1997-02-18CITY OF SOUTHLAKE, TEXAS
667 NORTH CARROLL AVENUE
REGULAR CITY COUNCIL MEETING
FEBRUARY 18, 1997
MINUTES
COUNC LMEMBERS PRESENT: Mayor Rick Stacy; Mayor Pm Tem W. Ralph Evans;
Deputy Mayor Pro Tern Pamela Muller. Members: Gary Fawks, Wayne Moffat, Scott Martin,
David Harris.
STAFF PRESENT: Curtis E. Hawk, City Manager; Shana Yelverton, Assistant City Manager;
Klm Lenior, Director of Parks and Recreation; Lou Ann Heath, Director of Finance; Karen
Gandy, Zoning Administrator; Bob Whitehead, Director of Public Works; Ron Harper, City
Engineer; Greg Last, Director of Community Development; Billy Campbell, Director of Public
Safety; Wayne K. Olson, City Attorney; and, Sandra L. LeGrand, City Secretary.
INVOCATION: Mayor Pro Tem W. Ralph Evans.
WORK SESSION: The work session was held to discuss agenda items by Council and staff.
Mayor Rick Stacy called the meeting to order at 7:00 p.m.
Councilmember Gary Fawks arrived at the meeting just before agenda item #7-C.
Councilmember Scott Martin left the meeting after agenda item #7-C.
Agenda Item #3, Approval of the Minutes of the City Council Meeting Held on February
4.1997.
Motion was made to approve the minutes of the City Council meeting held on February 4, 1997,
with a change on page 15, first paragraph to read, "The driveway off of Brock Drive will be
chained and used for emergency vehicles only. ~
Motion: Harris
Second: Muller
Ayes: Harris, Muller, Moffat, Martin, Stacy
Nays: None
Abstention: Evans
Approved: 5-0-1 vote ~
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 1
Agenda Item #4-A. Mayor's Report
During the Mayor's Report, Councilmember Muller reported her father recently became a citizen
of the City of Southlake and attended the by-monthly senior luncheon. While attending the
Valentine luncheon she stated Brownie Troop 4044 made valentines for the seniors. Ms. Muller
thanked the Girl Scout Brownie Troop for providing the valentines for the seniors, making their
day a little brighter.
Mayor Pro Tem Ralph Evans reported on the upgrade of our bond ratings as the result of the bond
meeting held on February 13. Evans stated our rating was increased from an "A' to "A+~ by
Standard and Poors and Moodys. Evans thanked staff for the good job on the sessions and on the
tour of the City provided to the bond agents.
Mayor Stacy reported on the "Mayor's Cup Tennis Tournament" which will be held on April 5,
1997 from 12 noon to 2:00 p.m. at Carroll High School, noting, we still need volunteers to
commit to play. A few people have signed up, however, we need more. Twelve (12) two (2)
member teams are needed to play. If anyone is interested, contact the City Secretary.
Mayor Stacy made a presentation to Greg Last and employees of the Community Development
Department. The Midwest Section of the Texas Chapter of the American Planning Association
presented the "Certificate of Achievement for Planning Excellence" award to Southlake. The
Mayor stated this award recognizes professional planning standards demonstrated by City staff
responsible for planning and further recognizes the support that the Mayor and other
Councilmember have exhibited with regard to funding and support of professional planning efforts
in Southlake. The members of the Community Development are: Greg Last, Karen Candy, Tom
Elgin, Dennis Killough, Chris Carpenter; Stephanie Sarakaitis, Lori Farwell, Lea Cromer,
Roxanne Luna, and Mary Stanley.
The Southlake 40th Birthday celebration will be held on May 3, 1997 at Bicentennial Park. If
anyone would like to help with the planning of the celebration, contact Tracy Soutbers, Public
Information Officer for the City.
Applicants are now being received for appointments to City Boards and Commission. Places will
be available on the Planning and Zoning Commission, Parks and Recreation Board, Southlake
Parks Development Corporation, and Senior Advisory Board. For more information, contact the
City Secretary.
Mayor Stacy noted yesterday was the first day to file for a place on the May 3, 1997 General
Election Ballot. The last day to file is March 19, 1997. The Mayor and Councilmember Place
2 are up for re-election. For more information, contact the City Secretary.
Mayor Rick Stacy stated that two big issues have come up during the last several
months that have upset a lot of people. We have learned how to proceed and make
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 2
it less painful for the people. The first issue is the update of the Thoroughfare
Plan. The Mayor stated that updating the Thoroughfare Plan is a normal process
that takes place every four years which is a requirement of our Home Rule Charter.
It does not mean we are going to go out and widen all the roads at this time. He
commented that one of the reasons that our bond ratings have gone up is because
we have a plan and we stick to that plan. We don't have the money right now to
build roads. We have millions of dollars of roads to build. The second issue is
Continental Boulevard as it connects to State Highway 26. If folks still have
concerns with this portion of the Thoroughfare Plan, we can send just that portion
of the plan back to the Planning and Zoning Commission for further review. The
Mayor asked that the Thoroughfare Plan be included in the March 4, 1997 City
Council meeting agenda.
Councilmember Pamela Muller stated she had already talked with staff about the
possibility of South Kimball Avenue being increased to a divided boulevard to
separate the residents from the through traffic. She feels this would be a workable
solution.
Councilmember Harris asked, does this one item need to be sent back to the
Planning and Zoning Commission, or does Council feel we need more work
sessions on the Thoroughfare Plan Update? Harris referenced the meetings the
City Manager has had with the property owners in the Continental Boulevard area.
Curtis Hawk stated the Planning and Zoning Commission has made a
recommendation.
It was noted that Councilmembers Martin and Muller have met with the City Manager in regards
to the exact Thoroughfare Plan.
The City Manager, Curtis Hawk, stated he will put the Thoroughfare Plan update
on the March 4, City Council meeting agenda. There will be a joint work session
with the City Council and Planning and Zoning Commission on March 13, at 6:30
p.m. in the City Council Chambers to consider the Timarron commercial tracts.
Councilmember Muller thanked the Planning and Zoning Commission members
and City staff for their work and long hours on the Thoroughfare Plan.
Aeenda Item #4-B. City Mana~,er's Report
The City Manager, Curtis Hawk, informed Council and the audience of a Joint City Council and
SPIN meeting to be held on Thursday, February 27, at 7:00 p.m.
Mr. Hawk commented that the Director of Community Development, Greg Last, will be making
a presentation to the Texas Forest Service on Southlake's Tree Ordinance.
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 3
Mr. Hawk stated on March 26 and 27, Parmers in Mobility will be going to Austin with the Texas
Department of Transportation. He noted, we need at least four Councilmembers to attend.
On Thursday, February 20, Metroport 114 Parmership will be meeting in the Council Chambers
of Southlake City Hall, beginning at 7:30 a.m.
The City Manager commented on Councilmember Martin's father-in-law being ill and in the
hospital.
Aeenda Item #4-C. SPIN Report
Joe Mast, SPIN Representative for SPIN #3, 2415 Taylor Street, Southlake. Mr. Mast reported
his group had a joint meeting with SPIN #2 in the recent past, and commented on a potential
traffic hazard on Dove Road. He commented that south-bound on Ridgecrest, it was suggested
that the guard-rail be moved back as the ditch overflows and causes lawn problems. Also, a large
east-west culvert is needed on Lonesome Dove and Dove Roads.
Aeenda Item #5. Consent Aeenda
Mayor Stacy read the consent agenda items, including:
5-A. Resolution No. 97-12, Renewal of an agreement with the For~ Worth Star Telegram
naming them as the legal publication for the City.
5-B. Award of bid for Continental Boulevard Paving, Drainage, and Water Improvements in
Heritage Industrial Park from SH 26 to approximately 1000 ft. west.
5-C. Award of bid for self contained breathing apparatus for the Department of Public Safety,
Fire Services Division.
5-D. Resolution No. 97-14, authorizing the Mayor to enter into a renewal of the Mass Care
Shelter Agreement with the American Red Cross.
5-E. Authorizing two (2) additional motorcycle police officer positions for FY 96-97.
Resolution No. 97-13, a resolution by the City Council of the City of Southlake, Texas,
to the "Southlake Parks Development Corporation Refunding and Improvement Sales Tax
Revenue Bonds, Series 1997."
10-A.
Authorizing the Mayor to enter into a contract with Cheatham and Associates for the
design of sanitary sewers for the Neighborhood Sewer Program for Dove Acres, Hillwood
Estates, Cross Timber Hills and Jellico Estates.
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 4
Motion was made to approve the consent agenda consisting of items #5-A, #5-B, #5-C, #5-D, #5-
E, #5-G, and #10-A.
Motion: Harris
Second: Muller
Ayes: Harris, Muller, Moffat, Martin, Evans, Stacy
Nays: None
Approved: 6-0 vote
ADDITIONAL INFORMATION ON CONSENT AGENDA ITEMS
Resolution No. 97-12, renewal of an agreement with the Fort Worth Star Telegram as the
City's legal publication. Each year the City must renew their contract with fixed pricing
on the legal notices. The Fort Worth Star Telegram has increased their rates somewhat,
however, are lower than other area newspapers. The City has an excellent working
relationship with this newspaper.
Award of bid for Continental Blvd., paving, drainage and water improvements in Heritage
Industrial Park from SH 26 to approximately 1,000 feet west, was approved. Bid
tabulations were prepared by the design engineers, Halff Associates. Staff recommends
the bid be awarded to L.H. Lacy Company in the amount of $360,640.30 for the
Continental Blvd. paving and drainage from SH 26 west approximately 1,000 ft. and the
low bid in the amount of $68,627.40 for a 12-inch water main for the same area.
Award of bid for self contained breathing apparatus for the Department of Public Safety,
Fire Services Division. The bid specifications included 20 complete self contained
breathing apparatus units to include masks, bottles and ancillary issue. They also specified
20 extra air bottles and spare face masks. These will be utilized by our paid firefighters,
firefighter reserves, and public safety officers. Staff recommended Hoyt Breathing
Apparatus be awarded the bid in the amount of $58,344.00.
Resolution No. 97-14, allows for a renewal agreement between the City of Southlake and
the American Red Cross to insure understanding and agreement on interpretation and
implementation of disaster relief responsibility, as well as providing for mass care shelters
within the City of Southlake. This was reaffirmed in the State of Texas Disaster Relief
Law in 1975. The City has been under this contract since March, 1990.
Authorizing additional motocycle police officer positions. The City currently has two
motorcycle officers and we need an additional two officers. The objectives for a
Comprehensive Race Day Traffic Management Plan includes: (a) Provides additional
mobile officers for race track events; (b) allows the expansion of times that traffic can be
worked to help evaluate trouble spots in our city that we, because of scheduling and
numbers of personnel dedicated to the traffic program, cannot address; (c) increase our
ability to work with the schools, parks and recreation, and other public and civic
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 5
5-F
5-G.
10-A.
organizations that bring additional traffic to our community. The urgency in this request
is related to the close time frame that is needed to meet the hiring and training of
personnel, including motorcycle training and placing the proper equipment on the
motorcycles. The cost of this program in the 1996-97 budget year will be about $17,000
per traffic officer.
(This item left intentionally blank).
Resolution No. 97-13, Relating to the "Southlake Parks Development Corporation
Refunding and Improvement Sales tax Revenue Bonds, Series 1997". The SPDC board
will consider a resolution to approve the refunding of the current outstanding sales tax
revenue bonds and issuance of the $8.97 million 1997 bonds. Of the $8.97 million,
approximately $5 million will be available for new projects. The board is in the process
of prioritizing the parks projects through review of a three year plan and budget.
Contract with Cheatham and Associates for the design of sanitary sewers for the
Neighborhood Sewer Program for Dove Acres, Hillwood Estates, Cross Timber Hills and
Jellico Estates. The sewer assessment program consists of a three-year program. Each
year certain subdivisions have been designated to be considered for a sanitary sewer
program. Year 1: Vista Trails, Emerald Estates, Whispering Dell Estates and Highland
Estates; Year 2: Subdivisions include: Mission Hills Estates, Diamond Circle Estates,
Huntwick Estates, and Shady Lane-Raintree Area; Year 3: Cross Timber Hills, Dove
Acres, Hillwood Estates, and Jellico Estates. The FY96-97 Budget, Fund 755-Sewer
Assessment Fund includes $180,000 for engineering services for the "Year 3" Sewer
Assessment Program. Staff recommends the City Council authorize the Mayor to execute
the proposal from Cheatham and Associates for professional services for the design of
sewer systems in four (4) existing residential subdivisions: Cross Timber Hills, Dove
Acres, Hillwood Estates, and Jellico Estates. The total cost of the engineering design is
estimated to be $173,675.
Agenda Item//6. Public Forum
Dick Johnston, 139 Jellico Circle, Southlake. Mr. Johnston stated he appeared before the City
Council and the Carroll School Trustees and recommended the City go forward with a bond
election for the new City Hall to be located on the Richards/Timarron property. This has caused
concerns with many citizens. The City spent $50,000 on planners and architects for the study and
he stated he feels Council isn't even considering the findings of the Municipal Complex
Committee.
Jim Giffin, 3002 Briar Lane, Southlake. Mr. Giffin thanked the City Council and staff for the
complete upgrades to water and roads on Hilltop, Briar Lane and the Southlake Park area. The
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 6
project is complete, not just in spots. He noted the workers and contractors were helpful in
answering questions from the citizens.
~genda Item g'/-B. Ordinance No. 480-226. 2nd readinn (ZA 96-152).
Ordinance No. 480-226, 2nd reading (ZA 96-152), Rezoning and Concept Plan for Southlake
Church of Christ, on property being described as Lot 1, Brock Addition, an addition to the City
of Southlake, Tarrant County, Texas, according to the plat recorded in Volume 3288-44, Page
40, Plat Records, Tarrant County, Texas, save and except the portion awarded to the State of
Texas by Agreed Judgement entered in Cause No. 153-127796-90, a certified copy of which is
recorded in Volume 11284, Deed Records, Tarrant County, Texas. Current zoning is "SF-1A'
Single Family Residential District (Lot 1, Brock Addition), and "CS" Community Service District
(Lot 3R, J.G. Allen No. 18 Addition). Applicant: FDS International District. Owners: Jimmie
O. and Judith A. Hettinger (Lot 1 Brock Addition), and Southlake Church of Christ (Lot 3R, J.G.
Allen No. 18 Addition). SPIN Neighborhood No. 15.
Karen Gandy, Zoning Administrator, reported that twelve (12) notices were sent to property
owners within the 200' notification area and two (2) written responses have been received from:
Mr. and Mr. John Parry, 105 Brock Drive, Southlake, opposed; and Perry and Elvira Vargas, 209
Brock Drive, Southlake, opposed.
Michael C. Schistose, Director of Service Master FDS International, 320 Decker Drive, Suite
200, Irving, Texas. Mr. Schistose stated site lighting was as issue, but it is taken care of.
PUBLIC HEARING: no comments were received during the public hearing.
Motion was made to approve Ordinance No. 480-226, 2nd reading, was approved subject to the
Concept Plan Review Summary No. 3 dated January 31, 1997; subject to the Planning and Zoning
Commission's recommendation and subject to the closure of the driveway on Brock Drive at the
house once the acquisition of Lot 1, Brock Addition is completed.
Motion: Martin
Second: Harris
Mayor Stacy read the caption of the ordinance.
Ayes: Martin, Harris, Evans, Muller, Moffat, Stacy
Nays: None
Approved: 6-0 vote
Councilmember Gary Fawks arrived for the meeting at this time.
Agenda Item gT-C. Ordinance No. 670. 2nd reading Tax and Waterworks and Sewer System
(Limited Pledee} Revenue Certificates of Obligation. Series 1997.
Lou Ann Heath, Director of Finance for the City of Southlake, stated on January 21, 1997 during
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 7
the City Council meeting, the City Council approved Resolution No. 97-06, which approved and
authorized the publication of notice of intention to issue $9.67 million certificates of obligation.
This notice was published in the Fort Worth Star Telegram on January 23, and 30. The first
reading of Ordinance No. 670 was approved by Council at their February 4, 1997 meeting. On
February 18, the second reading is being considered for approval. Approval by the Texas
Attorney General is required after approval by the Council, and delivery of the funds is anticipated
by March 18. The certificates will be issued at a level annual debt service with a 20 year
maturity.
On February 12, members of City staff, representatives from First Southwest Company,
Councilmembers Martin, Evans, and Muller and SPDC President David Yelton met with analysts
from Standard and Poor's, Moody's Investors Service, and AMBAC Indemnity Corp. This was
the first time that a bond rating presentation was held in the City. Part of the presentation focused
on parks development, since the Southlake Parks Development Corporation will be issuing sales
tax revenue bonds at the same time.
Rating assignment was made, whereby currently Southlake is rated "A' by both rating agencies.
It was announced that Southlake was upgraded to an "A+' rating from both agencies.
Jim Sabonis, First Southwest Corporation, was present and explained to Council the upgrades in
ratings by both Standard and Poor's and Moody's. Mr. Sabonis introduced Jeff Roberts from
First Southwest Corporation, and Ed Esquival, Fulbright & Jaworski, City's bond counsel.
PUBLIC HEARING: No comments were received during the public hearing.
Curtis Hawk, City Manager, stated Southlake was successful because of hard work
and dedication of our City staff. He stressed the importance of planning. He
noted the City Council also needs to take credit for allowing staff to do some things
that makes Southlake a unique community.
Councilmember Scott Martin commented on the continuity of the City. He stated
he hopes the citizens will support Council sticking to the plans.
Councilmember Muller stated this is exciting to hear as she recalls in 1988-89, the
Council spent several nights a week in planning meetings where the development
regulations were originated and it has paid off.
Motion was made to approve Ordinance No. 670, 2nd reading.
Motion: Martin
Second: Harris
Mayor Rick Stacy read the caption of the ordinance.
Ayes: Martin, Harris, Evans, Fawks, Muller, Moffat, Staey
Nays: None
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 8
Approved: 7-0 vote
A~enda ltom #7-A. Resolution No. 96-51 fZA 96-7B Specific Use Permit for Outside Storage
Resolution No. 96-51 (ZA 96-71), Specific Use Permit for outside storage from Great Outdoor
Landscape being legally described as Lot 3, Block A, Hart Industrial Park, and being
approximately 0.998 acres situated in the John N. Gibson Survey, Abstract No. 591. Current
zoning is "I-1" Light Industrial District. Owner: Joseph Hart. Applicant: Scott and Carol
Malone. SPIN Neighborhood #7.
Karen Gandy, Zoning Administrator, commented that the applicant has met the requirements in
all the Plan Review Summary No. 1, No. 2, and No. 3.
Buddy Luce, 1850 Hunter's Creek, Southlake, an attorney for the applicant was present to answer
questions of Council.
