1994-062RESOLUTION NO. 94-62
A RESOLUTION by the City Council of the City of
Southlake, Texas, relating to the "Southlake Parks
Development Corporation Sales Tax Subordinate Lien
Revenue Bonds, Series 1994"; approving (i) the
resolution of the Southlake Parks Development
Corporation authorizing the issuance of such Bonds
and (ii) the execution, on behalf of the City, of
the Financing/Use Agreement relating to such
financing by the economic development corporation;
resolving other matters incident and related to the
issuance of such Bonds; and providing an effective
date.
WHEREAS, Southlake Parks Development Corporation (the
Issuer") was created by the City of Southlake, Texas (the "City"),
pursuant to the provisions of Section 4B of the Development
Corporation Act of 1979, Article 5190.6, Vernon's Texas Civil
Statutes, as amended (the "Act"); and
WHEREAS, pursuant to the Act, the Issuer is empowered, on
behalf of the City, to issue bonds for the purpose of defraying the
cost of any "project" defined as such by the Act; and
WHEREAS, the Act defines "project" to include land, buildings,
equipment, facilities, and improvements found by the Board of
Directors of the Issuer to be required or suitable for use for
sports and entertainment and public park purposes or promote or
develop new and expanded business enterprises; and
WHEREAS, the Issuer has determined that the (i) the expansion
and development of Bicentennial Park, including baseball and
softball fields, soccer fields, playgrounds, parking lot and
utilities development, access roads and the acquisition of land and
rights-of-way to include the purchase of land adjacent to the Corp
of Engineers' property and (ii) a gymnasium facilities suitable for
use for amateur (including children's) sports, athletic and
entertainment purposes and events (the "Project") should be
financed by the Issuer; and
WHEREAS, the Issuer and the City has each found the Project
will promote or develop new or expanded business enterprises in the
area adjacent to and surrounding the Project; and
WHEREAS, Section 25(f) of the Act requires the City Council of
the City approve the resolution of the Issuer providing for the
issuance of the Bonds no more than sixty (60) days prior to the
delivery of the Bonds; now, therefore,
0210258
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE,
TEXAS:
Section 1: The Resolution authorizing the issuance of
1,000,00o I'Southlake Parks Development Corporation Sales Tax
Subordinate Lien Revenue Bonds, Series 199411, adopted by the Issuer
the "Issuer Resolution") on November 15, 1994 and submitted to the
City Council this day, is hereby approved in all respects. The
Bonds are being issued to finance the construction of the Project,
which will be located within the City of Southlake and the City
agrees that upon receipt of the proceeds of sale of the Bonds from
the Issuer, the City will construct the Project and thereafter be
fully responsible for the upkeep, maintenance and use of the
Project.
Section 2: The approvals herein given are in accordance with
Section 25(f) of the Act, and the Bonds shall never be construed an
indebtedness or pledge of the City, or the State of Texas (the
State"), within the meaning of any constitutional or statutory
provision, and the owner of the Bonds shall never be paid in whole
or in part out of any funds raised or to be raised by taxation
other than sales tax proceeds as authorized pursuant to Section 4B
of the Act) or any other revenues of the Issuer, the City, or the
State, except those revenues assigned and pledged by the Issuer
Resolution.
Section 3: The City hereby agrees to promptly collect and
remit to the Issuer the Gross Sales Tax Revenues (as defined in
the Issuer Resolution) in accordance with the terms of the Issuer
Resolution and the Act to provide for the prompt payment of the
Bonds, and to assist and cooperate with the Issuer in the
enforcement and collection of sales and use taxes imposed on
behalf of the Issuer.
Section 4: The Financing/Use Agreement by and between the
City and the Issuer in relation to the Project, attached hereto as
Exhibit A and incorporated by reference as a part of this
resolution for all purposes, with respect to the obligations of
the City and Issuer during the time the Bonds are outstanding, is
hereby approved as to form and substance and the Mayor and the
City Secretary are hereby authorized to execute and deliver such
agreement for and on behalf of the City and as the act and deed of
this City Council. Furthermore, the Mayor and the City Secretary
and the other officers of the City are hereby authorized, jointly
and severally, to execute and deliver such endorsements,
instruments, certificates, documents, or papers necessary and
advisable to carry out the intent and purposes of this Resolution.
