign my
name to all certificates of registration, and/or cancellation of bonds required by law to be registered
and/or cancelled by me, and was acting as such on the date first mentioned in this certificate, and
that the bonds/certificates described in this certificate have been duly registered in the office of the
Comptroller, under Registration Number 65546.
GIVEN under my hand and seal of office at Austin, Texas, this the 6th day of May. 2002.
CAROLE KEETON RYLANDER
Comptroller of Public Accounts
of the State of Texas
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Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 312-3000
(800) 352-0001
A GE Capital Company
May 8, 200E
City of Pearland
UBS PaineWebber Inc.,
as Underwriter or as Representative of the Underwriters
�-' Re: S25,000,000 in aggregate principal amount of City of Pearland, Texas
Permanent Improvement Bonds, Series 2002
Ladies and Gentleman:
EI am Senior Counsel of Financial Guaranty Insurance Company "Financial Guaranty"),
and have been requested to render an opinion concerning the issuance by Financial 7 with the issuance of the captioned obligations (the "Bonds"). I have examined suchGuaranty of its Municipal Bond New Issue Insurance Policy (the "Policy") in connection
documents and records as I have deemed relevant for purposes of this opinion. including
(a) the Certificate of Incorporation of Financial Guaranty, including all amendments
E. thereto, (b) the amended By-laws of Financial Guaranty as in effect on the date hereof, (c)
the certificate of authority issued to Financial Guaranty by the Superintendent of
7 Insurance of the State of New York. (d) the certificate of authority issued to Financial
Guaranty by the Commissioner of Insurance of the State of Texas, (e) the executed Policy
and (f) the statements in the Official Statement dated April 8, 2002 relating to the Bonds
7 (the "Official Statement") under the caption "MUNICIPAL BOND INSURANCE".
On the basis of the foregoing. it is my opinion that:
(1)
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Financial Guaranty is a stock insurance corporation validly existing and in good
standing under the laws of the State of New York and qualified to do business
therein and is licensed and authorized to issue its financial guaranty insurance
policies under the laws of the State of Texas.
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May 8. 2002
Page 2
(2)
(3)
(4)
The Policy is valid and binding upon Financial Guaranty and enforceable in
accordance with its terms. subject to applicable laws affecting creditors' rights
generally.
Financial Guaranty, as an insurance company. is not eligible for relief under the
Federal Bankruptcy Laws. Any proceedings for the liquidation. conservation or
rehabilitation of Financial Guaranty would be governed by the provisions of the
Insurance Law of the State of New York.
The statements described above in the Official Statement relating to Financial
Guaranty (with the exception of Financial Guaranty's total capital and surplus
which as of December 31.2001 was approximately $1.002 billion) and the Policy
accurately and fairly present the summary information set forth therein and do not
omit any material fact with respect to the description of Financial Guaranty
relative to the material terms of the Policy or the ability of Financial Guaranty to
meet its obligations under the Policy.
Very truly yours.
Isabel Guerra
Senior Counsel
0201 06 17
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$25,000,000
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT BONDS,
SERIES 2002
RECEIPT AND CROSS RECEIPT
May 8, 2002
I, the undersigned, a duly authorized representative of Wells Fargo Bank Texas, N.A.,
Houston, Texas, hereby acknowledge receipt on behalf of the City of Pearland, Texas (the
"City") of the full purchase price for the City's Permanent Improvement Bonds, Series 2002, in
the total amount of $25,027,363.64 (representing the par amount of the Bonds of $25,000,000,
Plus a cash premium of $1,697.75, plus accrued interest of $25,938.89) on the date hereof.
WELLS FARGO BANK TEXAS, N.A.
Houston, Texas
By:
aatd, ktu_o
Name: Deirdre H., Ward
Title: Vote President
I, the undersigned, a duly authorized representative of UBS PaineWebber, Inc., hereby
acknowledge receipt from the City of (i) the initial bonds of its Permanent Improvement Bonds,
Series 2002, dated May 1, 2002, which have been delivered to the undersigned in proper form on
the date hereof; and (ii) the return of our uncashed good faith check in the amount of $500,000.
UBS PAINEWEBBER, INC.
