Loading...
Ord. 0429 07-27-81u. ORDINANCE NO.'429 ORDINANCE AUTHORIZING ISSUANCE OF $400,000 CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981 THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND § WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS (the "City"), authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council will meet in the City Hall of the City on July 13, 1981, to adopt an ordinance authorizing the issuance of certificates of obligation, payable from City ad valorem taxes and revenues of the waterworks system of the City, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitutions and laws of the State of Texas and of -the United States of America, respec- tively, particularly Article 2368a.1,., Vernon's Texas Civil Statutes, as amended; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND: Section 1. The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct. Section 2. The City's negotiable certificates of obligation, to be designated CITY OF PEARLAND, TEXAS, WATER- • , r credit of the Interest and Sinking Fund. During each year while any of the Certificates or interest coupons appertain- ing thereto are outstanding and unpaid, the City Council of the City shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Certificates as such interest comes due_and to provide and maintain a sinking fund adequate to pay the principal of the Certifi- cates as such principal matures but never less than 2% of the original principal amount of the Certificates as a sinking fund each year; and said tax shall be based on the latest approved tax rolls of the City, with full allowance being made for tax delinquencies and the cost of tax collec- tion. Said rate and amount of ad valorem tax are hereby levied, and are hereby ordered to be levied, against all taxable property in the City for each year while any of the Certificates or interest coupons appertaining thereto are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment within the limits prescribed by law. Section 8. The revenues to be derived from the opera- tion of the waterworks system of the City, after the payment of all operation and maintenance expenses of said system, are hereby pledged to the payment of the principal of and interest on the Certificates as the same -come due to the extent that the taxes mentioned in Section 7 of this ordi- nance may ever be insufficient or unavailable for said purpose, provided that this pledge of said revenues is and shall be in all things junior and subordinate to the exist- -8- Section 14. The approving opinion of Vinson & Elkins, Houston, Texas, may be printed on the back of each of the Certificates, but errors or omissions in such opinion shall have_-rio effect on the validity of the Certificates. Section 15. The Mayor and all other appropriate offi- cers of the City are hereby authorized and directed to do any and all things necessary or convenient to carry out the provisions of this ordinance. Section 16. This ordinance shall "take effect immedi- ately upon its passage following the second and final read- ing thereof. Section 17. It is hereby officially found and deter- mined that the need of the City for such financing creates an emergency and an urgent public necessity for the holding, at the scheduled time, of the meeting of the City Council at which this ordinance is adopted and for the adoption of this ordinance; and the NOTICE OF MEETING relating to said meeting and heretofore posted by the City Secretary, and the posting thereof, is hereby authorized, approved, adopted and ratified. PASSED AND APPROVED this 13th day of July, 1981. ATTEST: Mayor CITY OF PEARLAND, TEXAS • City Secretdry CITY OF PEARLAND, TEXAS (SEAL)= a_ WORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981 (here- inafter called the "Certificates"), are hereby authorized to be issued and delivered in the principal amount of $400,000 for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of profes- sional services incurred in connection therewith. Section 3. The Certificates shall be dated June 1, 1981, shall be numbered consecutively from 1 through 80, shall be in the denomination of $5,000 each and shall mature, serially on March 1 of each of the years, and in the amounts, respectively, set forth in the following schedule: YEAR AMOUNT 1990 $100,000 1991 100,000 1992. 100,000 1993 100,000 Section 4. The Certificates shall bear interest per annum at the following rates, respectively, to -wit: Certificates maturing 1990 Certificates maturing 1991 Certificates maturing 1992 Certificates maturing 1993 9.25% 9.40% 9..75% 9.75% Section 5. The Certificates, and the interest coupons appertaining thereto, shall be payable, shall have the characteristics, and shall be signed and executed (and the Certificates shall be sealed), all as provided and in the manner indicated in the FORM OF CERTIFICATE set forth in this ordinance. Section 6. The form of the Certificates, including the form of registration certificate of the Comptroller of Public Accounts of the State of Texas to be printed and endorsed on each of the Certificates, and the form of the aforesaid interest coupons which shall appertain and be attached initially to each of the Certificates, shall be, respectively, substantially as follows: NO. FORM OF CERTIFICATE: UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATE OF OBLIGATION SERIES 1981 $5,000 ON MARCH 1, 19, the CITY OF PEARLAND (the "City"), in the Counties of Brazoria and Harris, in the State of Texas, promises to pay to bearer the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from the date hereof, at the -3- r rate of % per annum, evidenced by interest coupons payable March 1, 1982, and semiannually thereafter on each September 1. and March 1 while this Certificate is outstand- ing. The principal of this Certificate and the interest coupons appertaining hereto shall be payable to bearer, in lawful money of the United States of America, without ex- change or collection charges to the bearer, upon presenta- tion and surrender of this Certificate or proper interest coupon at the PEARLAND STATE BANK, Pearland, Texas, which shall be the paying agent for this series of Certificates. THIS CERTIFICATE is one of a series of negotiable, coupon certificates, dated June 1, 1981, numbered consecu- tively from 1 through 80, in the denomination of $5,000 each, aggregating $400,000, issued in accordance with the Constitution and laws of the State of Texas, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of profes- sional services incurred in connection therewith, and pursu- ant to an ordinance (the "Ordinance") duly adopted by the City Council of the City, which Ordinance is of record in the official minutes of said City Council. IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Certi- ficate, have been performed, existed, and been done in accordance with law; that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City and have been pledged for such payment within the limits prescribed by law; that this Certificate shall be a debt of the City within the meaning of Article XI, Sections 5 and 7 of the Constitution of Texas; and that, when delivered, this Certi- ficate shall be deemed and construed (i) to be a "Security" within the meaning Uniform Commercial of Chapter 8, Investment Securities, Code (Chapter 785, Acts of the 60th Legislature, Regular Session, 1967), and (ii) to be an obligation of the City within the meaning of Chapter 784, Acts of the 61st Legislature of Texas, Regular Session, 1969. IT IS FURTHER CERTIFIED, RECITED AND REPRESENTED that the revenues to be derived from the operation of the water- works system of the City, after the payment of all operation and maintenance expenses of said system, are also pledged to the payment of the principal of and interest on this Certifi- cate and the series of Certificates of which it is a part to the extent that said taxes levied and collected for same may ever be insufficient or unavailable for said purpose, the said pledge of revenues being in all things junior and subordinate to the existing and any future pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City, now outstanding or from time to time hereafter issued, all as set forth in the Ordinance. THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL PARITY CERTIFICATES, and said certificates may be payable from the same source, secured in the same manner and placed on a parity with this Certificate and the series of which it is a part, all as set forth in the Ordinance. IN WITNESS WHEREOF, this Certificate of Obligation and the interest coupons appertaining hereto have been signed with the facsimile signature of the Mayor and countersigned with the facsimile signature of the City Secretary of the City, respectively, and the official seal of the City has been duly impressed, or placed in facsimile, on this Certificate. COUNTERSIGNED: xxxxxxxxxx Mayor xxxxxxxxxx CITY OF PEARLAND, TEXAS City Secretary CITY OF PEARLAND, TEXAS (SEAL) FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Certificate of Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been registered by the Comp- troller of Public Accounts of the State of Texas. WITNESS my signature and seal this xxxxxxxxxx (SEAL) Comptroller of Public Accounts of the State of Texas t� L NO. FORM OF INTEREST COUPON: ON 1, 19 , the CITY OF PEARLAND, in the Counties of Brazoria and Harris, State of Texas, promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to the bearer, upon presentation and surrender of this interest coupon, at the PEARLAND STATE BANK, Pearland, Texas, said amount being interest due that day on the Certificate of Obligation bearing the number hereinafter designated of that issue of CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFI- CATES OF OBLIGATION, SERIES 1981, dated June 1, 1981. Certificate No. xxxxxxxxxx xxxxxxxxxx City Secretary Mayor Section 7. A special fund or account, to be designated the "City of Pearland, Texas, Waterworks System Certificates of Obligation Interest and Sinking Fund" (hereinafter called the "Interest and Sinking Fund"), is hereby created and shall be established and maintained by the City at an official depository bank of the City. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City and shall be used only for paying the interest on and principal of the Certificates and any addi- tional certificatesjhereafter issued on a parity herewith. All ad valorem taxes levied and collected for and on account of the Certificates shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates or interest coupons appertain- ing thereto are outstanding and unpaid, the City Council of the City shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Certificates as such interest comes due_and to -provide and maintain a sinking fund adequate to pay the principal of the Certifi- cates as such principal matures but never less than 2% of the original principal amount of the Certificates as a sinking fund each year; and said tax shall be based on the latest approved tax rolls of the City, with full allowance being made for tax delinquencies and the cost of tax collec- tion. Said rate and amount of ad valorem tax are hereby levied, and are hereby ordered to be levied, against all taxable property in the City for each year while any of the Certificates or interest coupons appertaining thereto are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of -the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment within the limits prescribed by law. Section 8. The revenues to be derived from the opera- tion of the waterworks system of the City, after the payment of all operation and maintenance expenses of said system, are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due to the extent that the taxes mentioned in Section 7 of this ordi- nance may ever be insufficient or unavailable for said purpose, provided that this pledge of said revenues is and shall be in all things junior and subordinate to the exist- ing and any future pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City now outstanding or from time to time hereafter issued; and provided, further, that this pledge of said revenues is and shall be in all things on a parity with the pledge of and lien on said revenues'for the payment of the interest on and principal of the City's outstanding Waterworks System Certifi- cates of Obligation, Series 1980, dated September 1, 1980. Section 9. Immediately following delivery of the Certificates to the purchaser thereof, the accrued interest and premium, if any, shall be deposited in the Interest and Sinking Fund. Section 10. The City expressly reserves the right to (a) issue additional parity certificates, which may be payable from the same source, secured in the same manner and placed on a parity with the Certificates and (b) refund the Certificates in any manner provided by law. Section 11. The City certifies that based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered and paid for, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates:or any portion of the Certificates to be an "arbitrage certificate" under Section 103(c)(2) of the Internal Revenue Code of 1954, as amended, and the regula- tions prescribed thereunder. Furthermore, all officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City as of the. date the Certificates are delivered and paid for. In particular, all or any officers of the City are authorized to certify for the City the facts and circumstances and reasonable expectations of the City on the date the Certifi- cates are delivered and paid for regarding the amount and use of the proceeds of the Certificates. Moreover, the City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds of the Certi- ficates and take such other and further actions as may be required so that the Certificates shall not be "arbitrage certificates" under Section 103(c)(2) of the Internal Reve- nue Code of 1954, as amended, and the regulations prescribed from time to time thereunder. Section 12. The Mayor of the City is hereby authorized to have control of the Certificates and all necessary records and proceedings pertaining to the Certificates pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Certificates, the Comptroller of Public Accounts (or a deputy designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on each Certificate; and the seal of the Comptroller shall be impressed, or placed in facsimile, on each of the Certificates. Section 13. The Certificates are hereby sold and shall Underwood -Neuhaus & Company be delivered to the Pearland State Bank for the par value thereof and accrued interest thereon to date of delivery, subject to the unqualified approving opinions, as to the legality of the Certificates, of the Attorney General of the State of Texas and of Vinson & Elkins, Houston, Texas, market attorneys; and it is hereby officially found, deter- mined, and declared that the Certificates are sold on the best terms and for the best price possible. t,. Section.14. The approving opinion of Vinson & Elkins, Houston, Texas, may, be printed on the back of each of the Certificates, but errors or omissions in such opinion shall have-lio effect on the validity of the Certificates. Section 15. The Mayor and all other appropriate offi- cers of the City are hereby authorized and directed to do any and all things necessary or convenient to carry out the provisions of this ordinance. Section 16. This ordinance shall take effect immedi- ately upon its passage following the second and final read- ing thereof. Section 17. It is hereby officially found and deter- mined that the need of the City for such financing creates an emergency and an urgent public necessity for the holding, at the scheduled time, of the meeting of the City Council at which this ordinance is adopted and for the adoption of this ordinance; and the NOTICE OF MEETING relating to said meeting and heretofore posted by the City Secretary, and the posting thereof, is hereby authorized, approved, adopted and ratified. PASSED AND APPROVED this 13th day of July, 1981. ATTEST: City Secretary CITY OF PEARLAND, TEXAS (SEAL)== Mayor CITY OF PEARLAND, TEXAS r- CITY OF PEARLAND, TEXAS WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION SERIES 1981 * * * * * * * * $400,000 * * * * * * * * 9.25%, 9.40% and 9.75% VINSON & ELKINS ATTORNEYS AT LAW FIRST CITY NATIONAL BANK BUILDING HOUSTON, TEXAS 77002 CITY OF PEARLAND, TEXAS WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION SERIES 1981 * * * * * * * * $400,000 * * * * * * * * 9.25%, 9.40% and 9.75% VINSON & ELKINS ATTORNEYS AT LAW FIRST CITY NATIONAL BANK BUILDING HOUSTON,TEXAS 77002 AUG 1 9 1981 WE HAVE ACTED as bond counsel for the CITY OF PEARLAND, TEXAS (the "City"), in connection with the certificates of obligation hereinafter described (the "Certificates"): CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFI- CATES OF --OBLIGATION, SERIES 1981, dated June 1, 1981, numbered consecutively from 1 through 80, both inclu- sive, in the denomination of $5,000 each, aggregating $400,000, bearing interest per annum at the respective rates shown below, interest payable March 1, 1982, and semiannually thereafter on September 1 and March 1 in each year, and maturing serially on March 1 in each year as follows: $100,000 100,000 100,000 9.25% 9.40% 9.75% 1990 1991 1992/93 WE HAVE ACTED as bond counsel for the sole purpose of rendering an opinion with respect to the legality and validity of the Certificates under the Constitution and laws of the State of Texas, under which the City is acting as an incorporated city of the State of Texas, and with respect to the exemption of in- terest on the Certificates from Federal income taxation. We have not been requested to investigate or verify and have not investigated or verified original proceedings, records, data, or other material, but have relied solely upon certificates executed by public officials and representatives of the City. We have not assumed any responsibility with respect to the financial condition or capabilities of the City or the dis- closure thereof in connection with the sale of the Certificates. IN OUR CAPACITY as bond counsel, we have examined a trans- cript of certified proceedings pertaining to the Certificates which contains certified copies of certain proceedings of the City Council of the City, customary certificates of officers, agents and representatives of the City, and other certified showings relating to the authorization and issuance of the Certificates. We have also made a limited examination of the Official Statement prepared by the City's financial advisors in connection with the sale of the Certificates, such examina- tion having been limited solely to matters concerning the de- scription of certain terms of the Certificates to verify that such description conforms to the provisions of the ordinance adopted by the City Council of the City authorizing the Cer- tificates. We have also examined executed Certificate No. 1 of this issue. BASED ON SAID EXAMINATION, IT IS OUR OPINION that the transcript of certified proceedings evidences complete legal authority for the issuance of the Certificates in full compliance with the Constitution and laws of the State of Texas presently effective; that therefore the Certificates constitute valid and legally binding obligations of the City, and that taxable prop- erty within the City is subject to the levy of ad valorem taxes, Page 1 of 2 pages within the limits prescribed by law, to pay the Certificates and the interest thereon. IT IS OUR FURTHER OPINION that the revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses of said system, are also pledged to the payment of the principal of and interest on the Certificates to the extent that said taxes levied and colleeted for same may ever be insufficient or un- available for'"said purpose, the said pledge of revenues being in all things junior and subordinate to the existing pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City, now outstanding or from time to time hereafter issued, all as set forth in the ordinance adopted by the City Council of the City authorizing the Cer- tificates (the "Ordinance"). THE CITY has reserved the right, subject to the restric- tions stated in the Ordinance, to issue additional certificates of obligation, for any lawful purpose, to be on a parity with the Certificates and to be payable from, and secured by a lien on and pledge of the aforesaid Net Revenues in the same manner and to the same extent as the Certificates. IT IS OUR FURTHER OPINION that the interest on the Cer- tificates is exempt from all present Federal income taxation under existing statutes, egulations, published rulings and court decisions. Page 2 of 2 pages GENERAL CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § I, the undersigned, City Secretary 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 $400,000 WATER- WORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981, dated June 1, 1981, now in process of issuance. I certify that: 1. The following persons constitute the City Council of the City: Tom Reid Carlton McComb Charles Mack Alfred E. Lentz Harry Farley Terry Gray Dorothy L. Cook Mayor Council Council Council Council Council Member Member Member Member Member City Secretary 2. James O. DeShazer is City Tax Assessor -Collector of the City. 3. The Home -Rule Charter of the City has not been amended, altered, changed, or repealed since the issuance of the City's Waterworks System Certificates of Obligation, Series 1980, dated September 1, 1980, Comptroller's Registration No. 45793. 