0210259
Section 5: The City hereby acknowledges and recognizes that
the Bonds are being issued as tax exempt obligations under and
pursuant to section 103(a) of the Code (as defined below) and the
proceeds of sale of such Bonds are to be deposited with the City
following their receipt by the Issuer and the City shall have full
control and responsibility with respect to the construction of the
Project and the investment and disbursement of the proceeds of
sale of the Bonds. Therefore, as a result of the foregoing, the
City hereby makes the following representations and warranties to
the Issuer:
a) Definitions. When used in this Section, the following
terms have the following meanings:
Closing Date" means the date on which the Bonds
are first authenticated and delivered to the initial
purchasers against payment therefor.
Code" means the Internal Revenue Code of 1986, as
amended by all legislation, if any, effective on or
before the Closing Date.
Computation Date" has the meaning set forth in
Section 1.148-1(b) of the Regulations.
Gross Proceeds" means any proceeds as defined in
Section 1.148-1(b) of the Regulations, and any
replacement proceeds as defined in Section 1.148-1(c) of
the Regulations, of the Bonds.
Investment" has the meaning set forth in Section
1.148-1(b) of the Regulations.
Nonpurpose Investment" means any investment
property, as defined in section 148(b) of the Code, in
which Gross Proceeds of the Bonds are invested and which
is not acquired to carry out the governmental purposes
of the Bonds.
Rebate Amount" has the meaning set forth in
Section 1.148-1(b) of the Regulations.
Regulations" means any proposed, temporary, or
final Income Tax Regulations issued pursuant to Sections
103 and 141 through 150 of the Code, and 103 of the
Internal Revenue Code of 1954, which are applicable to
the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary
or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
0210M -
3-
Yield" of (1) any Investment has the meaning set
forth in Section 1.148-5 of the Regulations and (2) the
Bonds has the meaning set forth in Section 1.148-4 of
the Regulations.
b) Not to Cause Interest to Become Taxable ' . The City shall
not use, permit the use of, or omit to use Gross Proceeds or any
other amounts (or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with
Gross Proceeds) in a manner which if made or omitted,
respectively, would cause the interest on any Bond to become
includable in the gross income, as defined in section 61 of the
Code, of the owner thereof for federal income tax purposes.
Without limiting the generality of the foregoing, unless and until
the city receives a written opinion of counsel nationally
recognized in the field of municipal bond law to the effect that
failure to comply with such covenant will not adversely affect the
exemption from federal income tax of the interest on any Bond, the
City shall comply with each of the specific covenants in this
Section.
c) No Private Use or Private Pavments. Except as permitted
by section 141 of the Code and the Regulations and rulings
thereunder, the City shall at all times prior to the last Stated
Maturity of Bonds:
1) exclusively own, operate and possess all
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use
or permit the use of such Gross Proceeds (including all
contractual arrangements with terms different than those
applicable to the general public) or any property
acquired, constructed or improved with such Gross
Proceeds in any activity carried on by any person or
entity (including the United States or any agency,
department and instrumentality thereof) other than a
state or local government, unless such use is solely as
a member of the general public; and
2) not directly or indirectly impose or accept
any charge or other payment by any person or entity who
is treated as using Gross Proceeds of the Bonds or any
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with such Gross Proceeds, other than taxes of
general application within the City or interest earned
on investments acquired with such Gross Proceeds pending
application for their intended purposes.
0210M
d) No Private Loan. Except to the extent permitted by
section 141 of the Code and the Regulations and rulings
thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state
or local government. For purposes of the foregoing covenant, such
Gross Proceeds are considered to be "loaned" to a person or entity
if: (1) property acquired, constructed or improved with such Gross
Proceeds is sold or leased to such person or entity in a
transaction which creates a debt for federal income tax purposes;
2) capacity in or service from such property is committed to such
person or entity under a take -or -pay, output or similar contract
or arrangement; or (3) indirect benefits, or burdens and benefits
of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise
transferred in a transaction which is the economic equivalent of
a loan.
e) Not to Invest at Hiaher Yield. Except to the extent
permitted by section 148 of the Code and the Regulations and
rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest
Gross Proceeds in any Investment (or use Gross Proceeds to replace
money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross
Proceeds (or with money replaced thereby), whether then held or
previously disposed of, exceeds the Yield of the Bonds.
f) Not Federallv Guaranteed. Except to the extent
permitted by section 149(b) of the Code and the Regulations and
rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed
within the meaning of section 149(b) of the Code and the
Regulations and rulings thereunder.
g) Pavment of Rebatable Arbitraae. Except to the extent
otherwise provided in section 148(f) of the Code and the
Regulations and rulings thereunder:
1) The City shall account for all Gross Proceeds
including all receipts, expenditures and investments
thereof) on its books of account separately and apart
from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of
accounting for at least six years after the day on which
the last Outstanding Bond is discharged. However, to
the extent permitted by law, the City may commingle
Gross Proceeds of the Bonds with other money of the
City, provided that the City separately accounts for
each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
0210258 -5-
2) Not less frequently than each Computation
Date, the City shall calculate the Rebate Amount in
accordance with rules set forth in section 148(f) of the
Code and the Regulations and rulings thereunder. The
City shall maintain such calculations with its official
transcript of proceedings relating to the issuance of
the Bonds until six years after the final Computation
Date.