By:
Name:
Title:
HOU:776600.1
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05/08/02 WED 12:08 FAS 2129697795
PR' SYNDICATE
*Ha CCD 4Z00 T-38E P.002/:C2 F-ET*
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S25,000,000
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT BONDS,
SERIES 2002
LCEIPT AND C1205S EIPT
May 8, 2002
I, the undersigned, a duly authorized representative of Wells Fargo Bank Texas, N.A.,
Houston, Texas, hereby acknowledge receipt on behalf of the City of Pearland, Texas (the
"City") of the full purchase price for the City's Permanent Improvement Bonds. Series 2002, in
the total amount of S25,027,363.64 (representing the par amount of the Bonds of S25,000,000,
plus a cash premium of $1,697.75, plus accrued interest of S25,938.89) on the date hereof.
WELLS FARGO BANK TEXAS, N.A.
IIouston, Texas
By: ,
Name;
Title;
I, the undersigned, a duly authorized representative of UBS PaineWebber, Inc_, hereby
acknowledge receipt from the City of (i) the initial bonds of its Permanent Improvement Bonds,
Series 2002, dated NIa3 I, 2002, which have been delivered to the undersigned in proper form on
the date hereof; and (ii) the return of our uncashed good faith check in the amount of S500,000.
UBS PAINEWEBBER, INC.
HOU:776600.1
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Name: ice4/41./
Title: I• - ;, eza—
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$25,000,000
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT BONDS,
SERIES 2002
REGISTRAR'S RECEIPT
The undersigned duly authorized representative of Wells Fargo Bank Texas, N.A.,
Houston, Texas, the paying agent/registrar for the $25,000,000 City of Pearland, Texas,
Permanent Improvement Bonds, Series 2002, certifies that said bonds have been duly
registered in accordance with the Ordinance dated April 8, 2002, and have been delivered
to the purchaser of said bonds.
Executed and delivered this May 8, 2002.
WELLS FARGO BANK TEXAS, N.A.
Houston, Texas
Title: Vice President
HOU:776605.1
OFFICIAL BID FORM
Mayor and City Council
City of Pearland
3519 Liberty Drive
Pearland. Texas 77581
Gentlemen:
April S. 2002
Subject to the terms of your Official Notice of Sale and Official Statement. dated March 27. 2002, which are
incorporated herein by reference, we hereby submit the following bid for the $25.000.000 THE CITY OF
PEARLAND. TEXAS. PERMANENT IMPROVEMENT BONDS, SERIES 2002. dated May 1. 2002. This offer is
being made for all said Bonds and for not less than all.
For said legally issued Bonds, we will pay you the par value thereof. plus accrued interest from their date to the date
of delivery to us, plus a cash premium of $ (:41 7.7. for the Bonds maturing and bearing interest per annum as
follows:
Maturity Principal Interest Maturity Principal Interest
Date Amount Rate Date Amount Rate
March 1, 2004(a) $ 535,000 e- Sc % March 1, 2016(a)(b) $1.000,000 ..' %
March 1, 2005(a) 560,000 t•Sc % March 1, 2017(a)(b) 1,055,000 'r %
March 1, 2006(a) 595,000 G •5 % March 1, 2018(a)(b) 1,115.000 er %
March 1, 2007(a) 625,000 S•0,. % March 1, 2019(a)(b) 1,175,000 %
March 1, 2008(a) 660,000 ?•o % March 1, 2020(a)(b) 1,235.000 S %
March 1, 2009(a) 695,000 C.. o c % March 1, 2021(a)(b) 1,305,000
March 1, 2010(a) - 730,000 ?• % March 1, 2022(a)(b) 1,375,000 S
March 1, 2011(a) 770,000 G..e % March 1, 2023(a)(b) 1.445.000 S %
March 1. 2012(a) 810,000 1. % March 1, 2024(a)(b) 1,525.000
March 1. 2013(a)(b) 855,000 5•00 % March 1, 2025(a)(b) 1.605,000 %
March 1, 2014(a)(b) 900,000 S•ae. % March 1, 2026(a)(b) 1.695.000 %
March 1, 2015(a)(b) 950,000 S.� % March 1. 2027(a)(b) 1,785.000 %
(a) At the option of the Initial Purchaser, any or all of such serial maturities may be designated as term bonds
subject to mandatory sinking fund redemption as follows; provided that the mandatory sinking fund amount
in each year shall equal the amounts shown above as maturing in such year.
