2000-030r
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 2000"; 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 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, the Issuer is empowered 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 to finance on behalf of the City the costs of
purchasing land and making improvements thereto for neighborhood parks and making additional
improvements to existing park land, including related road and streets improvements that enhance
such park facilities (the "Projects"); 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,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
Section 1: The Resolution authorizing the issuance of $4,180,000 "Southlake Parks
Development Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2000", adopted by
the Issuer (the "Issuer Resolution") on March 7, 2000 and submitted to the City Council this day,
is hereby approved in all respects. The Bonds are being issued to finance the acquisition and
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 acquire and
construct the Projects and thereafter be fully responsible for the upkeep, maintenance and use of
the Projects.
Section 2: The approvals herein given are in accordance with Section 25(f) of the Act and
the Issuer's bylaws, 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 413 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.
825743.1
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 Projects, 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, individually or jointly, to execute
and deliver such endorsements, instruments, certificates, documents, or papers necessary and
advisable to carry out the intent and purposes of this Resolution.
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 a portion of 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
acquisition and construction of the Projects and the investment and disbursement of the proceeds -
of sale of the Bonds issued to finance the Projects. 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.
825743.1 -2-
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.
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
825743.1 -3-
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 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
825743.1 -4-
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
Resolution 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 Resolution, 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 March 7, 2000.
CITY OF SOUTHLAKE, TEXAS
Mayo(
ATTEST:
war,
City Secretary
City Seal)
825743.1 -5-
EXHIBIT A 1*q
FINANCING/USE AGREEMENT
This Financing/Use Agreement (this "Agreement') is made to be effective as of the 71h day
of March, 2000, 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")
RECITALS
WHEREAS, the Corporation on behalf of the City is to finance the purchase of land and
making improvements thereto for neighborhood parks and making additional improvements to
existing park land, including related road and streets improvements that enhance such park facilities
collectively, the "Project"); and
WHEREAS, such financing contemplates the issuance and sale of the Corporation's tax
exempt bonds in the principal amount of $4,180,000, 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;
AGREEMENT
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
a series of obligations to be known as "Southlake Parks Development Corporation Sales Tax
Subordinate Lien Revenue Bonds, Series 2000", hereinafter called the "Bonds", and deposit
proceeds of sale of the Bonds (less amounts to pay costs of issuance, municipal bond insurance
premium, surety bond insurance premium, and accrued interest) to the credit of a construction fund
or account designated by the City, and the City hereby agrees and covenants that the 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 Bonds have been fully paid, discharged and retired, the
upkeep and maintenance of the Project will be the responsibility of the City and the Corporation
shall have no responsibility with respect to the operation, upkeep and maintenance of the Project.
3. Recognition of Tax Exempt Financinq. 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.
825740.1 --
EXHIBIT A
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.
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.
3-
EXHIBIT q
e) Not to Invest at Higher 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 Arbitrage. 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.
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
4-
EXHIBIT 4',--4
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 Agreement. 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 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. Applicable 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.
825140.1 5-
EXHIBIT A
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)
r azi- ]
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
CITY OF SOUTHLAKE, TEXAS
Mayor
6-
EXHIBIT 4-14