3) As additional consideration for the purchase
of the Bonds by the Purchasers and the loan of the money
represented thereby and in order to induce such purchase
by measures designed to insure the excludability of the
interest thereon from the gross income of the owners
thereof for federal income tax purposes, the City shall
remit to the Issuer for payment to the United States the
amount described in paragraph (3) above and the amount
described in paragraph (4) below, at the times, in the
manner and accompanied by such forms or other
information as is or may be required by Section 148(f)
of the Code and the Regulations and rulings thereunder.
4) The City shall exercise reasonable diligence
to assure that no errors are made in the calculations
and payments required by paragraph (2), and if an error
is made, to discover and promptly correct such error
within a reasonable amount of time thereafter (and in
all events within one hundred eighty (180) days after
discovery of the error), including the amount remitted
to the Issuer for payment to the United States of any
additional Rebate Amount owed to it, interest thereon,
and any penalty imposed under Section 1.148-3(h) of the
Regulations.
Section 6: It is officially found, determined, and declared
that the meeting at which this Ordinance is adopted was open to
the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting,
including this Ordinance, was given, all as required by V.T.C.A.,
Government Code, Chapter 551, as amended.
Section 7: This Resolution shall be in force and effect
from and after its passage on the date shown below.
PASSED AND ADOPTED, this November 15, 1994.
CITY OF SOUTHLAKE, TEXAS
or
ATTEST:
hh JJ A 4 A A ,, I )
City Secretary
0! %10 F S4(jj
it a'
i .m-
0210258 - / -
EXH161 " A
FINANCING/USE AGREEMENT
This Financing/Use Agreement (this "Agreement') is made to be
effective as of the 15th day of November, 1994, by and between the
City of Southlake, Texas, a duly incorporated and existing
municipal corporation and political subdivision of the State of
Texas (the "City") and the Southlake Parks Development Corporation,
a non-profit industrial development corporation organized and
existing under the laws of the State of Texas, including Vernon's
Ann. Civ. St., Section 4B of Article 5190.6, (the "Corporation")
R E C I T A L S
WHEREAS, the Corporation on behalf of the City is to finance
i) the expansion and development of Bicentennial Park, including
baseball and softball fields, soccer fields, playgrounds, parking
lot and utilities development, access roads and the acquisition of
land and rights-of-way to include the purchase of land adjacent to
the Corp of Engineers' property and (ii) a gymnasium facilities
suitable for use for amateur (including children's) sports,
athletic and entertainment purposes and events (the "Project"); and
WHEREAS, such financing contemplates the issuance and sale of
the Corporation's tax exempt bonds in the principal amount of
1,000,000, and the proceeds of sale are to be used by the City to
design and construct the Project; and
WHEREAS, the City will have full responsibility for the design
and construction of the Project and the Corporation shall have no
duties or responsibilities with respect to the Project other than
to provide for the financing of its costs;
A G R E E M E N T
1. Financina of Proiect: For and in consideration of the
City's covenants and agreements herein contained and subject to the
terms contained herein, the Corporation hereby agrees to issue and
sale a series of obligations to be known as "Southlake Parks
Development Corporation Sales Tax Subordinate Lien Revenue Bonds,
Series 199411, hereinafter called the "Bonds", and deposit the
proceeds of sale of the Bonds to a construction fund or account to
be designated by the City and the City hereby agrees and covenants
that all proceeds of sale deposited to the credit of such
construction account shall be used solely to pay the costs of the
Project.
2. Use of Proiect. Until all the
discharged and retired, the upkeep and
will be the responsibility of the City
have no responsibility with respect t
maintenance of the Project.
0210256
Bonds have been fully paid,
maintenance of the Project
and the Corporation shall
o the operation, upkeep and
3. Recognition of Tax ExemAt Financing_. The City hereby
acknowledges and recognizes that the Bonds are being issued as
state or local bonds" under and pursuant to section 103(a) of the
Internal Revenue Code of 1986, as amended, and the City hereby
covenants and agrees with respect to the use of proceeds of sale of
the Bonds and the use of the Project as follows:
a) Definitions. When used in this Section, the following
terms have the following meanings:
Closing Date" means the date on which the Bonds are
first authenticated and delivered to the initial
purchasers against payment therefor.