4. The following is a true, correct, and complete statement of the indebtedness of the City payable from taxes, to -wit: Purpose Brazoria Co. WC&ID #3 WW&SS Ser. '61 WW&SSS Ser. '64 Date Interest 4.20% 3.60% 3-3/4% 3.80% 3.90% Maturities $ 10M 4-1-1982/87 35M 6-1-1982/83 40M 1984 30M 1985/86 35M 1987 45M 1988 50M 1989/91 55M 1992/94 Amt. Outst. $ 60,000 565,000 Page 1 of 3 pages Purpose Date Interest Maturities Amt. Outst. G.O. Ser. '66 6-1-66 4-7/8% $ 15M 6-1-1982/84 30M 1985 4.30% 30M 1986/88 4.35% 30M 1989/90 35M 1991 4.40% 35M 1992/93 40M 1994 100M 1995 G.O. Ser. '68 8-1-68 4.80% 25M 2-1-1982 30M 1983/84 5% 30M 1985/87 35M 1988/89 5.10% 40M 1990/91 5-1/4% 40M 1992 50M 1993/95 G. 0. Ser. '75 6-1-75 5.90% 30M 2-1-1982 35M 1983/85 45M 1986/87 6% 50M 1988/89 6.10% 55M 1990 6.25% 60M 1991 6.40% 65M 1992 6.50% 65M 1993 Cert. of Oblig. Ser. '76 7-1-76 6.25% 25M 8-1-1981 30M 1982 25M 1983 30M 1984/85 25M 1986 $ 470,000 515,000 570,000 165,000 Cert. of Oblig. Ser.'76-A 7-1-76 6.25% 5M 8-1-1986 35M 1987/88 40M 1989 1M 1990 116,000 Time Wts. 7-1-77 6-1/2% 15M 7-1-1982 15,000 Cert. of Oblig. Ser. '78 5-1-78 5.00% 20M 2-1-1982/84 25M 1985 30M 1986 60M 1987/88 Cert. of Oblig. Ser. '78A 6-1-78 235,000 6.00% 25M 2-1-1982/86 5M 1987 130,000 Perm. Imp. Ser. '78 9-1-78 5.90% 30M 3-1-1982 50M 1983/86 30M 1987 Page 2 of 3 pages Purpose Date Interest 4.90% 5.00% 5.10% 5.20% 5.25% 5. 30% 5.40% 5.50% Cert. of Oblig. Ser. '78B 12-1-78 6.25% Med. Serv. Time Wts. Ser. '79 10-1-79 6.50% Drainage Study Time Wts. Ser. '79 12-1-79 6.50% Cert. of Oblig. Ser. '80 9-1-80 6.50% Maturities $ 50M 1988 125M 1989/90 125M 1991 125M 1992 125M 1993 200M 1994 200M 1995 250M 1996/97 11M 12-1-1981 10M 1982 15M 10-1-1981/82 6M 12-1-1981 10M 3-1-1983 40M 1984 45M 1985 50M 1986 65M 1987 60M 1988 55M 1989 CERTIFICATES IN PROCESS OF ISSUANCE WW Cert. of Oblig. Ser. '81 6-1-81 9.25% 9.40% 9.75% 100M 3-1-1990 100M 1991 100M 1992/93 Amt. Outst. $ 1,835,000 21,000 30,000 6,000 325,000 400,000 TOTAL $ 5,458,000 WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 27th day of July, 1981. (SEAL) 41-7411( pity Secretary/ CITY OF PEAR '' D, TEXAS Page 3 of 3 pages 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 regular meeting on the 22nd day of June, 1981, 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 and the City Secretary, to -wit: Tom Reid Carlton McComb Charles Mack Alfred E. Lentz Harry Farley Terry Gray Dorothy L. Cook Mayor Council Council Council Council Council Member Member Member Member Member City Secretary and all of said persons were present, except the following absentees: Council Members McComb and Farley , thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE $400,000 CITY OF PEARLAND, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 1981 (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, said motion, carrying with it the adoption of the Resolution, prevailed and carried by the fol- lowing vote: AYES: All members of the City Council shown present above voted "Aye". NAYS: None. 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 said meeting; that the above and fore- going paragraph is a true, full and correct excerpt from the City Council's minutes of said 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 said meeting, and each of said officers and members consented, in advance, to the holding of such meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon's Article 6252-17, as amended. SIGNED AND SEALED this 22nd day of June, 1981. (SEAL) *to/ Ci ,< 8ecr tary RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE $400,000 CITY OF PEARLAND, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 1981 THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS (the "City"), deems it advisable to issue Certificates of Obligation of the City in accordance with the notice herein- after set forth; therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct. Section 2. The City Secretary is hereby authorized and directed to cause to be published in the manner required by law a notice of intention to issue Certificates of Obligation in substantially the following form: NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that the City Council of the City of Pearland, Texas (the "City"), will meet in the City Hall, City of Pearland, Texas, at 7:30 p.m. on July 13, 1981, and on July 27, 1981, respectively, to adopt an ordinance, on first and second readings, authorizing the issuance of the City's Certificates of Obligation, payable from City ad valorem taxes and a subordinate pledge of the revenues of the waterworks system of the City, in the maximum aggregate principal amount of $400,000, bearing interest at such rate or rates as shall be determined by the City Council, provided that such interest rate or rates shall not exceed the maximum legal limit in effect at the time of their issuance, and maturing over a period of years not to exceed twenty (20) years from the date thereof, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of professional services incurred in connection therewith. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 22nd day of June, 1981. (SEAL) /s/ Dorothy L. Cook City Secretary CITY OF PEARLAND, TEXAS Section 3. The notice set forth in Section 2 above shall be published once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be not less than fourteen (14) days prior to July 13, 1981, the date tentatively set in said notice for the passage on first reading of the ordinance authorizing the issuance of such Certificates of Obligation. Section 4. The Mayor, City Secretary, and other officers of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this resolution. Section 5. This resolution shall take effect immediately upon its passage. Section 6. It is hereby officially found and determined that the need of the City for such financing creates an emer- gency and an urgent public necessity for the holding, at the scheduled time, of the meeting of the City Council at which this resolution is adopted and for the adoption of this resolu- tion; and the NOTICE OF MEETING relating to said meeting and heretofore posted by the City Secretary, and the posting thereof, are hereby authorized, approved, and ratified. PASSED AND APPROVED this 22nd day of June, 1981. ATTEST: /s/ Dorothy L. Cook City Secretary CITY OF PEARLAND, TEXAS (SEAL) /s/ Tom Reid Mayor CITY OF PEARLAND, TEXAS AVISO DE INTENCION DE EMITIR CERTIFICADOS DE OBLIGACION SE NOTIFICA POR EL PRESENTE que el Cabildo Municipal de la Ciudad de Pearland, Texas (la "Ciudad"), se reunira en el Edificio del Cabildo Municipal, Ciudad de Pearland, Texas, a las 7:30 p.m. en el 13 de julio de 1981, y en el 27 de julio de 1981, respectivamente, para adoptar una ordenanza, en primera y segunda lecturas, autorizando la emision de los Certificados de Obligacion de la Ciudad, pagaderos de impuestos al valor de la Ciudad y de una prenda subordinada de los ingresos del sistema de abastecimiento de aguas de la Ciudad, en la cantidad total maxima principal de $400,000, llevando inters a cualquiera tasa o tasas segfin sea deter- minado por el Cabildo Municipal, condicionado a que dicha tasa o tasas de interes no excederan el limite legal maximo en efecto al tiempo de su emision, y con vencimiento sobre un periodo de anos a no exceder veinte (20) ailos a partir de la fecha de los mismos, con el proposito de evidenciar el adeudo de la Ciudad por todo o alguna parte del costo de ampliar y mejorar el sistema de abastecimiento de aguas de la Ciudad, y el costo de servicios profesionales incurridos en relacion a to mismo. OTORGADO ANTE MI Y EL SELLO OFICIAL DE LA CIUDAD, este dia 22 de junio de 1981. (SELLO) /fdo/ Dorothy L. Cook Secretario Municipal CIUDAD DE PEARLAND, TEXAS (h 27. Legal Notices AFFIDAVIT OF P THE STATE OF TEXAS COUNTY OF BRAZORIA NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that the City Council of the City of Pearland, Texas (the "City"), will meet in the City Hall, City of Pearland, Texas. at - 7:30 p.m. on July 13, 1981, and on July 27, 1981. respectively, to adopt an ordinance, on first and second readings, authorizing the issuance of the City's Certificates of Obligation. payable from City ad valorem taxes and a subordinate pledge of the BEFORE ME, the undersigned i revenues of the waterworks system of the City, in the maximum aggregate principal amount of $400,000, bear- sonally appeared Annie Alexande ing interest at such rate or rates as § (Editor/Publisher) of The Journ duly sworn, upon oath, deposes al The attached clippings one in Spanish) of a NC TO ISSUE CERTIFICATES C published in The Jour paper which is of genes the City of Pearland, 7 lowing issues, to -wit: June 25 July 2 shall be determined by the City Council, provided that such interest rate or rates shall not exceed the maximum legal limit in effect at the time of their issuance, and maturing over a period of years not to exceed twenty (20) years from the date thereof, for the purpose of evidenc- ing the indebtedness of the City for all or any part of the cost of exten- ding and improving the waterworks system of the City, and the cost of professional services incurred in con- nection therewith. WITNESS MY HAND AND THE OF- FICIAL SEAL OF THE CITY, this 22nd day of June, 1981. /s/ DOROTHY L. COOK CITY SECRETARY CITY OF PEARLAND, TEXAS (SEAL) and the attached newspaper clippings a true and correct copies of said publis notice. (SELLO) 27. Legal Notices AVISO DE INTENCION DE EMITIR CERTIFICADOS DE OBLIGACION SE NOTIFICA POR EL PRESENTE que el Cabildo Municipal de la Ciudad de Pearland, Texas (la "Ciudad''). se reunira en el Edrflcio del Cabildo Municipal, Ciudad de Pearland, Texas. a las 7.30 p.m. en el 13 de Julio de 1981. y en el 21 de Julio de 1981, respectivamente. para adoptar una ordenanza, en primera y segunda lecturas, autorizando la emision de los Certificados de Obligation de la Ciudad. pagaderos de impuestos al valor de la Ciudad y de una prenda subordinada de los in- gresos del sistema de abastecimiento de aguas de la Ciudad, en la can- tidad total maxima principal de $400.000, Ilevando interes a cual- quiera tasa o tasas sequn sea deter- minado por el Cabildo Municipal. condicionado a que dicha tasa o tasas de interes no excederan el limite legal maximo en efecto al tiempo de su emision, y con venci- miento sobre un periodo de ands a no exceder veinte (20) anos a partir de la fecha de los mismos, con el proposito de evidenciar el adeudo de la Ciudad por todo o alguna parte del costo de ampliar y melorar el sistema de abastecimiento de aguas de la Ciudad. y el costo de sernclos profe- sionales incurridos en relation a to mismo. OTORGADO ANTE MI Y EL SELLO OFICIAL DE LA CIUDAD, este dia 22 de junix de 1981. /tdo/ DOROTHY L. COOK SECRETARIO MUNICIPAL CIUDAD DE PEARLAND, TEXAS gs SWORN TO AND SUBSCRIBED BEFORE ME, this \-' day of (NOTARY SEAL) , 1981. Notary Brazoria unty, Texas —� A�st.. 1 Pu is in and for MARY JANE WEISS Notary Public State of Texas My Commission Expires March 31, 1985 Bonded by L. A..le a�r'^r ° ov&it; i--•. Su ^ty Corp. NOTICE OF MEETING THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § NOTICE is hereby given of a meeting of the City Council of the CITY OF PEARLAND, Brazoria and Harris Counties, Texas (the "City"), to be held on the 13th day of July, 1981, at 7:30 p.m. in the: City Council Chamber City Hall Pearland, Texas for the purpose of adopting an ordinance authorizing the issu- ance of certificates of obligation of the City and for the purpose of conducting, considering, and acting upon such other business as shall come before the meeting. The need of the City for such financing creates an emer- gency and an urgent public necessity for the holding of the meeting and for the adoption of such ordinance at the meeting. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this day of July, 1981. /s/ Dorothy L. Cook City Secretary CITY OF PEARLAND, TEXAS (SEAL) CERTIFICATE OF POSTING OF NOTICE OF MEETING THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § I, the undersigned officer of the CITY OF PEARLAND, Brazoria and Harris Counties, Texas (the "City"), do hereby execute this certificate for the benefit of all persons in- terested in the posting of notice of a meeting of the City Council of the City as required by the Open Meetings Act (Article 6252-17, Vernon's Texas Civil Statutes, as amended) and the validity of all actions and proceedings taken at such meeting and I do hereby certify as follows: 1. I am the duly chosen, qualified and acting officer of the City for the office shown beneath my signature, and in such capacity I am familiar with the matters contained in this certificate. 2. The attached and foregoing is a true and correct copy of the Notice of Meeting which was posted by me at - ' -- o'clock P.m. on the r day of �c_P�.� , 1981, in a place readily accessible to e gene public at all times, to -wit: „1. , in the City Hall of the City. WITNESS M HAND AND THE OFFICIAL SEAL OF THE CITY, this f day of , 1981. ity Secretary CITY OF PEARL AGND , TEXAS (SEAL) 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 regular meeting on the 13th day of July, 1981, 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 and the City Secretary, to -wit: Tom Reid Carlton McComb Charles Mack Alfred E. Lentz Harry Farley Terry Gray Dorothy L. Cook Mayor Council Council Council Council Council Member Member Member Member Member City Secretary and all of said persons were present, except the following absentees: thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING ISSUANCE OF $400,000 CITY OF PEARLAND, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 1981 (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, said motion, carrying with it the adoption of the Ordinance, prevailed and carried by the fol- lowing vote: AYES: All members of the City Council shown present above voted "Aye". NAYS: None. 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 said meeting; that the above and fore- going paragraph is a true, full and correct excerpt from the City Council's minutes of said 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 said meeting, and each of said officers and members consented, in advance, to the holding of such meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon's Article 6252-17, as amended. SIGNED AND SEALED this 13th day of July, 1981. , 1) ecretary Mayor (SEAL) ORDINANCE AUTHORIZING ISSUANCE OF $400,000 CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981 THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS (the "City"), authorized the publication of a notice of intention to issue certificates of effect that the City Council the City on July 13, 1981, to the issuance of certificates obligation to the will meet in the City Hall of adopt an ordinance authorizing of obligation, payable from City ad valorem taxes and revenues of the waterworks system of the City, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitutions and laws of the State of Texas and of the United States of America, respec- tively, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND: Section 1. The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct. Section 2. The City's negotiable certificates of obligation, to be designated CITY OF PEARLAND, TEXAS, WATER- WORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981 (here- inafter called the "Certificates"), are hereby authorized to be issued and delivered in the principal amount of $400,000 for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of profes- sional services incurred in connection therewith. Section 3. The Certificates shall be dated June 1, 1981, shall be numbered consecutively from 1 through 80, shall be in the denomination of $5,000 each and shall mature serially on March 1 of each of the years, and in the amounts, respectively, set forth in the following schedule: YEAR AMOUNT 1990 $100,000 1991 100,000 1992 100,000 1993 100,000 Section 4. The Certificates shall bear interest per annum at the following rates, respectively, to -wit: Certificates maturing 1990 Certificates maturing 1991 Certificates maturing 1992 Certificates maturing 1993 9.25% 9.40% 9.75% 9.75% Section 5. The Certificates, and the interest coupons appertaining thereto, shall be payable, shall have the characteristics, and shall be signed and executed (and the Certificates shall be sealed), all as provided and in the manner indicated in the FORM OF CERTIFICATE set forth in this ordinance. Section 6. The form of the Certificates, including the form of registration certificate of the Comptroller of Public Accounts of the State of Texas to be printed and endorsed on each of the Certificates, and the form of the aforesaid interest coupons which shall appertain and be attached initially to each of the Certificates, shall be, respectively, substantially as follows: FORM OF CERTIFICATE: NO. $5,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATE OF OBLIGATION SERIES 1981 ON MARCH 1, 19, the CITY OF PEARLAND (the "City"), in the Counties of Brazoria and Harris, in the State of Texas, promises to pay to bearer the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from the date hereof, at the rate of % per annum, evidenced by interest coupons payable March 1, 1982, and semiannually thereafter on each September 1 and March 1 while this Certificate is outstand- ing. The principal of this Certificate and the interest coupons appertaining hereto shall be payable to bearer, in lawful money of the United States of America, without ex- change or collection charges to the bearer, upon presenta- tion and surrender of this Certificate or proper interest coupon at the PEARLAND STATE BANK, Pearland, Texas, which shall be the paying agent for this series of Certificates. THIS CERTIFICATE is one of a series of negotiable, coupon certificates, dated June 1, 1981, numbered consecu- tively from 1 through 80, in the denomination of $5,000 each, aggregating $400,000, issued in accordance with the Constitution and laws of the State of Texas, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of profes- sional services incurred in connection therewith, and pursu- ant to an ordinance (the "Ordinance") duly adopted by the City Council of the City, which Ordinance is of record in the official minutes of said City Council. IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Certi- ficate, have been performed, existed, and been done in accordance with law; that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such IN WITNESS WHEREOF, this Certificate of Obligation and the interest coupons appertaining hereto have been signed with the facsimile signature of the Mayor and countersigned with the facsimile signature of the City Secretary of the City, respectively, and the official seal of the City has been duly impressed, or placed in facsimile, on this Certificate. COUNTERSIGNED: xxxxxxxxxx Mayor xxxxxxxxxx CITY OF PEARLAND, TEXAS City Secretary CITY OF PEARLAND, TEXAS (SEAL) FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Certificate of Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been registered by the Comp- troller of Public Accounts of the State of Texas. WITNESS my signature and seal this xxxxxxxxxx (SEAL) Comptroller of Public Accounts of the State of Texas FORM OF INTEREST COUPON: NO. $ ON 1, 19 , the CITY OF PEARLAND, in the Counties of Brazoria and Harris, State of Texas, promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to the bearer, upon presentation and surrender of this interest coupon, at the PEARLAND STATE BANK, Pearland, Texas, said amount being interest due that day on the Certificate of Obligation bearing the number hereinafter designated of that issue of CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFI- CATES OF OBLIGATION, SERIES 1981, dated June 1, 1981. Certificate No. xxxxxxxxxx xxxxxxxxxx City Secretary Mayor Section 7. A special fund or account, to be designated the "City of Pearland, Texas, Waterworks System Certificates of Obligation Interest and Sinking Fund" (hereinafter called the "Interest and Sinking Fund"), is hereby created and shall be established and maintained by the City at an official depository bank of the City. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City and shall be used only for paying the interest on and principal of the Certificates and any addi- tional certificates hereafter issued on a parity herewith. All ad valorem taxes levied and collected for and on account of the Certificates shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates or interest coupons appertain- ing thereto are outstanding and unpaid, the City Council of the City shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Certificates as such interest comes due and to provide and maintain a sinking fund adequate to pay the principal of the Certifi- cates as such principal matures but never less than 2% of the original principal amount of the Certificates as a sinking fund each year; and said tax shall be based on the latest approved tax rolls of the City, with full allowance being made for tax delinquencies and the cost of tax collec- tion. Said rate and amount of ad valorem tax are hereby levied, and are hereby ordered to be levied, against all taxable property in the City for each year while any of the Certificates or interest coupons appertaining thereto are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment within the limits prescribed by law. Section 8. The revenues to be derived from the opera- tion of the waterworks system of the City, after the payment of all operation and maintenance expenses of said system, are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due to the extent that the taxes mentioned in Section 7 of this ordi- nance may ever be insufficient or unavailable for said purpose, provided that this pledge of said revenues is and shall be in all things junior and subordinate to the exist- ing and any future pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City now outstanding or from time to time hereafter issued; and provided, further, that this pledge of said revenues is and shall be in all things on a parity with the pledge of and lien on said revenues for the payment of the interest on and principal of the City's outstanding Waterworks System Certifi- cates of Obligation, Series 1980, dated September 1, 1980. Section 9. Immediately following delivery of the Certificates to the purchaser thereof, the accrued interest and premium, if any, shall be deposited in the Interest and Sinking Fund. Section 10. The City expressly reserves the right to (a) issue additional parity certificates, which may be payable from the same source, secured in the same manner and placed on a parity with the Certificates and (b) refund the Certificates in any manner provided by law. Section 11. The City certifies that based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered and paid for, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates or any portion of the Certificates to be an "arbitrage certificate" under Section Internal Revenue Code of 1954, tions prescribed thereunder. as amended, Furthermore, 103(c)(2) of the and the regula- all officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City as of the date the Certificates are delivered and paid for. In particular, all or any officers of the City are authorized to certify for the City the facts and circumstances and be reasonable expectations of the City on the date the Certifi- cates are delivered and paid for regarding the amount and use of the proceeds of the Certificates. Moreover, the City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds of the Certi- ficates and take such other and further actions as may be required so that the Certificates shall not be "arbitrage certificates" under Section 103(c)(2) of the Internal Reve- nue Code of 1954, as amended, and the regulations prescribed from time to time thereunder. Section 12. The Mayor of the City is hereby authorized to have control of the Certificates and all necessary re- cords and proceedings pertaining to the Certificates pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Certificates, the Comptroller of Public Accounts (or a deputy designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on each Certificate; and the seal of the Comptroller shall be impressed, or placed in simile, on each of the Certificates. Section 13. The Certificates are hereby sold and shall delivered to the UNDERWOOD, NEUHAUS & CO., INCORPORATED, fac- Houston, Texas, and PEARLAND STATE BANK, Pearland, Texas, for the par value thereof and accrued interest thereon to date of delivery, subject to the unqualified approving opinions, as to the legality of the Certificates, of the Attorney General of the Houston, Texas, State of Texas and of Vinson & Elkins, market attorneys; and it is hereby offi- cially found, determined, and declared that the Certificates are sold on the best terms and for the best price possible. Section 14. The approving opinion of Vinson & Elkins, Houston, Texas, may be printed on the back of each of the Certificates, but errors or omissions in such opinion shall have no effect on the validity of the Certificates. Section 15. The Mayor and all other appropriate offi- cers of the City are hereby authorized and directed to do any and all things necessary or convenient to carry out the provisions of this ordinance. Section 16. This ordinance shall take effect immedi- ately upon its passage following the second and final read- ing thereof. Section 17. It is hereby officially found and deter- mined that the need of the City for such financing creates an emergency and an urgent public necessity for the holding, at the scheduled time, of the meeting of the City Council at which this ordinance is adopted and for the adoption of this ordinance; and the NOTICE OF MEETING relating to said meeting and heretofore posted by the City Secretary, and the posting thereof, is hereby authorized, approved, adopted and ratified. PASSED AND APPROVED this 13th day of July, 1981. ATTEST: /s/ Dorothy L. Cook City Secretary CITY OF PEARLAND, TEXAS (SEAL) /s/ Tom Reid Mayor CITY OF PEARLAND, TEXAS NOTICE OF MEETING THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND 5 NOTICE is hereby given of a meeting of the City Council of the CITY OF PEARLAND, Brazoria and Harris Counties, Texas (the "City"), to be held on the 27th day of July, 1981, at 7:30 p.m. in the: City Council Chamber City Hall Pearland, Texas for the purpose of adopting an ordinance authorizing the issu- ance of certificates of obligation of the City and for the purpose of conducting, considering, and acting upon such other business as shall come before the meeting. The need of the City for such financing creates an emer- gency and an urgent public necessity for the holding of the meeting and for the adoption of such ordinance at the meeting. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 23 day of July, 1981. (SEAL) /s/ Dorothy L. Cook City Secretary CITY OF PEARLAND, TEXAS CERTIFICATE OF POSTING OF NOTICE OF MEETING THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § I, the undersigned officer of the CITY OF PEARLAND, Brazoria and Harris Counties, Texas (the "City"), do hereby execute this certificate for the benefit of all persons in- terested in the posting of notice of a meeting of the City Council of the City as required by the Open Meetings Act (Article 6252-17, Vernon's Texas Civil Statutes, as amended) and the validity of all actions and proceedings taken at such meeting and I do hereby certify as follows: 1. I am the duly chosen, qualified and acting officer of the City for the office shown beneath my signature, and in such capacity I am familiar with the matters contained in this certificate. 2. The attached and foregoing is a true and correct copy of the Notice of Meeting which was pos .qd by me at ` 10n o'clock -P.m. on the ,r4-,3 day of , 1981, in a place readily accessible to tie gener pub is at all times, to -wit: in the City Hall of the City. WITNESS MHAND AND THE OFFICIAL SEAL OF THE CITY, this day of (SEAL) , 1981. eity Secretary CITY OF PEARL','' D , TEXAS c,„( 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 regular meeting on the 27th day of July, 1981, 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 and the City Secretary, to -wit: Tom Reid Carlton McComb Charles Mack Alfred E. Lentz Harry Farley Terry Gray Dorothy L. Cook Mayor Council Member Council Member Council Member Council Member Council Member City Secretary and all of said persons were present, except the following absentees: , thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING ISSUANCE OF $400,000 CITY OF PEARLAND, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 1981 (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, said motion, carrying with it the adoption of the Ordinance, prevailed and carried by the fol- lowing vote: AYES: All members of the City Council shown present above voted "Aye". NAYS: None. 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 said meeting; that the above and fore- going paragraph is a true, full and correct excerpt from the City Council's minutes of said 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 said meeting, and each of said officers and members consented, in advance, to the holding of such meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon's Article 6252-17, as amended. SIGNED AND SEALED this 27th day (SEAL) ORDINANCE AUTHORIZING ISSUANCE OF $400,000 CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981 THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS (the "City"), authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council will meet in the City Hall of the City on July 13, 1981, to adopt an ordinance authorizing the issuance of certificates of obligation, payable from City ad valorem taxes and revenues of the waterworks system of the City, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitutions and laws of the State of Texas and of the United States of America, respec- tively, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND: Section 1. The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct. Section 2. The City's negotiable certificates of obligation, to be designated CITY OF PEARLAND, TEXAS, WATER- WORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981 (here- inafter called the "Certificates"), are hereby authorized to be issued and delivered in the principal amount of $400,000 for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of profes- sional services incurred in connection therewith. Section 3. The Certificates shall be dated June 1, 1981, shall be numbered consecutively from 1 through 80, shall be in the denomination of $5,000 each and shall mature serially on March 1 of each of the years, and in the amounts, respectively, set forth in the following schedule: YEAR AMOUNT 1990 $100,000 1991 100,000 1992 100,000 1993 100,000 Section 4. The Certificates shall bear interest per annum at the following rates, respectively, to -wit: Certificates maturing 1990 9.25% Certificates maturing 1991 9.40% Certificates maturing 1992 9.75% Certificates maturing 1993 9.75% Section 5. The Certificates, and the interest coupons appertaining thereto, shall be payable, shall have the characteristics, and shall be signed and executed (and the Certificates shall be sealed), all as provided and in the manner indicated in the FORM OF CERTIFICATE set forth in this ordinance. Section 6. The form of the Certificates, including the form of registration certificate of the Comptroller of Public Accounts of the State of Texas to be printed and endorsed on each of the Certificates, and the form of the aforesaid interest coupons which shall appertain and be attached initially to each of the Certificates, shall be, respectively, substantially as follows: FORM OF CERTIFICATE: NO. $5,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATE OF OBLIGATION SERIES 1981 ON MARCH 1, 19 , the CITY OF PEARLAND (the "City"), in the Counties of Brazoria and Harris, in the State of Texas, promises to pay to bearer the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from the date hereof, at the rate of % per annum, evidenced by interest coupons payable March 1, 1982, and semiannually thereafter on each September 1 and March 1 while this Certificate is outstand- ing. The principal of this Certificate and the interest coupons appertaining hereto shall be payable to bearer, in lawful money of the United States of America, without ex- change or collection charges to the bearer, upon presenta- tion and surrender of this Certificate or proper interest coupon at the PEARLAND STATE BANK, Pearland, Texas, which shall be the paying agent for this series of Certificates. THIS CERTIFICATE is one of a series of negotiable, coupon certificates, dated June 1, 1981, numbered consecu- tively from 1 through 80, in the denomination of $5,000 each, aggregating $400,000, issued in accordance with the Constitution and laws of the State of Texas, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of profes- sional services incurred in connection therewith, and pursu- ant to an ordinance (the "Ordinance") duly adopted by the City Council of the City, which Ordinance is of record in the official minutes of said City Council. IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Certi- ficate, have been performed, existed, and been done in accordance with law; that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City and have been pledged for such payment within the limits prescribed by law; that this Certificate shall be a debt of the City within the meaning of Article XI, Sections 5 and 7 of the Constitution of Texas; and that, when delivered, this Certi- ficate shall be deemed and construed (i) to be a "Security" within the meaning of Chapter 8, Investment Securities, Uniform Commercial Code (Chapter 785, Acts of the 60th Legislature, Regular Session, 1967), and (ii) to be an obligation of the City within the meaning of Chapter 784, Acts of the 61st Legislature of Texas, Regular Session, 1969. IT IS FURTHER CERTIFIED, RECITED AND REPRESENTED that the revenues to be derived from the operation of the water- works system of the City, after the payment of all operation and maintenance expenses of said system, are also pledged to the payment of the principal of and interest on this Certifi- cate and the series of Certificates of which it is a part to the extent that said taxes levied and collected for same may ever be insufficient or unavailable for said purpose, the said pledge of revenues being in all things junior and subordinate to the existing and any future pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City, now outstanding or from time to time hereafter issued, all as set forth in the Ordinance. THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL PARITY CERTIFICATES, and said certificates may be payable from the same source, secured in the same manner and placed on a parity with this Certificate and the series of which it is a part, all as set forth in the Ordinance. IN WITNESS WHEREOF, this Certificate of Obligation and the interest coupons appertaining hereto have been signed with the facsimile signature of the Mayor and countersigned with the facsimile signature of the City Secretary of the City, respectively, and the official seal of the City has been duly impressed, or placed in facsimile, on this Certificate. COUNTERSIGNED: xxxxxxxxxx Mayor xxxxxxxxxx CITY OF PEARLAND, TEXAS City Secretary CITY OF PEARLAND, TEXAS (SEAL) FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Certificate of Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been registered by the Comp- troller of Public Accounts of the State of Texas. WITNESS my signature and seal this xxxxxxxxxx (SEAL) Comptroller of Public Accounts of the State of Texas NO. FORM OF INTEREST COUPON: ON 1, 19 , the CITY OF PEARLAND, in the Counties of Brazoria and Harris, State of Texas, promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to the bearer, upon presentation and surrender of this interest coupon, at the PEARLAND STATE BANK, Pearland, Texas, said amount being interest due that day on the Certificate of Obligation bearing the number hereinafter designated of that issue of CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFI- CATES OF OBLIGATION, SERIES 1981, dated June 1, 1981. Certificate No. xxxxxxxxxx xxxxxxxxxx City Secretary Mayor Section 7. A special fund or account, to be designated the "City of Pearland, Texas, Waterworks System Certificates of Obligation Interest and Sinking Fund" (hereinafter called the "Interest and Sinking Fund"), is hereby created and shall be established and maintained by the City at an official depository bank of the City. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City and shall be used only for paying the interest on and principal of the Certificates and any addi- tional certificates hereafter issued on a parity herewith. All ad valorem taxes levied and collected for and on account of the Certificates shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates or interest coupons appertain- ing thereto are outstanding and unpaid, the City Council of the City shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Certificates as such interest comes due and to provide and maintain a sinking fund adequate to pay the principal of the Certifi- cates as such principal matures but never less than 2% of the original principal amount of the Certificates as a sinking fund each year; and said tax shall be based on the latest approved tax rolls of the City, with full allowance being made for tax delinquencies and the cost of tax collec- tion. Said rate and amount of ad valorem tax are hereby levied, and are hereby ordered to be levied, against all taxable property in the City for each year while any of the Certificates or interest coupons appertaining thereto are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment within the limits prescribed by law. Section 8. The revenues to be derived from the opera- tion of the waterworks system of the City, after the payment of all operation and maintenance expenses of said system, are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due to the extent that the taxes mentioned in Section 7 of this ordi- nance may ever be insufficient or unavailable for said purpose, provided that this pledge of said revenues is and shall be in all things junior and subordinate to the exist- ing and any future pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City now outstanding or from time to time hereafter issued; and provided, further, that this pledge of said revenues is and shall be in all things on a parity with the pledge of and lien on said revenues for the payment of the interest on and principal of the City's outstanding Waterworks System Certifi- cates of Obligation, Series 1980, dated September 1, 1980. Section 9. Immediately following delivery of the Certificates to the purchaser thereof, the accrued interest and premium, if any, shall be deposited in the Interest and Sinking Fund. Section 10. The City expressly reserves the right to (a) issue additional parity certificates, which may be payable from the same source, secured in the same manner and placed on a parity with the Certificates and (b) refund the Certificates in any manner provided by law. Section 11. The City certifies that based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered and paid for, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates or any portion of the Certificates to be an "arbitrage Internal certificate" under Section Revenue Code of 1954, tions prescribed thereunder. as amended, Furthermore, 103(c)(2) of the and the regula- all officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City as of the date the Certificates are delivered and paid for. In particular, all or any officers of the City are authorized to certify for the City the facts and circumstances and reasonable expectations of the City on the date the Certifi- cates are delivered and paid for regarding the amount and use of the proceeds of the Certificates. Moreover, the City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds of the Certi- ficates and take such other and further actions as may be required so that the Certificates shall not be "arbitrage certificates" under Section 103(c)(2) of the Internal Reve- nue Code of 1954, as amended, and the regulations prescribed from time to time thereunder. Section 12. The Mayor of the City is hereby authorized to have control of the Certificates and all necessary re- cords and proceedings pertaining to the Certificates pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Certificates, the Comptroller of Public Accounts (or a deputy designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on each Certificate; and the seal of the Comptroller shall be impressed, or placed in fac- simile, on each of the Certificates. Section 13. The Certificates are hereby sold and shall be delivered to the UNDERWOOD, NEUHAUS & CO., INCORPORATED, Houston, Texas, and PEARLAND STATE BANK, Pearland, Texas, for the par value thereof and accrued interest thereon to date of delivery, subject to the unqualified approving opinions, as to the legality of the Certificates, of the Attorney General of the State of Texas and of Vinson & Elkins, Houston, Texas, market attorneys; and it is hereby offi- cially found, determined, and declared that the Certificates are sold on the best terms and for the best price possible. Section 14. The approving opinion of Vinson & Elkins, Houston, Texas, may be printed on the back of each of the Certificates, but errors or omissions in such opinion shall have no effect on the validity of the Certificates. Section 15. The Mayor and all other appropriate offi- cers of the City are hereby authorized and directed to do any and all things necessary or convenient to carry out the provisions of this ordinance. Section 16. This ordinance shall take effect immedi- ately upon its passage following the second and final read- ing thereof. Section 17. It is hereby officially found and deter- mined that the need of the City for such financing creates an emergency and an urgent public necessity for the holding, at the scheduled time, of the meeting of the City Council at which this ordinance is adopted and for the adoption of this ordinance; and the NOTICE OF MEETING relating to said meeting and heretofore posted by the City Secretary, and the posting thereof, is hereby authorized, approved, adopted and ratified. PASSED AND APPROVED this 27th day of July, 1981. ATTEST: /s/ Dorothy L. Cook City Secretary CITY OF PEARLAND, TEXAS (SEAL) /s/ Tom Reid Mayor CITY OF PEARLAND, TEXAS CERTIFICATE OF ASSESSED VALUATION THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § I, the undersigned, the duly appointed, qualified, and acting Tax Assessor -Collector of the CITY OF PEARLAND of Brazoria and Harris Counties, Texas, do hereby certify that the following is a true and correct statement of the assessed valuation of taxable property in said City as shown by the duly approved tax rolls for the year 1980, which are the last approved tax rolls for said City on file in my office, to -wit: $176,465,914 WITNESS MY HAND AND THE OFFICIAL SEAL OF SAID CITY, this 3/ day of July, 1981. ax Assessor-Collec r CITY OF PEARLAND, TEXAS (SEAL) SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § We, the undersigned officers of the CITY OF PEARLAND, TEXAS, certify that we officially signed, by our facsimile signatures, on behalf of said City, the following described certificates of obligation, to -wit: CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981, dated June 1, 1981, numbered consecu- tively from 1 through 80, in the denomination of $5,000 each, aggregating $400,000, maturing serially on March 1 in each of the years 1990 through 1993, (the "Certificates") being on the date of such signing and on the date hereof the duly chosen, qualified, and acting officers authorized to execute the Certificates, and holding the official titles set forth below opposite our signatures. We further certify that said facsimile signatures have been affixed to the Certificates with our full knowledge and consent, and we hereby respectively adopt the same as our own signatures. We further certify that, to our knowledge, no litigation of any nature is now pending or threatened, either in the State or Federal courts contesting or attacking the Certificates or restraining or enjoining their issuance, execution or delivery, or restraining or enjoining the levy and/or collection and/or pledge of the funds from which the Certificates are payable, or in any manner questioning the authority or proceedings for the issuance, execution or delivery of the Certificates, or affecting the title of the present officials, and that no proceedings or authority for the issuance, execution or delivery of the Certificates have been repealed, rescinded or revoked. The undersigned officers whose facsimile signatures do appear on each of the coupons attached to the Certificates further certify that said facsimile signatures have been so affixed with their full knowledge and consent, and are hereby respectively adopted. We further certify that the seal which has been impressed, or placed in facsimile, upon each of the Certificates is the legally adopted, proper and only official seal of the issuer of the Certificates, said official seal being impressed on this certificate. We further certify that no petition or other request has been filed with or presented to any official of the issuer of the Certificates re- questing that any of the proceedings authorizing the Certificates be sub- mitted to a referendum or other election. We further certify that the information and data contained in the General Certificate dated July 27, 1981, is still true and correct as of this date. WITNESS OUR HANDS AND SAID SEAL, this /Z day/off (,��� - , 1981. D'oro by L. Co City Secreta (SEAL) Tom Reid Mayor The signatures of the above officers are hereby certified to be genuine. Pearland State Bank Name of Bank Pearland, Texas City (BANK SEAL) ature of Bank Officer Sr. Vice President Title of Bank Officer r MARK WHITE Attorney General ^;uprerne Court Building P 0 Box 12548 Austin. TX 78711 512,475 2501 The Attorney General of Texas August 12, 1981 THIS IS TO CERTIFY that the following described certificates, together with authenticated copies of the proceedings relating to and authorizing the issuance of same, have been submitted to me for examination in accordance with the requirements of the statutes of the State of Texas, to -wit: CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981, issued by virtue of Ordinance adopted by the City Council of said City on the 13th day of July, 1981, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of extending and improving the waterworks system of the City, and the cost of professional services incurred in connection therewith; dated June 1, 1981; numbered consecutively from 1 to 80, inclusive; in the denomination of Five Thousand Dollars ($5,000) each; aggregating the principal sum of Four Hundred Thousand Dollars ($400,000); maturing serially on March 1 in each of the years as follows: 1990/1993 $100,000 bearing interest from date at the following rates per annum, to -wit: Certificates maturing Certificates maturing Certificates maturing 1990 1991 1992/1993 9.25% 9.40% 9.75% payable on March 1, 1982, and semiannually thereafter on September 1 and March 1 in each year while these Certificates are outstanding; both principal and interest payable at the Pearland State Bank, Pearland, Texas. From a careful examination of said certificates and proceedings and the Constitution and laws of the State of Texas on the subject of the execution and issuance thereof, I find the following facts, to -wit: (1) That the City of Pearland, Texas was, at the time of the adoption of the Ordinance above referred to, and is, as of this date, legally incorporated; I Page -2- (2) That annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of these Certificates, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City and have been pledged for such payment within the limits prescribed by law, and that the revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses of said system, are also pledged to the payment of the principal of and interest on these Certificates to the extent that said taxes levied and collected for same may ever be insufficient or unavailable for said purpose, the said pledge of revenues being in all things junior and subordinate to the existing and any future pledge of and lien on said revenues for the payment of the interest on and principal of all waterworks and sanitary sewer system revenue bonds of the City, now outstanding or from time to time hereafter issued, all as set forth in the Ordinance; (3) That said City has reserved the right to issue additional parity Certificates, and said Certificates may be payable from the same source, secured in the same manner and placed on a parity with these Certificates, all as set forth in the Ordinance; (4) That the Ordinance authorizing the issuance of said certificates is in proper form and was legally adopted; (5) That said certificates and interest coupons attached thereto are proper in form and in accordance with the Ordinance authorizing their issuance. IT IS MY JUDGMENT, and I so find, that all of the require- ments of the laws under which said certificates were issued have been met; that said certificates were issued in conformity with the Constitution and laws of the State of Texas; and that said certificates are valid and binding obligations of said City of Pearland, Texas. WHEREFORE, said certificates are hereby approved. IN TESTIMONY WHEREOF, I have hereunto signed my name offi- cially and caused the seal of my office to be impressed hereon, in the City of Austin, Texas. AttorGeneral of the State No. 17805 Book No. 70 jh FORM 2P40-1.04 OFFICE OF COMPTROLLER OF THE STATE OF TEXAS 1 I, Bob Bullock, Comptroller of Public Accounts of the State of Texas, do hereby certify that the foregoing hereof is a true and correct copy of the opinion of the Attorney General approving the City of Pearland, Texas, Waterworks System Certificates of Obligation, Series 1981 numbered consecutively from 1 to 80 of the denomination of $ 5,000.00 each, dated June 1 , 19 81 ,due See foregoing interest Various percent, under and by authority of which said bonds were registered in this office, on the 14th day of August 19 81 , as the same appears of record on page 84 Bond Register of the Comptroller's Office, Vol 83 Register Number 46204 day of Given under my hand and seal of office, at Austin, Texas, the 14th August ,1981 Bob Bullock Comptroller of Public Accounts of the State of Texas TREASURER'S RECEIPT THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § I, the undersigned Treasurer of the CITY OF PEARLAND, TEXAS, certify as follows: AUG 19 1981 1. That on , I delivered to the purchaser thereof the following certificates of obligation: CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION, SERIES 1981, dated June 1, 1981, numbered consecu- tively from 1 through 80, in the denomination of $5,000 each, aggregating $400,000, maturing serially on March 1 in each of the years 1990 through 1993 (the "Certificates"). 2. At the time of such delivery, there were no matured coupons attached to the Certificates, and all unmatured coupons were attached to the Certificates. 3. At the time of such delivery, I received from said purchaser full payment for the Certificates in keeping with the ordinance autho- rizing the issuance thereof and the ordinance awarding the sale thereof, said full purchase price being $400,000 plus accrued interest from date to delivery. IN WITNESS WHEREOF, I //--1► YJ,� e11ae;�»pto set my hand and the official seal of said City, on yy I (SEAL) 5,c1„cti, Treasur rl NO -LITIGATION CERTIFICATE We, the undersigned officers of said CITY OF PEARLAND, TEXAS, do hereby certify that at the time of delivery of the Certificates, as set forth in the Treasurer's Receipt above, there was not pending, and, to our knowledge, there was not threatened, any litigation affecting the validity of the Certificates, or the levy and/or collection and/or pledge of funds for the payment thereof, or the organization or boundaries of said City, or the title of the officers thereof to their respective offices, and that no additional certificates of obligation, bonds, warrants, or other indebtedness have been issued since the date of the statement of indebtedness or non -encumbrance certificate submitted to the Attorney General of Texas in connection with the approval of the Certificates. AUG 1 9 1981 WITNESS OUR HANDS AND THE OFFICIAL SEAL OF SAID ,TY, on (SEAL) Mayor: City Secretary: The foregoing signatures of the above Treasurer, Mayor, and City Secretary are hereby certified to be genuine. (RANK SEAL) Pearland Stara Bank Name of Bank Pearland, Texas City LI.G� Si ture of Bank Officer Sr. Vice President Title of Bank Officer VINSON & ELKINS ATTORNEYS AT LAW FIRST CITY NATIONAL BANK BUILDING HOUSTON,)TEXAS 77002 of oWE HAVE ACTED as bond co F, for the CI1 JF PEARLAND, TEXAS (the "City"), in connection with the certificates gation hereinafter described kij"Certificates") : CI Y OF WATERWORKS 1 81, dated June 1, PEARLAND, 81 TEXAS, consecutively f omS 1Ethrough M T80,1 both e inS clusive, OBLIGATION,, nhedenSERIES m nation of $5,000 each, aggregating $400,000, bearing interest per annum at the respective rates shown below. interest payable March 1, 1982, and semiannually thereafter on September 1 and March 1 in each year, and maturing serially on March 1 in each year as follows: $100,000 9.25% 1990 100,000 9.40 100,000 9.75% 1991 WE RAVE 1992/93 of the Certificatesunderthe Constitution nTED as bond counsel for the and lawse ofthe State of Texas, under which the City is acting as an incorporated city of purpose of rendering an opinion with respect to the legality and validity city the State of Texas, and with respect to the exemption of interest on the Certificates from Federal income taxation. We oth r not been requested to investigate or verify and have not investigated or verified original radata, or not aeMaterial, but have relied soles upon certificates executed b y con- nection any responsibility with respct to the financial condition porbeapabilities of the c officials and eCityeo 8the edilsc disclosure thereof eof in con n with an sale of the Certith res. which contains CAPACITY as bond counsel, we have examined a transcript of certified proceedings and repro certified copies of the City, andtain otherertifedgsh wingsCrelat relating totheauthorizationto d issuance of the Certificates. We have y cepertificatengs ofto the officeCertrs, agents hale also made a limited examination of the Official Statement solely byCityconcerning the Certificates Certificates. verify that suchnation description conforms toe the provisions matters theordinancethe adoptedbyCity Council ofterms the been prepared the e financial advisors in connection with the City nUthorizing the Certificates. We have also examined executed Certificate No. 1 of this issue. D OH IT IS 'egaBautho ity for EXAMINATION, ohCertificaesRin full comp ianceN that hwithatheriCon Constitution laws of the State of Texas Presently effective; that therefore the Certificates constitute valid and legally binding obligations of the City, and that taxable Propertynwithin the City is subject to the levy of ad valorem taxes, within the limits prescribed by law, to interest thereon. pay the Certificates e Dal 18 OUR FURTHER OPINION that the revenues to be derived from the operation of the waterworks system of the ter the payment of all operation and maintenance expenses of said system, are also pledged to the payment of the unat of and interest on the Certificates to the extent that said taxes levied and collected for same may ever be insufficient or and peable for said purpose, the said pledge of revenues being in all things junior and subordinate to the existingprin n on said revenues for the payment of the interest on and of nu bonds of the City, now outstanding or from time to time hereafter issued, all as set forth in the ordinance adopted pledge by the y Council of the Cityprincipal of all waterworks and sanitary sewer system reve- authorizing the Certificates (the "Ordinance"). ga.. TTH, E CITY has reserved the right, subject to the restrictions stated in the Ordinance. to issue additional certificates of obli- for any lawful purpose, to be on a parity with the Certificates and to be Payable from, and secured by a lien on and Dledge of the aforesaid Net Revenues in the same manner and to the same extent as the Certificates. anderT IS OUR FURTHER OPINION that the interest on the Certificates is exempt from all present Federal Income taxation existing statutes, regulations, published rulings and court decisions. VINSON & ELKINS HEREBY C �edr°tp'a �eaerlbed CERTIFY that the above and foregoing is a true and correct copy of the legal opinion upon the Certificates yvent for said was manually signed by Vinson & Eikine, Houston, Texas, and was dated as of the date of delivery of d Certificates. Secreta CITY OF PEARLAND TEXAS lieninrn IWO II IIIII II�1 iiiii UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND, TEXAS, WATERWORKS SYSTEM CERTIFICATE OF OBLIGATION SERIES 1981 Dated June 1, 1981 Principal Due March 1, 1993 No Option INTEREST 9 75 PER CENT Interest coupons payable March 1, 1982, and semiannually thereafter on each September 1 and March 1 while this Certificate is outstanding Principal and interest payable at the PEARLAND STATE BANK, Pearlland, Texas t�l ����������\\1"111�11�����I\\I\\�� 2014;411010fAlti REGISTER NO COMPTROLLER'S REGISTRATION CERTIFICATE Texas, and that 0 w w v w 1 counts of the State of Texas. WITNESS my signature and seal this • FISCAL YEAR 'ENDING 9/30 DEBT SERVICE REQUIREMENT SCHEDULE $400,000 CITY OF PEARLAND WATERWORKS SYSTEM C.O.'S SERIES 1981 CURRENT ISSUE PRESENT DEBT PRINCIPAL INTEREST REQUIREMENT COUPON DUE: 3/ 1 DUE: 3/ 1 1982 1983 1984 19:35 1986 1987 1988 1989 1990 1991 1992 1993 DATED: FIRST COUPON DATE: MATURITIES:: PAYING AGENT: $0 0 0 0 0 0 0 0 0 0 0 0 9.250 9.400 9.750 9.750 100,000 100,000 100,000 100,000 PRINCIPAL 4< INTEREST DUE: 3/ 1 $28,612.501 19,075.00 19,075.005 19,075.007 19,075.009 19,075.00ii 19,075.001'5 19,075.0915 19, 075. 