2005-016e.nu 05 06 OFFICI& REGURIJ
A RESOLUTION by the City Council of the City of Southlake, Texas, relating to
the "Southlake Parks Development Corporation Sales Tax Third Lien,
Revenue Refunding Bonds, Series 2005'; approving the resolution of the
Southlake Parks Development Corporation authorizing the issuance of
such Bonds; 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 refunding
outstanding bonds issued on account of a "project" defined as such,by the Act; and
WHEREAS, the Issuer has determined to refund the following described outstanding
bonds of the Corporation totaling in principal amount $16,685,000 (hereinafter collectively
referred to as the "Refunded Obligations"), to wit:
1) Southlake Parks Development Corporation Refunding and
Improvement Sales Tax Revenue Bonds, Series 1997, dated February 15, 1997,
representing the portion of such bonds eligible to be refunded under federal tax
laws scheduled to mature on August 15 in each of the years 2007 through 2014,
2017 and 2021, and aggregating in principal amount $4,605,000 (the "Series
1997 Refunded Obligations") and further described as follows:
Year of Principal Amount Principal Amount
Maturity Outstandina f$1 Beina Refunded ($1
2007 305,000 210,000
2008 320,000 220,000
2009 335,000 230,000
2010 350,000 240,000
2011 370,000 255,000
2012 390,000 270,000
2013 410,000 285,000
2014 430,000 295,000
2015 455,000 315,000
2016* 480,000 330,000
2017 510,000 350,000
2018** 535,000 370,000
2019** 565,000 390,000
2020** 595,000 410,000
2021 630,000 435,000
represents mandatory sinking fund redemption for term bond maturing in the year 2017
represents mandatory sinking fund redemption for the term bond maturing in the year 2021
45578857.1
2) Southlake Parks Development Corporation Sales Tax Revenue
Bonds, Series 1999, dated April 1, 1999, maturing on August 15 in each of the.
years 2009 through 2019 and 2024, and aggregating in principal amount
4,065,000 (the "Series 1999 Refunded Obligations");
3) Southlake Parks Development Corporation Sales Tax Subordinate
Lien Revenue Bonds, Series 2000, dated March 1, 2000, maturing on August 15
in each of the years 2010 through 2018, 2025 and 2030, and aggregating in
principal amount $2,505,000 (the "Series 2000 Refunded Obligations");
4) Southlake Parks Development Corporation Sales Tax Subordinate
Lien Revenue Bonds, Series 2001, dated May 15, 2001, maturing on August 15,
2031, and aggregating in principal amount $4,690,000 (the "Series 2001
Refunded Obligations"); and
5) Southlake Parks Development Corporation Sales Tax Third Lien
Revenue Bonds, Series 2004, dated December 1, 2004, maturing on August 15
in each of the years 2005 through 2011, and aggregating in principal amount
820,000 (the "Series 2004 Refunded Obligations");
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 $17,695,000 "Southlake Parks
Development Corporation Sales Tax Third Lien Revenue Refunding Bonds, Series 2005",
adopted by the Issuer (the "Issuer Resolution") on March 15, 2005 and submitted to the City
Council this day, is hereby approved in all respects. The Bonds are being issued to refund the
Refunded Obligations (identified in the preamble hereof).
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 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 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, in connection therewith, the City hereby makes the following representations and
warranties to the Issuer:
45578857.1 2
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 cant' 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:
45578857.1 3
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 (including property financed with
Gross Proceeds of the Refunded Obligations), 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
including property financed with the Gross Proceeds of the Refunded
Obligations), 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 Hiqher 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 Federally 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
45578857.1 4
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 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.
h) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the
Bonds were issued, the Corporation reasonably expected to spend at least 85% of the
spendable proceeds of such bonds within three years after such bonds were issued and (2) not
more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in
Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or
more.
i) Current Refundinci. The Bonds are a current refunding of the Series 2004
Refunded Obligations as the Bonds will be used within 90 days of the redemption of the Series
2004 Refunded Obligations.
0) Qualified Advance Refundina. The Bonds will be issued more than 90 days
before the redemption of the Series 1997 Refunded Obligations, Series 1999 Refunded
Obligations, the Series 2000 Refunded Obligations, and the Series 2001 Refunded Obligations
collectively, the "Advance Refunded Bonds"). The Corporation represents as follows:
1) The Bonds are first advance refunding of the Advance Refunded
Bonds, within the meaning of section 149(d)(3) of the Code.
45578857.1 5
2) The Advance Refunded Bonds are being called for redemption,
and will be redeemed not later than the earliest date on which such bonds may.
be redeemed.
3) The initial temporary period under section 148(c) of the Code will
end: (i) with respect to the proceeds of the Bonds not later than 30 days after the
date of issue of such Bonds; and (ii) with respect to proceeds of the Advance
Refunded Bonds on the Closing Date if not ended prior thereto.
4) On and after the date of issue of the Bonds, no proceeds of the
Advance Refunded Bonds will be invested in Nonpurpose Investments having a
Yield in excess of the Yield on such Advance Refunded Bonds.
5) The Bonds are being issued for the purposes stated in the
preamble of this Resolution. There is a present value savings associated with
the refunding. In the issuance of the Bonds the Corporation has neither:
i) overburdened the tax-exempt bond market by issuing more bonds, issuing
bonds earlier or allowing bonds to remain outstanding longer than reasonably
necessary to accomplish the governmental purposes for which the Bonds were
issued; (ii) employed on "abusive arbitrage device" within the meaning of Section
1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material
financial advantage based on arbitrage, within the meaning of section 149(d)(4)
of the Code, apart from savings attributable to lower interest rates and reduced
debt service payments in early years.
SECTION 5: 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 6: This- Resolution shall be in force and effect from and after its passage on
the date shown below.
remainder of page left blank intentionally)
45578857.1 6
PASSED AND ADOPTED, this March 15, 2005.
ATTEST:
a
City Secretary
City Seal)
45578857.1 7
CITY OF SOUTHLAKE, TEXAS
Mayor