Term Bonds Years of First
Maturity Date Mandatory Principal Amount Interest
(March 1) Redemntion of Term Bonds Rate
ive ace %
roar: ro Z4 $ - . - '"
2-027 YE•:. ca- %
LvVic i°
%
ty. in whole or. from time to time. in
(b) Subject ontMarch 10 a1redemption
on of the
2012,, oron any date the
thereafter at a' price equal lt the principal amount thereof, plus
part,
accrued interest to the date fixed for redemption.
Interest cost, in accordance with the above bid. is:
Total Interest Cost from May L.2002
Less: • Premium
NET INTEREST COST s ``` �- `` i . -9 `
NET EFFECTIVE INTEREST RATE 5 i3.. ' 32-0`"
The Initial Bonds shall be registered in the name of (syndicate manager). We will
advise Wells Fargo Bank Texas. N.A., in Houston. Texas the Paying Agent/Registrar. on forms to be provided by the
Paying Agent/Registrar and on registration instructions at least five business days prior to the date set for initial
delivery.
Cashier's Check ofthe Frost National Bank San Antonio Texas. in the amount of S500.000 which
represents our Good Faith Deposit (kattlal Xt*KetiPPSK(has been made available to you prior to the opening of this
Bid). and is submitted in accordance with the terms as set forth in the "Official Notice of Sale" and "Official
Statement."
We agree to accept delivery of and make payment for the Initial Bonds in immediately available finds at the
Corporate Trust Office, Wells Fargo Bank Texas, N.A., in Houston, Texas not later than 10:00 A.M.. on May 8,
2002, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Official
Notice of Sale.
The undersigned agrees to complete, execute and deliver to the City, by the date of delivery of the Bonds. a
certificate relating to the "issue price' of the Bonds in the form and to the effect attached to or accompanying the
Official Notice of Sale, with such changes thereto as may be acceptable to the City and its Bond Counsel.
Respectfully submitted,
UBS PaineWebber, Inc.
ByLewis W. Pollok,III Vice President
Authorized Representative
ACCEPTED this 8th day of April, 2002, by the City Council, City of Pearland. Texas.
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Mayor
ATTEST:
(For your information you will find attached a list of the group of purchasers associated with us in this proposal)
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MH,.-1 i, -.`GO2 04 MOOt' E I N')E_TMEN ='.!CE
Financial Guaranty Insurance Company
125 Park Avenue, 5th Floor
New York, New York 10017
To Whom It May Concern:
Moody's investors Servo.
99 Cnurcr, Stree:
New York, New York 10007
May 6, 2002
Moody's Investors Service has assigned the rating of Aaa (Financial Guaranty
Insurance Company Insured - Policy No. 02010619 ) to the $25,000,000.00 , City of
Pearland, Texas ---Permanent Improvement Bonds, Series 2002 , dated May 1,
2002 which sold on April 8, 2002. The rating is based upon an insurance policy
provided by Financial Guaranty Insurance Company.
Should you have any questions regarding the above, please do not hesitate to contact
the assigned analyst, Margaret Kessler at (212) 553-7864.
MK:SY
Sincerely yours,
La/
Margaret L. Kessler
Vice President/Senior Analyst
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Ratings Services
ii Lvatrr Cure. 38th I^„rrr
' urk..NY iOOi:-nl)O
e: 2:2 4 8.2C '4
kc)crence .ho.:.4 01.".(7 78
SaP FOND 111SUPPNC_
Viturni Orgo
,itiminn!ra::tie Officer
Pu ,iic F :nanc. RaLtrg_
Standard & Poor's
^. ihinsunt .,( rrz NIcGrnw•HiII Comomncc
May 6, 2002
Ms. Cheryl Whaley
Group Leader
Financial Guaranty Insurance Co.
125 Park Avenue. 5th Floor
New York. NY 10017
Re: S25,000,000 City of Pearland, Texas Permanent .improvement Bonds, Series 2002, dared:
May 1, 2002, Serial Bonds due: March 1, 2004-2023; Term Bonds due: March 1, 2025 and
2027, (POLICY #02010617)
Dear Ms. Whaley:
This is to advise you that we have changed the rating to `AAA' from `A+' on the subject bonds.
The rating change reflects our assessment of the likelihood of repayment of principal and interest based
on the bond insurance policy your company is providing.