0011 \ 14,450.00tq ' 9,750.00 -xi 4,875.00 1,1, $28,612.50 19,075.00 19,075.00 19,075.00 19,075.00 19,075.00. 19,075.00`' 19,075.00j 119,075:00 114,450.00 109,750.00 104,875.00 JUNE 1, 1981 MARCH 1, 1982 MARCH 1, 1990/93 PEARLAND STATE BANK, PEARLAND, TEXAS LEGAL OPINION INTEREST DUE: 9/ 1 TOTAL PRINCIPAL 4 INTEREST $19, 075.00 19,075.00 19,075.00G, 19,075.00? 19,075.001r 19,075.001' 19,075.00 ,Y 19, 075.00 Ib 14,450.0018 9, 7E0.00 10 _ 4,875.00 7-Y $47,687.50 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 133,525.00 124,200.00 114,625.00 104,875.00 TOTAL ANNUAL REQUIREMENTS $47,688 38,150 38,150 38,150 38,150 38,150 38,150 38,150 133,525 124,200 114,625 104,875 YEAR TOTAL INTEREST 1982 47,687.50 1983 38,150.00 1984 38,150.00 1985 38,150.00 1986 38,150.00 1987 38,150.00 1988 38,150.00 1939 38,150.00 1990 33,525.00 1991 24,200.00 1992 14,625.00 1993 4,875.00 391, 962.50 READY I101 CONNECTICUT AVE. N. W..SUITE 900 WASHINGTON, D. C. 20036 TELEPHONE 202 862-6500 CABLE VINELKINS TELEX 89680 VINSON & ELKINS ATTORNEYS AT LAW FIRST CITY TOWER HOUSTON, TEXAS 77002 TELEPHONE 713 651-2222 TWX 9108816391 TELEX 762 146 47 CHARLES ST.. BERKELEY SQUARE LONDON WIX 7PB, ENGLAND TELEPHONE 44 01 491-7236 CABLE VINELKINS LONOON W. I.TELEX 24140 February 10, 1982 Mr. Frank Ildebrando Underwo,d, Neuhaus & Co., Inc. 724 Tr,vis Street at Rusk Avenue Hous n, Texas 77002 Re: $400,000 City of Pearland, Texas, Waterworks System Certificates of Obligation, Series 1981 Dear Frank: AUSTIN NATIONAL BANK TOWER AUSTI N, TEXAS 78701 TELEPHONE 512 478-2500 Enclosed is a bound transcript of proceedings authorizing the, issuance of these certificates of obligation. It is for you as financial advisor and co -purchaser of the certificates. With copies of this letter, I am also sending bound trans- cripts to the City for their permanent records and to Pearland State Bank, co -purchaser of the certificates. Very truly yours, Howard W. May's 185:51B Enclosures cc: Mrs. Dorothy L. Cook 7 City Secretary P. 0. Box 1157 Pearland, Texas 77581 Pearland State Bank P. O. Box 66 Pearland, Texas 77581 LI. 1, 2, ..g i N,tv:es AVISO DE INTENCION DE EMITIR CERTIFICADOS DE OBLIGACION NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that the SE NOTIFICA P0R EL PRESENTE City Council of the City of Pearland, que el Cabildo Municipal de la Texas (the "City'), will meet in the Ciudad de Pearland, Texas (la City Hall, City of Pearland, Texas, at "Ciudad''), se reunira en el Edificio 7:30 p.m. on July 13, 1981, and on del Cabildo Municipal. Ciudad de i July 27, 1981, respectively. to adopt Pearland, Texas, alas 7:30 p.m. en an ordinance, on first and second el 13 de julio de 1981, y en el 27 de . readings, authorizing the issuance of Julio de 1981 respectivamente. pars the City's Certificates of Obligation. adopter una ordenanza, en primers y payable from City ad valorem taxes segunda lectures, autorizando la emision de los Certificados de Obligation de la Ciudad, pagaderos de impuestos al valor de la Ciudad y de una prenda subordinada de los in- gresos del sistema de abastecimiento de agues de la Ciudad. r la alcan- tided total maxima pnciP de $400,000, Ilevando interes a cual- gwera tasa o tasas sequn sea deter- minado por el Cabildo Municipal, condreionado a que dicha tasa o tasas de interes no excederan el limite legal maxim° en efecto al tiempo de su emision, y con venci- miento sobre un period° de anos a ng,exceder vente (20) anos a partir de za hda de los mism°s, con el proposito de ev denciar el adeudo de la Ciudad por todo o alguna parte del costo de ampliar y n °iorar el sistema M r . de abastecimiento de aguas de la Uncle Ciudad, y el costo de servicios profe- 7 2 4 sionales incurridos en relation a to O U S mismo. OTORGADO ANTE MI Y EL SELLO Dear OFICIAL DE LA CIUDAD, este dia 22 de junio de 1981. /fdo/ DOROTHY L COOK The ( SECRETARIO MUNICIPAL 1981. CIUDAD DE PEARLAND, TEXAS as s L _�SEuo) and a subordinate pledge of the revenues of the waterworks system of the City, in the maximum aggregate principal amount of $400,000, bear- ing interest at such rate or rates as shall be determined by the City Council, provided that such interest rate or rates shall not exceed the maximum legal limit in effect at the time of their issuance, and maturing over a period of years not to exceed twenty (20) years from the date thereof, for the purpose of evidenc- ing the indebtedness of the City for all or any part of the cost of exten- ding and improving the waterworks system of the City, and the cost of professional services incurred in con- nection therewith. WITNESS MY HAND AND THE OF- FICIAL SEAL OF THE CITY, this 22nd day of lune. 1981. r /s/ DOROTHY L. COOK CITY SECRETARY CITY OF PEARLAND, i (SEAL) 1981 TELEPHONE (713) 485-2411 POST OFFICE BOX 1157 PEARLAND, TEXAS 77581 a regular meeting held on August 24, 'ficial Statement dated July 27, 1981, office, for the sale of the $400,000 in Certificates of Obligation. This is for your information. very truly, Dorothy L. City Secreta DLC:tjv ok y OFFICIAL STATEMENT DATED JULY 27, 1981 THE ISSUANCE OF THE CERTIFICATES IS SUBJECT TO THE OPINION OF BOND COUNSEL TO THE EFFECT THAT INTEREST ON THE CERTIFICATES IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER EXISTING STATUTES, REGULATIONS, PUBLISHED RULINGS AND COURT DECISIONS. $400,000 CITY OF PEARLAND (A political subdivision of the State of Texas located within Brazoria and Harris Counties) WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION SERIES 1981 Principal and interest payable at the Pearland State Bank, Pearland, Texas. Interest is payable March 1, 1982 (9 month coupon), and each September 1 and March 1 thereafter until maturity. The Certificates are not subject to redemption prior to their scheduled maturities. The Certificates are issued in $5,000 denominations and are not registrable. MATURITY SCHEDULE Dated: June 1, 1981 Due: March 1 Amount Maturity Coupon Amount Maturity Coupon $100,000 100,000 1990 9.25% $100,000 1992 9.75% 1991 9.40 100,000 1993 9.75 The $400,000 Waterworks System, Certificates of Obligation, Series 1981 (the "Certificates"), constitute the entire amount of waterworks system certificates of obligation authorized by the City of Pearland, Texas (the "City"), for that purpose on July 27, 1981. The Certificates, when issued, will constitute valid and binding obligations of the City, payable as to principal and interest from the proceeds of a continuing, direct annual ad valorem tax levied, within the limits prescribed by the Constitution and laws of the State of Texas, against taxable property within the City and further payable from a junior lien on the net revenues derived from the operation of the waterworks system of the City. The Certificates are offered subject to prior sale, when, as an if issued by the City and accepted by the Purchaser, subject to the approval of the Attorney General of Texas and approval of certain legal matters by Messrs. Vinson & Elkins, Bond Counsel for the City (the "Bond Counsel"). Delivery of the Certificates is expected on or about August 3, 1981. OFFICIAL STATEMENT DATED JULY 27, 1981' THE ISSUANCE OF THE CERTIFICATES IS SUBJECT TO THE OPINION OF BOND COUNSEL TO THE EFFECT THAT INTEREST ON THE CERTIFICATES IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER EXISTING STATUTES, REGULATIONS, PUBLISHED RULINGS AND COURT DECISIONS. $400,000 CITY OF PEARLAND (A political subdivision of the State of Texas located within Brazoria and Harris Counties) WATERWORKS SYSTEM CERTIFICATES OF OBLIGATION SERIES 1981 Principal and interest payable at the Pearland State Bank, Pearland, Texas. Interest is payable March 1, 1982 (9 month coupon), and each September 1 and March 1 thereafter until maturity. The Certificates are not subject to redemption prior to their scheduled maturities. The Certificates are issued in $5,000 denominations and are not registrable. MATURITY SCHEDULE Dated: June 1, 1981 Due: March 1 Amount Maturity Coupon Amount Maturity Coupon $100,000 1990 9.25% $100,000 1992 9.75? 100,000 1991 9.40 100,000 1993 9.75 The $400,000 Waterworks System, Certificates of Obligation, Series 1981 (the "Certificates"), constitute the entire amount of waterworks system certificates of obligation authorized by the City of Pearland, Texas (the "City"), for that purpose on July 27, 1981. The Certificates, when issued, will constitute valid and binding obligations of the City, payable as to principal and interest from the proceeds of a continuing, direct annual ad valorem tax levied, within the limits prescribed by the Constitution and laws of the State of Texas, against taxable property within the City and further payable from a junior lien on the net revenues derived from the operation of the waterworks system of the City. The Certificates are offered subject to prior sale, when, as an if issued by the City and accepted by the Purchaser, subject to the approval of the Attorney General of Texas and approval of certain legal matters by Messrs. Vinson & Elkins, Bond Counsel for the City (the "Bond Counsel"). Delivery of the Certificates is expected on or about August 3, 1981. TABLE OF CONTENTS Page USE OF INFORMATION IN OFFICIAL STATEMENT 3 OFFICIAL STATEMENT SUMMARY 3 SALE AND DISTRIBUTION OF THE CERTIFICATES 4 Registration and Qualification of Certificates for Sale 4 Municipal Certificates Rating 4 DEBT SERVICE REQUIREMENTS. 5 THE CERTIFICATES 6 Description 6 Source of Payment 6 Authority for Issuance. 6 Future Debt 6 Use of Proceeds 6 Legal lneestments in Texas 6 No Arbitrage 6 Holders' Remedies 7 DEBT STATEMENT 7 General 7 Bonded Indebtedness 7 Estimated Oyerlappirio Debt 7 Debt Ratios 8 TAX DATA 8 General. 8 Authority for Ad Valorem Taxation 8 Recent Legislation 9 Historical Analysis of Ad Valorem Taxation 10 Analysis of lax Base 10 Tax Adequacy 10 Sales Tax 10 FINANCIAL DATA 11 Historical Operations of the City's General Fund 11 Pension Fund 11 Financial Statements 12 ADMINISTRATION OF THE CITY 12 Mayor and City Council 12 Administraton 12 Consultants 12 LEGAL MATTERS 13 Legal Opinion 13 No -Litigation Certificate 13 SOURCES AND COMPILATION OF INFORMATION 13 General 13 Updating of Official Statement 13 Certification of Official Statement 14 APPENDIX A - Economic and Demographic Characteristics APPENDIX 8 - Financial Statements of the City 2 USE OF INFORMATION IN OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement and if given or made, such other information or representations must not be relied upon as having been authorized by the City. This Official Statement is not to be used in connection with 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. 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 affairs of the City or other matters described herein since the date hereof. SUMMARY The following material is qualified in its entirety by the detailed information and financial statements appearing elsewhere in this Official Statement, reference to which is made for all purposes. - General - The Issuer The City of Pearland, a political subdivision of the State of Texas, located in Brazoria and Harris Counties, Texas. The Issue $400,000 Waterworks System Certificates of Obligations, Series 1981, dated June 1, 1981, maturing March 1, 1990 through 1993, both inclusive. Interest due March 1, 1982, and semi-annually thereafter until maturity. The Certi- ficates contain no provision for registration. The Certi- ficates are not subject to redemption prior to their scheduled maturities. Source of Payment Principal of and interest on the Certificates are payable solely from the proceeds of an annual ad valorem tax levied, within the limits prescribed by the Constitution and laws of the State of Texas, against taxable property within the City. Use of Proceeds The Certificates are being issued to provide funds for the construction of a water well and related facilities. Proceeds will also be used to pay engineering costs and costs incurred through the issuance of the Certificates. Rating Moody's Investors Service Inc Population 13,130 (1980 Census) 3 - Financial Highlights - (Unaudited) 1981 Estimated Assessed Valuation (100% of Estimated Market Value) $315,500,000 (a) 1980 Assessed Valuation (60% of Estimated Market Value) $175,727,435 Bonded Indebtedness Outstanding City Debt (as of May 1, 1981) $ 5,087,000 The Certificates $ 400,000 Direct Debt $ 5,487,000 Estimated Overlapping Debt $ 7,549,203 Direct and Estimated Overlapping Debt $ 13,036,203 Interest & Redemption Fund Balance (as of May 1, 1981) $ 320,653 (a) Provided by the City's Tax Assessor/Collector; does not. represent a final assessed valuation, as the Board of Equalization may determine to raise or lower all or a part of such valuation. %of 1980 of 1981 Ass'd Value Est. A.V. Per Capita Debt Ratios: Direct Debt 3.12% 1.74% $413 Direct and Estimated Overlapping Debt 7.42% 4.13% $980 Debt Service Requirements Average (1982/1997) Maximum (1982) $500,448 $576,702 Tax Collections (through May 30, 1981) Tax Year (1979/1980) - Current year 95.02% Current and prior years 96.82% Arithmetic Average Tax Years (1976/1980) - Current year 96.16% Current and prior years 98.91% SALE AND DISTRIBUTION OF THE CERTIFICATES Registration and Qualification of Certificates for Sale: No registration statement relating to the Certificates has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, in reliance upon exemptions provided thereunder. The Certificates have not been registered or qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Certificates been registered or qualified under the securities act of any jurisdiction. The City assumes no responsibility for registration or qualification of the Certificates under the securities laws of any jurisdiction in which the Certificates may be offered, sold, or otherwise transferred. This disclaimer of responsibility for registration or qualification for sale or other disposition of the Certificates shall not be construed as an interpretation of any kind with regard to the availability of any exemptions from securities registration or qualification provisions. Municipal Certificates Rating: Application has been made to Moody's Investor's Service, Inc. ("Moody's") for a municipal rating, and a rating of " " has been assigned to the Certificates and the other outstanding City indebtedness which ranks on a parity with the Certificates. An explanation of the significance of such rating may be obtained from Moody's. The rating reflects only the view of Moody's and the City makes no representation as to the appropriateness of the rating. There is no assurance that such rating will continue for any given period of time or that it will not be revised or withdrawn entirely by Moody's, if, in its sole judgment, circumstances so warrant. Any such revision or withdrawal may have an effect on the market price of the Certificates. 4 Fiscal Ending Year 9-30 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 DEBT SERVICE SCHEDULE Outstanding Debt (Principal and Interest $ 528,014 527,138 526,658 525,262 527,605 523,901 525,239 528,615 423,689 418,689 412,866 406,127 406,142 394,012 277,500 263,750 $7,215,207 The Certificates Principal $100,000 100,000 100,000 100,000 Interest $ 47,688 38,150 38,150 38,150 38,150 38,150 38,150 38,150 33,525 24,200 14,625 4,875 $400,000 $391,963 A%.erage Annual Requirements• $500,448 Total Debt SerN,ice $ 575,702 565,288 564,808 563,412 565,755 562,051 563,389 566,765 557,214 542,889 527,491 511,002 406,142 394,012 277,500 263,750 $8,007,170 5 THE CERTIFICATES Description: The Certificates are dated June 1, 1981, and bear interest from such date at the rates specified under "MATURITY SCHEDULE", which interest is payable on March 1, 1982, and each September 1 and March 1 thereafter until maturity. the Certificates maturing March 1, 1990 through 1993, both inclusive, are issued as coupon certificates in the denomination of $5,000 each, and are not registrable. The Certificates are not subject to redemption prior to their scheduled maturities. Principal of and interest on the Certificates are payable at Pearland State Bank, Pearland, Texas. The Certificates are bearer certificates and are fully negotiable. Safekeeping must be employed by the holder. In accordance with Article 715a, Vernon's Texas Civil Statutes, lost, stolen, destroyed or mutilated Certificates may be replaced by the City upon request of the holder and the furnishing of indemnity to the satisfaction of the City, proof of ownership, explanation of loss and costs incurred by the City. Such replacement certificates are subject to the approval of the Attorney General of Texas. Replacement is a time-consuming and expensive process. Source of Payment: The Certificates, when issued, will constitute valid and binding obligations of the City and, together with other outstanding debt on a parity with the Certificates are payable as to principal and interest from the proceeds of an annual ad valorem tax levied, within the limits prescribed by the Constitution and laws of the State of Texas, against taxable property within the City and further payable from a junior lien on the net revenues derived from the operation of the waterworks system of the City. The Council covenants in the ordinance authorizing issuance of the Certificates (the "Ordinance") that while the Certificates or any part of them are outstanding, it will levy and assess, considering delinquencies and costs of collection, an annual ad valorem tax, within the aforementioned limitations, against taxable property within the City, which will be sufficient to pay the interest and principal, when due, on the Certificates, and will undertake collection of such tax. Authority for Issuance: The Certificates are issued pursuant to an Ordinance which authorizes issuance and awards sale of the Certificates. The Certificates were authorized on July 27, 1981, pursuant to authority granted by Article 2368a.1, Vernon's Texas Civil Statutes, as amended. Future Debt: Upon issuance of the Certificates, there will be no ad valorem tax debt authorized but unissued. The City currently has no plans to authorize and issue additional ad valorem tax debt, however, nothing herein should be construed as precluding the right of the City to seek such approval and to issue such authorized debt in the future. Use of Proceeds: The Certificates are being issued to provide funds for the construction of a water well and related facilities. Proceeds will also be used to pay the placement agent's fee of S10,440, the Bond Counsels fee, engineering fees and the cost of issuance of the Certificates. Legal Investments in Texas: The Certificates are legal investments for sinking funds of Texas counties, cities and towns. They are eligible to secure Texas state and school district funds, and constitute legal investment for insurance companies in the State of Texas. No representation is made with respect to the laws of the states other than Texas as to whether the Certificates are legal investments for various institutions or purposes in those states. No Arbitrage: The City certifies that based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered and paid for, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates or any portion of the Certificates to be an "arbitrage certificate" under Section 103(c)(2) of the Internal Revenue Code of 1954, as amended, and the regulations prescribed thereunder. Futhermore, all officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City as of the date the Certificates are delivered and paid for. In particular, all or any officers of the City are authorized to certify for the City the facts and circumstances and reasonable expectations of the City on the date the Certificates are delivered and paid for regarding the amount and use of the proceeds of the Certificates. Moreover, the City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds of the Certificates and take such other and further actions as may be required so that the Certificates shall not be "arbitrage certificates" under Section 103(c)(2) of the Internal Revenue Code of 1954, as amended, and regulations prescribed from time to time thereunder. 