R2003-0091 07-14-03 RESOLUTION NO. R2003-91
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, APPROVING A BOND ORDER OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 2 AUTHORIZING THE ISSUANCE OF
$3,195,000 WATERWORKS AND SEWER SYSTEM COMBINATION
UNLIMITED TAX AND REVENUE BONDS, SERIES 2003.
WHEREAS, the Brazoria County Municipal Utility District No. 2 (the "District")
is located within the extraterritorial jurisdiction of the City of Pearland, Texas
(the "City"); and
WHEREAS, by Resolution 81-2, dated January 26, 1981, the City consented to
the creation of the District, and placed certain conditions on the issuance of bonds by
the District, including the approval by the City Council of the District's resolution
authorizing the issuance of such bonds; and
WHEREAS, the City Council has considered such a bond resolution in connection
with the issuance of the District's proposed $3,195,000 Waterworks and Sewer
System Combination Unlimited Tax and Revenue Bonds, Series 2003, and has found it
to be acceptable; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
All of the matters and facts set forth in the preamble hereof are
Section 1.
true and correct.
Section 2.
The bond order of the board of directors of Brazoria County
Municipal Utility District No. 2 authorizing the issuance of its $3,195,000 Waterworks
and Sewer System Combination Unlimited Tax and Revenue Bonds, Series 2003, is
hereby approved.
RESOLUTION NO. R2003-91
Section 3. The Mayor of the City of Pearland is hereby authorized to execute
such letters or other documents required to be provided to the Attorney General of
Texas in connection with the issuance of such bonds by the District.
Section 4, This Resolution shall take effect immediately from and after its
passage in accordance with the provisions of the Charter of the City of Pearland and it
is accordingly so resolved.
PASSED, APPROVED and ADOPTED this the
A. D., 2003.
14th day of ~]u]y ,
TOM REID
MAYOR
ATTEST:
(~Y SECJ~ETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
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PRELIMINARY OFFICIAL STATEMENT DATED JULY 10, 2003
This Preliminao' Official Statement is subject to completion and amendment and is intended solely for the solicitation of initial bids
to purchnse the Bonds. Upon the sale of thc Bonds, the Official Statement will be completed and delivered to the Underwriter.
TIlE DELIYERY OF THE BONDS IS SUBJECT TO THE OPINIONS OF BOND COUNSEL AS TO THE VALIDITY OF TH£ BONDS,aND
OF SP~CI,4L T/tX COUNSEL TO THE ~FF. ff, CT THAT iNTERE,~7 ON THE BONDS IS EXCLUDABLE FROM GRO~S INCOM£ FOR
FEDERAL INCObIE T/Dr PURPOSES UNDER EXISTING L4W AND THE INTERE$7 ON THE BONDS IS NOT INCLUDABLE
DETERMINING THE ALTERNATIVE MINIbtUM TAXABLE INCOME OF AN INDIYIDUtlL. SEE "LEG, aL MATTERS" AND "TAX
MATTERS" HEREIN FOR A DISCUSSION OF THE OPLNIONS OF BOND (,DUNSEL AND SPECIAL TAX COUNSEL, INCLUDING
DESCRIPTIOIV OF ALTERNATIVE MINIMUM TAX CONS£QUENCE,? FOR CORPORATIONS.
Thc Dbtrict has designated tlt~ Bond$ a~ "Qualified Tax-]~xcrnpt Obligotion~" for finem¢ial institution~. See 'TAX M,4TTERS- Qualified Tax-
~.r, empt Obligations" herein.