When using the Standard & Poor's rating, include the definition of the rating together with a statement
that this may be changed, suspended or withdrawn as a result of changes in, or unavailability of,
information. This rating is not a "market rating", because it is not a recommendation to buy, hold or sell
the obligations.
If you have any questions, please contact us.
ms
MAY FE 2002 13:05
Very truly yours
GAGE.01
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Financial Guaranty Insurance
Company
125 Park Avenue
New York. NY 10017
(212) 312-3000
(800) 352-0001
A GE Capital Company
TX DISCLOSURE OF GUAR. FUND
NONPART1CIPATION
In the event the insurer is unable to
fulfill its contractual obligation under
this policy or contract or application or
certificate or evidence of coverage, the
policyholder or certificateholder is not
protected by an insurance guaranty fund
or other solvenc v DLotection_arrangemgt
Municipal Bond
New Issue Insurance Policy
FGIC
Issuer: City of Pearland, Texas
Policy Number: 02010617
Control Number: 0010001
Bonds: S25,000,000 in aggregate principal amount of Premium: S97,200.00
Permanent Improvement Bonds, Series 2002
Financial Guaranty Insurance Company ("Financial Guaranty"), a New York stock insurance company, in
consideration of the payment of the premium and subject to the terms of this Policy. hereby unconditionally and
irrevocably agrees to pay to State Street Bank and Trust Company. N.A.. or its successor. as its agent (the."Fiscal
Agent"). for the benefit of Bondholders. that portion of the principal and interest on the above -described debt
obligations (the "Bonds") which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the
Issuer.
Financial Guaranty will make such payments to the Fiscal Agent on the date such principal or interest becomes Due
for Payment or on the_ Business Day next following the day on which Financial Guaranty shall have received Notice
of Nonpayment. whichever is later. The Fiscal Agent will disburse to the Bondholder the face amount of principal
and interest which is then Due for Payment but is unpaid by reason of Nonpayment by the Issuer but only upon
receipt by the Fiscal Agent. in form reasonably satisfactory to it, of (i) evidence of the Bondholder's right to receive
payment of the principal or interest Due for Payment and (ii) evidence, including any appropriate instruments of
assignment, that all of the Bondholder's rights to payment of such principal or interest Due for Payment shall
thereupon vest in Financial Guaranty. Upon such disbursement, Financial Guaranty shall become the owner of the
Bond. appurtenant coupon or right to payment of principal or interest on such Bond and shall be fully subrogated to
all of the Bondholder's rights thereunder, including the Bondholder's right to payment thereof.
This Policy is non -cancellable for any reason. The premium on this Policy is not refundable for any reason. including
the payment of the Bonds prior to their maturity. This Policy does not insure against loss of any prepayment premium
• which may at any time be payable with respect to any Bond.
As used herein, the term "Bondholder" means. as to a particular Bond. the person other than the Issuer who. at the
time of Nonpayment. is entitled under the terms of such Bond to payment thereof. "Due for Payment" means, when
referring to the principal of a Bond, the stated maturity date thereof or the date on which the same shall have been
duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by
reason of call for redemption (other than by mandatory sinking fund redemption). acceleration or other advancement
of maturity and means. when referring to interest on a Bond. the stated date for payment of interest. "Nonpayment" in
respect of a Bond means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in
full of all principal and interest Due for Payment on such Bond. "Notice" means telephonic or telegraphic notice.
subsequently confirmed in writing, or written notice by registered or certified mail. from a Bondholder or a paying
agent for the Bonds to Financial Guaranty. "Business Day" means any day other than a Saturday. Sunday or a day on
FGIC is a registered service mark used by Financial Guaranty Insurance Company under license from its parent company. FGIf aCe or1poration.
Form 9000 (10/93)
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Financial Guaranty Insurance
Company
125 Park Avenue
New York. NY 10017
(212) 312-3000
(800) 352-0001
A GE Capital Company
FGIC
Municipal Bond
New Issue Insurance Policy
which the Fiscal Agent is authorized by law to remain closed.
In Witness Whereof. Financial Guaranty has caused this Policy to be affixed with its corporate seal and to be signed
by its duly authorized officer in facsimile to become effective and binding upon Financial Guaranty by virtue of the
countersignature of its duly authorized representative.