6 Remedies in the Event of Default: The Ordinance provides that while any part of the Certificates are outstanding there shall be levied, assessed and collected an ad valorem tax, within the limits prescribed by law, against taxable property within the City, sufficient to pay principal of and interest on the Certificates when due and to pay the expenses necessary in collecting such taxes. In the event the City defaults on the payment of the principal of or interest on any of the Certificates when due, fails to make required payments into the Interest and Sinking Fund or any other fund, or defaults in the observance or performance of any of the covenants set forth in the Ordinance, any holder of the Certificates shall be entitled at any time to seek a writ of mandamus from a court of competent jurisdiction requiring the City to observe the covenants, obligations, or conditions contained in the Ordinance: however, the mandamus remedy may be impracticable and difficult to enforce and may have to be relied upon from year to year. The Ordinance does not specifically provide for other remedies to a holder of the Certificates in the event of default nor does it provide for the appointment of a trustee to protect Certificates upon the occurrence of such a default. Further, the holders of the Certificates cannot themselves foreclose on or sell property within the City in order to pay the principal of or interest on the Certificates. While holders of the Certificates could obtain a judgment against the City, such a judgment could not be enforced by a direct levy and execution against property within the City. The enforceability of the rights and remedies of the holders of the Certificates may further be limited by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political sudivisions such as the City. In addition, court decisions other than in Texas have upheld the right of a state, in appropriate emergency circumstances and in the exercise of the state's police power, to modify the terms and conditions of contractual covenants relating to the payments of indebtedness of a political subdivision. Such an exercise of the state's police power could further serve to limit the enforceability of the rights and remedies of holders of the Certificates. DEBT STATEMENT General: The following tables and calculations relate to the Certificates and other debt of the City. Various other political subdivisions of government within which the City is located, which overlap all or a portion of the area of the City, are also empowered to incur debt to be paid from revenues raised or to be raised through taxation. Bonded Indebtedness: Outstanding City Debt (as of May 1, 1981) $ 5,087,000 The Certificates 400,000 Total Direct Debt $ 5,487,000 Interest & Sinking Fund Balance (as of May 1, 1981) $ 320,653 Estimated Overlapping Debt: The following table indicates the indebtedness, defined as outstanding certificates payable from ad valorem taxes, of governmental entities within which the City is located and the estimated percentages and amounts of such indebtedness attributable to taxable property within the City. Such figures do not indicate the tax burden levied by the applicable taxing jurisdications for operation and maintenance purposes. Taxing Jurisdiction Debt as of May 1, 1981 Brazoria County $ 2,725,000 Clear Creek I.S.D. 40,815,000 Harris County 253,995,000 Harris County Flood Control Dist. 147,840,000 Pearland I.S.D. 9,735,000 Port of Houston Authority 85,654,000 Total Estimated Overlapping Debt The City Total Direct & Estimated Overlapping Debt Overlapping Percent Amount 4.04 1.51 .07 .07 66.58 .07 $ 110,090 616,307 177,797 103,488 6,481,563 59,958 $ 7,549,293 $ 5,487,000 $13,036,203 7 Debt Ratios: Direct and Estimated Direct Debt Overlapping Debt Per 1981 Estimated Assessed Valuation ($315,500,000) 1.74% 4.13% Per 1980 Assessed Valuation ($175,727,435` 3.12% 7.42% Per Capita (13,130 1980 census) $413 $981 TAX DATA General: One of the City's sources of operational revenue and its principal source of funds for ad valorem tax debt service payments is from the receipts from ad valorem taxation. the following is a recapitulation of (1) the authority for taxation, including methodology, limitations, remedies and procedures; (2) historical analysis of collection and trends of tax receipts and provisions for delinquencies; and (3) an analysis of (a) the current tax base, (b) the principal taxpayers and (c) other ad valorem taxation that may compete with the City's tax collections. Additionally, sales tax authority and collections are analyzed. Authority for Ad Valorem Taxation: - Tax Rate Limitations - The State Constitution limits the City's ad valorem tax rate to a maximum of $2.50 per $100 of assessed valuation. Rules promulgated by the Attorney General of Texas provide that the Attorney General of Texas will not approve tax bonds of the City unless the City can demonstrate its ability to pay debt service requirements on the Outstanding Bonds and the Certificates, from a tax levy of $1.50 at 90% collection per $100 of assessed valuation. - Property Subject to Taxation - Except for certain exemptions provided by Texas law, all the property in the City, real or personal, is subject to taxation by the City. Principal categories of exempt property are property of a religious, educational or charitable character; property of the United States of America, the State of Texas, or one of their agencies; property of disabled veterans only to the extent of $3,000 of taxable valuation; and residential homesteads of persons over 65 years, to the extent the governing body of the political subdivision granting an exemption deems it advisable to exempt such homestead. In the legislative session ended June 1, 1981, House Joint Resolution 81 was passed, thereby providing that voters of the State of texas will cast ballots on November 3, 1981, to approve or disapprove a state constitutional amendment concerning homestead property tax exemptions. Such amendment, if approved, would provide to local governments the option of granting homestead exemptions of up to 40% of market value for the 1982-1984 tax years, up to 30% of market value for the 1985-1987 tax years and up to 20% of market value thereafter. It cannot be predicted whether such amendement will be approved or whether the City would exercise any of its options thereunder. For tax year 1980, the Council exempted from taxation $12,500 of assessed valuation of residential homesteads of person over 65 years of age. See "Recent Legislation". - City's Rights in the Event of lax Delinquencies The City has a lien granted by statute for unpaid taxes on real property which is discharged upon payment. Thereafter, no lien exists in favor of the City until it again levies taxes. In the event a taxpayer fails to make timely payment of taxes due to the City on real property, a penalty of 1/2% of unpaid taxes is added monthly until reaching 6% total (9% after January 1, 1982). In addition, 8% annual interest is charged on such delinquent taxes. the City may file suit for collection of delinquent taxes on real property, together with penalty and interest, and may foreclose such lien in a foreclosure proceeding. The property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Any liens and subsequent suits against the taxpayer for payment of delinquent personal property taxes are barred unless instituted within four years from the time such taxes become delinquent. unlike real property, the sale of or transfer of title to personal property does not require any evidence that taxes thereon are paid. 8 - Assessment and Collection Procedures - Taxable property in the City is presently valued on the City's tax rolls at a claimed 60% of its market value as of each January 1, as determined by the Tax Assessor/Collector and the City's Board of Equalization. Effective January 1, 1981, the City has increased its basis of assessment to 100% of estimated market value. Under Texas law, a tax assessor/collector is under an obligation to assess or appraise all property for taxation which has not been rendered for taxation by the owner and to present the assessments or appraisals, together with the renditions and any recommendations for changing such rendered values, to a Board of Equalization, which is comprised of no fewer than three, nor more than five persons who shall be qualified voters and real property owners in the City, none of whom shall be employees, officers or members of the City Council. The Board of Equalization has the ultimate responsibility for determining the taxable value for property in the City; however, any owner who rendered property may appeal the decision of the Board of Equalization by filing suit in district court. Recent Legislation: 0n May 28, 1979, the Legislature adopted a comprehensive Property Tax Code !"the Code") which will significantly affect the taxing procedures of all political subdivisions of the State, including the City. Although the City is unable to determine at this time the full impact of the Code, it is possible that the provisions of the Code requiring, after January 1, 1982, county -wide appraisal and equalization of taxable property values, will result in some change in what otherwise would have been the City's assessed valuation under present law and practices. The City's ad valorem tax, which is pledged to the payment of the Certificates, is currently imposed at a rate determined by the City Council of the City, based on the assessed valuation of property in the City as initially established by the City's Tax Assessor/Collector and as approved or modified by the City's Board of Equalization. The Code, however, establishes an appraisal district within and for each county in the State. As of January 1, 1982, the appraisal district (and an appraisal review board) will have the responsibility for establishing the appraisal rolls for most political subdivisions within the county, including the City. Such appraisal values must be used by the City in establishing its tax rolls and tax rate. Beginning in 1982, the appraisal of property within the City will be the responsibility of an Appraisal District with county -wide jurisdiction. The State Property lax Board (The "Tax Board") will adopt rules establishing minimum standards for administration and operation of Appraisal Districts and county assessor/collector offices. The lax Board, appointed by the Governor, began operation on January 1, 1980. Appraisal Districts within each county also began operation at that time. lhe majority of the directors of the Appraisal District may be selected by taxing entities other than the City. A City, or other taxing unit, may challenge the appraisals assigned property within its jurisdiction under certain limited circumstances. The City may also sue the appraisal district to compel it to comply with the Code. The Codes requires a reappraisal of values by the appraisal district not less frequently than every five years. It is not known what frequency of reappraisals will be utilized by the 8razoria County appraisal district or whether reappraisals will be conducted on a zone or county -wide basis. The City, however, at its expense, has the right to obtain from the appraisal districts a current estimate of appraised values within the City or an estimate of new property or improvements within the City. While such a current estimate of appraised values may serve to indicate the rate and extent of growth of taxable values within the City, it could not he used for establishing a tax rate within the City until such time as the appraisal district chooses to formally include such values on the appraisal rolls. Alternatively, any political subdivision within an appraisal district, including the City, may request at its expense, a more frequent review of property appraisals within such political subdivision. It should also be noted that an! more frequent review of appraisals of property, if requested by the City, could result in increased appraised values (and therefore increased taxes) by other taxing entities overlapping the City which are required to use the appraisal district's values. lhe Code also restates, with certain modifications, the provisions of certain constitutional and statutory law amendments effective January 1, 1979, requiring notice and hearing of tax rate increases, permitting taxpayer referenda to repeal certain tax increases and providing for protests and appeals of tax or appraisal increases by taxpayers. 9 Historical Analysis of Ad Valorem Taxation: - Collection Ratios - % of Collections Tax Assessed Tax Rate Per Adjusted Current Current & Fiscal Year Year Valuation $100 A.V. Tax Levy Year Prior Years Ending 9-30 1976 $ 72,218,028 $1.300 $ 940,543 97.57% 101.86% 1977 1977 79,377,746 1.300 1,034,667 95.09 96.74 1978 1978 137,961,516 (a) .950 1,310,634 96.65 100.11 1979 1979 161,760,250 .950 1,536,722 96.47 99.02 1980 1980 175,727,435 1.065 1,871,497 95.02 96.82 (b) (a) Revaluation (b) Partial year's collections through 5-31-81 - Tax Rate Distribution - Tax Year 1980 1979 1978 1977 1976 General Fund $0.773 $0.658 $0.616 $0.932 $1.009 Interest & Redemption Fund .292 .292 .334 .368 .291 Total 1.065 $0.950 117.Wf 1.300 1.300 Analysis of Tax Base: - Principal Taxpayers - Taxpayer Type of Property Capitol Pipe and Steel Products Steel Pipe Manufacturing Southwestern Bell Telephone Utility Hausman & Associates Apartments Pearland State Bank Bank Gaido-Lingle Company Pipe Coating C. H. Alexander Estate Commercial and Farmland Golfcrest Country Club Golf Course & Club Meadow Creek Village Apartments Thomas A. Alexander Land Houston Helicopters Air transport Dow Chemical Company Equipment and Pipe Total Top len Taxpayers Assessed Valuation % of Assessed Valuation to Respective Tax Roll Assessed Valuation 1980 lax Roll 1979 lax Roll $ 3,868,224 3,273,655 2,274,835 1,873,109 1,498,708 1,230,655 (a) 1,199,736 1,157,997 1,079,344 1,049,855 -x- $18,506,103 10.53% (a) Decrease due to enactment of certain agricultural exemptions. (b) Principally pipe storage. $ 3,648,005 2,415,520 2,322,822 1,490,346 1,520,020 3,625,424 1,195,278 1,206,771 1,074,888 -x- 1,612,690 (b` $20,111,764 12.43% lax Adequacy: Average Annual Debt Service Requirements (1982/1997) $ 500,448 Tax Rate of $0.30 per $100 of assessed valuation against the 1980 Assessed Valuation, at 95% collection, produces $ 500,823 Maximum Annual Debt Service Requirement (1982) $ 575,702 lax Rate of $0.35 per $100 of assessed valuation against the 1980 Assessed Valuation, at 95% collection, produces $ 584,294 10 Sales Tax: - Authority - The City has adopted the provisions of Article 1066c, Vernon's Texas Civil Statutes as amended, which grants the City the power to impose and levy a 1% sales tax. The City may not pledge the proceeds from the Sales Tax as security for the Certificates. - Collection History - The State Comptroller, after deduction of a 2% service fee, remits the City's portion of sales tax collection monthly. The following is an analysis of the collection history of the City's sales tax: Fiscal Year Ended 9-30 1977 1978 1979 1980 1981(a) Total Collected $ 277,159 360,449 445,271 863,670 81 1 , 818 (a) Eight -month period ending June 30, 1981 of Ad Valorem Tax Levy 29.47 34.70 36.74 56.20 43.38 FINANCIAL DATA Historical Operations of the City's General Fund: The following is a condensed statement General Fund for the past five fiscal years. Revenues General Property Taxes Penalties and Interest Sales Taxes Franchises Licenses and Permits Interest Sanitation Fines and Forfeitures Miscellaneous TOTAL Expenditures General Government Police Fire Public Safety Streets Sanitation Community Services TOTAL Equivalent of Ad Valorem Tax Rate as 95% Collections $ 0.36 .43 .31 .51 .44 of revenues and expenditures of the Cit)'s Fiscal Year Ended 9-30-80 9-30-79 9-30-78 9-30-77 9-30-76 $ 1,052,754 $ 859,344 $ 720,814 $ 681,506 $ 485,880 35,440 17,658 9,145 13,350 10,597 863,670 455,271 360,449 277,159 219,242 235,628 187,820 153,355 128,032 92,169 67,875 118,175 130,615 99,316 70,340 60,957 25,581 18,710 11,848 9,657 368,199 318,809 274,791 197,055 138,083 166,789 148,437 101,584 101,495 81,184 144,180 38,349 16,274 15,075 9,453 $ 2,995,492 $ 2,169,444 $ 1,785,737 $ 1,524,836 $ 1,116,605 $ 756,226 $ 743,143 $ 648,421 $ 448,077 $ 344,815 608,329 558,715 391,877 366,864 307,696 49,485 43,517 32,983 36,408 23,608 181,144 141,994 129,553 105,055 44,490 412,668 414,711 310,356 266,964 164,871 387,905 311,258 265,710 183,664 138,673 126,328 102,531 64,279 45,179 27,461 $ 2,522,085 $ 2,315,869 $ 1,843,179 $ 1,452,211 $ 1,051,614 Financial Statements: A copy of the City's Financial Statements for the fiscal year ended September 30, 1980, is attached hereto in the APPENDIX B. Copies of such statements fur preceding years are available, for a fee, upon request. 