NEW ISSUE Standard & Poor's Ratings Services ( ) ~ (AAA)
(See "MUNICIPAL BOND INSURANCE" and "RATINGS" herein)
$3,195,000
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 2
(A Political Subdivision of the State of Texas, located within Brazoria County, Texas)
WATERWORKS AND SEWER SYSTEM COMBINATION
UNLIMITED TAX AND REVENUE REFUNDING BONDS, SERIES 2003
Dated: August 1, 2003 , ,Due: September 1, as shown below
Principal of the above-described bond~ (the 'Bonds ') is payable at .~tatcd maturity or redemption upon presentation of the Bonds at the
principal payment office of the paying agent/registrar, initially, .IPMorgan Chase Bank. in Dallas, Texas, or any successor paying
agcnt/r~gistrar (the "Registrar" or the "Paying Agent/Register"). Interest on the Bonds is payable March 1, 2004 (~ven. month interest
payment) and on oath September I and March 1 ~hcrcaf~er until maturity or prior redemption. Thc Bonds will be issued as fully registered
Bonds in thc denomination of $5,000 or integral multiples thereof. Thc Bonds scheduled to matur~ on and after September 1,2011, are subjec~
to redemption prior to their scheduled maturities, in whole cr in part, on September 1, 2010. or on any date thereafter, at thc option of Brazoria
redeemed at any time, the Bond~ to be redeemed shall bc selected by the District, and within a maturity, by lot or other customary mcth~.
The Bonds will bc tcgistcrcd Jn the name of Cede & Co., ~ nominee for The Depository Trust Company, Ne~' York, blew York
("DTC")0 which will act as securities depository for the Bonds. Beneficial owners of the Bonds will not receive physical ccrtificatcs ~epmSenting
the Bonds, but will receive a credit balance on the books of the nominee~ of such beneficial owners. So long as Cede & Co. is the rcgistcred
owner of the Bonda, the principal of and intcre-st on the Bonds will be paid by thc Paying A~cnt directly to DTC, which will, in turn, remit such
principal and interest to its participants for subsequent disbursement to the beneficial owners of thc Bonds as described hcrdn. Scc "TIIE
BONDS ~ Book-Entry-Only System."
Payment of the principal of and interest on the Bonds when due will be insured by an imuranzc policy to be issued by
slmultan¢ously with thc delivery of the Bonds.
PRINCIPAL AMOUNTS, MATURITIES, INTEREST RATES AND INITIAL REOFFERING YIELDS hfilial
Principal Maturity. Interest Reofl'erlng Principal Maturity Interest
Amount (September 1) Rate Yield (a) Amount (September 1) Rat..=.~e
$ 30,000 2004 % % $260,000 2011 lb)
45,000 2005 275,000 2012 (h)
45.~0 2006 2~0,000 2013 lb)
220,000 2007 300.000 2014(b)
230,000 2008 320,000 201 S lb)
235,000 2009 340,000 2016(b)
250.000 2010 355,000 2017(b)
Initial
Reoffering
Yield(a)
(al Information with respect to the initial rcoffcrlns y~clds of the Bonds has bccn provided by the Underwriters (hereinafter defined). Initial rcoffcring
yields rcprc.scnting thc initial offering price to thc public of a ~ubstantial amount of the Bonds for each maturity, which may be changed for
subscquent purchasem
(b) Subject to optional redemption as described above.
Thc proceeds of thc Bond~, to$cther with pertain lawfully available funds of thc District, will be applied to advance re~'und certa;n
outstanding bond~ of the District and to pay certain costs incurred in connection wi~h the issuance of thc Bonds. See "PLAN OF
FINANCING ~ Use of Bond Prooeeds." The Bonds, when issued, will constitutc valid and binding obligations of the District and will bc
payable from the proceeds of a continuing, d~rect annual ad valorem tax, without lc§al limitation as to rate or amount, levied against all taxable
property located within the District, and arc further payable from and .~ceumd by a pledge of and lien on certain Net Revenues (as dcfincd
hcrcin), if any, of the District's water~,orks and sewer system (the "Sy~tem"), to thc cxtent and upon the conclitions described herein. The
System is not expected to produce sufficicnt Net Revenues to make significant contributions, if any, to fulure debt service payments. Sec "THE
BONDS ~ Source of Payment." Neither the State of Toxas, Brazorla County, T~xas, the City of PenTland, Texas, nor any political subdivision
other than the District shall bc obligated to pay the principal of and in~erest on thc Bonds. Neither the faith and orodi~ nor the taxing power of
the State of Texas, Brazoria County, Texas, nor the City of PenTland. Texas, is pledged to the payment of thc principal of and intcrcst on thc
Bonds,
Thc Bonds will be delivered when. as and if issued and acceptcd by the Underwriters, subject to prior sale and to the approval of thc
Attorney Oencral of T~-z~t~; Paul A. Philbin & A~uo., P.C., FIou~ton, Texan, ]~c, nd ~oun*¢l; and M¢Calt. Parkhurst &' I-Iot'ton L.L.P., Dallas,
Texas, Special Tax Counsel. Ccrtain legal mauers will bc passod upon Ibr thc Undcr',vfitcrs by McCall, Parkhur~t &FIorton L.L.P., Dallas,
Texas. Delivery of the Bonds is expcctcd on or about August 28. 2003.