Wayne Olson, City Attorney, stated the specific use permit is limited to the
requirements and restrictions set out in the motion. If it is not commented on in
the motion, the SUP will run with the land unless Council states otherwise.
PUBLIC HEARING: The public hearing resulted with no comments from the audience.
Councilmember Pamela Muller noted that Buddy Luce was on the Planning and
Zoning Commission when this ordinance was written.
Motion was made to approve Resolution No. 96-51 with the following specific requirements and
special conditions to be included in Section 1 on page 7A-8, that the applicant be restricted from
placing any type of structure storage or any other material of any kind or type whatsoever in the
landscaped area as shown; that the sand and gravel as shown on the west side of the property be
relocated to the east side of the property; that the applicant will engage in reasonable dust
abatement; that there will be no outside vehicle storage on the property; that it will be incumbent
upon the applicant to maintain the drainage characteristics of the landscaped area and the buffered
area on the property; that if the applicant receives two or more code violations for drainge
violations within a one year period, that will result in an automatic review of the SUP; if the
applicant received three or more other violations such as height of material within a one year
period of time, that will result in review of the SUP; and that the SUP granted to this applicant
is for these uses shown and cannot be expanded; that the SUP is limited to this applicant only;
and also that the materials to be stored will be those shown on the drawings submitted together
with the application for the SUP and none other.
Motion: Harris
Second: Martin
Ayes: Harris, Martin, Evans, Stacy
Nays: Fawks, Muller, Moffat
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 9
Approved: 4-3 vote
Councilmember Scott Martin left the meeting at this time (8:35 p.m.)
Agenda Item #7-D. ZA 96-167. Site Plan of Lot 1. Block 1. 1709 Southlake Oaks Addition
ZA 96-167, Site Plan of Lot 1, Block 1, 1709 Southlake Oaks Addition, being approximately
2.2957 acres situated in the Littleberry G. Hall Survey, Abstract No. 686, and being a portion of
Tract 3C. Current zoning is "C-2" Local Retail Commercial District. Owner and Applicant is
1709 Southlake Oaks, Ltd. SPIN Neighborhood//13.
Karen Gandy, Zoning Administrator, commented that eight (8) notices were sent to property
owners within the 200' notification area and twenty-nine (29) responses were received from
outside the 200' notification area, including: Deborah Andrup, 203 Lake Crest, Southlake,
opposed; Ray and Linda Burbank, 201 Lake Crest. Drive, Southlake, opposed; David Boone, 306
Canyon Lake Drive, Southlake, opposed; Stephanie Chesbro, 102 Clear Lake Court, Southlake,
opposed; Brian Campbell, 206 Lake Crest Drive, Southlake, opposed; Kimberley and Jose Deras,
212 Canyon Lake Drive Southlake, opposed; Mary and John Dominguez, 209 lake Crest Drive,
Southlake, opposed; Coila Edson, 214 Canyon Lake Drive, Southlake, opposed; Garry Gibbons,
210 Lake Crest Drive, Southlake, opposed; Katherine Holland, 208 Lake Crest, Southlake,
opposed; Dan Jaeger, 224 Canyon Lake Drive, Southlake, opposed; Terry Krieber, 310 Canyon
Lake Drive, Southlake, opposed.
Scott and Francine Kingery, 204 Lake Crest Drive, Southlake, opposed; Patrick and Jo Ann
Loprete, 300 Canyon Lake Drive, Southlake, opposed; Jennie Moore, 211 Canyon Lake Drive,
Southlake, opposed; Lucia McCoy, 223 Canyon Lake, Southlake, opposed; Joma Nassir, 312
Canyon Lake Drive, Southlake, opposed; Samatha Powell, 205 Lake Crest, Southlake, opposed;
Ann Prendergast, 207 Lake Crest Drive, Southlake, opposed; James and Suzanne Peckham, 309
Canyon Lake Drive, Southlake, opposed; Lois Scheidt, 311 Canyon Lake Drive, Southlake,
opposed; Sue Tepper, 215 Canyon Lake Drive, Southlake, opposed; Glen Teel, 101 Clearlake
Court, Southlake, opposed; Cynthia Jane Whitehead, 2111 Lake Crest Drive, Southlake, opposed;
Kevin Sweeney, 100 Clear Lake Court, Southlake, opposed; and, Janet Kendall, 203 Canyon
Lake, Southlake, opposed. Ms. Gandy noted that the applicant has met all items in the Site Plan
Review Summary No. 1 dated January 17, 1997, with the exception of those items addressed in
the attached Site Plan Review Summary No. 2, dated February 14, 1997.
Dick Scarbrough, Scarbrough Corporation, was present and stated the only issue is the building
material, split-board vs. brick. He noted the material he would like to use on the back of the
building is an approved masonry material with a finish like a split-base material. He noted it is
a handsome building. The applicant stated by using this material would save him approximately
$I0,000 on the project.
Councilmember David Harris asked the applicant if he would have a substantial
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 10
savings by using the split-board on the back of the building.
It was noted that the City is now using this material at Bicentennial Park.
Councilmember Harris stated he would like to see additional landscaping on the
rear of the building.
Mayor Stacy stated one of the City's biggest complaints received from citizens is
concerning the backs of buildings. Councilmember Fawks stated he shared the
Mayor's concerns.
Agenda Item. #2-A. Executive Sesslon
Mayor Stagy advised the audience that Council would be going into executive session pursuant to
Chapter 551 of the Texas Government Code, to seek the advice of the City Attorney with regard
to an agenda item.
Council adjourned for executive session at 8:45 p.m.
Council returned to open session at 9:05 p.m.
Agenda Item #2-B. Action Necessary
No action was necessary as the result of the executive session.
Agenda Item #7-D. Continued
Motion was made to approve ZA 96-167 as presented.
Motion: Muller
Second: Evans
Ayes: None
Nays: Harris, Fawks, Muller, Moffat, Evans, Stacy
Denied: 6-0 vote
Agenda Item #8-A. Ordinance No. 480-229. 1st reading (ZA 96-1631.
Ordinance No. 480-229, 1st reading (ZA 96-163), Rezoning and Concept Plan for the Kimball
Road Substation, being approximately 2.456 acres and a portion of Tract 3B situated in the
Thomas Mahan Survey, Abstract No. 1049. Current zoning is "AG" Agricultural District, with
a requested zoning of "CS" Community Service District. Applicant: Espey, Huston & Associates,
Inc. Owner: TU Electric. SPIN Neighborhood #6.
K~tren Coandy, Zoning Administrator, stated eight (8) notices were sent to property owners within
the 200' notification area and one (1) response was received from within the 200' notification area
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 11
from Ernest Taylor, 579 North Kimball Avenue, Southlake, opposed. Three (3) responses were
received outside the notification area from: Lloyd and Dana Sherwood, 906 North Shady Oaks
Lane, Southlake, opposed; Jeanne Cook 158 East Highland, Southlake, opposed; and Mafia
Looney, 2901 Tumbleweed Trail, Grapevine, opposed. Ms. Gandy reported the applicant has met
all items in the Concept Plan Review Summary No. 1 dated January 3, 1997 with the exception
of those items addressed in the Concept Plan Review Summary No. 2 dated February 14, 1997.
Sonny Rhodes, Manager, TU Electric. Mr. Rhodes stated he is manager for the cities of
Grapevine, Southlake, and Colleyville. He noted the proposed structure is 225' foot off Kimball
Avenue, and will have a 5' fence inside their property. He introduced Keith Jackson, with Espy
Huston; Bob Dean engineer for TU Electric; and Lonny Frazer, transmission specialist for TU
Electric.
PUBLIC COMMENTS:
Kenneth Home, 1215 Ashmore Court, Southlake. Mr. Home stated TU Electric has talked about
the Grapevine Mills, and asked why don't they put this structure there? He also suggested T.W.
King Blvd. for a location for the tower. Home stated they don't have to be near the Harold
Knight property where the new school will be built. A copy of the letter submitted by Mr. Home
is hereby attached to the minutes of this meeting.
Sonny Rhodes stated they need to build the tower as close to the center of
development as possible. Initially the lines will be overhead.
Councilmember Wayne Moffat addressed Mr. Horn's concerns and asked that he
be given a copy of the map that was presented to the City Council tonight. Moffat
stated he feels TU Electric has met all the requirements and has done everything
possible to find the right location.
Councilmember Pamela Muller asked Mr. Home to meet with Sonny Rhodes
prior to the second reading of the ordinance.
Motion was made to approve Ordinance No. 480-229, 1st reading (ZA 96-163), subject to staff
review summary//2 dated February 14, 1997; deleting items//3,//4, and//5; and requiring the
10' bufferyard along Kimball Avenue and deleting the remaining bufferyard and providing a type
"C' 10' bufferyard along each side the length of the concrete drive per Planning and Zoning
Commission recommendation.
Motion: Harris
Second: Muller
Mayor Rick Stacy read the caption of the ordinance.
Ayes: Harris, Muller,.Moffat, Evans, Fawks, Stacy
Nays: None
Approved: 6-0 vote
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 12
Aeenda Item #8-B. ZA 96-164. Preliminary Plat for Rodgers Addition
ZA 96-164 Preliminary Plat for Rodgers Addition, being approximately 16.846 acres and a
portion of Tract 3B situated in the Thomas Mahan Survey. Current zoning is "AG' Agricultural
District. Applicant: Espey, Huston & Associates, Inc. Owners: TU Electric (Lot 1) and Loyal
Edward Rodgers (Lot 2). SPIN Neighborhood//6.
Karen Gandy, Zoning Administrator, commented that eight (8) notices were sent to property
owners within the 200' notification area and no written responses have been received.
Ronny Rhodes, TU Electric Company, asked that this item be approved.
Motion was made to approve the Preliminary Plat for Rodgers Addition subject to the Preliminary
Plat Review Summary No. 2 dated February 14, 1997.
Motion: Harris
Second: Fawks
Ayes: Harris, Fawks, Muller, Moffat, Evans, Stacy
Nays: None
Approved: 6-0 vote
Agenda Item #8-C. Ordinance No. 480-228. 1st reading (ZA 96-160~
Ordinance No. 480-228, 1st reading (ZA 96-160), Rezoning of Aubrey Estates, Lot 4, as recorded
in Volume 388-142, Page 41, P.R.T.C.T. and being approximately 6.854 acres. Current zoning
is "AG" Agricultural District with a requested zoning of "SF-1A' Single Family Residential
District. Applicant: Interwoven Design. Owners: Aubrey L. Smith and Rosa Lee Smith. SPIN
Neighborhood #10.
Karen Gandy Zoning Administrator, commented that eleven (11) notices were sent to property
owners within the 200' notification area and two (2) written responses have been received, from:
Lenora Herron, 500 S. White Chapel Blvd., Southlake, in favor; and Mark Fowler, 410 S. White
Chapel Blvd., Southlake, in favor. Ms. Gandy noted that a change in zoning to the ~SF-1A'
Single Family Residential District does not require a Concept Plan Review by staff.
Ron Parks, Interwoven Design, was present to answer questions of Council. Mr. Parks stated he
wants to build two (2) estate homes on the property.
Motion was made to approve Ordinance No. 480-228, 1st reading, as presented.
Motion: Fawks
Second: Harris
Mayor Rick Stacy read the caption of the ordinance.
Ayes: Fawks, Harris, Muller, Moffat, Evans, Stacy
Nays: None
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 13
Approved: 6-0 vote
Agenda Item #8-D. ZA 96-165. Plat Revision of Aubrey Estates
ZA 96-165, Plat Revision of the proposed Lots 4R1 and 4R2, Aubrey Estates, as recorded in
Volume 388-142, Page 41, P.R.T.C.T. and being approximately 6.854 acres. Current zoning is
"AG" Agricultural District. Applicant: Interwoven Design. Owners: Aubrey and Rosa Lee
Smith. SPIN Neighborhood #10.
According to Karen Gandy, Zoning Administrator, twelve (12) notices were sent to property
owners within the 200' notification area and no written responses have been received.
Ron Parks, 420 Bedford Euless Road, Bedford. Mr. Parks stated they will be happy to dedicate
an additional 5' for right-of-way.
Motion was made to approve ZA 96-165, subject to the Plat Review Summary No. 2, dated
February 14, 1997, including the incorporation of an additional 5' right-of-way dedication as
agreed to by the applicant.
Motion: Harris
Second: Fawks
Ayes: Harris Fawks, Muller, Moffat, Evans, Stacy
Nays: None
Approved: 6-0 vote
3, genda Item #8-E. Ordinance No. 671. 1st reading. Codification of Civil and Criminal
Ordinances to be known as Southlake City Code.
The City of Southlake Home Rule Charter, Article 31.5, Codification of Ordinances states: "The
City Manager as soon as practical after the adoption of this Charter may cause to be codified and
properly entered and published for public distribution or for anyone desiring same, the ordinances
of the City, which codification may be revised and updated annually.'
The City Manager stated since the City was in the process of updating many of the older, outdated
ordinances, as well as developing many new ordinances, we did not proceed with codification
until February, 1995 entering into a contract with Municipal Code Corporation. When it was
determined that Southlake had many more ordinances that was average for a city our size, the cost
of codification exceeded initial estimates. It was decided to proceed with codification in two parts.
Volume I would consist of the City Charter and the general ordinances of the City; Volume II
would consist of the land development regulations and would be published at a later date.
Councilmember Muller stated she is happy to see this happen as it is a requirement
of the City Charter. She thanked those who worked on making it happen.
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 14
Motion was made to approve Ordinance No. 671, 1st reading,
Motion: Muller
Second: Evans
Mayor Rick Stacy read the caption of the ordinance.
Ayes: Muller, Evans, Fawks, Moffat, Harris, Stacy
Nays: None
Approved: 6-0 vote
p, genda item gl0B. Initiation of contractual negotiations for facilities aereement for Town
rD ! mn
Curtis Hawk, City Manager, gave an overview on the efforts made to find a city hall site. He
stated materials provided will enable Council to look at the proposal submitted by Mr. Stebbins
and to evaluate its appropriateness for the new City HaI1/CISD Administrative building. Mr.
Hawk stated we have spoken with our financial advisors concerning the TIP (Tax Increment
Financing). Mr. Hawk stated we are at the point where some decisions need to be made about
the direction we are going to take. If the City Council is ready to choose the Town Center site
over the Richardsfrimarron site, we can go ahead and begin negotiations contingent upon certain
factors which we need to discuss.
PUBLIC COMMENTS:
Karen Cienki, 803 Shadow Glen Drive, Southlake. Ms. Cienki stated for those who have worked
on the Municipal Complex Committee for the past nine (9) months, only one City Councilmember
has asked any member of the committee a question. She commented that if City Hall goes on the
Fetchel site, 52,000 square feet will not be enough.
Councilmember Wayne Moffat stated everyone on the City Council appreciates the
work done by the Municipal Complex committee. The information will be used,
no matter which site is chosen by Council.
Rex Potter, 303 Waterford Court, Southlake. Mr. Potter stated he is disappointed after hearing
the discussions. He stated the committee was clearly directed to not get into the pro's and con's
of the sites. Mr. Potter stated he feels before the City Council makes a decision, he wants it to
go back to SPIN--get the citizens involved.
David Baltimore, 1368 Holland Hill, Southlake. Mr. Baltimore thanked the City Council for the
opportunity of working on the committee. It was a great experience and he feels Mr. Johnston
does not speak for other members of the committee.
Brian Stubbins, 904 Independence, Southlake. Mr. Stubbins introduced Henry Beck, as the
builder of the Town Center, stating Mr. Beck is responsible for Grapevine Mills, Texas Motor
Speedway, and many other projects in our area.
REGULAR CITY COUNCIL MINUTES OF THE 2/18/97 MEETING PAGE 15
Councilmembers present wanted it to be clear by voting to allow the City Manager
to initiate contractual negotiations for a facilities agreement with Southlake Venture
West, L.P. for the purpose of constructing a new City Hall/CISD Administration
Building in the Southlake Town Square Development. It does not mean the vote
is a final vote for the location of the new City Hall.
Motion was made to authorize the City Manager to initiate contractual negotiations for a facilities
agreement with Rialto for the purpose of constructing a new City HalI/CISD Administrative
Building in the Southlake Town Square Development.
Motion: Harris
Second: Evans
Ayes: Harris, Evans, Fawks, Muller, Moffat, Stacy
Nays: None
Approved: 6-0 vote
A_~enda Item//12. Adlournment
The meeting was [~I;lled by Mayor Rick Stacy at 11:20 p.m.
Iai '~ }~ ~ May~r l~,ick Stacy
Sandru L. LeGrand
City Secretary
d:\wp-ffies\cc'~2\ 18~97.min\sl
REGULAR CITY COUNCIL MENUTES OF THE 2/18/97 MEETING PAGE 16
City of Southlake, Texas
CITY COUNCIL MEETING
SIGN UP IF YOU WISH TO SPEAK DURING THE MEETING
DATE: o `14 "y7
NAME ADDRESS TELEPHONE AGENDA ITEM
li,
•
SunAmerica Securities Inc.
Kenneth Home Telephone (817)424 -9175
Registered Representative
1215 Ashmoore Ct.
Southlake, Texas, 70092 -4602
February 18, 1997
Mr. Jeff Dunklin
Editor/Publisher
Southlake Progress
P.O. Box 92521
Southlake, Texas 76092
Dear Mr. Dunklin:
Thank you and your paper and staff for it's unbiased reporting of events that occur in
Southlake.
Unfortunately there was an error of omission that could be cleared up. I believe it was
Keith Jackson of Espy, Houston, and Associates who told the P &Z Commission that the
Kimball Ave. site was chosen because it was not in a "prime area " of Southlake. It seems
that the most desirable location in Southlake for this substation is on 1709 and White's
Chapel Rd. There was no mention of any compunction about building 90 ft. transmission
lines there; so construction costs can't be an issue. The site is further removed from any
residential area than the proposed site on Kimball. There was no suggestion from anyone
on the commission that the petitioners "get with the neighbors and discuss" anything.
That's understandable. After all, we the Not Ready for Primetime residents have been
silently watching our city slowly turn its back on us for years We just didn't believe it.
The old story of the frog in tepid water comes to mind. The thought that our part of town
would not receive the same meticulous attention that has been afforded our newer
developments just never occurred to us.
From the Wal -Mart fiasco, to the Home - Depot /Kroger center, on down to our new City
Center ,or should I say City Edge, we have been effectively mooned.
To be fair, let's look at the other side of the ledger. North of 114 we do get :
A. A new gas station to service all the people going out to the new racetrack in
Perotville.
B. A lovely new over 2 acre electrical substation to help distribute power to our grand
City Edge. If they really needed this open facility, and they really looked for 3 years, how
is it they missed T.W. King Rd. It couldn't be the cost. They were willing to build on
1709, and there aren't any transmission lines there either.