11 ADMINISTRATION OF THE CITY Mayor and City Council: The legislative and governing body of the City consists of a mayor and five councilmen and are known as the "City Council of the City of Pearland" collectively, (the "Council"). The Mayor and members of the Council are elected from the City at large. The Mayor and each of the five members of the Council serve three-year staggered terms. Members of the Council are described below: Term Council Members Position Years Served Expires Occupation Tom Reid Mayor 8 1984 Shuttle Program Administrator, Rockwell International Alfred E. Lentz Mayor Pro-Tem 1 1983 Vice President, Koehn Engineers, Inc. Carlton McComb Councilman 12 1982 Buyer, Electric Wire and Cable Charles Mack Councilman 2 1982 Supervisor, Ford Aerospace & Comm. Corp. Harry Farley Councilman 6 1984 Engineering Manager, FMC Corporation Terry Gray Councilman 4 1983 Assistant Manager, Southwestern Bell Telephone Administration: City Manager - Ronald Wicker City Secretary - Dorothy L. Cook Tax Assessor/Collector - James 0. DeShazer City Treasurer - Dorothy S. Thompson Consultants: The City has retained several consultants to perform professional services in connection with the issuance of bonds, the independent auditing of its books and records, the engineering designing of construction facilities and other City activities. Several of these consultants are identified below: Auditor (Certified Public Accountants) Lairson, Young & Co. Houston, texas Bond Counsel Messrs. Vinson & Elkins Houston, Texas Placement Agent Underwood, Neuhaus & Co. Incorporated Houston, Texas 12 LEGAL MATTERS Legal Opinion: The City will furnish the Purchaser a transcript of certain certified proceedings had incident to the authorization and issuance of the Certificates, including a certifed 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 Certificates are valid and binding obligations of the City. The City will also furnish the approving legal opinion of Messrs. Vinson & Elkins, Bond Counsel, to the effect that, based upon an examination of such transcript, the Certificates are legal, valid and binding obligations of the City under the Constitution and laws of the State of Texas and to the effect that the interest on the Certificates is exempt from all present federal income taxes under existing statutes, regulations, published rulings and court decisions. The opinion of Bond Counsel is expected to be reproduced on the back panel of the Certificates over a certification by the facsimile signature of the City Secretary attesting that legal opinion was dated as of the date of delivery of and payment for the Certificates and the copy is a true and correct copy of the original opinion. Messrs. Vinson & Elkins did not take part in the preparation of the Official Statement nor has such firm undertaken to independently verify any of the information contained herein, except that, in their capacity as Bond Counsel, such firm has reviewed the information concerning the description of the Certificates appearing herein to verify that such description conforms to the provisions of the Ordinance. No -litigation Certificate: The Council will furnish to the Purchasers a certificate, dated as of the date of delivery of the Certificates, executed by both the Mayor and City Secretary to the effect that no litigation of any nature is then pending or threatened, either in state or federal courts, contesting or attacking the Certificates; restraining or enjoining the issuance, execution, or delivery of the Certificates; affecting the provisions made for the payment of or security for the Certificates; in any manner questioning the authority or proceedings for the issuance, execution or delivery of the Certificates; or affecting the validity of the Certificates or coupons. SOURCES OF INFORMATION General: The information contained in this Official Statement has been obtained primarily from the City and from other sources believed to be reliable. However, no representation is made as to the accuracy or completeness of the information derived from such other sources. The summaries of the statutes, resolutions 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 - Financial Statements of the City" has been provided by Lairson, Young & Co., Certified Public Accountants, and has been included herein in reliance upon their authority as experts in the field of audit and accounting. Updating of Official Statement: The City will 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 comes to its attention, to the other matters described in this Official Statement, until the delivery of the Certificates to the Purchasers. All changes in the affairs of the City and other matters described in this Official Statement subsequent to the delivery of the Certificates and all information with respect to the resale of the Certificates shall be the responsibility of the Purchaser. 13 Certification of Official Statement: At the time of payment for and delivery of the Certificates, the City will furnish the Purchasers a certificate executed by the Mayor and City Secretary of the City 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 in its Official Statement, on the date of such statement, on the date of sale of the Certificates and the award of sale thereof, and on the date of delivery of the Certificates, 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; and (c) insofar as the descriptions and statements, including financial data other than the City and their activities are concerned, such statement and data have been obtained from sources which they believe to be reliable and that they have no reason to believe that they are untrue in any material respect. This Official Statement was duly authorized and approved by the Mayor and City Council of the City of Pearland, Texas, on the date specified on the front page hereof. ATTEST: /s/ City Secretary, City of Pearland /s/ Mayor, City of Pearland, Texas 14 APPENDIX A - Economic and Demographic Characteristics The following information has been derived from various sources, including the Texas Almanac, Texas Municipal Reports, Directory of Texas Manufacturers, 1980, "1980 Sales & Marketing Management's Survey of Buying Power", and municipal officials. While such sources are believed to be reliable, no representation is made as to the accuracy thereof. Location: The City is located in Houston to the north. The 518. the northeast corner of Brazoria County bordering the City of City is traversed by State Highway 35 and Farm -to -Market Road Economic Base: Due to its proximity to Houston, the City has experienced continued residential, commercial and light industrial development. Agriculture and mineral production also remain a factor in the economy. The following is a listing of some of the other companies included iri the City. Employment range and relevant product extracted from the Directory of lexas Manufacturers 1980 or company offices. Name Brazoria Fabricating Inc. Davis -Lynch Inc. Dearman Mfg. Products Inc. Gaido-Lingle Co. Inc. HOW Houdaille Maloney Crawford Corp. McGinnes Mfg. Co. Pauluhn Electric Mfg. Co. Inc. Royce Equipment Co. Statistical Data: 1973 1974 1975 1976 1977 1978 1979 1980 Residential No. Value 140 117 237 295 386 491 207 94 $ 5,253,000 4,310,900 9,501,800 14,188,100 21,489,824 23,298,945 13,024,664 7,485,570 (1) Includes Apartments Pearland State Bank First National Bank Community Bank Product Steel fabricating Oil well equipment Pipe fitting tools Pipe coating Precast concrete Chemical and water storage tanks Materials handling equipment Light fixtures Stationary screeners - Building Permits - (Source - City of Pearland) Employment Range Commercial (1) Other total 25-49 25-49 25-49 100-249 25-49 100-249 25-49 50-99 25-49 No. Value Nu. Value No. Value 20 $ 511,750 130 $ 390,405 290 $ 6,155,155 19 1,171,700 144 496,428 280 5,979,028 170 2,844,800 156 1,142,600 563 13,489,200 268 5,471,893 197 1,109,387 760 20,769,380 31 2,759,699 282 3,514,385 698 27,763,908 160 8,414,422 270 3,113,533 921 34,826,900 36 7,150,700 386 2,167,264 629 22,342,628 18 2,204,200 495 3,007,071 607 12,696,841 - Bank Deposits - (Source - Texas Banking Red Book) 12-31-1980 12-31-1979 12-31-1978 12-31-1977 12-31-1976 $42,743,614 $39,206,253 $30,934,734 $28,054,946 $21,862,714 17,991,068 15,628,262 10,102,027 5,402,427 2,156,448 21,901,000 20,716,814 18,221,785 14,581,777 11,852,491 Total $82,635,682 $75,551,329 $59,258,546 R48,039,150 $35,871,652 Li/R.SON, YOUNG 8 CO CERTIFIED PUBLIC ACCOUNTANTS MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Honorable Mayor and Members of City Council City of Pearland, Texas 1425 CAPITAL NATIONAL BANK BLDG HOUSTON. TEXAS 77002 713 658 ,745 We have examined the combined financial statements of the City of Pearland, Texas for the year ended September 30, 1980, as listed in the table of contents. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. 0ur examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The combining, 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 combined financial statements of the City of Pearland, Texas. The information has been subjected to the auditing procedures applied in the examination of the combined financial statements and, in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. In our opinion, the combined financial statements referred to above present fairly the financial position of the City of Pearland, Texas, at September 30, 1980, and the results of its operations and the changes in financial position of its proprietary fund types for the year then ended, in confor- mity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Houston, Texas December 10, 1980 -18- GENERAL PURPOSE FINANCIAL STATEMENTS -19- LifIRSON. YOUNG 8 CO COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS CITY OF PEARLAND, TEXAS September 30, 1980 ASSETS CASH - (including certifi- cates of deposit of $1,984,068) GOVERNMENTAL FUND TYPES Debt Capital Special Special General Service Projects Assessment Revenue $606,798 $141,674 $583,879 $21,093 $46,677 RECEIVABLES - less allowance for doubtful accounts of $1,500 Taxes 92,249 Accounts 7,846 DUE FROM OTHER FUNDS 48,272 LAND PLANT AND EQUIPMENT - cost Less allowance for depreciation - Note 2 CONSTRUCTION IN PROCESS PREPAID EXPENSES RESTRICTED ASSETS Certificate of deposit AMOUNT AVAILABLE IN DEBT SERVICE FUND AMOUNT TO BE PROVIDED FOR RETIREMENT OF GENERAL LONG-TERM DEBT 25,072 2,932 1,470 1,801 8,059 27,655 TOTAL ASSETS $783,169 $143,144 $585,680 $29,152 $74,332 The notes to the financial statements are an integral part of this statement. -20- LAIRSON, YOUNG 8 CO ACCOUNT GROUPS PROPRIETARY General General FUND TYPE Fixed Long - Enterprise Assets Term Debt TOTAL (Memorandum Only) 1980 1979 $1,068,757 $ 2 468,878 $ 4,012,128 129,264 77,425 $ 704,313 6,376,415 3,985,789 905,075 5,471,340 3,985,789 212,873 2,545 48,000 46,797,331 $ 143,144 92,249 174,625 48,272 781,738 10,362,204 905,075 9,457,129 212,873 29,087 50,932 143,144 4,817,856 4,817,856 78,720 234,459 48,575 725,954 7,888,158 767,727 7,120,431 110,483 15,645 50,932 110,812 4,972,188 $4,902,975 $4,961,000 $18,276,783 417,480,327 -21- MIRSON. YOUNG 8 CO COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS - 2 LIABILITIES ACCOUNTS PAYABLE ACCRUED EXPENSES CUSTOMER METER DEPOSITS DUE TO OTHER FUNDS MUNICIPAL COURT ESCROW ACCOUNTS DEFERRED REVENUES TIME WARRANTS - Note 3 CERTIFICATES OF OBLIGATION - Note 3 REVENUE BONDS - Note 3 GENERAL OBLIG;ATION BONDS - Note 3 TOTAL LIABILITIES FUND EQUITY CONTRIBUTED CAPITAL INVESTMENT IN GENERAL FIXED ASSETS RETAINED EARNINGS Reserved for revenue bond retirement Unreserved GOVERNMENTAL FUND TYPES Debt Capital Special Special General Service Projects Assessment Revenue S 55,049 44,523 $ 8,163 6,895 92,249 $18,016 198,716 8,163 18,016 FUND BALANCES Reserved for social security 2,932 Unreserved Designated For debt service $143,144 For subsequent years expenditures 577,517 11,136 Undesignated 581,521 $74,332 TOTAL FUND EQUITY 584,453 143,144 577,517 11,136 74,332 TOTAL LIABILITIES AND FUND EQUITY $783,169 $143,144 $585,680 429,152 $74,332 ===== = ======= The notes to the financial statements are an integral part of this statement. -22- PROPRIETARY FUND TYPE Enterprise ACCOUNT GROUPS General General Fixed Long - Assets Term Debt TOTAL (Memorandum Only) 1980 1979 $ 14,876 $ 69,925 $ 72,633 11,396 55,919 102,770 42,026 42,026 38,833 40,109 48,272 48,575 $ 88,000 723,000 2,650,000 4,150,000 2,758,407 4,961,000 3,530,118 $4,902,975 48,000 460,806 508,806 4,038,924 4,902,975 6,895 110,265 88,000 6,645 212,069 49,000 723,000 779,000 2,650,000 2,700,000 4,150,000 4,255,000 7,944,302 8,264,525 3,530,118 3,518,938 4,902,975 3,843,637 48,000 460,806 48,000 223,440 508,806 271,440 2,932 143,144 588,653 655,853 110,812 1,271,660 199,315 10,332,481 9,215,802 $6,797,331 $4,902,975 4,961,000 $18,276,783 $17,480,327 -23- COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CITY OF PEARLAND, TEXAS Year ended September 30, 1980 REVENUES Taxes Franchises, licenses, and permits Federal revenue sharing and grants Interest on investments Sanitation income Street assessments Fines and forfeitures Other revenue TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Community services Capital outlay Debt service Principal retirement Interest and fiscal charges TOTAL EXPENDITURES REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds from time warrants, certificates of obligation and bonds issued Operating transfers in (out) REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES Fund balances at October 1, 1979 FUND BALANCES AT SEPTEMBER 30, 1980 GOVERNMENTAL FUND TYPES Debt Capital Special Special General Service Projects Assessment Revenue $1,951,864 $449,054 303,503 60,957 368,199 166,789 144,180 2,995,492 711,446 810,868 797,180 116,960 85,631 2,522,085 32,392 $ 61,785 115,638 481,446 177,423 860,862 187,000 262,114 449,114 860,862 473,407 32,332 (683,439) 473,407 32,332 111,046 110,812 (683,439) 1,260,956 $ 584,453 $143,144 $ 577,517 $111,457 $ 84 3,671 349 433 115,128 5,037 124,028 -0- 129,065 433 (13,937) 433 (13,937) 10,703 88,269 $11,136 $ 74,332 The notes to the financial statements are an integral part of this statement. -24- TOTAL (Memorandum Only) 1980 1979 $2,400,918 303,503 173,242 212,742 368,199 349 166,789 144,180 3,769,922 711,446 810,868 797,180 121,997 1,070,521 187,000 262,114 3,961,126 $1,786,988 305,995 201,089 190,815 318,809 2,400 148,437 38,349 2,992,882 695,987 718,218 699,677 95,808 1,179,262 167,400 279,191 3,835,543 (191,204) (842,661) 1,860,000 76,765 1,936,765 (191,204) 1,094,104 1,581,786 487,683 $1,390,582 $1,581,787 COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACT(IAI. GENERAL, DEBT SERVICE AND SPECIAL REVENUE FUND TYPES CITY OF PEARLAIID, TEXAS Year ended September 30, 1980 GENERAI. FUND DENT SERVICE FUND Variance Favorable Budget Actual (Unfavorable) Budget Variance Favorable Actual (Unfavorable) REVENUES Taxes 41,499,207 41,951,864 4452,657 4449,04 4449,054 Franchises, licensee, and permits 326,683 303,503 (23,180) Federal revenue steering and grants Interest on investments 15,000 60,957 45,957 32,392 412,792 Sanitation income 331,000 368,199 37,199 Street assessment■ Fines and forfeitures 160,475 166,789 6,114 Other revenues 26,800 144,180 III,1B0 TOTAL REVENUES 2,359,165 2,995,492 636,327 449,054 481,446 32,392 EXPENDITURES Current General government 439,379 711,446 (212,067) Public safety 687,037 810,868 (123,811) Public works 1,145,638 797,180 348,458 Community services 99,372 116,960 (17,588) Capital outlay 23,502 85,631 (62,129) Debt service Principal retirement 1117,000 187,000 Interest and fiscal ch 262,054 262,114 (60) TOTAL EXPENDITURES 2,394,928 2,522,085 127,157) 449,054 449,114 ----TO) EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (35,163) 473,407 509,170 32,332 32,332 OTHER FINANCING SOURCES Operating transfers in 35,763 (35,763) _ EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES 473,407 473,407 32,332 32,3)2 Fund balances at October 1, 1979 I11,046 111,046 110,812 110,812 FUND BALANCES AT SEPTEMBER 30, 1980 i 111,046 i 584,451 4473,407 4110,812 4143,144 412,412 The notes to the financial statements are an integral part of this statement. -26- L1/k.5f/1 110;1(, H (7I Budget SPECIAI. RLJF:NUE FUND Variance Favorable Actual (Unfavorable) 4112,198 4111,451 a (741) 3,671 3,671 Total (Memorandum (Inly) _2aLtLt___Actlial al,9:11,261 116,683 112,198 15,01N) 311,000 160,475 26,800 112,198 115,128 2,930 2,920,417 5,000 5,017 107,198 114,028 (17) (16,81U) 112,198 129,065 16,867) 439,379 6117,017 1,145,638 104.312 130,700 a2,4(10,9)6 101,504 111,457 47.020 366,199 166,769 144,180 3,542,066 711,446 810,08 741,180 121,997 209,659 Variance Favorable (Unfavorable) 3:52,07 (21,180) 17411 62,u20 37,199 6,314 117, 160 671,649 (272,067) (121,841) 348,458 (17,625) (78,9591 187,000 187,000 262,054 262,114 (601 2,956,180 .1100,264 (14:,064) (13,937) (13,397) (35,763) 491,802 527,565 35,763 (15,761) (13,937) (13,917) 491,802 :91,802 88.269 88,269 4 88,269 74,332 4(11,937) 310,127 31(1,127 i 310,127 i 801,929 4491,802 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - ENTERPRISE FUND (PROPRIETARY FUND TYPE) CITY OF PEARLAND, TEXAS Years ended September 30, 1980 and 1979 Operating revenues Water sales and services Operating expenses Water department Personal services Supplies Contractual services Other Sewer department Personal services Supplies Contractual services Other Depreciation OPERATING INCOME Non -operating revenues (expenses) Interest revenue Interest expense Fiscal agent fees INCOME BEFORE OPERATING TRANSFERS Operating transfers out NET INCOME Retained earnings at beginning of year RETAINED.EARNINGS AT END OF YEAR 1980 $943,450 154,590 66,453 140,122 465 48,970 24,877 140,973 465 137,348 714,263 229,187 170,689 (162,510) 8,179 , 237,366 237,366 271,440 $508,806 1979 $838,628 160,110 49,263 117,881 58 34,250 24,501 88,274 58 112,030 586,425 252,203 278,755 (165,793) (26,431) 86,531 338,734 76,765 261,969 9,471 $271,440 The notes to the financial statements are an integral part of this statement. -27- LiIRSON. YOLVC 8 CO STATEMENT OF CHANGES IN FINANCIAL POSITION - WATER AND SEWER FUND (PROPRIETARY FUND) CITY OF PEARLAND, TEXAS Years ended September 30, 1980 and 1979 SOURCES OF WORKING CAPITAL Operations Net income Expense not requiring current outlay of financial resources Depreciation Working capital provided from Proceeds of bond issue Increase in meter deposits - net Contributions USES OF WORKING CAPITAL Retirement of revenue bonds Acquisitions of plant and equipment operations INCREASE (DECREASE) IN WORKING CAPITAL Elements of net increase (decrease) in working capital Cash Accounts receivable Prepaid expenses Accounts payable Accrued expenses Due to other funds INCREASE (DECREASE) IN WORKING CAPITAL 1980 $ 237,366 137,348 374,714 3,193 11,180 14,373 50,000 1,572,882 1,622,882 $(1,233,795) $(1,188,575) (56,059) 2,378 6,004 2,154 303 $(1,233,795) 1979 $ 261,969 112,030 373,999 2,750,000 4,270 15,043 3,143,312 50,000 891,614 941,614 S2,201,698 42,130,480 88,506 (3,391) (3,358) (4,858) (5,681) $2,201,698 The notes to the financial statements are an integral part of this statement. -28- MASON. YOUNG 6 CO NOTES TO FINANCIAL STATEMENTS CITY OF PEARLAND September 30, 1980 1. ORGANIZATION The City of Pearland, Texas adopted a "Home Rule Charter" on February 6, 1971 which provides for a "Council -Manager" form of city government. 2. SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF FUNDS General Fund The General Fund is used to account for all financial transactions which are not accounted for in another fund. The principal sources of revenue of the General Fund are property taxes, sales and use taxes, franchises, charges for sanitation services, and fines and forfeitures. Expenditures are for general government, public safety, public works, and other community services. 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 general property taxes. Capital Projects Fund The Capital Projects Fund is used to account for the receipt and expenditure of resources used for acquisition of designated fixed assets except those financed by special assessment funds. Special Assessment Fund The Special Assessment Fund is used to account for street paving projects which are to be partially paid from special assessments levied against benefited property. Special Revenue Fund The Special Revenue Fund is used to account for revenue received from the Federal Government under State and Local Fiscal Assistance Act of 1972. Such funds may be used only for "priority expenditures" as defined in the Act. Capital improvements are charged to expenditures in the accounts of this fund and capitalized in either the Enterprise Fund or General Fixed Asset Group of Accounts. -29- LIIRSON. YOUNG 6 CO. NOTES TO FINANCIAL STATEMENTS - 2 2. SIGNIFICANT ACCOUNTING POLICIES (continued) DESCRIPTION OF FUNDS (continued) Enterprise Fund The Enterprise Fund, a proprietary fund type, is used to account for operations of the Water and Sewer Department. General Fixed Assets Group of Accounts The General Fixed Assets Group is used to account for the City's land, buildings, improvements and equipment except those recorded in the Enterprise Fund. Such assets are acquired by transfer from other funds and are recorded at cost. No depreciation is recorded on these assets. General Long -Term Debt Group of Accounts This group of accounts is used to account for the City's liability for general obligation bonds due at varying dates through 1997 and time warrants and certificates of obligation. BASIS OF ACCOUNTING The City utilizes the modified accrual and accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded when earned and measurable; expenditures are recorded when incurred. The modified accrual basis of accounting recognizes revenues in the account- ing period in which they become available and measurable. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, except for unmatured interest on general long-term debt. The accrual basis of accounting is followed (with minor exceptions) by all funds other than budgetary funds (general and debt service funds) which utilitze the modified accrual basis of accounting. Modifications in such method from the accrual basis follow: General Fund General property taxes are recorded when levied. Uncollected property taxes are reported as deferred revenue. Sales and use taxes and franchise revenue are recorded when received. -30- L IIRSON. YOIiVC 8 CO. NOTES TO FINANCIAL STATEMENTS — 3 2. SIGNIFICANT ACCOUNTING POLICIES (continued) BASIS OF ACCOUNTING (continued) Debt Service Fund Interest expense on long-term debt is recorded when paid. Accrued Vacation Expense The City records vacation pay as it accrues. As of September 30, 1980 the accrued vacation pay was as follows: General Fund Enterprise Fund Budgets 23,263 8,072 Budgets are prepared using the same method of accounting as for finan- cial reporting. MEASUREMENT FOCUS Proprietary (Enterprise Fund) fund types are accounted for on an "income determination" or "cost of services" measurement focus. Accordingly, all assets and all liabilities are included on their balance sheets, and the reported fund equity (total reported assets less total reported liabilities) provides an indication of the economic net worth of the fund. Operating statements for proprietary fund types (on an income determination measurement focus) report increases (revenues) and decreases (expenses) in total economic net worth. Governmental (General, Special Revenue, Debt Service, and Capital Projects) fund types, on the other hand, are accounted for on a "spending" or "financial flow" measurement focus. Accordingly, only current assets and current liabilities are included on their balance sheets, and the reported fund balance (total reported assets less total reported lia- bilities) provides an indication of available spendable or appropriable resources. Operating statements for governmental fund types (on a spending measurement focus) report increases (revenues) and decreases (expendi- tures) in available spendable resources. Fixed assets which are not used in proprietary fund operations, are all accounted for in a separate self -balancing General Fixed Assets Account Group. Long-term debts which are not intended to be financed through proprietary funds or Special Assessment Funds, are all accounted for in a separate self -balancing General Long -Term Debt Account Group. Depreciation is reported on the operating statements of proprietary fund types (on an income determination measurement focus). Depreciation is not reported on the operating statements of governmental fund types (on a spending measurement focus). -31- MIRSON. MEW 6 CO NOTES TO FINANCIAL STATEMENTS - 4 2. SIGNIFICANT ACCOUNTING POLICIES (continued) ENCUMBRANCES The City had no encumbrances recorded as of September 30, 1980. Investments Investments are stated at cost. Allowance for Depreciation Allowance for depreciation has been provided for plant and equipment in the Enterprise Fund using the straight-line method over the following estimated useful lives of the assets: Equipment 2 to 10 years Water and sewer system 3 to 50 years 3. LONG-TERM DEBT During the year ended September 30, 1980, the City authorized and issued the following time warrants: Description Amount Drainage Study Emergency Medical Services $13,000 45,000 TOTAL TIME WARRANTS ISSUED $58,000 The change in long-term debt for the City is summarized as follows: Balance at October 1, 1979 Obligations Issued Obligations Retired Balance at September 30, 1980 General Long -Term Water & Sewer Debt Revenue Bonds Total $5,083,000 58,000 180,000 $4,961,000 $2,700,000 50,000 $2,650,000 $7,783,000 58,000 230,000 $7,611,000 -32- LfIIRSON. YOUNG 8 CO NOTES TO FINANCIAL STATEMENTS - 5 3. LONG-TERM DEBT (continued) The total debt of the City (governmental and proprietary funds) by maturity is as follows: Fiscal Year Water & Sewer Ending General Long -Term Debt Revenue Bonds September 30 Principal Interest Principal Interest 1981 $ 253,000 $ 252,699 $ 50,000 $ 159,310 1982 267,000 239,889 60,000 156,110 1983 270,000 226,338 70,000 152,270 1984 255,000 212,483 70,000 147,790 1985 265,000 198,849 75,000 143,310 1986 280,000 184,280 80,000 138,510 1987 280,000 169,314 80,000 133,390 1988 305,000 154,714 90,000 128,270 1989 331,000 140,826 100,000 122,510 1990 300,000 123,737 100,000 116,910 1991 310,000 108,689 110,000 111,510 1992 320,000 92,866 120,000 105,570 1993 330,000 76,127 125,000 99,090 1994 345,000 61,142 130,000 92,090 1995 350,000 44,012 140,000 84,680 1996 250,000 27,500 150,000 76,560 1997 250,000 13,750 160,000 67,710 1998 170,000 58,110 1999 180,000 47,740 2000 190,000 36,580 2001 200,000 24,800 2002 200,000 12,400 TOTAL $4,961,000 $2,327,215 $2,650,000 $2,215,220 4. LITIGATION As of September 30, 1980, the City is either a defendant or co-defendant in seven lawsuits. It is the opinion of City Management and legal counsel that any ultimate liability to the City from these lawsuits will not be material. -33- L ARSON. YOUNG 8 CO NOTES TO FINANCIAL STATEMENTS - 6 5. PENSION PLAN The City participates in the Texas Municipal Retirement System, an agency operated by the State of Texas. All full-time employees are covered by the pension plan. The total pension expense for the year ended Septmber 30, 1980 was $38,457 which includes amortization of prior service cost over 25 years. The City's policy is to fund pension cost accrued. The total of the pension fund and balance -sheet accruals less pension prepayments and deferred charges as of December 31, 1979 exceeded the actuarially computed value of vested benefits for all plans by approximately $60,837. The unfunded prior service liability was $88,572 at December 31, 1979. 6. RESTRICTED CASH General Fund $2,932 is restricted for payment of federal taxes withheld. Enterprise Fund $48,000 is restricted for revenue bond debt service. 7. GENERAL FIXED ASSETS The changes in general fixed assets during the year is summarized as follows: Balance at October 1, 1979 Additions Balance at September 30, 1980 $3,843,637 1,059,338 $4,902,975 Investments in general fixed assets by source at September 30, 1980 follows: Capital Projects Funds General obligation bonds Time warrants and certificates of obligation Federal grants General Fund Revenues Special Revenue Fund Revenues Special Assessments $1,900,958 829,965 375,456 1,152,841 505,845 137,910 $4,902,975 -34- M/RSON. YOUNG 8 CO INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS AND SCHEDULES -35- L I RSON. YOGNG 6 CO GENERAL FUND -36- LAIRSON. YOUNG 8 CO GENERAL FUND STATEMENT OF REVENUES - BUDGETED AND ACTUAL CITY OF PEARLAND, TEXAS Years ended September 30, 1980 and 1979 Revenues Taxes General property taxes Penalties and interest Sales and use taxes Franchises, licenses and permits Franchises Licenses and permits Other income Interest on investments Sanitation income Fines and forfeitures Miscellaneous TOTAL REVENUES EXHIBIT A-1 1980 Budget $1,070,607 18,000 410,600 1,499,207 194,683 132,000 326,683 15,000 331,000 160,475 26,800 533,275 Actual $1,052,754 35,440 863,670 1,951,864 235,628 67,875 303,503 60,957 368,199 166,789 144,180 740,125 $2,359,165 $2,995,492 Variance Favorable (Unfavorable) 1979 Actual $(17,853) $ 859,344 17,440 17,658 453,070 455,271 452,657 1,332,273 40,945 (64,125) (23,180) 45,957 37,199 6,314 117,380 206,850 187,820 118,175 305,995 25,581 318,80- ]48,437 38.349 531,176 $636,327 $2,169,444 -37- L1IIRSON. YOUNG 8 CO GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY FUNCTIOi1 CITY OF PEARLAND, TEXAS Years ended September 30, 1980 and 1979 General government City council City manager City secretary Finance Tax Legal Municipal court Engineering City shop City hall Planning and transportation Other requirements Total general governmental Public safety Police Fire Animal shelter Inspection Communication Emergency medical services Total public safety Public works Street Sanitation Total public works Community services Library Parks, recreation and cemetery Total community services 1980 EXHIBIT A-2 Budget $ 41,577 73,688 42,191 63,366 80,170 25,350 39,602 15,600 120,679 66,066 78,535 128,575 775,399 581,072 42,633 25,466 96,289 6,000 33,966 785,426 404,635 322,894 TOTAL EXPENDITURES 727,529 10,770 95,804 106,574 82,394,928 Actual Variance Favorable (Unfavorable) 1979 Actual 42,091 $ (514) $ 42,570 78,914 (5,226) 69,853 37,133 5,058 35,492 64,006 (640) 55,043 77,566 2,604 76,006 26,072 (722) 35,709 37,161 2,441 39,931 9,589 6,011 13,204 144,816 (24,137) 145,221 65,484 582 62,800 62,384 16,151 54,511 111,010 17,565 112,803 756,226 19,173 743,143 608,329 (27,257) 558,715 49,485 (6,852) 43,517 27,615 (2,149) 23,648 92,014 4,275 87,566 20,760 (14,760) 12,259 40,755 (6,789) 18,321 838,958 (53,532) 744,226 412,668 (8,033) 414,711 387,905 (65,011) 311,258 800,573 (73,044) 725,969 9,782 988 9,090 116,546 (20,742) 93,441 126,328 (19,754) 102,531 $2,522,085 $(127,157) $2,315,869 -38- LilRSON. YOUNG' 8 CO GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT CITY OF PEARLAND, TEXAS Years ended September 30, 1980 and 1979 1980 EXHIBIT A-3 Budget Variance Favorable Actual (Unfavorable) 1979 Actual City Council Personal services $ 5,700 $ 5,700 $ -0- $ 5,700 Supplies 1,500 1,680 (180) 3,302 Contractual services 3,600 4,357 (757) 3,695 Memberships and subscriptions 1,200 1,507 (307) 1,074 Travel and training 6,000 5,270 730 5,594 Contingency fund 23,577 23,577 -0- 23,205 41,577 42,091 (514) 42,570 City Manager Personal services 68,638 71,566 (2,928) 60,68 Supplies 1,375 1,865 (490) 1,702 Contractual services 950 3,002 (2,052) 5,058 Memberships and subscriptions 525 638 (113) 443 Travel and training 2,000 1,843 157 1,598 Capital outlay 200 200 37C 73,688 78,914 (5,226) 69,853 City Secretary Personal services 33,141 31,043 2,098 30,650 Supplies 600 736 (136) 335 Contractual services 6,500 4,222 2,278 3,320 Memberships and subscriptions 300 117 183 237 Travel and training 800 776 24 613 Capital outlay 850 239 611 337 42,191 37,133 5,058 35,492 Finance Personal services 45,836 45,423 413 42,463 Supplies 2,000 1,056 944 1,019 Contractual services 13,800 16,455 (2,655) 9,797 Memberships and subscriptions 230 145 85 205 Travel and training 1,000 747 253 609 Capital outlay 500 180 320 950 63,366 64,006 (640) 55,043 -39- M SON. YOUNG eil CO GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 2 1980 Budget Variance Favorable 1979 Actual (Unfavorable) Actual Tax Personal services $ 48,324 $ 47,458 $ 866 $ 42,23 Supplies 1,575 1,712 (137) 1,0, Contractual services 27,196 25,933 1,263 29,978 Memberships and subscriptions 325 219 106 295 Travel and training 1,500 1,649 (149) 1,545 Capital outlay 1,250 595 655 899 80,170 77,566 2,604 76,006 Legal 25,350 26,072 (722) 35,709 Municipal Court Personal services 36,842 33,219 3,623 36,379 Supplies 500 546 (46) 329 Contractual services 1,900 2,628 (728) 2,188 Memberships and subscriptions 60 137 (77) 30 Travel and training 100 501 (401) 5? Capital outlay 200 130 70 _ 948 39,602 37,161 2,441 39,92i Engineering Personal services 600 600 -0- 600 Contractual services 15,000 8,989 6,011 12,604 15,600 9,589 6,011 13,204 City Shop Personal services 83,654 75,977 7,677 86,194 Supplies 21,475 26,048 (4,573) 21,414 Contractual services 13,450 24,786 (11,336) 21,289 Memberships and subscriptions 100 63 37 72 Travel and training -0- 110 (110) -0- Capital outlay 2,000 17,832 (15,832) 16,252 120,679 144,816 (24,137) 145,221 Planning and Transportation Personal services 68,299 51,052 17,247 41,864 Supplies 2,700 2,688 12 1,434 Contractual services 3,386 5,306 (1,920) 9,918 Memberships and subscriptions 450 539 (89) 289 Travel and training 1,700 688 1,012 973 Capital outlay 2,000 2,111 (111) 33 78,535 62,384 16,151 54,511 -40- L 1IRSON. YOUNG 8 CO. GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 3 1980 Budget Variance Favorable Actual (Unfavorable) 1979 Actual City Hall Personal services $ 10,510 $ 9,956 $ 554 $ 9,6= Supplies 8,025 7,051 974 8,9:0 Contractual services 47,531 48,477 (946) 43,432 Capital outlay -0- -0- -0- 774 Other Requirements 66,066 65,484 582 62,800 128,575 111,010 17,565 112,803 TOTAL GENERAL GOVERNMENT 775,399 756,226 19,173 743,143 Police Service Personal services 470,132 482,721 (12,589) 441,573 Supplies 67,700 72,278 (4,578) 48,137 Contractual services 31,190 45,966 (14,776) 42,247 Memberships and subscriptions 950 1,498 (548) 829 Travel and training 10,000 4,033 5,967 3,915 Capital outlay 1,100 1,833 (733) 19,017 581,072 608,329 (27,257) 558,715 Fire Service Personal services 4,966 5,294 (328) 4,258 Supplies 10,750 14,101 (3,351) 13,539 Contractual services 22,305 25,882 (3,577) 23,740 Memberships and subscriptions 512 600 (88) 395 Travel and training 4,100 2,019 2,081 1,375 Capital outlay - 1,589 (1,589) 210 42,633 49,485 (6,852) 43,517 Animal Shelter Personal services 15,991 16,841 850 15,203 Supplies 4,500 4,015 485 3,080 Contractual services 3,500 2,420 1,080 1,864 Memberships and subscriptions 75 23 52 42 Travel and training 400 240 160 392 Capital outlay 1,000 4,076 (3,076) 3,267 25,466 27,615 (2,149) 23,848 -41- LfIIRSON, YOING 6 CO GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 4 1980 Budget Variance Favorable 1979 Actual (Unfavorable) Actual Inspection Personal services $ 86,799 $ 82,058 $ 4,741 $ 78,507 Supplies 4,680 5,304 (624) 4,281 Contractual services 3,480 3,823 (343) 2,811 Memberships and subscriptions 530 362 168 374 Travel and training 800 373 427 785 Capital outlay - 94 (94) 800 96,289 92,014 4,275 87,566 Communication Personal services - 1,900 (1,900) 63 Supplies - 5,664 (5,664) 115 Contractual services 6,000 11,493 (5,493) 8,725 Memberships and subscriptions - 86 (86) 83 Capital outlay - 1,617 (1,617) 2,706 6,000 20,760 (14,760) 12 25O Emergency Medical Services Supplies 10,600 9,668 932 5,559 Contractual services 14,100 12,206 1,894 12,662 Travel and training 2,166 - 2,166 100 Capital outlay 7,100 18,881 (11,781) - 33,966 40,755 (6,789) 18,321 TOTAL PUBLIC SAFETY 785,426 838,958 (53,532) 744,226 Street Personal services 152,629 139,227 13,402 133,611 Supplies 141,750 136,553 5,197 167,781 Contractual services 110,256 133,717 (23,461) 100,42E Memberships and subscriptions -0- 164 (164) -0- Travel and training -0- 132 (132) -0- Capital outlay -0- 2,875 (2,875) 12,791 404,635 412,668 (8,033) 414,711 -42- L ARSON. YOUNG 8 CO GENERAL FUND STATEMENT OF EXPENDITURES - BUDGETED AND ACTUAL - BY OBJECT - 5 1980 Budget Variance Favorable Actual (Unfavorable) 1979 Actual Sanitation Personal services $ 165,569 $ 188,780 $ (23,211) $ 144,999 Supplies 26,400 40,797 (14,397) 29,91C1 Contractual services 130,925 157,392 (26,467) 118,498 Memberships and subscriptions -0- 103 (103) -0- Travel and training -0- 315 (315) -0- Capital outlay -0- 518 (518) 17,851 322,894 387,905 (65,011) 311,258 TOTAL PUBLIC WORKS 727,529 Library 10,770 Parks, recreation and cemetery Personal services 64,427 Supplies 12,205 Contractual services 15,220 Memberships and subscriptions 50 Capital outlay 3,902 TOTAL COMMUNITY SERVICES TOTAL EXPENDITURES 95,804 800,573 9,782 (73,044) 725,959 988 9,09G 68,593 (4,166) 13,051 (846) 29,105 (13,885) 45 5 5,752 (1,850) 116,546 20,742 106,574 126,328 52,536 9,53 25,644 6,723 93,441 (19,754) 102,53' $2,394,928 $2,522,085 $(127,157) S2,315,869 -43- MIRSON, MVO 6 CO. GENERAL FUND SCHEDULE OF DELINQUENT TAXES RECEIVABLE CITY OF PEARLAND, TEXAS September 30, 1980 Year EXHIBIT A-4 Delinquent Taxes 1979 $55,700 1978 17,969 1977 6,947 1976 3,641 1975 2,440 1974 2,194 1973 1,117 1972 802 1971 285 1970 296 1969 222 1968 97 1967 80 1966 367 1965 37 1964 40 1963 3 1962 1 1961 1 1960 1 1959 1 1958 1 1957 1 1956 1 1955 1 1954 1 1953 1 1952 1 1951 1 TOTAL DELINQUENT TAXES $92,249 -44- L IRSON. YOUNG 8 CO SPECIAL ASSESSMENT FUND -45- MIRSON. YOUNG 8 CO ENTERPRISE FUND (PROPRIETARY FUND TYPE) STATEMENT OF REVENUES ANT) EXPENSES - BUDGETED AND ACTUAL CITY OF PEARLAND, TEXAS Years ended September 30, 1980 and 1979 Operating revenues Water sales Water taps and connections Sewer service charge Sewer taps and connections Service charges TOTAL OPERATING REVENUES 198n EXHIBIT C-1 Budget $ 540,000 36,000 294,000 36,000 17,000 923,000 Variance Favorable 1979 Actual (Unfavorable) Actual $573,581 17,275 308,635 13,17n 30.789 943:450 $ 33,581 (18,725) 14,635 (22 .830) 13,789 20,450 S 499,723 40,859 248,883 33,020 16,143 818,628 Operating expenses Water department Personal services 184,388 154,616 29,772 160,110 Supplies 61,750 66,453 (4,703) 49,263 Contractual services 141,74E 140,122 1,626 117,8R1 Other 465 (465) 58 Sewer department Personal services 46,967 48.97n (2 003) 34,250 Supplies 27,980 24,877 1,103 24,501 Contractual services 121,547 140,973 (19,426) 88,274 Other 465 (465) 58 Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME 584.380 338,620 Non -operating revenues (expenses) Interest revenue 6,000 Interest expense (212,610) Fiscal agents fees TOTAL NON -OPERATING REVENUES (EXPENSES) (206,610) INCOME BEFORE OPERATING TRANSFERS 132,010 Operating transfers out 33,263 137,348 714,263 229,187 17n,69Q (162,510) 8,179 237,366 (137 .148) 112,030 (129,883) (1(19,433) 164 ,689 5n,1nn 214,789 105,356 33,263 NET INCOME $98,747 $2.37,366 138,619 586,425 252,203 278,755 (165,793) (26,431) 86531 338,73a 76,765 S261,969 ,48. L,UIR.St7.YOUNG 6 CO ENTERPRISE FUND (PROPRIETARY FUND TYPE) -47r !A/RSON. YOUNG & CO. SPECIAL ASSESSMENT FUND STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS CITY OF PEARLAND, TEXAS Year ended September 30, 1980 Cash balance at October 1, 1979 Receipts Streets assessments CASH BALANCE AT SEPTEM3ER 30, 1980 EXHIBIT B-1 518,711 2,382 $21,093 F46 LAIRSON. YOUNG 8 CO GENERAL FIXED ASSETS GROUP OF ACCOUNTS -49- - LAIRSON. YGYING 8 CO GENERAL FIXED ASSETS EXHIBIT D-1 STATEMENT OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY CITY OF PEARLAND, TEXAS September 30, 1980 Function and Activity General government City council City manager City secretary Finance Tax Legal Municipal court City shop City hall Planning and transportation Public safety Police Fire Animal shelter Inspection Civil defense and communications Emergency medical services Public works Street Sanitation Community services Library Parks, recreation and cemetery Construction in Progress Total $ 1,514 3,411 3,321 4,043 7,979 616 2,628 260,560 158,075 2,833 444,980 240,130 153,443 15,104 12,790 45,377 47,569 514,413 2,179,436 428,698 Land Buildings Improvements Equipment $ 60,014 60,014 4,320 $241,007 87,456 328,463 67,136 1,589 7,149 4,320 75,874 203,195 2,613 57,236 800 2,608,134 260,431 57,658 1,064,917 1,122,575 212,873 $4,902,975 5,000 374,548 3,413 41,586 379,548 41,586 $1,894,998 142,070 2,037,068 657,904 657,904 $ 1,514 3,411 3,321 4,043 7,979 616 2,628 19,553 10,605 2,833 56,503 172,994 151,854 3,635 12,790 45,377 47,569 434,219 78,630 228,592 307,222 11,072 32,465 43,537 $704,313 $449,336 $2,694,972 $841,481 -50- LAIRSON. YOUNG d CO STATEMENT OF CHANGES IN GENERAL FIXED ASSETS - BY DEPARTMENT CITY OF PEARLAND, TEXAS Year ended September 30, 1980 EXHIBIT D-2 Balance at Balance a: Oct. 1, 1979 Additions Retirements Sept. 30, 1980 General Government City Council $ 1,514 $ 1,514 City Manager 3,411 3,411 City Secretary 3,082 $ 239 3,321 Finance 3,863 180 4,043 Tax 7,384 595 7,979 Legal 500 116 616 Municipal Court 2,498 130 2,628 City Shop 221,764 38,796 260,560 City Hall 158,075 158,07.5 Planning and Transportation 722 2,111 2,833 402,813 42,167 444,980 Public Safety Police 195,842 44,288 240,13Ci Fire 151,854 1,589 153,443 Animal Shelter 11,029 4,075 15,104 Inspection 12,696 94 12,790 Civil Defense and Communications 43,760 1,617 45,377 Emergency Medical Services 28,689 18,880 47,569 443,870 70,543 514,413 Public Works Street 1,500,822 678,614 2,179,436 Sanitation 362,043 66,655 428,698 1,862,865 745,269 2,608,134 Community Services Library 54,042 3,616 Parks, recreation and cemetery 969,564 95,353 1,023,606 Construction in Progress 110,483 TOTAL $3,843,637 98,969 212,873 $(110,483) $1,169,821 $(110,483) 57,658 1,064,917 1,122,575 212,873 $4,902,975 -51- MIRSON. YOUNG 8 CO