President
Effective Date: May 8, 2002
1
t.(-C L ��
Authorized Representative
State Street Bank and Trust Company. N.A.. acknowledges that it has agreed to perform the duties of Fiscal
Agent under this Policy.
Authorized Officer
FGIC is a registered service mark used by Financial Guaranty• Insurance Company under license from its parent comnam. FGIC Corporation.
Page 2of2
Form 9000 (10/93)
Financial Guaranty Insurance
Company
125 Park Avenue
New York. NY I0017
(212)312-3000
(800) 352-0001
A GE Capital Company
FGIC
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number: 02010617
Control Number: 0010001
It is further understood that the term "Nonpayment" in respect of a Bond includes any payment of principal or interest
made to a Bondholder by or on behalf of the issuer of such Bond which has been recovered from such Bondholder
pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable
order of a court having competent jurisdiction.
NOTHING HEREIN SHALL BE CONSTRUED TO WAIVE. ALTER. REDUCE OR AMEND COVERAGE IN
ANY OTHER SECTION OF THE POLICY. IF FOUND CONTRARY TO THE, POLICY LANGUAGE. THE
TERMS OF THIS ENDORSEMENT SUPERSEDE THE POLICY LANGUAGE.
In Witness Whereof Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and to be
signed by its duly authorized officer in facsimile to become effective and binding upon Financial Guaranty by virtue
of the countersignature of its duly authorized representative.
i
President
Effective Date: May 8, 2002
Acknowledged as of the Effective Date written above:
Authorized Officer
State Street Bank and Trust Company, N.A.. as Fiscal Agent
Authorized Representative
FGIC is a registered service mark used by Financial Guaranty Insurance Compam under license from its parent company. FGIC Corporation
Form E-0002 (10/93) t'age I of I
CITY OF PEARLAND, TEXAS
S25,000,000
PERMANENT IMPROVEMENT BONDS, SERIES 2002
The following information is included in the transcript submitted to the Office of the Attorney General
for the purpose of obtaining Attorney General approval of the issuance of the referenced bonds, as required by
H.B. 1564, 74th Legislature, Regular Session (Tex. Laws 1995, ch. 383, at 2930).
A. An additional copy of the Official Statement and the following information, if not included in the
Official Statement or such statement has not been prepared.
1. Name of bond issue: Permanent Improvement Bonds, Series 2002
2. a) par amount of issue: 825,000,000_
b) dollar amount of bond premium, if any: 5138,300
c) dollar amount of bond original issue discount, if any: N/A
3. Dated date: May 1, 2002
4. Closing date (expected delivery date, on or about): May 8, 2002
5. By year, maturity amounts, coupon rates, prices or yields: See Official Statement.
(If no reoffering yield (NRO) indicated, please provide yield separately.)
6. Call provisions, including premiums, if any: See Official Statement.
7. Mandatory redemption provisions: N/A
8. Debt -service schedule, principal and interest, and annual totals, with fiscal year identified: See
Official Statement.
9. Use of derivative products associated with financing: N/A
10. If applicable, schedule of bonds refunded, including, by year, principal amount, coupon, and
interest cost: N/A
11. Pledge: tax (ad valorem, sales, other), revenue, combination: Ad valorem tax
12. Type of credit enhancement (including PSF guarantee): None
13. Rating service(s) and rating(s) assigned to issue: Moody's "Aaa"
S&P "AAA"
B. Additional Information
1. Type of sale: Competitive
2. Pricing: April 8, 2002; approx. 6:00 p.m.
3. If purchaser of bonds is a governmental entity, such as the Texas Water Development Board,
please name purchaser: N/A
4. If a refunding bond issue, please provide final schedule of cash and present value savings (loss):
N/A
5. If a school district refunding bond issue, and the refunding involves "old debt" per the Texas
Education Code, please provide schedule of principal and interest payments of refunding bonds
associated with "old debt": N/A
If the same issue also involves "new debt," please provide a schedule of principal and interest
payments on the "new debt" portion as well. These two schedules together should equal total
debt service by maturity: N/A
6. CAB's and CIB's — please provide the per annum bond interest rates by maturity as shown in the
bond order document: N/A
HOU:776624.1
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7. Costs of Issuance — please provide best estimate of costs.