C. Now comes Timarron; the people who said they knew and shared with us our vision of
an open office park arrangement as the way to complete the "Timarron Concept ". OOPS,
I forgot they sold out and now we have a new vision (with the same name to give it
RECD FEB 18
1997
credibility in our community); big box retail, fast food drive -ins, and 45 ft. walls along
Highland Ave. These will effectively wall in the communities that border Highland.
To get the picture all you have to do is go to the back wall of Kroger, back up 58 paces
and look up. Lovely isn't it? Watch our property values soar!
Southlake is in a unique position. We have an opportunity to fulfill the dreams and goals
of ALL of our citizens. We welcome and need commercial development; but it has to be
done in a manor that will enhance our city, not devalue it. We have in us the seeds of
greatness.Don't let outside interests' greed, avarice, and desire to cash in on Perotville
make us merely ordinary. We know that you are trustworthy and will keep faith with us
your friends, neighbors, and constituents.
sincerely,
Kenneth Horne
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City of Southlake, Texas
Certificates of Obligation
Series 1997
SOURCES & USES
Dated 02/15/1997 Delivered 03/18/1997
SOURCES OF FUNDS
Par Amount of Bonds 59,670,000.00
Accrued Interest from 02/15/1997 to 03/18/1997 44,730.70
TOTAL SOURCES S9,714,730.70
USES OF FUNDS
Original Issue Discount (OID) 28,832.20
Total Underwriter's Discount (0.775%) 74,942.50
Costs of Issuance 84,243.00
Gross Bond Insurance Premium ( 20.0 bp) 32,072.22
Deposit to Debt Service Fund 44,730.70
Rounding Amount 9,449,910.08
TOTAL USES S9,714,730.70
First Southwest Company FILE = SOUTHLKE -97 Co 2
Public Finance Department 2/18/1997 2:38 PM
City of Southlake, Texas
Certificates of Obligation
Series 1997
DEBT SERVICE SCHEDULE
DATE PRINCIPAL COUPON INTEREST TOTAL P +I FISCAL TOTAL
3/18/1997 - - - - -
8/15/1997 - - - - -
9/30/1997 - - - - -
2/15/1998 45,000.00 3.750% 487,971.25 532,971.25 -
8/15/1998 243,141.88 243,141.88
9/30/1998 - - - - 776,113.13
2/15/1999 310,000.00 4.000% 243,141.88 553,141.88 -
8/15/1999 - - 236,941.88 236,941.88 -
9/30/1999 - - - - 790,083.76
2/15/2000 325;000.00 4.100% 236,941.88 561,941.88
8/15/2000 - - 230,279.38 230,279.38 -
9/30/2000 - - - - 792,221.26
2/15/2001 340,000.00 4.250% 230,279.38 570,279.38 -
8/15/2001 - - 223,054.38 223,054.38 -
9/30/2001 - 793,333.76
2/15/2002 355,000.00 4.300% 223,054.38 578,054.38 -
8/15/2002 - - 215,421.88 215,421.88 -
9/30/2002 - - - - 793,476.26
2/15/2003 375,000.00 4.400% 215,421.88 590 -
8/15/2003 - 207,171.88 207,171.88
9/30/2003 - - - - 797,593.76
2/15/2004 390,000.00 4.500% 207,171.88 597,171.88 -
8/15/2004 - - 198,396.88 198,396.88 -
9/30/2004 - - - - 795,568.76
2/15/2005 410,000.00 4.600% 198,396.88 608,396.88
8/15/2005 - - 188,966.88 188,966.88 -
9/30/2005 - - - - 797,363.76
2/15/2006 435,000.00 4.700% 188,966.88 623,966.88 -
8/15/2006 - - 178,744.38 178,744.38 -
9/30/2006 - - 802,711.26
2/15/2007 455,000.00 4.800% 178,744.38 633,744.38 -
8/15/2007 - - 167,824.38 167,824.38 -
9/30/2007 - - - - 801,568.76
2/15/2008 480,000.00 5.000% 167,824.38 647,824.38 -
8/15/2008 - 155,824.38 155,824.38 -
9/30/2008 - - - - 803,648.76
2/15/2009 505,000.00 5.125% 155,824.38 660,824.38 -
8/15/2009 - - 142,883.75 142,883.75 -
9/30/2009 - - - - 803,708.13
2/15/2010 535,000:00 5.250% 142,883.75 677,883.75 -
8/15/2010 - - 128,840.00 128,840.00 -
9/30/2010 - - - - 806,723.75
2/15/2011 565,000.00 5.300% 128,840.00 693,840.00 -
8/15/2011 - - 113,867.50 113,867.50 -
9/30/2011 807,707.50
2/15/2012 595,000.00 5.300% 113,867.50 708,867.50 -
8/15/2012 - - 98,100.00 98,100.00 -
9/30/2012 - - - - 806,967.50
2/15/2013 630,000.00 5.400% 98,100.00 728,100.00 -
8/15/2013 - 81,090.00 81,090.00
9/30/2013 - - - - 809,190.00
2/15/2014 670,000.00 5.400% 81,090.00 751,090.00 -
8/15/2014 - - 63,000.00 63,000.00 -
9/30/2014 - - - - 814,090.00
2/15/2015 705,000.00'' 5.600% 63,000.00 768,000.00' -
8/15/2015 - - 43,260.00 43,260.00 -
9/30/2015 - - - - 811,260.00
2/15/2016 750,000.00 5.600% 43,260.00 793,260.00 -
8/15/2016 - - 22 22,260.00 -
9/30/2016 815,520.00 <!
First Southwest Company FILE = SOUTHLKE -97 Co 2
Public Finance Department 2/18/1997 2:38 PM
City of Southlake, Texas
Certificates of Obligation
Series 1997
DEBT SERVICE SCHEDULE
DATE PRINCIPAL COUPON INTEREST TOTAL P +I FISCAL TOTAL
2/15/2017 795,000.00 5.600% 22,260.00 817,260.00
8/15/2017 - - - - 9/30/2017 - - - - 817,260.00
TOTAL 9,670,000.00 - 6,366,110.11 16,036,110.11 -
YIELD STATISTICS
Accrued Interest from 02/15/1997 to 03/18/1997 44,730.70
Bond Year Dollars $120,940.00
Average Life 12.507 Years
Average Coupon 5.2638582%
Net Interest Cost (NIC) 5.3496650%
True Interest Cost (TIC) 5.3396720%
Bond Yield for Arbitrage Purposes 5.2901188%
All Inclusive Cost (AIC) 5.4437062%
IRS FORM 8038
Net Interest Cost 5.3063775%
Weighted Average Maturity 12.413 Years
First Southwest Company FILE = SOUTHLKE -97 Co 2
Public Finance Department 2/18/1997 2:38 PM
CITY OF SOUTHLAKE, TEXAS
Tax and Waterworks
and
Sewer System (Limited Pledge) Revenue
Certificates of Obligation
Series 1997
Pricing Summary
February 18, 1997
BancAmerica Securities, Inc.
THE CITY OF SOUTHLAKE, TEXAS
Table of Contents
SECTION TAB
Issue A
- Preliminary Official Statement
Debt Structure B
- Sources and Uses of Funds
- Debt Service Schedule
Pricing Details C
- Initial Pricing Wire
- Final Pricing Wire
Investment Services Research Report D
Daily Market Summary E
Articles F
PRELIMINARY OFFICIAL STATEMENT
CD CD
0 Y Dated February 10, 1997
Ratings:
`s L Moody's: Applied For
a " = S &P: Applied For
m (5) t See ( "Other Information
C
°
m ' NEW ISSUE - Book- Entry -Only Ratings" herein)
�
° In the opinion of Bond Counsel, interest on the Certificates will be excludable from gross income for federal income tax
° purposes under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum
° tax on corporations.
0 o3
N o THE CERTIFICATES WILL NOT BE DESIGNATED AS "QUALIFIED TAX - EXEMPT OBLIGATIONS" FOR FINANCIAL
S = INSTITUTIONS
° N
t ° $9,670,000
E o Y CITY OF SOUTHLAKE, TEXAS
° (Tarrant and Denton Counties)
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
s CERTIFICATES OF OBLIGATION, SERIES 1997
° o Due: Februar 15 as shown on inside cover
°; � Dated Date: February 15,1997 Y
ra PAYMENT TERMS ... Interest on the $9,670,000 City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited
Q Pledge) Revenue Certificates of Obligation, Series 1997 (the "Certificates ") will accrue from the dated date shown above, will
E ° o be payable February 15 and August 15 of each year commencing February 15, 1998, and will be calculated on the basis of a
= 360 -day year consisting of twelve 30 -day months. The definitive Certificates will be initially registered and delivered only to
V ( Cede & Co., the nominee of The Depository Trust Company ( "DTC ") pursuant to the Book - Entry-Only System described
herein. Beneficial ownership of the Certificates may be acquired in denominations of $5,000 or integral multiples thereof. No
c o, physical delivery of the Certificates will be made to the owners thereof. Principal of, premium, if any, and interest on the
° ° C ertificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to
L r 2 the participating members of DTC for subsequent payment to the beneficial owners of the Certificates. See "The Certificates -
~ E o Book- Entry-Only System" herein. The initial Paying Agent/Registrar is Texas Commerce Bank N.A., Dallas, Texas (see "The
z Certificates - Paying Agent/Registrar").
)
— 3 AUTHORITY FOR ISSUANCE ... The Certificates are issued pursuant to the Constitution and general laws of the State of Texas,
E 5 12 (the "State ") particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of
o o ° 1971), as amended, and constitute direct obligations of the City of Southlake, Texas (the "City"), payable from a combination of
z (i) the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property
S within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Waterworks and Sewer
E o System, as provided in the ordinance authorizing the Certificates (the "Ordinance ") (see "The Certificates - Authority for
E 3 Issuance ").
°a
N PURPOSE ... Proceeds from the sale of the Certificates will be used for (i) improvements and extensions to water and sewer
h facilities; (ii) street and drainage improvements; (iii) improvements to municipal buildings; (iv) the purchase of materials,
equipment and machinery for various city departments; and (v) paying the costs associated with the issuance of the Certificates.
S
=
x a
E a> SEE MATURITY SCHEDULE ON REVERSE OF THIS PAGE
°
C
0 0
C 0
REDEMPTION OPTION ... The City reserves the right, at its option, to redeem Certificates having stated maturities on and after
S 3 February 15, 2007, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2006 or
E — any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Certificates - Optional
o Redemption ").
g_
-= a) LEGALITY ... The Certificates are offered for delivery when, as and if issued and received by the Underwriters and subject to
the approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaworski L.L.P., Bond Counsel, Dallas,
Texas (see Appendix C, "Form of Bond Counsel's Opinion "). Certain legal matters will also be passed upon for the Underwriters
by McCall, Parkhurst & Horton L.L.P., Dallas, Texas.
E a ; DELIVERY ... It is expected that the Certificates will be available for delivery through The Depository Trust Company on March
18, 1997.
E
° a) d
O tn t
L, T _ BANCAMERICA SECURITIES, INC.
O �? °
_
E
CD CD
NOIN
y ESTRADA HINOJOSA & COMPANY, INC.
Na to
41111 -
MATURITY SCHEDULE
Price Price
or or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$ 45,000 1998 $ 480,000 2008 r
310,000 1999 505,000 2009
325,000 2000 535,000 2010
340,000 2001 565,000 2011
355,000 2002 595,000 2012 '
375,000 2003 630,000 2013
390,000 2004 670,000 2014
410,000 2005 705,000 2015
435,000 2006 750,000 2016
455,000 2007 795,000 2017
(Accrued Interest from February 15, 1997 to be added)
row
pot
2
This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the
solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale.
No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other
than those contained in this Official Statement, and, if given or made, such other information or representations must not be
relied upon.
The information set forth herein has been obtained from the City and other sources believed to be reliable, but such information
is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the Financial
Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact,
and no representation is made as to the correctness of such estimates and opinions, or that they will be realized.
The information and expressions of opinion contained herein 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.
TABLE OF CONTENTS
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE
OFFICIAL STATEMENT SUMMARY 4 PUBLIC FUNDS IN TEXAS 25
CITY OFFICIALS, STAFF AND CONSULTANTS 6 LEGAL OPINIONS AND No- LITIGATION CERTIFICATE.. 25
ELECTED OFFICIALS 6 AUTHENTICITY OF FINANCIAL DATA AND OTHER
SELECTED ADMINISTRATIVE STAFF 6 INFORMATION 26
CONSULTANTS AND ADVISORS 6 CONTINUING DISCLOSURE OF INFORMATION 26
FINANCIAL ADVISOR 27
INTRODUCTION 7 UNDERWRITING 27
THE CERTIFICATES 7 APPROVAL OF OFFICIAL STATEMENT 27
TAX INFORMATION 11 APPENDICES
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL GENERAL INFORMATION REGARDING THE CITY A
OBLIGATION DEBT 13 EXCERPTS FROM THE ANNUAL FINANCIAL REPORT .. B
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY FORM OF BOND COUNSELS OPINION C
CATEGORY 14
TABLE 3 - VALUATION AND GENERAL OBLIGATION The cover page hereof, this page, the appendices included
DEBT HISTORY 15 herein and any addenda, supplement or amendment hereto,
TABLE 4 - TAX RATE, LEVY AND COLLECTION are part of the Official Statement.
HISTORY 15
TABLE 5 - TEN LARGEST TAXPAYERS 15
TABLE 6 - TAX ADEQUACY 16
TABLE 7 - ESTIMATED OVERLAPPING DEBT 16
DEBT INFORMATION 17
TABLE 8 - PRO -FORMA GENERAL OBLIGATION DEBT
SERVICE REQUIREMENTS 17
TABLE 9 - INTEREST AND SINKING FUND BUDGET
PROJECTION 17
TABLE 10 - COMPUTATION OF SELF - SUPPORTING
DEBT 17
TABLE 11 - OTHER OBLIGATIONS 18
FINANCIAL INFORMATION 19
TABLE 12 - GENERAL FUND REVENUES AND
EXPENDITURE HISTORY 19
TABLE 13 - MUNICIPAL SALES TAX HISTORY 20
TABLE 14 - CURRENT INVESTMENTS 22
TAX MATTERS 23
OTHER INFORMATION 25
RATINGS 25
LITIGATION 25
REGISTRATION AND QUALIFICATION OF CERTIFICATES
FOR SALE 25
3
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions contained or incorporated in this
Official Statement. The offering of the Certificates to potential investors is made only by means of this entire Official Statement.
No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official
Statement.
THE CITY The City of Southlake is a political subdivision and municipal corporation of the State,
located in Tarrant and Denton Counties, Texas. The City covers approximately 23 square
miles (see "Introduction - Description of City").
THE CERTIFICATES The Certificates are issued as $9,670,000 Tax and Waterworks and Sewer System (Limited
Pledge) Revenue Certificates of Obligation, Series 1997. The Certificates are issued as serial
certificates maturing February 15, 1998 through February 15, 2017 (see "The Certificates -
Description of the Certificates ").
PAYMENT OF INTEREST Interest on the Certificates accrues from February 15, 1997, and is payable February 15, 1998,
and each February 15 and August 15, thereafter until maturity or prior redemption (see "The
Certificates - Description of the Certificates" and "The Certificates - Optional Redemption ").
AUTHORITY FOR ISSUANCE The Certificates are issued pursuant to the general laws of the State, particularly Subchapter C
of Chapter 271, Texas Local Govemment Code (the Certificate of Obligation Act of 1971), as
amended, and an Ordinance passed by the City Council of the City (see "The Certificates -
Authority for Issuance ").
SECURITY FOR THE
CERTIFICATES The Certificates constitute direct obligations of the City, payable from a combination of (i) the
levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law,
on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus
net revenues of the City's Waterworks and Sewer System (see "The Certificates - Security and
Source of Payment ").
OPTIONAL REDEMPTION The City reserves the right, at its option, to redeem Certificates having stated maturities on
and after February 15, 2007, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof, on February 15, 2006, or any date thereafter, at the par value thereof
plus accrued interest to the date of redemption (see "The Certificates - Optional
Redemption ").
TAX EXEMPTION In the opinion of Bond Counsel, the interest on the Certificates will be excludable from gross
income for federal income tax purposes under existing law, subject to the matters described
under the caption "Tax Matters" herein, including the alternative minimum tax on
corporations.
USE OF PROCEEDS Proceeds from the sale of the Certificates will be used for (i) improvements and extensions to
water and sewer facilities; (ii) street and drainage improvements; (iii) improvements to
municipal buildings; (iv) the purchase of materials, equipment and machinery for various city
departments; and (v) paying the costs associated with the issuance of the Certificates.
RATINGS The presently outstanding tax supported debt of the City is rated "A" by Moody's Investors
Service, Inc. ( "Moody's ") and "A" by Standard & Poor's Ratings Services, A Division of The
McGraw -Hill Companies, Inc. ( "S &P "). The City also has twelve issues outstanding which
are rated "Aaa" by Moody's and "AAA" by S &P through insurance by various commercial
insurance companies. Application for contract ratings on the Certificates have been made to
Moody's and S &P (see "Other Information - Ratings ").
4
BOOK - ENTRY -ONLY
SYSTEM The definitive Certificates will be initially registered and delivered only to Cede & Co., the
nominee of DTC pursuant to the Book - Entry-Only System described herein. Beneficial
ownership of the Certificates may be acquired in denominations of $5,000 or integral
multiples thereof. No physical delivery of the Certificates will be made to the beneficial
owners thereof. Principal of, premium, if any, and interest on the Certificates will be payable
by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so
paid to the participating members of DTC for subsequent payment to the beneficial owners of
the Certificates (see "The Certificates - Book- Entry-Only System ") .
PAYMENT RECORD The City has never defaulted in payment of its general obligation tax debt.
SELECTED FINANCIAL INFORMATION
Ratio
G.O.
Fiscal Per Capita Per Tax Debt
Year Estimated Taxable Taxable General Capita to Taxable % of
Ended City Assessed Assessed Obligation G. 0. Tax Assessed Total Tax
9/30 Population Valuation Valuation Tax Debt Debt Valuation Collections
1993 8,700 619,564,581 71,214 11,186,137 1,286 1.81% 104.41%
1994 10,400 685,069,698 65,872 18,076,137 1,738 2.64% 103.88%
1995 12,750 821,386,985 64,423 24,196,137 1,898 2.95% 102.49%
1996 (2) 14,195 1,064,449,048 74,988 25,946,137 1,828 2.44% 101.87%
1997 (3) 16,235 1,309,488,163 80,658 34,561,137 2,129 2.64% N/A
(1) Source: North Central Texas Council of Governments and the City Staff.