RBC DAIN RAUSCHER INC.
FIRST SOUTHWEST COMPANY
% %
Under Texas law ad valorem taxes levied by each taxing authority other than the District create a lien which is on a parity
with the lien in favor of the District on all taxable property within the District. In addition to the ad valorem taxes
required to retire the foregoing direct and overlapping debt, the various taxing authorities mentioned above also are
authorized by Texas law to assess, levy and collect ad valorem taxes for operation, maintenance, administration and/or
general revenue purposes. Certain of the jurisdictions have in the past levied such taxes. The District has the power to
assess, levy and collect ad valorem taxes for operation and maintenance purposes in an amount not to exceed $0.20 per
$100 of Assessed Valuation, and such taxes have been authorized by the duly qualified voters of the District. The
District levied a total tax of $0.74 per $100 of Assessed Valuation in 2002, consisting of debt service and maintenance
tax components of $0.70 and $0.04 per $100 of Assessed Valuation, respectively. See "TAX DATA - Maintenance
Tax" and "Tax Rate Distribution."
Debt Service Requirements
The following schedule sets forth the debt service requirements on the Outstanding Bonds, less the debt service
requirements on the Refunded Bonds, plus the principal and estimated interest requirements of the Bonds.
Less: Debt
Current Service on Total
Year Ending Total Debt Refunded Plus: -- The Bonds -- New Debt
December 31 Service Bonds Principal Interest* Service
2003 $1,476,958 $ 84,488 $1,392,470
2004 1,475,288 168,975 $ 30,000 $116,304 1,452,617
2005 1,480,625 168,975 45,000 99,138 1,455,788
2006 1,480,365 168,975 45,000 98,406 1,454,796
2007 1,482,455 338,975 220,000 95,703 1,459,183
2008 1,484,498 344,115 230,000 90,633 1,461,015
2009 1,484,910 343,200 235,000 84,759 1,461,469
2010 1,487,385 351,500 250,000 77,895 1,463,780
2011 1,486,975 353,600 260,000 70,115 1,463,490
2012 1,488,385 359,800 275,000 61,616 1,465,201
2013 1,491,211 364,800 290,000 52,290 1,468,701
2014 1,500,361 368,600 300,000 42,258 1,474,019
2015 1,495,794 376,200 320,000 31,403 1,470,996
2016 1,501,250 382,300 340,000 19,518 1,478,468
2017 1,500,013 386,900 355,000 6~656 1,474,769
$22,316,473 $4,561,403 $3,195,000 $946,694 $21,896,762
Average Annual Requirements - Subsequent to Refunding (2004-2017) ..................
Maximum Annual Requirement - Subsequent to Refunding (2016 ......................
$1,464,592
$1,478,468
* Interest is estimated at various rates for the maturities of the Bonds.
See "TAX DATA - Tax Rate Calculations" and "INVESTMENT CONSIDERATIONS - Maximum Impact on District
Tax Rates" for a discussion of the District's projected tax rates and the effect of the Bonds thereon.
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