If final costs are significantly different, please submit changes directly to the Texas Bond
Review Board. Call (512) 463-1741 or (512) 475-4802 (FAX).
Bond Rating
SERVICE
Moody's
FIRM I_ ONE-TIME FEE i'. ANNUAL FEE(a)
(in dollars)
S 15.000
Standard &
Poor's
S15,000
Fitch
N/A
Other General Costs of Issuance (b)
_ ...
S75,000
I Any Specialized Costs of Issuance (c)
N/A
Credit Facility
N/A
Bond Insurance
S97.200
Total Underwriting Spread (d)
S138,300 f=
Did underwriter pay rating fee(s)
No i Which one(s)?
Did underwriter pay bond insurance fee?
Yes
PARTICIPANTS
FIRM
Financial Advisor
RBC Dain Rauscher. Inc.
Bond Counsel
I Andrews & Kurth L.L.P.
Paying Agent/Registrar; Authenticating Agent
Wells Fargo Bank, N.A.
Underwriter
None
(a) relates to the ongoing fees or recurring costs of a financing for services such as paying agent,
remarketing agent, credit provider and other similar services (may be expressed as a formula as
appropriate)
(b) e.g., bond counsel, financial advisor, paying agent, printing, AG approval
(c) e.g., remarketing fees. escrow verification fees, etc.
(d) the cost for marketing and selling the bonds, including takedown, structuring fee, underwriting risk and
expenses.
PERSON COMPLETING FORM:
Name: Marcus W. Deitz
Telephone No. (713) 220-4876
Fax No. (713) 238-7125
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HOU:776624.1
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PEARLAND. TEXAS
PERMANENT IMPROVEMENT BONDS, SERIES 2002
NUMBER
R-1
REGISTERED
INTEREST RATE:
6.500%
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DENOMINATION
$ 53 5.000
REGISTERED
ISSUE DATE:
May 1, 2002
MATURITY DATE:
March 1, 2004
UBS PAINEWEBBER, INC.
FIVE HUNDRED THIRTY FIVE �t I ,ANl9''ND NO/100
DOLLARS
THE CITY OF PEARLAND, TEXAS. a municipal co
"City"), for value received, hereby promises to pay to thee'
registered assigns, on the maturity date specified
provided), upon presentation and surrender of this B
N.A., Houston, Texas or its successor (th
identified above (or so much thereof as shall
prior redemption) payable in any coin
date of payment of such principal is
of America, and to pay interest th
year composed of twelve 30-
most recent interest paym
this Bond is payable o
maturity or earlier
postage prepaid,
of business on t
payment date, as
accrued interest pa
surrender of this Bond at the office of the Paying Agent/Registrar.
THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Bonds")
in the aggregate principal amount of $25,000,000 issued pursuant to an ordinance adopted by the
City Council of the City on April 8, 2002 (the "Ordinance") for the purpose of providing funds for
permanent public improvements in the City, under and pursuant to the authority of Chapter 1331,
Texas Government Code, as amended, the City's Home Rule Charter, and an election held on
November 6, 2001. Proceeds of the Bonds will also be used to pay costs of issuance of the Bonds
and other professional services related thereto.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Bond either (i) is registered by the Comptroller of Public
Accounts of the State of Texas by due execution of the registration certificate endorsed hereon or
(ii) is authenticated by the Paying Agent/Registrar by due execution of the authentication
certificate endorsed hereon.
State of Texas (the
identified above or its
ier redemption as herein
of Wells Fargo Bank Texas,
gistrar"), the principal amount
d-or deemed to have been paid upon
c cv o',b e United States of America which on the
payment of debts due to the United States
own above, calculated on a basis of a 360-day
tbe later' of the Issue Date identified above or the
erest has been paid or duly provided for. Interest on
,`Zfl►'-, and each September 1 and March 1 thereafter until
if this Bond. by check sent by United States mail, first class,
-ent/Resistrar to the Registered Owner of record as of the close
e ezilendar month immediately preceding the applicable interest
.theegistration books kept by the Paying Agent/Registrar. Any
t maturity or earlier redemption shall be paid upon presentation and
Page 1 of 7
�1 ..._.JW.•tOv_..
THE.CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity. Bonds maturing on
and after March I, 2013, in whole or in part, on March 1, 2012, or any date thereafter. at par plus accrued interest to
the date fixed for redemption.