(2) Preliminary figures furnished by the City Staff.
(3) Projected. Includes the Certificates.
GENERAL FUND CONSOLIDATED STATEMENT SUMMARY
Fiscal Year Ended September 30
1996 0) 1995 1994 1993 1992
Beginning Balance $ 1,689,295 $ 2,059,031 $ 1,521,101 $ 1,136,448 $ 875,223
Total Revenue 8,474,051 6,375,681 5,587,324 4,678,980 3,907,393
Total Expenditures 8,166,749 7,040,649 5,774,667 4,453,773 3,836,342
Net Transfers 308,866 318,860 725,273 159,446 190,174
Other Miscellaneous Adjust. - (23,628) - - -
Net Funds Available 616,168 (369,736) 537,930 384,653 261,225
Ending Balance $ 2,305,463 $ 1,689,295 $ 2,059,031 $ 1,521,101 $ 1,136,448
(1) Preliminary, unaudited figures furnished by the City Staff.
For additional information regarding the City, please contact:
Mr. Curtis E. Hawk Mr. James S. Sabonis
Ms. Lou Ann Heath Mr. Jeff W. Robert
City of Southlake or First Southwest Company
667 N. Carroll Avenue 1700 Pacific Avenue
Southlake, Texas 76092 Suite 500
(817) 481 -5581 Dallas, Texas 75201
(214) 953 -4000
5
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
Length of Term
City Council Service Expires Occupation
Rick Stacy 1 Year 5 / 97 Owner, Furniture Store
Mayor
W. Ralph Evans 1 Year 5 / 99 Insurance
Mayor Pro Tem
Pamela Muller 2 Years 5 / 98 Community Volunteer
Deputy Mayor Pro Tem
Wayne Moffat 1 Year 5 / 97 Firefighter
Councilmember
David Harris 1 Year 5 / 98 Attorney
Councilmember
Gary Fawks 1 Year 5 / 98 Sales
Councilmember
Scott Martin 1 Year 5 / 99 Architect
Councilmember
SELECTED ADMINISTRATIVE STAFF
Length of
Name Position Service
Curtis E. Hawk City Manager 8 Years
Lou Ann Heath Director of Finance 6 Years
Sandra L. LeGrand City Secretary 19 Years
CONSULTANTS AND ADVISORS
Auditors Weaver and Tidwell L.L.P.
Dallas, Texas
Engineers Cheatham & Associates
Arlington, Texas
Bond Counsel Fulbright & Jaworski L.L.P.
Dallas, Texas
Financial Advisor First Southwest Company
Dallas, Texas
6
OFFICIAL STATEMENT
RELATING TO
$9,670,000
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION, SERIES 1997
INTRODUCTION
This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of
$9,670,000 City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 1997. Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the
Ordinance to be adopted on the date of sale of the Certificates which will authorize the issuance of the Certificates, except as
otherwise indicated herein.
There follows in this Official Statement descriptions of the Certificates and certain information regarding the City and its
finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to
each such document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company,
Dallas, Texas.
DESCRIPTION OF THE CITY ... The City is a political subdivision and municipal corporation of the State, duly organized and
existing under the laws of the State, including the City's Home Rule Charter. The City first adopted its Home Rule Charter in
1987. The City operates under a Council/Manager form of government with a City Council comprised of the Mayor and six
Councilmembers who are elected for staggered three -year terms. The City Council formulates operating policy for the City
while the City Manager is the chief administrative officer. Some of the services that the City provides are: public safety (police
and fire protection), highways and streets, electric, water and sanitary sewer utilities, health and social services,
culture- recreation, public transportation, public improvements, planning and zoning, and general administrative services. The
1990 Census population for the City was 7,065, while the estimated 1997 population is 16,235. The City covers approximately
23 square miles.
THE CERTIFICATES
DESCRIPTION OF THE CERTIFICATES ... The Certificates are dated February 15,1997, and mature on February 15 in each of the
years and in the amounts shown on the cover page hereof. Interest will be computed on the basis of a 360 -day year of twelve 30-
day months, and will be payable on February 15 and August 15, commencing February 15, 1998. The definitive Certificates
will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered
and delivered only to Cede & Co., the nominee of The Depository Trust Company ( "DTC ") pursuant to the Book - Entry-Only
System described herein. No physical delivery of the Certificates will be made to the owners thereof. Principal of, premium,
if any, and interest on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make
distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the
Certificates. See "Book- Entry-Only System" herein.
AUTHORITY FOR ISSUANCE . ..The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas,
particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as amended,
and the Ordinance.
SECURITY AND SOURCE OF PAYMENT ... All taxable property within the City is subject to a continuing direct annual ad valorem tax
levied by the City sufficient to provide for the payment of principal of and interest on all obligations payable in whole or in part from
ad valorem taxes, which tax must be levied within limits prescribed by law. Additionally, the Certificates are payable from and
secured by a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Waterworks and Sewer System, as provided
in the Ordinance authorizing the Certificates.
TAX RATE LIMITATION ... All taxable property within the City is subject to the assessment, levy and collection by the City of a
continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax
debt within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its
maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home Rule Charter of
the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed Valuation.
OPTIONAL REDEMPTION ... The City reserves the right, at its option, to redeem Certificates having stated maturities on and
after February 15, 2007, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15,
2006, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the
Certificates are to be redeemed, the City may select the maturities of Certificates to be redeemed. If less than all the Certificates
7
of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Certificates are in Book - Entry-Only form)
shall determine by lot the Certificates, or portions thereof, within such maturity to be redeemed. If a Certificate (or any portion
of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such
Certificate (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest
thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and
accrued interest thereon are held by the Paying Agent/Registrar on the redemption date.
NOTICE OF REDEMPTION ... Not less than 30 days prior to a redemption date for the Certificates, the City shall cause a notice of
redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Certificates to be
redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying
Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO
MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE
REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE CERTIFICATES
CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND
NOTWITHSTANDING THAT ANY CERTIFICATE OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR
PAYMENT, INTEREST ON SUCH CERTIFICATE OR PORTION THEREOF SHALL CEASE TO ACCRUE.
BOOK - ENTRY -ONLY SYSTEM . . . The Depository Trust Company ( "DTC "), New York, New York, will act as securities
depository for the Certificates. The Certificates will be issued as fully- registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully- registered certificate will be issued for each maturity of the Certificates in the aggregate
principal amount of each such maturity and will be deposited with DTC.
DTC is a limited - purpose trust company organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning
of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants ( "Direct Participants ") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The Rules
applicable to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of Certificates under the DTC system must be made by or through DTC Participants, which will receive a credit for
such purchases on DTC's records. The ownership interest of each actual purchaser of each Certificate ("Beneficial Owner ") is in
turn to be recorded on the Direct or Indirect Participants' records. Beneficial Owners will not receive written confirmation from
DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interest in the Certificates are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Certificates, except in the event that use of the book -entry system described herein is
discontinued.
To facilitate subsequent transfers, all Certificates deposited by Direct Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Certificates with DTC and their registration in the name of Cede & Co. effect
no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Certificates; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Certificates are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject
to any statutory or regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Certificates. Under its usual procedures, DTC mails an
Omnibus Proxy to the City as soon as possible after the Record Date (hereinafter defined). The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose accounts the Certificates are credited on the Record Date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Certificates will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered
8
in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City,
subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to
DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC,
and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Certificates at any time by giving
reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained,
Certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository).
In that event, Certificates will be printed and delivered.
Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that
while the Certificates are in the Book - Entry-Only System, references in other sections of this Official Statement to registered
owners should be read to include the person for which the Participant acquires an interest in the Certificates, but (i) all rights of
ownership must be exercised through DTC and the Book - Entry-Only System, and (ii) except as described above, notices that are
to be given to registered owners under the Ordinance will be given only to DTC.
Information concerning DTC and the Book - Entry-Only System has been obtained from DTC and is not guaranteed as to
accuracy or completeness by, and is not to be construed as a representation by the City or the Purchasers.
PAYING AGENT /REGISTRAR . . . The initial Paying Agent/Registrar is Texas Commerce Bank N.A., Dallas, Texas. In the
Ordinance, the City retains the right to replace the Paying Agent /Registrar. The City covenants to maintain and provide a Paying
Agent/Registrar at all times until the Certificates are duly paid and any successor Paying Agent/Registrar shall be a commercial
bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to
serve as and perform the duties and services of Paying Agent/Registrar for the Certificates. Upon any change in the Paying
Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each registered owner
of the Certificates by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying
Agent/Registrar.
TRANSFER, EXCHANGE AND REGISTRATION . . In the event the Book - Entry-Only System should be discontinued, the
Certificates may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation
and surrender thereof to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to
the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration,
exchange and transfer. Certificates may be assigned by the execution of an assignment form on the respective Certificates or by
other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Certificates will be delivered by the
Paying Agent/Registrar, in lieu of the Certificates being transferred or exchanged, at the principal office of the Paying
Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the
extent possible, new Certificates issued in an exchange or transfer of Certificates will be delivered to the registered owner or
assignee of the registered owner in not more than three business days after the receipt of the Certificates to be canceled, and the
written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in
form satisfactory to the Paying Agent /Registrar. New Certificates registered and delivered in an exchange or transfer shall be in
any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Certificates surrendered for
exchange or transfer. See "Book- Entry-Only System" herein for a description of the system to be utilized initially in regard to
ownership and transferability of the Certificates. Neither the City nor the Paying Agent/Registrar shall be required to transfer or
exchange any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided,
however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a
Certificate.
RECORD DATE FOR INTEREST PAYMENT ... The record date ( "Record Date ") for the interest payable on the Certificates on any
interest payment date means the close of business on the last business day of the preceding month.
In the event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment
of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the
past due interest ( "Special Payment Date ", which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of
a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day
next preceding the date of mailing of such notice.
BONDHOLDERS' REMEDIES ... The Ordinance does not establish specific events of default with respect to the Certificates.
Under State law there is no right to the acceleration of maturity of the Certificates upon the failure of the City to observe any
covenant under the Ordinance. Although a registered owner of Certificates could presumably obtain a judgment against the City
if a default occurred in the payment of principal of or interest on any such Certificates, such judgment could not be satisfied by
9
execution against any property of the City. Such registered owner's only practical remedy, if a default occurs, is a mandamus or
mandatory injunction proceeding to compel the City to levy, assess and collect an annual ad valorem tax sufficient to pay
principal of an interest on the Certificates as it becomes due. The enforcement of any such remedy may be difficult and time
consuming and a registered owner could be required to enforce such remedy on a periodic basis. The Ordinance does not
provide for the appointment of a trustee to represent the interests of the bondholders upon any failure of the City to perform in
accordance with the terms of the Ordinance, or upon any other condition. Furthermore, the City is eligible to seek relief from its
creditors under Chapter 9 of the U.S. Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest
represented by a specifically pledged source of revenues, the pledge of taxes in support of a general obligation of a bankrupt
entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision
that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or bondholders of
an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from
creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be
heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary
powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all
opinions relative to the enforceability of the Ordinance and the Certificates are qualified with respect to the customary rights of
debtors relative to their creditors.
USE OF CERTIFICATE PROCEEDS ... Proceeds from the sale of the Certificates are expected to be expended as follows:
Certificates
Deposit to Project Fund $
Deposit to Interest & Sinking Fund
Underwriters Discount
Original Issue Discount
Bond Insurance
Other Costs of Issuance
Total $
10
TAX INFORMATION
AD VALOREM TAx LAW ... The appraisal of property within the City is the responsibility of the Tarrant County Appraisal District
(the "Appraisal District "). Excluding agricultural and open -space land, which may be taxed on the basis of productive capacity, the
Appraisal District is required under the Property Tax Code to appraise all property within the Appraisal District on the basis of 100%
of its market value and is prohibited from applying any assessment ratios. The value placed upon property within the Appraisal
District is subject to review by an Appraisal Review Board, consisting of three members appointed by the Board of Directors of the
Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three
years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of
property within the City by petition filed with the Appraisal Review Board.
Reference is made to the V.T.C.A., Property Tax Code, for identification of property subject to taxation; property exempt or which
may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and
limitations applicable to the levy and collection of ad valorem taxes.
Article VIII of the State Constitution ( "Article VIII ") and State law provide for certain exemptions from property taxes, the valuation
of agricultural and open -space lands at productivity value, and the exemption of certain personal property from ad valorem taxation.
Under Section 1 -b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant: (1) An
exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the
disabled from all ad valorem taxes thereafter levied by the political subdivision; (2) An exemption of up to 20% of the market value
of residence homesteads. The minimum exemption under this provision is $5,000.
State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or
children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal
property with the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000.
Article VIII provides that eligible owners of both agricultural land (Section 1 -d) and open -space land (Section 1 -d -1), including
open -space land devoted to farm or ranch purposes or open -space land devoted to timber production, may elect to have such property
appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1 -d
and 1 -d -1.
Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body
of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation.
Article VIII, Section 1-j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as
goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication.
Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal.
The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones, under which the
tax values on property in the zone are "frozen" at the value of the property at the time of creation of the zone. The City also may
enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to
construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value
attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up to 10
years.
EFFECTIVE TAX RATE AND ROLLBACK TAX RATE . . . By each September 1 or as soon thereafter as practicable, the City
Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for
funding of maintenance and operation expenditures, and (2) a rate for debt service.
Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate ". The
City Council may not adopt a tax rate that exceeds the lower of the rollback tax rate or 103% of the effective tax rate until it has
held a public hearing on the proposed increase following notice to the taxpayers and otherwise complied with the Property Tax
Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election
be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate.
"Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values
(adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included
in this year's taxable values.
"Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's
values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted)
divided by the anticipated tax collection rate.
11
The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize
an additional one -half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the
rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year.
Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the
calculation of the various defined tax rates.
PROPERTY ASSESSMENT AND TAX PAYMENT ... Property within the City is generally assessed as of January 1 of each year.
Business inventory may, at the option of the taxpayer, be assessed as of September. Taxes become due October 1 of the same
year, and become delinquent on February 1 of the following year. Taxpayers 65 years old or older are permitted by State law to
pay taxes on homesteads in four installments with the first due on February 1 of each year and the final installment due on
August 1.
PENALTIES AND INTEREST ... Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows:
Cumulative Cumulative
Month Penalty Interest Total
February 6% 1% 7%
March 7 2 9
April 8 3 11
May 9 4 13
June 10 5 15
July 12 6 18
After July, penalty remains at 12 %, and interest increases at the rate of 1% each month. In addition, if an account is delinquent
in July, a 15% attorney's collection fee is added to the total tax penalty and interest charge. Under certain circumstances, taxes
which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no
additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels,
pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against
an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities,
including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents
governmental units from foreclosing on property and prevents liens for post - petition taxes from attaching to property and
obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many
cases post - petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court.
CITY APPLICATION OF TAX CODE ... The City grants an exemption to the market value of the residence homestead of persons
65 years of age or older of $50,000, the disabled are also granted an exemption of $50,000.
The City has not granted any party the additional exemption of up to 20% of the market value of residence homesteads;
minimum exemption of $5,000.
See Table 1 for a listing of the amounts of the exemptions described above.
Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt.
The City does not tax nonbusiness personal property; and Tarrant County collects taxes for the City.
The City does allow permit split payments of taxes, and discounts for early payment of taxes are not allowed.
The City does not tax freeport property.
The City does not collect the additional one -half cent sales tax for reduction of ad valorem taxes.
The City has adopted a tax abatement policy, and reviews applications for abatements on a case by case basis.
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TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT
1996/97 Market Valuation Established by Tarrant County Appraisal District $1,376,438,373
(excluding totally exempt property)
Less Exemptions/Reductions at 100% Market Value:
Residential Homestead Exemptions $12,469,593
Disabled Veterans 421,500
Agricultural Use Reductions 54,059,117 66,950,210
1996/97 Taxable Assessed Valuation $ 1,309,488,163
General Obligation Debt Payable from Ad Valorem Taxes (as of 12/31/90
General Obligation Debt $25,946,137
The Certificates 9,670,000
General Obligation Debt Payable from Ad Valorem Taxes $35,616,137
Less: Self Supporting Debt (2)
Water and Sewer System General Obligation Debt $5,510,000
Net General Obligation Debt Payable from Ad Valorem Taxes $30,106,137
General Obligation Interest and Sinking Fund as of 1/31/97 $1,261,997
Ratio General Obligation Tax Debt to Taxable Assessed Valuation 2.30%
1997 Estimated Population - 16,235
Per Capita Taxable Assessed Valuation - $80,658
Per Capita Net General Obligation Debt Payable from Ad Valorem Taxes - $1,854
(1) The above statement of indebtedness does not include currently outstanding $366,000 revenue bonds, as these bonds are
payable solely from the net revenues of the Waterworks and Sewer System (the "System "), as defined in the ordinances
authorizing the bonds.
(2) General obligation debt in the amounts shown for which repayment is provided from revenues of the respective revenue
systems. The amount of self supporting debt is based on the percentages of revenue support as shown in Table 10. It is the
City's current policy to provide these payments from respective system revenues; this policy is subject to change in the future.