Code" means the Internal Revenue Code of 1986, as
amended by all legislation, if any, effective on or
before the Closing Date.
Computation Date" has the meaning set forth in
Section 1.148-1(b) of the Regulations.
Gross Proceeds" means any proceeds as defined in
Section 1.148-1(b) of the Regulations, and any
replacement proceeds as defined in Section 1.148-1(c) of
the Regulations, of the Bonds.
Investment" has the meaning set forth in Section
1.148-1(b) of the Regulations.
Nonpurpose Investment" means any investment
property, as defined in section 148(b) of the Code, in
which Gross Proceeds of the Bonds are invested and which
is not acquired to carry out the governmental purposes of
the Bonds.
Rebate Amount" has the meaning set forth in Section
1.148-1(b) of the Regulations.
Regulations" means any proposed, temporary, or
final Income Tax Regulations issued pursuant to Sections
103 and 141 through 150 of the Code, and 103 of the
Internal Revenue Code of 1954, which are applicable to
the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary
or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
Yield" of (1) any Investment has the meaning set
forth in Section 1.148-5 of the Regulations and (2) the
Bonds has the meaning set forth in Section 1.148-4 of the
Regulations.
0210256 -2-
EXHIBIT
2 -
EXHIBIT A
b) Not to Cause Interest to Become Taxable,. The City shall
not use, permit the use of, or omit to use Gross Proceeds or any
other amounts (or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with
Gross Proceeds) in a manner which if made or omitted, respectively,
would cause the interest on any Bond to become includable in the
gross income, as defined in section 61 of the Code, of the owner
thereof for federal income tax purposes. Without limiting the
generality of the foregoing, unless and until the City receives a
written opinion of counsel nationally recognized in the field of
municipal bond law to the effect that failure to comply with such
covenant will not adversely affect the exemption from federal
income tax of the interest on any Bond, the City shall comply with
each of the specific covenants in this Section.
c) No Private Use or Private Pavments. Except as permitted
by section 141 of the Code and the Regulations and rulings
thereunder, the City shall at all times prior to the last Stated
Maturity of Bonds:
1) exclusively own, operate and possess all
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use
or permit the use of such Gross Proceeds (including all
contractual arrangements with terms different than those
applicable to the general public) or any property
acquired, constructed or improved with such Gross
Proceeds in any activity carried on by any person or
entity (including the United States or any agency,
department and instrumentality thereof) other than a
state or local government, unless such use is solely as
a member of the general public; and
2) not directly or indirectly impose or accept any
charge or other payment by any person or entity who is
treated as using Gross Proceeds of the Bonds or any
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with such Gross Proceeds, other than taxes of
general application within the City or interest earned on
investments acquired with such Gross Proceeds pending
application for their intended purposes.
d) No Private Loan. Except to the extent permitted by
section 141 of the Code and the Regulations and rulings thereunder,
the City shall not use Gross Proceeds of the Bonds to make or
finance loans to any person or entity other than a state or local
government. For purposes of the foregoing covenant, such Gross
Proceeds are considered to be "loaned" to a person or entity if:
1) property acquired, constructed or improved with such Gross
0210256 - 3 -
EXH18 i A
Proceeds is sold or leased to such person or entity in a
transaction which creates a debt for federal income tax purposes;
2) capacity in or service from such property is committed to such
person or entity under a take -or -pay, output or similar contract or
arrangement; or (3) indirect benefits, or burdens and benefits of
ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise
transferred in a transaction which is the economic equivalent of a
loan.
e) Not to Invest at Hiaher Yield.. Except to the extent
permitted by section 148 of the Code and the Regulations and
rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest
Gross Proceeds in any Investment (or use Gross Proceeds to replace
money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross
Proceeds (or with money replaced thereby), whether then held or
previously disposed of, exceeds the Yield of the Bonds.
f) Not Federallv Guaranteed. Except to the extent permitted
by section 149(b) of the Code and the Regulations and rulings
thereunder, the City shall not take or omit to take any action
which would cause the Bonds to be federally guaranteed within the
meaning of section 149(b) of the Code and the Regulations and
rulings thereunder.
g) Pavment of Rebatable Arbitraae. Except to the extent
otherwise provided in section 148(f) of the Code and the
Regulations and rulings thereunder:
1) The City shall account for all Gross Proceeds
including all receipts, expenditures and investments
thereof) on its books of account separately and apart
from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of
accounting for at least six years after the day on which
the last Outstanding Bond is discharged. However, to the
extent permitted by law, the City may commingle Gross
Proceeds of the Bonds with other money of the City,
provided that the City separately accounts for each
receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
2) Not less frequently than each Computation Date,
the City shall calculate the Rebate Amount in accordance
with rules set forth in section 148(f) of the Code and
the Regulations and rulings thereunder. The City shall
maintain such calculations with its official transcript
of proceedings relating to the issuance of the Bonds
until six years after the final Computation Date.