MANDATORY REDEMPTION. The Bonds maturing on March 1, 2025 and March 1. 2027 (the "Term
Bonds") are subject to mandatory sinking fund in the following amounts (subject to reduction hereinafter provided)
on the following dates. in each case at a redemption price equal to the princip mount of the Bonds or the pornons
thereof so called for redemption plus accrued interest to the date fixed for rede
Term Bonds Maturing March 10,
Mandatory Redemption Dates P .;i' ' 1 A nts
March 1, 2024 %- $.1w _5, t 00
March 1, 2025 (maturity) 0
Term Bonds Maturi ; d; 2027
Mandatory Redemption D
March 1, 2026
March 1, 2027 (ma
The particular Term Bonds to be red
random selection method, on or before Janua
redeemed. The principal amount of the to
principal amount of such Term Bonds th
which have not been made the basis fo
BONDS MAY • BE RED
redemption is in a denomination
multiples of S5.000. In selectin
number of Bonds of $5,000 deno
$5,000. Upon surrender o
provisions of the Ordina
and interest rate in an ag
al Amounts
$1.695,000
$1,785,000
beselectedby the Registrar by lot or other customary
year in which the Term Bonds are to be mandatorily
ndatorily redeemed in each year shall be reduced by the
nonally redeemed on or before January 15 of such year and
uction.
T only in integral multiples of $5,000. If a Bond subject to
, 00, a portion of such Bond may be redeemed. but only in integral
of Bonds for redemption, each Bond shall be treated as representing that
on which is obtained by dividing the principal amount of such Bond by
redemption in part, the Paying Agent/Registrar, in accordance with the
enticate and deliver in exchange therefor a Bond or Bonds of like maturity
pal amount equal to the unredeemed portion of the Bond so surrendered.
NOTICE OF ANY S REDEMPTION, identifying the Bonds or portions thereof to be redeemed, shall
be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as
shown on the books of registration kept by the Paying Agent/Registrar, not less than thirty (30) days before the date
fixed for such redemption. By the date fixed for redemption, due provision shall be made with the Paying
Agent/Registrar for the payment of the redemption price of the Bonds called for redemption. If such notice of
redemption is given, and if due provision for such payment is made, all as provided above, the Bonds which are to
be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the
purpose of being paid with the funds so provided for such payment.
THIS BOND IS TRANSFERABLE only upon presentation and surrender at the office of the Paying
Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or its authorized
representative, subject to the terms and conditions of the Ordinance.
Page 2 of 7
THIS BOND IS EXCHANGEABLE at the office of the Paying Agent/Registrar for a
Bond or Bonds of the same maturity and interest rate and in the principal amount of S5,000 or any
integral multiple thereof, subject to the terms and conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange
any •Bond called for redemption, in whole or in part, during the forty-five (45) day period
immediately prior to the date fixed for redemption; provided, however, that such limitation shall
not apply to the transfer or exchange by the Registered Owner of an deemed portion of a
Pa• !q,
Bond called for redemption in part.
THE CITY OR PAYING AGENT/REGISTRAR may qua.se`I�tered Owner of
any Bond to pay a sum sufficient to cover any tax or othercharge that may be
imposed in connection with the transfer or exchange of a :,} ��. o charge of the Paying
Agent/Registrar for a transfer or exchange shall be paid b
THE REGISTERED OWNER of this Bond ;; hereof, acknowledges and
agrees to be bound by all the terms and conditions
IT IS HEREBY DECLARED AND P
validly issued and delivered; that all acts,
performed, exist and to be done preced dPor
been performed, exist and have been •, a in ac
any constitutional or statutory limitatio data
the payment of the interest on
principal matures, have been
against all taxable property in
tt
REFERENCE ' ►"' :�: i ` • a E TO THE ORDINANCE, a copy of which is filed
with the Paying Ag s+ , for the full provisions thereof, to -all of which the Registered
Owners of the Bo as .• �+ acceptance of the Bonds.
that this. Bond has been duly and
things required or proper to be
issuance and delivery of this Bond have
ce with law; that the Bonds do not exceed
ual ad valorem taxes sufficient to provide for
is Bond, as such interest comes due and such
IN
placed in facs
Secretary by their
Ordered to be levied, within the limits prescribed by law,
ve been irrevocably pledged for such payment.