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TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY
Taxable Appraised Value for Fiscal Year Ended September 30,
1997 ( 2) 1996
1995
of %of %ot
Category Amount Total Amount Total Amount Total
Real, Residential, Single - Family $ 927,115,146 66.91% - $ - W7 66.60% $ 577,696,109 64.37%
Real, Residential, Multi - Family 658,700 0.05% 561,500 0.05% 614,200 0.07%
Real, Vacant Lots/Tracts 85,420,513 6.16% 55,009,903 4.81% 57,685,194 6.43%
Real, Acreage (Land Only) 104,823,268 7.56% 100,812,646 8.82% 91,554,754 10.20%
Real, Farm and Ranch Improvements 35,600,458 2.57% 34,673,059 3.03% 33,596,522 3.74%
Real, Commercial 85,587.491 6.18% 66,209,220 5.79% 54,294,403 6.05%
Real, Industrial 3,028,765 0.22% 2,940,720 0.26% 2,917,596 0.33%
Real and Tangible Personal, Utilities 24,694,474 1.78% 21,306,442 1.86% 19,493,995 2.17%
Tangible Personal, Commercial 75,433,951 5.44% 70,206,281 6.14% 46,391,044 5.17%
Tangible Personal, Industrial 2,293,240 0.17% 2,173,982 0.19% 2.890,595 0.32%
Tangible Personal, Mobile Homes 284,206 0.02% 338,465 0.03% 368,436 0.04%
Real Property, Inventory 40,755,167 2.94% 27,416,400 2.40% 9,999,760 1.11%
Total Appraised Value Before Exemptions $ 1,385,695,379 100.00% $ 1,142,672,795 100.00% $ 897,502.608 100.00%
Less: Total Exemptions/Reductions 76,207,216 85,058,184 75.165,337
Taxable Assessed Value $ 1,309,488,163 $ 1,057,614,611 $ 822,337,271
Taxable Appraised Value for Fiscal Year Ended September 30,
1994 1993
%of %of
Category Amount Total Amount Total
Real, Residential, Single- Family $ 426,027,224 55.54% $ 351,986,570 50.14%
Real, Residential, Multi - Family 658,833 0.09% 658,833 0.09%
Real, Vacant Lots/Tracts 45,148,647 5.89% 56,672.267 8.07%
Real, Acreage (Land Only) 108,806,557 14.18% 117,937,875 16.80%
Real, Farm and Ranch Improvements 30,412,430 3.96% 32,478,408 4.63%
Real, Commercial 58,096,250 7.57% 54,841,649 7.81%
Real, Industrial 2,741,714 0.36% 3,320,610 0.47%
Real and Tangible Personal, Utilities 18,153,968 2.37% 13,867,224 1.98%
Tangible Personal, Commercial 51,498,065 6.71% 53,675,164 7.65%
Tangible Personal, Industrial 3,079,770 0.40% 3,262,097 0.46%
Tangible Personal, Mobile Homes 455,118 0.06% 448,175 0.06%
Real Property, Inventory 22,007,436 2.87% 12,806,222 1.82%
Total Appraised Value Before Exemptions $ 767,086,012 100.00% $ 701,955,094 100.00%
Less: Total Exemptions/Reductions 84,528,251 86,017,191
Taxable Assessed Value $ 682,557,761 $ 615,937,903
NOTE: Valuations shown are certified taxable assessed values reported by the Tarrant County Appraisal District to the State
Controller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and
the Appraisal District updates records.
(1) Previous years as stated on the State Property Tax Board Report at the beginning of the Tax Year. Any difference between ..
these figures and the final Taxable Assessed Valuations are due to adjustments and corrections to the respective tax rolls.
(2) Taxable Assessed Valuation includes cases in arbitration equal to $9,257,006.
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TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY
G.O. Ratio of
Fiscal Taxable Tax Debt G.O. Tax Debt G.O. Tax
Year Taxable Assessed Outstanding to Taxable Debt
Ended Estimated Assessed Valuation at End Assessed Per
9/30 Population Valuation (2) Per Capita of Year Valuation Capita
1993 8,700 $619,564,581 (3) $71,214 $11,186,137 1.81% $1,286
1994 10,400 685,069,698 (3) 65,872 18,076,137 2.64% 1,738
1995 12,750 821,386,985 64,423 24,196,137 2.95% 1,898
1996 14,195 1,064,449,048 74,988 25,946,137 2.44% 1,828
1997 16,235 1,309,488,163 80,658 34,561,137 (4) 2.64% 2,129
(1) Source: North Central Texas Council of Governments and City Staff.
(2) As reported by the Tarrant County Appraisal District on the City's Annual State Property Tax Board Reports; subject to
change during ensuing year.
(3) Revaluation.
(4) Projected. Includes the Certificates.
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY
Fiscal Interest
Year and
Ended Tax General Sinking % Current % Total
9/30 Rate Fund Fund Tax Levy Collections Collections
1993 $ 0.4550 $ 0.3223 $ 0.1327 3,914,196 97.74% 104.41%
1994 0.4550 0.3013 0.1537 3,077,688 99.17% 103.88%
1995 0.4490 0.2729 0.1762 3,688,030 98.64% 102.49%
1996 0.4220 0.2629 0.1592 4,526,038 98.06% 101.87%
1997 (1) 0.4220 0.2496 0.1724 5,517,334 49.82% (2) 51.29% (2)
(1) Preliminary figures furnished by the City Staff.
(2) Collections for part year only, through December, 1996.
TABLE 5 - TEN LARGEST TAXPAYERS
1996 / 97 % of Total
Taxable Taxable
Assessed Assessed
Name of Taxpayer Nature of Property Valuation Valuation
MTP -IBM Phase II & III JV Office Building $ 23,828,848 1.82 %
IBM Corporation Office Buildings 19,799,338 1.51
Walmart Stores, Inc. Retail 14,495,445 1.11
Texas Utilities Electric Electric Utility 12,478,750 0.95
Anderson Industries, Inc. Manufacturer 9,523,712 0.73
T & M Southlake Dev. Co. Real Estate 5,805,244 0.44
Crossroads Square Ltd. Retail 5,405,353 0.41
Darr Equipment Co. Office Buildings 4,800,000 0.37
Southlake JV Real Estate 4,270,000 0.33
General Telephone Co. of SW Telephone Utility 4,121,459 0.31
$ 104,528,149 7.98 %
GENERAL OBLIGATION DEBT LIMITATION ... No general obligation debt limitation is imposed on the City under current State
law or the City's Home Rule Charter (see "Tax Rate Limitation ").
15
TABLE 6 - TAX ADEQUACY
1997 Principal and Interest Requirements $2,020,293
$0.15584 Tax Rate at 99% Collection Produces $2,020,293
Average Annual Principal and Interest Requirements, 1997 -2017 $2,108,847
$0.16270 Tax Rate at 99% Collection Produces $2,109,232
Maximum Principal and Interest Requirements, 1998 $2,824,292
$0.21786 Tax Rate at 99% Collection Produces $2,824,322
TABLE 7 - ESTIMATED OVERLAPPING DEBT
Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities
on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures.
This statement of direct and estimated overlapping ad valorem tax bonds ( "Tax Debt ") was developed from information
contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts
relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person
should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued
additional bonds since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of
additional bonds, the amount of which cannot be determined. The following table reflects the estimated share of overlapping
Tax Debt of the City.
City's
1996/97 Overlapping
Taxable 1996/97 Total Estimated G.O.
Assessed Tax G.O. Tax % Tax Debt
Taxing Jurisdiction Value Rate Debt Applicable As of 12/31/96
City ofSouthlake $1,309,488,163 0.4220 $35,616,137 (I 100.00% $35,616,137
Denton County 13,127,273,682 0.2669 58,845,000 0.04% 23,538
Tarrant County 47,411,875,822 0.2648 149,355,000 1.21% 1,807,196
Carroll Independent School District 1,447,813,024 1.7400 54,980,254 65.58% 36,056,051
Grapevine - Colleyville Independent School District 4,790,773,567 1.5378 135,782,480 0.80% 1,086,260
Keller Independent School District 1,930,484,802 1.5000 114,779,319 3.75% 4,304,224
Northwest Independent School District 899,391,491 1.6293 24,719,460 0.68% 168,092
Tarrant County Hospital District 47,462,011,277 0.2341 46,789,987 1.21% 566,159
Tarrant County Junior College District 47,818,163,857 0.0577 99,880,000 1.21% 1,208,548
Total Direct and Overlapping G. O. Tax Debt 79,627,657
Ratio of Direct and Overlapping G. O. Tax Debt to Taxable Assessed Valuation 6.08%
Per Capita Overlapping G. O. Tax Debt 5,610
(1) Includes the Certificates.
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DEBT INFORMATION
TABLE 8 - PRO -FORMA GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS
Total
Fiscal
Less: Self Debt % of
Year
Ending Outstanding Debt This $9,670,000 Issue Grand Total Supporting Service Principal
9/30 Principal Interest Total Principal Interest Total Requirements W &S Debt Requirements Retired
1997 $ 1,055,000 $ 1,550,066 $ 2,605,066 $ 2,605,066 $ 584,773 $ 2,020,293
1998 1,310,000 1,417,365 2,727,365 $ 45,000 $ 771,161 $ 816,161 3,543,526 719,234 2,824,292
1999 1,214,532 1,427,320 2,641,853 310,000 506,335 816,335 3,458,188 718,572 2,739,616
2000 1,126,754 1,364,773 2,491,527 325,000 492,516 817,516 3,309,043 721,754 2,587,289
2001 1,374,851 1,290,547 2,665,398 340,000 477,465 817,465 3,482,863 723,607 2,759,256 19.94%
2002 1,240,000 1,123,918 2,363,918 355,000 461,303 816,303 3,180,221 724,094 2,456,127
2003 1,315,000 1,051,221 2,366,221 375,000 443,960 818,960 3,185,181 723,214 2,461,967
2004 1,325,000 978,966 2,303,966 390,000 425,405 815,405 3,119,371 725,824 2,393,547
2005 1,400,000 906,280 2,306,280 410,000 405,600 815,600 3,121,880 726,765 2,395,115
2006 1,480,000 828,528 2,308,528 435,000 384,258 819,258 3,127,786 726,054 2,401,732 44.44%
2007 1,565,000 745,371 2,310,371 455,000 361,790 816,790 3,127,161 723,674 2,403,487
2008 1,675,000 656,093 2,331,093 480,000 337,695 817,695 3,148,788 734,116 2,414,672
2009 1,780,000 559,429 2,339,429 505,000 311,340 816,340 3,155,769 732,223 2,423,546
2010 1,540,000 455,146 1,995,146 535,000 282,993 817,993 2,813,139 733,151 2,079,988
2011 1,635,000 362,268 1,997,268 565,000 252,601 817,601 2,814,869 736,531 2,078,338 74.58%
2012 1,095,000 273,211 1,368,211 595,000 220,263 815,263 2,183,474 462,174 1,721,300
2013 1,035,000 207,961 1,242,961 630,000 185,805 815,805 2,058,766 460,775 1,597,991
2014 850,000 152,883 1,002,883 670,000 148,913 818,913 1,821,796 462,895 1,358,901
2015 905,000 101,508 1,006,508 705,000 109,725 814,725 1,821,233 458,478 1,362,755
2016 580,000 46,661 626,661 750,000 68,070 818,070 1,444,731 457,413 987,318 96.52%
2017 445,000 14,463 459,463 795,000 23,254 818,254 1,277,717 459,463 818,254 100.00%
$25,946,137 $15,513,978 $41,460,115 $9,670,000 $6,670,450 $16,340,450 $57,800,565 $13,514,784 $44,285,781
(1) "Outstanding Debt" does not include lease /purchase obligations.
(2) Average life of the issue - 12.507 years. Interest on the Certificates has been calculated at the rate of 5.52% for purposes
of illustration.
(3) Includes self - supporting debt.
TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION
Tax Supported Debt Service Requirements, Fiscal Year Ending 9/30/97 $ 2,020,293
Interest and Sinking Fund, 9/30/96 $ 472,913
Budgeted Interest and Sinking Fund Tax Levy (1) 2,249,344
Estimated Investment Income 35,750 2,758,007
Estimated Balance, 9/30/97 $ 737,714
(1) Preliminary information furnished by the City.
TABLE 10 - COMPUTATION OF SELF - SUPPORTING DEBT
Net System Revenue Available Fiscal Year 1996 (1) $ 180,240
Less: Requirements for Revenue Bonds 82,032
Balance Available for Other Purposes $ 98,208
Requirements for System Tax Bonds, Fiscal Year 1997 $ 584,773
Percentage of System General Obligation Bonds Self - Supporting 16.8%
(1) Preliminary figures furnished by the City.
17
AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS
The City has no authorized but unissued general obligation debt.
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT .. .
The City does not anticipate the issuance of additional general obligation debt within the next twelve months.
TABLE 11 - OTHER OBLIGATIONS
The following table illustrates the City's two outstanding lease obligations:
Lease #1 Lease #3
Original date of the loan or lease: November, 1992 Original date of the loan or lease: February, 1996
Purpose of loan or lease: Copy Machine Purpose of loan or lease: Copy Machine
Repayment Schedule: 60 Months Repayment Schedule: 60 Months
Date of Final Payment: November, 1997 Date of Final Payment: January, 2001
Payments made from what source: General Fund Payments made from what source: General Fund
Amount currently outstanding: $5,189 Amount currently outstanding: $12,126
Lease #2 Lease Purchase
Original date of the loan or lease: June, 1993 Original date of the loan or lease: June, 1996
Purpose of loan or lease: Copy Machine Purpose of loan or lease: Computer Equipment
Repayment Schedule: 60 Months Repayment Schedule: 60 Months
Date of Final Payment: June, 1998 Date of Final Payment: May, 2001
Payments made from what source: General Fund Payments made from what source: General Fund
Amount currently outstanding: $8,443 Amount currently outstanding: $84,542
PENSION FUND ... The City provides pension benefits for all of its full -time employees through the Texas Municipal Retirement
System ( "TMRS "), a State -wide administered pension plan. The City makes annual contributions to the plan equal to the
amounts accrued for pension expense. (For more detailed information concerning the retirement plan, see Appendix B,
"Excerpts from the City's Annual Financial Report" - Note #7.)
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FINANCIAL INFORMATION
TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY
Fiscal Years Ended September 30,
1996 1995 1994 1993 1992
Revenues:
Taxes $ 4,926,209 $ 3,890,459 $ 3,467,579 $ 3,087,297 $ 2,754,104
Licenses and Permits 2,642,353 1,901,245 1,680,918 1,251,287 791,983
Charges for Services 221,003 109,093 56,225 60,328 47,540
Fine and Forfeitures 424,341 274,154 235,591 181,029 207,499
Other Revenues 260,145 200,730 147,011 99,039 106,267
Total Revenues $ 8,474,051 $ 6,375,681 $ 5,587,324 $ 4,678,980 $ 3,907,393
Expenditures:
City Administration $ 2,170,961 $ 1,610,196 $ 1,292,402 $ 1,003,587 $ 863,417
Police Department 1,389,411 1,304,845 1,055,234 895,343 825,242
Fire Department 902,281 783,873 728,480 566,832 531,671
Building Department 351,228 329,647 261,663 154,005 127,329
Streets and Drainage 878,433 1,058,438 1,225,241 857,494 685,700
Municipal Court 245,014 201,965 158,793 144,786 145,345
Parks 623,974 389,861 199,681 138,224 101,924
Public Works Department 352,943 359,623 137,192 102,064 69,674
Public Safety Support 835,010 608,880 434,779 357,268 340,626
Community Development 417,494 393,321 281,202 234,170 145,414
Total Expenditures $ 8,166,749 $ 7,040,649 $ 5,774,667 $ 4,453,773 $ 3,836,342
Excess (deficiency) of Revenues
Over Expenditures $ 307,302 $ (664,968) $ (187,343) $ 225,207 $ 71,051
Bonds Proceeds $ - $ - $ 720,827 $ $
Budgeted Transfers In $ 686,144 $ 941,860 159,446 159,446 190,970
Budgeted Transfers Out (377,278) (623,000) (155,000) 0 (796)
Total Other Sources (Uses) $ 308,866 $ 318,860 $ 725,273 $ 159,446 $ 190,174
Net Increase (Decrease) $ 616,168 $ (346,108) $ 537,930 $ 384,653 $ 261,225
Beginning Fund Balance 1,689,295 2,059,031 1,521,101 1,136,448 875,223
Reserve for Encumbrances $ - $ (23,628) $ - $ $ -
Ending Fund Balance $ 2,305,463 $ 1,689,295 $ 2,059,031 $ 1,521,101 $ 1,136,448
(1) Preliminary figures furnished by the City Staff.
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TABLE 13 - MUNICIPAL SALES TAX HISTORY
The City has adopted the Municipal Sales and Use Tax Act, VATCS, Tax Code, Chapter 321, which grants the City the power to
impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to
the payment of the Certificates. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts,
State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. On November 2, 1993,
the voters of the City approved the imposition of an additional sales and use tax of one -half of one percent (' /2% of 1 %) for economic
and park development. Collection for the additional tax went into effect in April, 1994. The sales tax for economic development is
collected solely for the benefit of Southlake Parks Development Corporation (the "Corporation "), and may be pledged to secure
payment of sales tax revenue bonds issued by the Corporation, and is not included in the table below.
Fiscal Equivalent
Year % of of
Ended Total Ad Valorem Ad Valorem Per
9/30 Collected Tax Levy Tax Rate Capita
1991 $ 448,149 0.0869% 19.06 60.49
1992 510,035 0.0894% 19.50 63.89
1993 636,738 0.1028% 22.63 73.19
1994 877,615 0.1281% 28.52 84.39
1995 1,033,502 0.1258% 28.02 84.37
1996 (2) 1,476,708 0.1387% 32.87 104.03
1997 (3) 412,343 0.0315% 7.47 25.40
(1) Population Sources: North Central Texas Council of Governments and City Staff.
(2) Unaudited figures provided by City Staff.
(3) Unaudited figures for three months ended December 31, 1996 provided by City Staff
FINANCIAL POLICIES
Basis of Accounting ... All governmental funds and agency funds are accounted for using the modified accrual basis of accounting.
Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets.
Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The
exception to this general rule is that principal and interest on general long -term debt is recognized when due.
The more significant revenues which are treated as susceptible to accrual under the modified accrual basis are property taxes,
intergovernmental revenues, charges for services, and interest. Other revenue sources are not considered measurable and available,
and are not treated as susceptible to accrual.
All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned
and their expenses are recognized when they are incurred.
General Fund Balance ... The City policy is to maintain surplus and unencumbered funds equal to 10% of expenditures in the
General Fund. This allows the City to avoid interim borrowing pending tax receipts.
Use of Bond Proceeds, Grants, etc.... The City's policy is to use bond proceeds, grants, revenue sharing or other non - recurring
revenues for capital expenditures only. Such revenues are never to be used to fund City operations.
Budgetary Procedures ... The City Charter establishes the fiscal year as the twelve -month period beginning October 1. The
departments submit to the City Manager a budget of estimated expenditures for the ensuing fiscal year by the first of July. The City
Manager subsequently submits a budget of estimated expenditures and revenues to the City Council by August 1. The City Council
then holds a public hearing on the budget. The Council shall then make any changes in the budget as it deems advisable and shall
adopt a budget prior to September 30.
Fund Investments ... The City investment policy parallels state law which governs investment of public funds. The City generally
restricts investments to direct obligations of the United States Government and to insured or collateralized bank certificates of
deposits.
20
INVESTMENTS
The City of South lake invests its investable funds in investments authorized by Texas law in accordance with investment policies
approved by the City Council of the City of South lake. Both state law and the City's investment policies are subject to change.