0210256 -4-
EXHIBIT A
3) As'additional consideration for the purchase of
the Bonds by the Purchasers and the use of the money
represented thereby and in order to induce such purchase
by measures designed to insure the excludability of the
interest thereon from the gross income of the owners
thereof for federal income tax purposes, the City shall
remit to the Corporation for payment to the United States
the amount described in paragraph (g)(2) above and the
amount described in paragraph (g)(4) below, at the times,
in the manner and accompanied by such forms or other
information as is or may be required by Section 148(f) of
the Code and the Regulations and rulings thereunder.
4) The City shall exercise reasonable diligence to
assure that no errors are made in the calculations and
payments required by paragraph (g)(2), and if an error is
made, to discover and promptly correct such error within
a reasonable amount of time thereafter (and in all events
within one hundred eighty (180) days after discovery of
the error), including the amount remitted to the
Corporation for payment to the United States of any
additional Rebate Amount owed to it, interest thereon,
and any penalty imposed under Section 1.148-3(h) of the
Regulations.
4. Receipt and Transfer of Proceeds of Sales Tax.. The City
agrees, in cooperation with the Corporation, to take such actions
as are required to cause the "Gross Sales Tax Revenues" (as such
term is defined in the resolution authorizing the issuance of the
Bonds) received from the Comptroller of Public Accounts of the
State of Texas for and on behalf of the Corporation to be
transferred and deposited immediately upon receipt by the City to
the credit of the banking or monetary fund maintained at the
depository designated by the Corporation and known on the books and
records of the Corporation as the "Pledged Revenue Fund".
5. Modifications. This Agreement shall not be changed
orally, and no executory agreement shall be effective to waive,
change, modify or discharge this Agreement in whole or in part
unless such executory agreement is in writing and is signed by the
parties against whom enforcement of any waiver, change,
modification or discharge is sought.
6. Entire Aareement. This Agreement, including the
Exhibits, contains the entire agreement between the parties
pertaining to the subject matter hereof and fully supersedes all
prior agreements and understandings between the parties pertaining
to such subject matter.
7. Counterparts. This Agreement may be executed in several
counterparts, and all such executed counterparts shall constitute
0210256 -5-
EXHIBIT
5 -
EXHIBIT A
the same agreement. It shall be necessary to account for only one
such counterpart in proving this Agreement.
8. Severabilitv. If any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement shall nonetheless
remain in full force and effect.
9. Anolicable Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the substantive
federal laws of the United States and the laws of the State of
Texas.
10. Captions. The section headings appearing in this
Agreement are for convenience of reference only and are not
intended, to any extent and for any purpose, to limit or define the
text of any section or any subsection hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to be effective as of the date and year first above
written.
ATTEST:
Secretary, Board of Directors
Corporation Seal)
ATTEST:
City Secretary
City Seal)
SOUTHLARE PARRS DEVELOPMENT
CORPORATION
President, Board of Directors
CITY OF SOUTHLARE, TEXAS
0210256 -6-
EXHIBIT
6 -
Mayor
EXHIBIT A
City of Southlake, Texas
u 0 NkVA gem 110.11001 DRUM
November• •.
TO: Curtis E. Hawk, City Manager
FROM: Lou Ann Heath, Director of Finance
SUBJECT: Resolution No. 94-62, Approving SPDC's issuance of $1,000,000 Sales Tax
Subordinate Lien Revenue Bonds, Series 1994
This resolution will approve the SPDC's issuance of $1 million in subordinated sales tax revenue
bonds. The original SPDC budget called for the sale of an additional $1.5 million bonds at the
end of FY95, therefore this is an acceleration of the plan. The scope of the SPDC projects
remains the same: 1. Bicentennial Park, 2. Land adjacent to the Corps property and 3. Joint use
gymnasium. The City currently has a $1.8 million construction project in progress at Bicentennial
Park. Negotiations are under way to purchase the additional tract of land near Bicentennial Park.
The City is also moving forward with the purchase of the land adjacent to the Corps property.
The City recently approved the joint use construction agreement for the middle school gymnasium.
The additional bonds will allow the City to move forward with the overall SPDC plan.
LAH