OF; • the City has caused its corporate seal to be impressed or
and this Bond to be signed by the Mayor and countersigned by the City
, lithographed or printed facsimile signatures.
(AUTHENTICATION OR CITY OF PEARLAND, TEXAS
REGISTRATION CERTIFICATE)
`�``,Ilttflllll1111''
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Mayor
COUNTERSIGNED:
City Secretary
Page 3 of 7
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE -STATE OF TEXAS
I hereby certifythat this bond has b
the • Attorney General of the State of Te>
Comptroller of Public Accounts of the State oil
#--'74/,-1..';.t.':;;(4'''''GISTER NO.
'certified as to validity and approved by
this bond has been registered by the
WITNESS MY SIGNATURE F OFFICE this ;p4Av c 5
(SEAL) Focek roller of Public Accounts of the State
Page 4 of 7
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AUTHENTICATION CERTIFIC
This Bond is one of the Bonds described in
mentioned Ordinance; and, except for the Bonds initially
exchange for or replacement of a Bond. Bonds, or a p.
originally was approved by the Attorney Gener• of
Comptroller of Public Accounts of the State of Te
j.5
istrar
pursuant to the within
s Bond has been issued in
or Bonds of an issue which
f Texas and registered by the
0 BANK TEXAS. N.A.. as Paving
Authorized Signature
. Date of Authentication:
Page 5 of 7
1 •
the within bond and all rights there
registration thereof, with full power o
DATED:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns aaiisfcs unto
(Please print or type name, address, and i�6.`of :+ • feree)
(Please insert Social Security or Taa on Nu mber.of Transferee)
y irrevocably constitutes and appoints
o transfer Such bond on the books kept for
e premises.
Signature Guaranteed: N� r
" . Y ° .. r Registered Owner
NOTICE: The signature above must
correspond to the name of the -Registered
Owner•as shown on the face of this bond in
every particular, without any alteration,
'enlargement or change whatsoever.
•.z*
NOTICE: ', �.�- �; • t be.g'irstanteed by, a,.
member f of tq. I�ew York Stock
Exchange or a rcia'i`.bank or trust
company. 1!:_
Page 6 of 7
containing the following provisions with respect to the Bonds, iccb `piq
principal office of Wells Fargo Bank Texas, N.A., as paying agent,(the
Financial Guaranty hereby unconditionally and irrecsab4,0
+ igr ;�, to pay for disbursement to
the Bondholders that portion of the principal or accrete • v� �� : ap able) of and interest on the
Bonds which is then due for payment and which the .."s=,. of �: �T ends (the "Issuer") shall have
�
failed to provide. Due for payment means, with re ect • 1 •al or accreted value (if applicable)
'*. 1. _
the stated maturity date thereof, or the date on t1`. shall have been duly called for
mandatory sinking fund redemption and does of re. arlier date on which the payment of
principal or accreted value (if applicable) of th+eds by reason of call for redemption (other
than mandatory sinking fund redemption), ele or other advancement of maturity, and with
respect to interest, the stated date for paest.
STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ("Financial GuaratitY.thas issued a policy
trig on file at the
g Agent"):
Upon receipt of telephoni
written notice by registered or ce
Guaranty that the required pa
made by the Issuer to the Payin
one business day after recei
funds. in an account with
"Fiscal Agent"), suffic
presentation to the Fi
payment and any
to such payment
As used herein th
bond proceeds. who at
payment thereof.
notice, subsequently confirmed in writing, or
a Bondholder or the Paying Agent to Financial
al, accreted value or interest (as applicable) has not been
ial Guaranty on the due date of such payment or within
ch nonpayment, whichever -is later, will make a deposit of
and Trust Company, N,A., or its successor as its agent (the
e the portion of such payment • not paid by the Issuer. Upon
evidence satisfactory to t..cfthe Bondholder's right to receive such
ents of assignment required to vest all of such Bondholder's right
uaranty, the Fiscal Agept will disburse such amount to the Bondholder.
dholder" means the on other.:thas4he Issuer or the borrower(s) of
of nonpayment Oa. Bond -is en -titled under the terms of such Bond to
The policy is non -cancellable Or any reason.
FINANCjatedUARANIT INSURANCE COMPANY
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