LEGAL INVESTMENTS ... Under Texas law, the City is authorized to invest in (1) obligations of the United States or its agencies and
instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities, (3) collateralized mortgage
obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed
by an agency or instrumentality of the United States, (4) other obligations, the principal of and interest on which are unconditionally
guaranteed or insured by, or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies
and instrumentalities, (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to
investment quality by a nationally recognized investment rating firm not less than A or its equivalent, (6) certificates of deposit that
are guaranteed or insured by the Federal Deposit Insurance Corporation or are secured as to principal by obligations described in the
preceding clauses or in any other manner and amount provided by law for City deposits, (7) certificates of deposit and share
certificates issued by a state or federal credit union domiciled in the State of Texas that are guaranteed or insured by the Federal
Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations
described in the clauses (1) through (5) or in any other manner and amount provided by law for City deposits, (8) fully collateralized
repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), and are placed
through a primary government securities dealer or a financial institution doing business in the State of Texas, (9) bankers'
acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at
least A -1 or P -1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper that is rated at
least A -1 or P -1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit
rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no -load money market
mutual funds regulated by the Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90
days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-
load mutual funds registered with the Securities and Exchange Commission that: have an average weighted maturity of less than two
years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment quality by at
least one nationally recognized investment rating firm of not less than AAA or its equivalent.
The City may invest in such obligations directly or through government investment pools that invest solely in such obligations
provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service.
The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the
outstanding principal balance of the underlying mortgage- backed security collateral and pays no principal; (2) obligations whose
payment represents the principal stream of cash flow from the underlying mortgage- backed security and bears no interest; (3)
collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage
obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.
INVESTMENT POLICIES ... Under Texas law, the City is required to invest its funds under written investment policies that primarily
emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of
investment management; and that includes a list of authorized investments for City funds, maximum allowable stated maturity of any
individual investment and the maximum average dollar- weighted maturity allowed for pooled fund groups. All City funds must be
invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment.
Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and
safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield.
Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of
prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for
investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment
officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers
jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending
value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the
reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each
individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment
strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council.
ADDITIONAL PROVISIONS ... Under Texas law the City is additionally required to: (1) annually review its adopted policies and
strategies, (2) require any investment officers' with personal business relationships or relatives with firms seeking to sell securities to
the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (3) require the
registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy , (b)
acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c)
deliver a written statement attesting to these requirements; (4) perform an annual audit of the management controls on investments
and adherence to the City's investment policy. (5) provide specific investment training for the Treasurer, Chief Financial Officer and
investment officers; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse
21
repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (7) restrict the investment in mutual
funds in the aggregate to no more than 80% of the City's monthly average fund balance, excluding bond proceeds and reserves and
other funds held for debt service and further restrict the investment in non -money market mutual funds of any portion of bond
proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding
bond proceeds and reserves and other funds held for debt service; (8) require local government investment pools to conform to the
new disclosure, rating, net asset value, yield calculation, and advisory board requirements.
The City of Southlake shall manage and invest its cash with four objectives, listed in order of priority: Safety, Liquidity, Yield,
and Public Trust. The safety of the principal invested always remains the primary objective. All investments shall be designed
and managed in a manner responsive to the public trust and consistent with State and Local law.
TABLE 14 - CURRENT INVESTMENTS
As of December 31, 1996, the City's investable funds were invested in the following categories:
Type of Investmernt Dollar Value Book Value
Treasuries and Agencies $7,064,585 100.2 %
Certificates of Deposit 3,000,000 100.0 %
Texpool 2763,027 100.0 %
Totals $12,827,612 100.1 %
As of such date, the average remaining term of investments is 120 days.
•
22
TAX MATTERS
TAX EXEMPTION ... The delivery of the Certificates is subject to the opinion of Bond Counsel to the effect that interest on the
Certificates for federal income tax purposes (1) will be excludable from gross income, as defined in section 61 of the Internal
Revenue Code of 1986, as amended to the date of such opinion (the "Code "), pursuant to section 103 of the Code and existing
regulations, published rulings, and court decisions, and (2) will not be included in computing the alternative minimum taxable
income of the owners thereof who are individuals or, except as hereinafter described, corporations. A form of Bond Counsel's
opinion is reproduced as Appendix C. The statute, regulations, rulings, and court decisions on which such opinion is based are
subject to change.
Interest on all tax- exempt obligations, including the Certificates, owned by a corporation will be included in such corporation's
adjusted current earnings for tax years beginning after 1989, for purposes of calculating the alternative minimum taxable income
of such corporation, other than an S corporation, a qualified mutual fund, a real estate investment trust (REIT), or a real estate
mortgage investment conduit (REMIC). A corporation's alternative minimum taxable income is the basis on which the
alternative minimum tax imposed by Section 55 of the Code will be computed.
In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the City made in a
certificate dated the date of delivery of the Certificates pertaining to the use, expenditure, and investment of the proceeds of the
Certificates and will assume continuing compliance by the City with the provisions of the Ordinance subsequent to the issuance
of the Certificates. The Ordinance contains covenants by the City with respect to, among other matters, the use of the proceeds
of the Certificates and the facilities financed therewith by persons other than state or local governmental units, the manner in
which the proceeds of the Certificates are to be invested, the periodic calculation and payment to the United States Treasury of
arbitrage "profits" from the investment of the proceeds, and the reporting of certain information to the United States Treasury.
Failure to comply with any of these covenants would cause interest on the Certificates to be includable in the gross income of the
owners thereof from date of the issuance of the Certificates.
Except as described above, Bond Counsel expresses no other opinion with respect to any other federal, state or local tax
consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or
disposition of, the Certificates. Prospective purchasers of the Certificates should be aware that the ownership of tax- exempt
obligations such as the Certificates may result in collateral federal tax consequences to, among others, financial institutions, life
insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United
States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement
benefits, individuals otherwise qualifying for the earned income tax credit, and taxpayers who may be deemed to have incurred
or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax- exempt
obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their
particular circumstances.
TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN CERTIFICATES ... The initial public offering price of
certain Certificates (the "Discount Certificates ") may be less than the amount payable on such Certificates at maturity. An
amount equal to the difference between the initial public offering price of a Discount Certificate (assuming that a substantial
amount of the Discount Certificates of that maturity are sold to the public at such price) and the amount payable at maturity
constitutes original issue discount to the initial purchaser of such Discount Certificate. A portion of such original issue discount
allocable to the holding period of such Discount Certificate by the initial purchaser will, upon the disposition of such Discount
Certificate (including by reason of its payment at maturity), be treated as interest excludable from gross income, rather than as
taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the Certificates
described above under "Tax Exemption." Such interest is considered to be accrued actuarially in accordance with the constant
interest method over the life of a Discount Certificate, taking into account the semiannual compounding of accrued interest, at
the yield to maturity on such Discount Certificate and generally will be allocated to an original purchaser in a different amount
from the amount of the payment denominated as interest actually received by the original purchaser during the tax year.
However, such interest may be required to be taken into account in determining the alternative minimum taxable income of a
corporation, for purposes of calculating a corporation's alternative minimum tax imposed by Sections 55 of the Code, and the
amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there
will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal
income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance
companies, S corporations with "subchapter C" earnings and profits, individual recipients of Social Security or Railroad
Retirement benefits, individuals otherwise qualifying for earned income tax credit, and taxpayers who may be deemed to have
incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax- exempt
obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Certificate by the initial
owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Certificate in the hands of
such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount
Certificate was held) is includable in gross income.
23
Owners of Discount Certificates should consult with their own tax advisors with respect to the determination of accrued original
issue discount on Discount Certificates for federal income tax purposes and with respect to the state and local tax consequences
of owning and disposing of Discount Certificates. It is possible that, under applicable provisions governing determination of
state and local income taxes, accrued interest on Discount Certificates may be deemed to be received in the year of accrual even
though there will not be a corresponding cash payment.
The initial public offering price of certain Certificates (the "Premium Certificates ") may be greater than the amount payable on
such Certificates at maturity. An amount equal to the difference between the initial public offering price of a Premium
Certificate (assuming that a substantial amount of the Premium Certificates of that maturity are sold to the public at such price)
and the amount payable at maturity constitutes premium to the initial purchaser of such Premium Certificates. The basis for
federal income tax purposes of a Premium Certificate in the hands of such initial purchaser must be reduced each year by the
amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for
amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to
be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Certificate. The amount of
premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity.
Purchasers of the Premium Certificates should consult with their own tax advisors with respect to the determination of
amortizable bond premium on Premium Certificates for federal income tax purposes and with respect to the state and local tax
consequences of owning and disposing of Premium Certificates.
24
OTHER INFORMATION
RATINGS
The presently outstanding tax supported debt of the City is rated "A" by Moody's and "A" by S &P. The City also has twelve
issues outstanding which are rated "Aaa" by Moody's and "AAA" by S &P through insurance by various commercial insurance
companies. Application for contract ratings on this issue have been made to Moody's and S &P. An explanation of the
significance of such ratings may be obtained from the company furnishing the rating. The rating reflects only the respective
views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance
that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by
either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such
downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the
Certificates.
LITIGATION
It is the opinion of the City Attorney and City Staff that there is no pending litigation against the City that would have a material
adverse financial impact upon the City or its operations.
REGISTRATION AND QUALIFICATION OF CERTIFICATES FOR SALE
The sale of the Certificates has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the
exemption provided thereunder by Section 3(a)(2); and the Certificates have not been qualified under the Securities Act of Texas
in reliance upon various exemptions contained therein; nor have the Certificates been qualified under the securities acts of any
jurisdiction. The City assumes no responsibility for qualification of the Certificates under the securities laws of any jurisdiction
in which the Certificates may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of
responsibility for 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 exemption from securities registration provisions.
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Section 9 of the Bond Procedures Act provides that the Certificates "shall constitute negotiable instruments, and are investment
securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of -law or court decision to
the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations,
savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages,
school districts, and other political subdivisions or public agencies of the State of Texas ". The Certificates are eligible to secure
deposits of any public funds of the state, its agencies and political subdivisions, and are legal security for those deposits to the
extent of their market value. For political subdivisions in Texas which have adopted investment policies and guidelines in
accordance with the Public Funds Investment Act (V.T.C.A., Government Code, Chapter 2256), the Certificates may have to be
assigned a rating of "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible
investments for sinking funds and other public funds. No review by the City has been made of the laws in other states to
determine whether the Certificates are legal investments for various institutions in those states.
LEGAL OPINIONS AND NO- LITIGATION CERTIFICATE
The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Certificates,
including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Certificate and to the
effect that the Certificates are valid and legally binding obligations of the City, and based upon examination of such transcript of
proceedings, the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Certificates will
be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters
described under "Tax Matters" herein, including the alternative minimum tax on corporations. The customary closing papers,
including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and
delivery of the Certificates, or which would affect the provision made for their payment or security, or in any manner
questioning the validity of said Certificates will also be furnished. Bond Counsel was not requested to participate, and did not
take part, in the preparation of the Official Statement, and such firm has not assumed any responsibility with respect thereto or
undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such
firm has reviewed the information under the headings and subheadings "Plan of Financing ", "The Bonds" (except the
subheadings "Book- Entry- Only" and "Use of Bond Proceeds "), "Selected Provisions of the Bond Resolution ", "Tax Matters ",
"Legal Investments and Eligibility to Secure Public Funds in Texas ", "Legal Opinions and No- Litigation Certificate" and,
"Continuing Disclosure of Information (except for "Compliance with prior Undertakings ")," "Annual Reports," "Material Event
Notices," "Availability of Information from NRMSIRs and SID" and "Limitations and Amendments" and such firm is of the
opinion that the information contained under such captions and subcaptions is an accurate and fair description of the laws and
legal issues addressed therein and, with respect to the Bonds, such information conforms to the Resolution. The legal fee to be
25
paid Bond Counsel for services rendered in connection with the issuance of the Certificates is contingent on the sale and delivery
of the Certificates. The legal opinion will accompany the Certificates deposited with DTC or will be printed on the Certificates
in the event of the discontinuance of the Book - Entry-Only System. Certain legal matters will be passed upon for the
Underwriters by McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Counsel to the Underwriters. The fees of Underwriters'
Counsel are contingent upon the delivery of the Certificates.
AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION
The financial data and other information contained herein have been obtained from City records, audited financial statements and
other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein
will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made
subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete
statements of such provisions and reference is made to such documents for further information. Reference is made to original
documents in all respects.
CONTINUING DISCLOSURE OF INFORMATION
In the Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of the
Certificates. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the
Certificates. Under the agreement, the City will be obligated to provide certain updated financial information and operating data
annually, and timely notice of specified material events, to certain information vendors. This information will be available to
securities brokers and others who subscribe to receive the information from the vendors.
ANNUAL REPORTS ... The City will provide certain updated financial information and operating data to certain information
vendors annually. The information to be updated includes all quantitative financial information and operating data with respect
to the City of the general type included in this Official Statement under Tables numbered 1 through 6 and 8 through 14. The
City will update and provide this information within six months after the end of each fiscal year ending in or after 1997. The
City will provide the updated information to each nationally recognized municipal securities information repository
( "NRMSIR ") and to any state information depository ( "SID ") that is designated by the State of Texas and approved by the State
of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC ").
The City may provide updated information in full text or may incorporate by reference certain other publicly available
documents, as permitted by SEC Rule 15c2 -12. The updated information will include audited financial statements, if the City
commissions an audit and it is completed by the required time. If audited financial statements are not available by the required
time, the City will provide unaudited financial statements at the time of filing and later furnish the audit report when it becomes
available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B
or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation.
The City's current fiscal year ends September 30. Accordingly, it must provide updated information by March 30, in each year,
unless the City changes its fiscal year. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change.
MATERIAL EVENT NOTICES ... The City will also provide timely notices of certain events to certain information vendors. The
City will provide notice of any of the following events with respect to the Certificates, if such event is material to a decision to
purchase or sell Certificates: (1) principal and interest payment delinquencies; (2) non - payment related defaults; (3) unscheduled
draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial
difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events
affecting the tax- exempt status of the Certificates; (7) modifications to rights of holders of the Certificates; (8) Bond calls; (9)
defeasances; (10) release, substitution, or sale of property securing repayment of the Certificates; and (11) rating changes.
Neither the Certificates nor the Ordinance make any provision for debt service reserves. In addition, the City will provide timely
notice of any failure by the City to provide information, data, or financial statements in accordance with its agreement described
above under "Annual Reports." The City will provide each notice described in this paragraph to any SID and to either each
NRMSIR or the Municipal Securities Rulemaking Board ( "MSRB ").
AVAILABILITY OF INFORMATION FROM NRMSIRs AND SID ... The City has agreed to provide the foregoing information only
to NRMSIRs and any SID. The information will be available to holders of Certificates only if the holders comply with the
procedures and pay the charges established by such information vendors or obtain the information through securities brokers
who do so.
The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a
qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street, P. O. Box 2177, Austin, Texas 78768-
2177, and its telephone number is 512/476 -6947.
LIMITATIONS AND AMENDMENTS ... The City has agreed to update information and to provide notices of material events only as
described above. The City has not agreed to provide other information that may be relevant or material to a complete
26
presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided,
except as described above. The City makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell Certificates at any future date. The City disclaims any contractual or tort liability for
damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made
pursuant to its agreement, although holders of Certificates may seek a writ of mandamus to compel the City to comply with its
agreement.
The City may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i)
the agreement, as amended, would have permitted an underwriter to purchase or sell Certificates in the offering described herein
in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment,
as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the
outstanding Certificates consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized
bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the
Certificates. The City may also amend or repeal its agreement if the SEC amends or repeals the applicable provisions of SEC
Rule 15c2 -12 or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that
reserving the right to do so does not make unlawful the underwriters' purchase and sale of the Certificates in the offering
described herein. If the City so amends the agreement, it has agreed to include with the next financial information and operating
data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the
reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided.
COMPLIANCE WITH PRIOR UNDERTAKINGS ... The City made a continuing disclosure agreement on February 20, 1996 with
regard to issuance of $2,380,000 Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation,
Series 1996. The City is in compliance with prior undertakings and will submit a disclosure statement prior to March 30, 1997.
FINANCIAL ADVISOR
First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Certificates. The
Financial Advisor's fee for services rendered with respect to the sale of the Certificates is contingent upon the issuance and
delivery of the Certificates. First Southwest Company has agreed, in its Financial Advisory contract, not to bid for the
Certificates, either independently or as a member of a syndicate organized to submit a bid for the Certificates. First Southwest
Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not
assume any responsibility for the information, covenants and representations contained in any of the legal documents with
respect to the federal income tax status of the Certificates, or the possible impact of any present, pending or future actions taken
by any legislative or judicial bodies.
UNDERWRITING
The Underwriters have agreed, subject to certain conditions, to purchase the Certificates from the City, at an underwriting discount of
$ from the initial offering price to the public shown on the inside cover page hereof. The Underwriters will be obligated
to purchase all of the Certificates if any Certificates are purchased. The Certificates to be offered to the public may be offered and
sold to certain dealers (including the Underwriters and other dealers depositing Certificates into investment trusts) at prices lower
than the public offering prices of such Certificates, and such public offering prices may be changed, from time to time, by the
Underwriters.
APPROVAL OF OFFICIAL STATEMENT
The Ordinance authorizing the issuance of the Certificates will also approve the form and content of this Official Statement, and
any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Certificates by the
Underwriters.
RICK STACY
Mayor
City of Southlake, Texas
ATTEST:
SANDRA L. LeGRAND
City Secretary
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APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
■
Amarillo
SOUTHLAKE
Fort Worth■ •Dallas
I Paso
Austin ■
■ Houst
San Antonio
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LOCATION
The City of Southlake is located in northeast Tarrant County. The City is approximately 15 miles northwest of the City of Dallas on
State Highway 114 and approximately 10 miles northeast of the City of Fort Worth.
POPULATION
Southlake's 1997 population was 16,235 an increase of 129.2% over the 1990 census population of 7,082.
ECONOMY
The City is primarily residential with some commercial and light manufacturing companies. Southlake's growth is due to its
proximity to the Dallas-Fort Worth Metroplex and to the Dallas-Fort Worth International Airport.
Major employers in the City are:
Company Nature of Business Number of Employees
AMR / Sabre Group Transportation 1,200
Carroll Independent School District School District 500
Walmart Retailer 300
TRANSPORTATION
The City is located on State Highways 114 and 26 providing direct access to the Cities of Dallas and Fort Worth and to Dallas-Fort
Worth International Airport. Southlake is approximately 5 miles northwest of Dallas-Fort Worth International Airport, 19 miles from
Dallas Love Field and 10 miles from Alliance Airport.
EDUCATION
The City of Southlake is served primarily by Carroll Independent School District, and additionally by Keller, Grapevine- Colleyville
and Northwest Independent School Districts. There are three elementary schools, one middle school, two intermediate school and
one high school located within the City. The combined enrollment for 1996 -97 was 4,725 students.
Higher education is provided by many institutions located within a 25 -mile radius from Southlake, such as: Texas Christian
University, University of North Texas, Southern Methodist University, Texas Woman's University, University of Texas at Arlington,
University of Texas at Dallas, University of Dallas and Tarrant County Junior College.
RECREATION
The City has four municipal parks. The Bicentennial Park is 48 acres that includes nine baseball fields, eight soccer fields, two tennis
courts, two community buildings and two playgrounds. The Country Walk is 5 acres that includes four practice ball fields. The
Lonesome Dove is 8 acres that includes a pavilion, a playground and two sand volleyball courts. The Bob Jones Park is
approximately 100 acres and is currently undeveloped.
Southlake lies on the southern boundary of Lake Grapevine which offers swimming, camping, boating and fishing.
HISTORICAL EMPLOYMENT (AVERAGE ANNUAL)
December
Area 1996 1995 1994 1993 1992 1991
Fort Worth - Arlington PMSA
Employed 806,883 776,586 760,352 685,200 689,700 695,500
Unemployed 26,982 39,760 44,724 48,700 47,800 38,400
% of Unemployed 3.2% 4.9% 5.6% 6.4% 6.5% 5.2%
Tarrant County
Employed 704,513 678,060 664,713 645,708 633,238 630,504
Unemployed
22,953 34,723 38,866 43,915 47,984 43,560
Source: Texas Employment Commission.
A -1
EFFECTIVE BUYING INCOME
Tarrant County
Effective Buying Income $ 21,934,414
Median Per Household 36,657
Median Age of Population 30.5
Household Earnings:
$20,000 - $34,999 23.3
$35,000 - $49,999 18.9
$50,000 and over 33.3
Source: Sales and Marketing Management, 1996 Survey of Buying Power
BUILDING PERMITS BY CATEGORY
Fiscal
Year
Ended Commercial Residential
9/30 Number Amount Number Amount Grand Total
1992 11 $ 3,273,000 326 $ 68,746,220 $ 72,019,220
1993 21 1,450,900 477 100,406,032 101,856,932
1994 12 9,309,800 629 140,035,538 149,345,338
1995 21 9,309,800 460 107,208,023 116,517,823
1996 77 27,117,000 691 169,959,810 197,076,810
TARRANT COUNTY
Tarrant County (the "County ") is located in North Central Texas with an estimated 1996 population of 1,279,700. The County,
together with Dallas County, is an integral part of the Dallas -Fort Worth Metroplex, one of the Largest and fastest growing
metropolitan areas in the nation. The combined Metroplex area has an estimated population in excess of 4.0 million.
A -2
APPENDIX B
EXCERPTS FROM THE
CITY OF SOUTHLAKE, TEXAS
ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 1995
The information contained in this Appendix consists of excerpts from the City of Southlake,
Texas Annual Financial Report for the Year Ended September 30, 1995, and is not intended
to be a complete statement of the City's financial condition. Reference is made to the
complete Report for further information.
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WEAVER AND TIDWELL
AFFILIATIONS
CERTIFIED PUBLIC ACCOUNTANTS FORT WORTH OFFICE
tiUMMiT INTERNATIONAL
A REGISTERED LIMITED LIABILITY PARTNERSHIP 1600 COMMERCE BUILDING
307 WEST SEVENTH STREET
ASSOCIATES, INC. THREE FOREST PLAZA
FORT WORTH, TEXAS 76101
ASSOCIATED REGIONAL 12221 MERIT DRIVE, SUITE 1700
(017)&12•7000
ACCOUNTING FIRMS DALLAS, TEXAS 75251 -2216
(214) 490-1970
FACSIMILE (214) 702 -8321
To Members of the City Council
and City Manager
City of Southlake, Texas
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying combined financial statements of the City of Southlake,
Texas as of and for the year ended September 30, 1995, as listed in the table of contents. These
combined financial statements are the responsibility of the City's management. Our responsibility
is to express an opinion on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the combined financial statements are free of material misstatement. An audit Includes
examining, on a test basis, evidence supporting the amounts and disclosures In the combined
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present fairly, In all
material respects, the financial position of the City of Southlake, Texas at September 30, 1995, and
the results of its operations and cash flows of its proprietary fund for the year then ended In
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the combined financial
statements taken as a whole. The 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 Southiake, Texas. The
individual fund and account group financial statements and schedules have been subjected to the
auditing procedures applied in the audit of the combined financial statements and, In our opinion,
are fairly stated in all material respects in relation to the combined financial statements taken as
a whole.
The statistical section has not been subjected to the auditing procedures applied in the audit
of the combined financial statements and, accordingly, we express no opinion on such data.
/4,%■•.J a 1 c d4.
WEAVER AND TIDWELL, LLP.
Dallas, Texas
February 9, 1996
489
1
Duthla e
2
CITY OF SOUTHLAKE, TEXAS
..
GENERAL PURPOSE FINANCIAL STATEMENTS -
COMBINED FINANCIAL STATEMENTS OVERVIEW
These basic financial statements provide a summary overview of the financial position of all funds
and account groups as well as the operating results of all funds.
■ Governmental Funds Those through which most Governmental functions are typically
financed. The measurement focus is upon determination of
financial position and changes in financial position. The
Governmental funds within the City are: the General, Special
Revenue, Debt Service and Capital Projects Fund.
•
Proprietary Funds To account for the financing, acquisition and maintenance of
Governmental facilities and services that are supported by user
charges. The measurement focus is upon determination of net
Income, financial position and cash flows. The Proprietary Fund
within the City is the Enterprise Fund.
■
Fiduciary Funds Used to account for assets held by the City as an agent for
Individuals, private organizations, other governments, and /or other
funds. Agency funds are custodial in nature and do not Involve
measurement of results of operations. The Agency Funds within
the City are used to account for the Municipal Cash Escrow Fund
and Deferred Compensation Plan.
Account Groups Used to establish accounting control and accountability for the
City's general fixed assets and unmatured principal of the City's
general Tong -term debt.
2
3
r
CITY OF SOUTHLAKE, TEXAS
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES
YEAR ENDED SEPTEMBER 30, 1995 IN
Totals
Governmental Fund Types (Memorandum Only)
•
Special Debt Capital
General Revenue Service Projects 1995 1994
IN
Revenues
Taxes $ 3,890,459 $ 516,750 $ 1,466,318 $ 6 5,873,527 $ 4,704,511
Licenses, permits and fees 1,901,245 159,579 106,737 2,167,561 1,967,777
Charges for services 109,093
Fines and fortelts 274,154 109,093 56,225
II
274,154 235,591
Miscellaneous 200,730 37,949 50,741 430,094 719,514 366,678
Total revenues 6,375,681 714,278 1,517,059 536,831 9,143,849 7,330,782 •
Expenditures
Current
City secretary/mayor 197,727 197,727 212,832
City manager's office 348,306 348,306 200,295 el
Economic development 98,694 98,694
Support services 706,488
Finance 706,488 615,511
inance
258,981 258,981 263,764
Municipal court 201,965 201,965 158,793 1
Police services 1,304,845 3,239 1,308,084 1,061,372
Fire services 783,873 783,873 728,480
Public safety support 608,880 608,880 434,779
Building inspection 329,647 329,647 261,663 •
Public works administration 359,623 359,623 137,192
Parks and recreation 389,861 235,950 625,811 834,875
Streets and drainage 1,058,438 1,058,438 1,225,241
Community development 393,321 393,321 281,202 1
Capital projects 5,146,959 5,146,959 1,070,234
Debt service
Principal retirement 715,000 715,000 470,000
Interest and fiscal charges 773,101 773,101 578,735 t
Total expendttures 7,040,649 239,189 1,488,101 5,146,959 13,914,898 8,534,968
Excess (deficiency) of revenues
over expendttures ( 664,968) 475,089 28,958 4
( 4,610,128) ( 4,771 ,049) ( 1 ,204,186)
Other financing sources (uses)
Operating transfers In 941,860 305,035 918,375 2,165,270 424,813 tIt
Operating transfers out ( 623,000) ( 251,310) ( 251,585) ( 295,375 IE
Proceeds of bonds ) ( 1,421,270) ( 373,679)
1,838,000 1,838,000 6,896,376
Proceeds of refunding bonds 3,265,318
Payments to refunded bond
escrow agent
( 3,265,318) 4 '
Total other financing
sources (uses) 318,860 ( 251,310) 53,450 2,461,000 2,582,000 6,947,310
l9
No
Excess (deficiency) of revenues and
other sources over expenditures
and other uses ( 346,108) 223,779 82,408 ( 2,149,128) ( 2,189,049) 5,743,124
R
s.
Fund balance, beginning of year 2,059,030 332,711 549,252 6,068,051 9,009,044 3,265,920
Fund balance, end of year $ 1,712 922 „6556 490 j_ 663` j 3,9 1 j 6,819,995 j 9,009,044
r
r. .
The Notes to Combined Financial Statements
are an Integral part of this statement.
7
-- liCT - 1
outhi • Q
9
CITY OF SOUTHLAKE, TEXAS
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL -
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUND
YEAR ENDED SEPTEMBER 30, 1995
General Fund
Variance -
Favorable
Budget Actual fUnfavorabiel
Revenues
Taxes $ 3,883,209 $ 3,890,459 $ 7,250
LJcenses, permits and fees 1,857,710 1,901,245 43,535
Charges for services 100,743 109,093 8,350
Fines and forfeits 243,600 274,154 30,554
Miscellaneous 160.300 200,730 40,430
Total revenues 6,245,562 6,375,681 130.119
Expenditures
City secretary/mayor 214,111 197,727 16,384
City manager's office 360,197 348,306 11,891
Economic development 117,245 98,694 18,551
Support services
714,274 706,488 7,786
Finance
261,974
Municipal court 211,383 201,965 9,418
Police services 9,418
1,330,994 1,304,845 26,149
Fire services 810,736 783,873 26,863
Public safety support 611,988 608,880
Building inspection 3,108
Public works administration 339,048 329,647 9,401
336,283 359,623 ( 23,340)
Parks and recreation 368,695 389,861 ( 21,166)
Streets and drainage 1,033,062 1,058,438 ( 25,376)
Debt service
development 378,439 393,321 ( 14,882)
Total expenditures 7, 7,040,649 47,780
Excess (deficiency) of revenues
over expenditures ( 842,86T ( 664,968) 177 899
Other financing sources (uses)
Operating transfers in 941,860 941,860
Operating transfers out ( 623,000) ( 623,000)
Total other financing
sources (uses) 318,860 318.860
Excess of revenues and other
sources over expenditures
and other uses ( 524,007) ( 346,108) 177,899
Fund balance at beginning of year 2,059,030 2,059,030
Fund balance at end of year $ 1,535,023 $ 1,712,922 $ 177,899
The Notes to Combined Financial Statements
are an integral part of this statement.
10
Special Revenue Fund Debt Service Fund
Variance - Variance -
Favorable Favorable
Budget Actual (Untavorablel Budget Actual lUnfavorable)
$ 510,000 $ 516,750 $ 6,750 $ 1,464,030 $ 1,466,318 $ 2,288
111,500 159,579 48,079
28,955 37,949 8,994 37,500 50,741 13 L 241
650,455 714,278 63,823 1,501,530 1,517,059 15,529
3,239 ( 3,239)
254,738 235,950 18,788
1,480,480 1,488,101 ( 7,621)
254,738 239,189 15,549 1 ,480,480 1 ,488,101 ( 7,621)
395,717 475,089 79,372 21,050 28,958 7,908
305,035 305,035
( 251,310) ( 251,310) ( 251,585) ( 251,585)
( 251,310) ( 251,310) 53.450 53
144,407 223,779 79,372 74,500 82,408 7,908
332,711 332,711 549,252 549,252
$ 477,118 =�� $ 79,372 $ 623,752 $ 631,660 $ 7,908
11
CITY OF SOUTHLAKE, TEXAS
PROPRIETARY FUND TYPE
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
Total
Enterprise (Memorandum
Fund Only)
1995 1994
Operating revenues
Water, sewer and garbage $ 4,588,156 $ 3,866,053
Service fees 245,546 365,284
Other miscellaneous revenues 240.688 79,924
Total operating revenues 5,074,390 4,311,261
Operating expenses
Personal service 454,651 434,166
Contractual services 459,273 410,518
Lease payments 1,276 2,626
Supplies 4,819
Utilities 3,905
1,719,818 1,432,855
Administrative 26,132 23,217
Maintenance 428,367 327,038
Professional benefits 10,512 10,706
Depreciation 876,064 356,063
Total operating expenses 3,980,912 3,001,094
Operating Income 1,093,478 1,310,167
Non - operating revenue (expense)
Interest income 420,451 173,203
Interest expense ( 952,021) ( 594,986)
Total non - operating revenue (expense) ( 531,570) ( 421,783)
Net Income before
operating transfers 561,908 888,384
Operating transfers
Operating transfers In 251,585 300,580
Operating transfers out ( 995,585) ( 351,513)
Total operating transfers ( 744,000) ( 50,933)
Net Income (loss) ( 182,092) 837,451
Add back depreciation on contributed assets 277,605
Retained earnings at beginning of year 3,049,605 2,212,154
Retained earnings at end of year $ 3,145,118 $ 3,049,605
The Notes to Combined Financial Statements
are an Integral part of this statement.
12
CITY OF SOUTHLAKE, TEXAS (1 of 2)
PROPRIETARY FUND
STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
Total
Enterprise (Memorandum
Fund Only)
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and users $ 4,941,206 $ 4,382,273
Cash payments to suppliers ( 2,770,318) ( 2,303,392)
Cash payments to employees ( 465.663) ( 444.812)
Net cash provided by
operating activities 1.705.225 1.634.069
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Capital expenditures ( 1,890,246) ( 2,087,350)
Principal payments on bonds, notes
and capital lease obligations ( 267,740) ( 214,330)
Bond proceeds 4,326,790
Interest paid ( 824,195) ( 647,386)
Capital contribution 875,365 1.035.198
Net cash provided by (used for) capital
and related financing activities 2,219.974 ( 1.913.868)
CASH FLOWS FROM NON - CAPITAL
FINANCING ACTIVITIES:
Cash received from other funds 251,585 313,319
Cash paid to other funds ( 1,008,324) ( 351,513)
Net cash provided by (used for)
non- capital financing activities ( 756.739) ( 38,194)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received 420.451 173.203
Net Increase in cash
and cash equivalents 3,588,911 ( 144,790)
Cash and cash equivalents at the
beginning of year 4,145,342 4.290.132
Cash and cash equivalents at the
end of year $ 7,734,253 S 4145,342
The Notes to Combined Financial Statements
are an integral part of this statement.
13
CITY OF SOUTHLAKE, TEXAS (2 of 2)
PROPRIETARY FUND TYPE
STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
Total
Enterprise (Memorandum
Fund Only)
1995 1994
RECONCILIATION OF CASH AND CASH
EQUIVALENTS OF STATEMENT OF CASH
FLOWS TO THE BALANCE SHEET:
Current assets $ 2,061,963 $ 2,083,690
Restricted assets 5.672.290 2,061.652
Cash and cash equivalents at
the end of the year $ 7,734,253 $ 4,145,342
RECONCILIATION OF OPERATING
INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Operating Income $ 1,093,478 $ 1,310,167
Adjustments to reconcile operating
Income to net cash provided by
operating activities:
Depreciation 876,064 356,063
Decrease (increase) In assets
Receivables ( 158,529) 44,847
Prepaid 1,411 ( 2,186)
Increase (decrease) In liabilities
Payables and accruals ( 132,044) ( 100,987)
Customer deposits 24,845 26.165
Net cash provided by
operating activities $ 1,705,225 $ 1,634,069
NONCASH INVESTING, CAPITAL,
AND FINANCING ACTIVITIES:
During the fiscal year ended September 30, 1995 the estimated value of water and sewer Infrastructure
contributed by developers was $2,742,127.
Additionally in 1995, the City Incurred contractual obligations in the amount of $5,230,000. Under the
agreement the Trinity River Authority is utilizing the proceeds to construct a wastewater project on the City's
behalf.
The Notes to Combined Financial Statements
are an integral part of this statement.
14
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
The combined financial statements of the Clty of Southlake are presented in accordance with
generally accepted accounting principles applicable to state and local governmental units as set
forth by the Governmental Accounting Standards Board. The following is a summary of the more
significant accounting policies:
A. Reporting Entity
The City of the City are operates vested under a Home Rule Council -
elected council which enacts legislation, adopts
powers of the Cty ae
budgets, determines policies and appoints the City Manager. The City Manager Is responsible
for executing the laws and administering the government of the City.
The City of Southlake's general purpose financial statements include the separate
governmental entitles that are controlled by or are dependent on the City. The determination
to include separate governmental entities is based on the criteria of Governmental Accounting
Standards (GASB) Statement 14. GASB Statement 14 defines the reporting entity as the
primary government and those component units for which the primary government Is financially
accountable. To be financially accountable, a voting majority of the component unit's board
must be appointed by the primary government, and either (A) the primary government must be
able to impose its will, or (B) the primary govemment may potentially benefit financially or be
financially responsible for the component unit.
Based on these criteria the financial information of the Southlake Parks Development
Corporation is included within the reporting entity.
The Southlake Parks Development Corporation (the 'Corporation') is a nonprofit industrial
development corporation under the Development Corporation Act of 1979. The Corporation is
organized exclusively to act on behalf of the City for the financing, development and operation
of parks and recreation facilities. The affairs of the Corporation are managed by a board of
directors which is composed of seven persons appointed by the City Council. However, the
annual corporate budget and issuance of debt must be approved by the Clty Council.
Although it is a legally separate entity, the Corporation 1s reported as if It were part of the
primary government because its sole purpose Is to finance and develop parks and recreational
facilities on behalf of the City.
B. Fund Accounting
The City's accounting system is organized and operated on the basis of fund accounting with
each fund and account group being an Independent fiscal and accounting entity with a self -
balancing set of accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses. City resources are allocated to and accounted for in Individual
funds based upon the purposes for which they are to be spent and the means by which
spending activities are controlled. The various funds and account groups are summarized into
six generic fund types, three broad fund categories and two account groups as follows:
15
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
B. Fund Accounting - continued
Governmental Fund Types
General Fund is the general operating fund of the City. It Is utilized to account for all
financial resources except those required to be accounted for in other funds.
Special Revenue Fund Is utilized to account for the proceeds of specific revenue sources
(other than special assessments, expendable trusts or major capital projects) that are legally b.
restricted to expenditures for specified purposes.
Debt Service Fund is utilized to account for the accumulation of financial resources for, and
the payment of general long -term debt principal, Interest, and related costs arising from
general obligation bonds.
Capital Projects Fund Is utilized to account for financial resources to be used for the
acquisition or construction of capital Improvements (other than those financed by proprietary
funds). Such resources are derived from proceeds of general obligation debt, other sources
designated for capital Improvements and Interest earned on such monies.
Proprietary Fund Type
Enterprise Fund is used to account for the operations that are financed and operated In a
manner similar to private business enterprises - where the intent of the City Is that costs
(expenses Including depreciation) of providing services to the general public on a continuing
basis be financed or recovered through user charges.
Fiduciary Fund Types
Agency Funds are used to account for assets held by the City as an agent for Individuals,
private organizations, other governments, and /or other funds. Agency funds are custodial
In nature and do not Involve measurement of results of operations.
Account Groups
General Fixed Assets Account Group is utilized to account for fixed assets in governmental
fund type operations.
General Long -Term Debt Account Group is utilized to account for the long -term liabilities of
governmental fund types.
16
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
C. Measurement Focus
Measurement focus 1s the accounting convention which determines which assets and liabilities
are Included on the balance sheet of a fund type and whether a fund type's operating statement
presents financial flow' or capital maintenance Information.
All governmental funds are accounted for on a spending or 'financial flow' measurement focus.
This means that only current assets and current Ifabilfties are generally Included on their
balance sheets. Their reported fund balance (net current assets) 1s considered a measure of
'available spendable resources'. Governmental fund operating statements present Increases
(revenues and other financing resources) and decreases (expenditures and other financing
uses) In net current assets. Accordingly, they are said to present a summary of sources and
uses of 'available spendable resources' during a period. Fixed assets used In governmental
fund type operations and Tong -term liabilities expected to be financed from governmental funds
are accounted for in the General Fixed Assets and General Long -Term Debt Account Groups.
The two account groups are not 'funds'. They are concerned only wfth the measurement of
financial position. They are not Involved with measurement of results of operations.
Proprietary funds are accounted for on a net Income and capltal maintenance' measurement
focus. This means that all assets, Ilabilfties, equity, revenues, expenses and transfers relating
to the activity of a proprietary fund are accounted for through the proprietary fund. The
measurement focus is upon the determination of net Income, financial position and cash flows.
D. Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized in
the accounts and reported in the financial statements. Basis of accounting relates to the timing
of the measurements made, regardless of the measurement focus applied.
All governmental funds and agency funds are accounted for using the modified accrual basis
of accounting. Under the modified accrual basis, revenues are recognized when they become
measurable and available as net current assets. Expenditures are generally recognized under
the modified accrual basis of accounting when the related fund liability Is Incurred. The
exception to this general rule is that principal and interest on general long -term debt is
recognized when due.
The more significant revenues which are treated as susceptible to accrual under the modified
accrual basis are property taxes, intergovernmental revenues, charges for services, and
Interest. Other revenue sources are not considered measurable and available, and are not
treated as susceptible to accrual.
All proprietary funds are accounted for using the accrual basis of accounting. Their revenues
are recognized when they are earned and their expenses are recognized when they are
incurred.
17
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
E. Budgets and Budgetary Accounting
The City Manager submits to the City Council, between sixty and ninety days prior to the
beginning of each fiscal year, a proposed budget for all funds of the City. At the meeting of
the City Council at which the budget Is submitted, the City Council fixes the time and place of
the public hearing on the budget and causes to be published a notice of the budget hearing.
After the budget hearing the budget may be adopted by a favorable vote of the majority of the
members of the City Council. Upon adoption the budget is filed wfth the City Secretary.
During the fiscal year, the City Council may transfer funds allocated to a department to another
department or re- estimate revenues or expenditures. The City Manager may transfer budgeted
funds within a department. Expenditures should not exceed appropriations at the department
level, the classification level as reported in the combined financial statements. Supplemental
appropriations to amend the budget during the year were not material to total appropriations.
The final amended version of the budget was utilized in this report. Unused appropriations
lapse at the end of each fiscal year.
The budgets for the general fund, special revenue funds, and debt service funds are adopted
on a basis consistent with generally accepted accounting principles (GAAP). The final
amended version of these budgets are used in this report.
Control over the expenditures for the capital projects funds are maintained through general
obligation bond indenture agreements, and authorized construction contracts. Accordingly,
formai budgetary integration Is not employed for the capital projects funds.
F. Cash and Investments
Cash and Investments are comprised of demand accounts, lmprest funds and certificates of
deposit. The City maintains a cash and investment pool that is available for use by all funds.
Each fund type's portion of this pool is displayed on the combined financial statements as cash
and cash equivalents or restricted cash and equivalents. All City deposits and investments are
insured or collateralized by the Federal Deposit Insurance Corporation and pledges of
securities issued by the State of Texas, other Texas municipalities or the Federal government.
The City's cash and Investments are considered as cash equivalents as they can be readily
converted to cash at their carrying value.
G. Property Taxes
Ad valorem taxes are levied from valuations assessed as of January 1 and are recognized as
revenue beginning on the date of levy, October 1, when they become available. Available
means collected within the current period or expected to be collected soon enough thereafter
to be used to pay current liabilities. Taxes not expected to be collected within sixty days of the
fiscal year ending are recorded as deferred revenues and are recognized when they become
available. Taxes collected prior to the levy date to which they apply are recorded as deferred
revenues and recognized as revenue of the period to which they apply.
18
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
G. Property Taxes - continued
The City's taxable assessed valuation of $826,083,256 and tax rate of .449 per $100 of taxable
assessed valuation resulted in a tax levy of $3,709,114.
Current taxes are due on October 1 and become delinquent if unpaid on February 1. Taxes
unpaid as of February 1 are subject to penalty and Interest as the City Council provides by
ordinance. A lien Is created and attaches to property on January 1 each year until taxes are
paid.
Tax collection of the 1994 tax levy and total collections, including collections of prior year
taxes, during the fiscal year ended September 30, 1995 were 98.08% and 101.90% of the
current year tax levy, respectively.
H. Allowance for Uncollectible Accounts
An allowance for uncollectible taxes Including penalties and Interest and water and sewer billed
receivables is provided based on an analysis of historical trends. The allowances for
uncollectibie taxes and water and sewer billings at September 30, 1995 were $29,950 and
$31,857, respectively.
I. Unbilled Services
Utility operating revenues (water, sewer and refuse collection) are billed on monthly cycles.
The City records estimated revenues for services delivered during the current fiscal year which
will be billed during the next fiscal year.
J. Inventories
Inventories are stated at cost (first -in, first -out) and are determined annually by taking a
physical inventory. Inventory in the general fund consists of gasoline and supplies held for
consumption and is reported on the consumption method. Under the consumption method the
cost is recorded as an expenditure at the time individual inventory items are utilized.
K. Property, Plant and Equipment
Property, plant and equipment of the proprietary fund Is stated at cost (estimated cost for
assets contributed). Depreciation expense Is calculated principally on the straight -line method.
Depreciation methods are designed to amortize the cost of the assets over their estimated
useful lives. Estimated useful lives of major categories of property are as follows:
19
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
K. Property, Plant and Equipment - continued
Category LBe
Buildings 20-30 years
Distribution system 30 years
Storage tanks 30 years
Equipment 5-10 years
Maintenance, repairs, renewals and betterments which do not enhance the value or Increase
the basic productive capacity of assets are charged to expense as Incurred.
L. General Fixed Assets
General fixed assets have been acquired for general governmental purposes from
governmental fund types. Assets purchased In governmental funds are recorded as
expenditures In governmental fund types and capitalized at cost In the general fixed asset
account group, except for Infrastructure fixed assets. Infrastructure fixed assets (roads,
bridges, curbs, gutters, streets, lighting systems, and similar assets that are Immovable and
of value only to the City) are not capitalized In the general fixed asset account group. Donated
fixed assets are recorded as general fixed assets at their fair value at the date donated.
No depreciation is provided on general fixed assets.
M. Accrued Vacation
It Is the City's policy to permit employees to accumulate a limfted amount of earned but unused
vacation which will be payable to City employees upon termination from City service.
The City has no other compensated absence obligations except for vacation benefits.
The City records compensated absences in governmental fuhd types for the amount expected
to be liquidated with expendable financial resources. The remainder of the liability from
compensated absences of governmental fund types Is reported In the general long -term debt
account group. Proprietary funds accrue compensated absences In the period for which they
are Incurred.
N. Contributed Capital
Contributed capital In enterprise funds represents the accumulation of contributions in the form
of cash or other assets which generally do not have to be returned to the contributor. Such
contributions are recorded directly to contributed capital and, accordingly, are not recognized
as revenue. The following types of transactions are recorded as contributed capftal in the
enterprise fund:
20
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
N. Contributed Capital - continued
• Assets contributed by City.
• Assets contributed by developers.
• Receipts of federal grants specifically designated for acquisition of assets.
• System development and impact fees charged to fund the costs of capital Improvements
to the utilities system.
• Special assessments levied to fund costs of capital Improvements.
O. Reserves
Reserves Indicate portions of fund equity legally segregated for a specific future use.
P. Tax Revenues
The City's tax revenues consist of property tax, franchise tax, and City sales tax. The
ordinance levying property taxes specifies the percentage applicable to the General Fund and
Debt Service Fund. Tax revenues by fund for the year ended September 30, 1995 were as
follows:
General Special Revenue Debt Service
Fund Funds Funds Total
Property taxes $ 2,375,342 $ $ 1,466,318 $ 3,841,660
Franchise taxes 478,633 478,633
Sales taxes 1,033,501 516,750 1,550,251
Mixed beverage taxes 2.983 2.983
Tax revenue $ 3,890,459 $ 516,750 $ 1,466,318 $ 5.873,527
0. Cash Flow Presentation
For the purposes of presenting the Statement of Cash Flows, the City considers all highly liquid
Investments with an original maturity or initial maturity of Tess than three months to be cash
equivalents.
R. Total Columns
Total columns on the combined financial statements are captioned 'Memorandum Only' to
indicate they are presented only to facilitate financial analysis. Data in these columns do not
present financial position, results of operations or cash flows In conformity with generally
accepted accounting principles. Neither are such data comparable to a consolidation.
Interfund eliminations have not been made in the aggregation of this data.
S. Comparative Data
Comparative totals for the prior year have been presented in the accompanying combined
financial statements In order to provide an understanding of changes In the City's financial
position and operations.
21
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 2. Deposits and Investments with Financial Institutions
The City's investment policies are governed by state statutes and City ordinance. Collateral 1s
required for all deposits and Investments not covered by federal deposit Insurance. Excess cash
may be invested In the following:
• Obligations of the United States or its agencies and Instrumentalities;
• Direct obligations of the State of Texas or its agencies;
• Other obligations, the principal of and interest on which are unconditionally guaranteed or
Insured by the State of Texas or the United States;
• Obligations of states, agencies, counties, cities, and political subdivisions of any state
having been rated as to investment quality by a nationally recognized investment rating firm
and having received a rating of not less than A or its equivalent;
• Certificates of deposit Issued by state and national banks domiciled in this state that are:
a) Guaranteed or insured by the Federal Deposit Insurance Corporation; or
b) Secured by obligations described above;
• Local Government Investment Pools as authorized by State Statute.
Maturities on all Investments are consistent with the City's cash flow requirements.
The City's deposits and Investments are pooled accounts consisting of the following:
Cost Market
Deposits and financial Institutions $ 2,620,458 $ 2,620,458
U.S. Government Agency obligation (at cost) 8,459,326 8,458,060
Government investment pools (at cost) 4,025,041 4,025,041
15,104, 825 15,103, 559
Deferred compensation plans (at market) 221,024 221.024
$ 15,325,849 $ 15,324,583
Deposits with financial institutions are fully insured or collateralized with securities held by Its
agent in the entity's name.
All Investments were Insured or registered, or securities held by the City or its agent in the City's
name.
Government pool investments are not categorized because they are not evidenced by securities
that exist in physical or book entry form.
22
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 3. Fixed Assets
General Fixed Assets
All fixed assets acquired for governmental fund type operations are capitalized at cost or
estimated historical cost If actual historical cost is not available. Donated fixed assets are valued
at their estimated fair value on the date donated.
A summary of changes In general fixed assets follows:
Land Buildings
and and
Total Improvements Improvements Equipment
Balance, beginning $ 4,844,950 $ 740,803 $ 1,337,845 $ 2,766,302
Additions 2,134,814 1,306,103 20,044 808,667
Deletions ( 210.435) ( 210.435)
Balance, ending $ 6,769,329 $ 2,046,906 $ 1,357,889 $ 3,364,534
Proprietary Fixed Assets
A summary of proprietary fund fixed assets by type of property Is as follows:
Land and improvements $ 280,573
Buildings and Improvements 65,909
Distribution system 23,396,013
Equipment 375,821
24,118,316
Less accumulated depreciation 3,616,063
$ 20,502,253
Note 4. General Long -Term Debt
General Tong -term debt of the City consists of general obligation bonds and obligations under
compensated absence agreements. General obligation bonds retirement is provided from the debt
service tax within the Debt Service Fund. The retirement of accrued vacation is provided by
financial resources of the General Fund.
23
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 4. General Long -Term Debt - continued
General obligation bonds and governmental revenue bonds outstanding at September 30, 1995
consist of the following:
Date Amount of Amount
Interest Date Series Original Outstanding
Rates issued Matures Issue 9 -30-95
General Obligation Bonds,
Series 1984 9.25 - 11.25% 1984 2001 600,000 5 45,000
General Obligation
Refunding, Series 1990 6.1 - 7.1 1990 2009 3,076,137 766,137
Public Property Finance Contractual
Obligation, Series 1990 7.0 - 7.13 1990 1996 200,000 45,000
Tax and Water Works and Sewer
System (Limited Pledge) Revenue
Certificates of Obligation,
Series 1990 7.25 - 9.75 1990 2012 1,100,000 245,000
Combined Tax/Revenue Certificates of
Obligation, Series 1991 6.0 1991 1996 200,000 45,000
Tax and Water Works and Sewer
System (Unified Pledge)
Revenue CertMcates of
Obligation, Series 1992 6.0 - 8.0 1992 2012 1,300,000 1,215,000
General Obligation Bonds,
Series 1992 5.2 - 8.2 1992 2013 1,500,00 1,460,000
General Obligation Refunding
Bonds, Series 1993 2.8 - 4.7 1994 2013 6,490,000 6,280,000
Public Property Contractual
Obligation, Series 1993 2.6 - 3.65 1994 1999 745,000 560,000
Certificates of Obligation,
Series 1994 3.0 - 4.4 1994 1998 320,000 200,000
Sales Tax Revenue Bonds,
Series 1994 6.0 - 6.25 19^4 2014 2,945,000 2,895,000
Sales Tax Subordinate Uen
Revenue Bonds, Series 1994 6.5 - 15.0 1994 2015 1,000,000 1,000.000
$ 14,756,137
A summary of changes in general long -term debt follows:
General Sales Tax Compensated
Obligation Revenue Absences Note
Total Bonds Bonds Obligation Payable -Land
Balance, beginning $ 14,540,302 5 11,526,137 $ 2,945,000 $ 69,165 $
Additions 1,886,452 1,000,000 18,452 868,000
Deletions 715,000 665,000 50,000
Balance, ending $ 15,711,754 5 10,861,137 $ 3,895,000 $ 87,617 $ 868,000
24
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 4. General Long -Term Debt - continued
The debt service requirements of general obligation bonds and sales tax revenue bonds are as
follows:
Due Fiscal
Year Ending Princioal Interest Total
1996 $ 830,000 6 814,483 $ 1,644,483
1997 795,000 721,189 1,516,189
1998 840,000 835,822 1,675,822
1999 714,532 953,662 1,668,194
2000 596,754 927,923 1,524,677
2001 -2015 10,979,851 5,419,793 16,399,644
14,756,137 $ 9,672,872 $ 24 -909
Note 5. Proprietary Long -Term Debt
Proprietary long -term debt consists of revenue bonds and revenue contract obligations. Resources
to retire these obligations are provided from the net revenues of the water and sewer fund and
transfers from the debt service fund.
Revenue Bonds and Combination Tax and Revenue Certificates of Obligations
Revenue bonds were Issued to make Improvements to the water and sewer system. Revenue
bonds are payable soley from the net revenues of the water and sewer system. Combination tax
and revenue certificate of obligations are payable from the net revenues of the water and sewer
system and general debt service tax.
Revenue bonds and combination tax and certificate of obligations outstanding at September 30,
1995 consist of the following:
Date Amount of Balance
Interest Date Series Original Outstanding
Rates Issued Matures Issue 9 -30-95
Waterworks and Sewer System
Revenue Bonds, Series 1984 9.80 - 11.75% 1984 2001 $ 500,000 $ 285,000
Waterworks and Sewer System
Revenue Bonds, Series 1987 3.75 1987 2005 217,000 127,000
Tax and Waterworks and Sewer
System Surplus Revenue
Certificates of Obligation,
Series 1992A 5.20 - 8.20 1992 2013 1,300,000 1,265,000
Tax and Waterworks and Sewer
System Revenue Certificates
of Obligation, Series 1994 5.95 - 8.75 1994 2015 4,350,000 4,350.000
6,027,000
25
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 5. Proprietary Long -Term Debt - continued
Contract Revenue Obi!nations
The City has entered Into various contractual agreements to unconditionally finance the principal
and interest or a fixed percentage of principal and interest of Trinity River Authority (TRA) Contract
Revenue Bonds. Under the agreements, the Trinity River Authority utilized the bond proceeds to
administer and construct various sewer and wastewater treatment projects on the City's behalf.
Such agreements provide the City title to the assets upon retirement of the debt or capacity rights
In the use of constructed assets. The City has Included in its financial statements Its proportionate
share of these obligations and Its investment in these assets as capacity rights.
Contract revenue obligations at September 30, 1995 consist of the following:
Amount
Date Date Outstanding
Issued Matures 940 -95
TRA - City of Southlake Sewer System
Project - Contract Revenue Obligations
- Series 1990 1990 2011 $ 1,130,000
TRA - Big Bear Creek Interceptor -
Contract Revenue Obligation - Series 1990 1990 2011 3,537,246
TRA - Denton Creek Wastewater Pressure
Interceptor - Contract Revenue
Obligation - Series 1990 1990 2012 1,360,000
TRA - Demon Creek Wastewater Pressure
Interceptor - Contract Revenue
Obligation - Series 1994 1994 2017 5,230,000
$ 11,257,246
Total principal and interest requirements outstanding for all revenue bonds and contract revenue
obligations for the respective years ending September 30, 1995 are as follows:
Principal Interest Total
1996 $ 358,832 $ 1,380,430 $ 1,739,262
1997 513,924 1,141,676 1,655,600
1998 685,698 1,095,040 1,780,738
1999 728,472 1,041,211 1,769,683
2000 785,246 983,669 1,768,915
2001 -2017 14,212,074 7,506,345 21,718,419
$17,284,246 $13,148,371 $30,432,617
26
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 6. Advance Refunding Resulting In In- Substance Defeasance of Debt
In previous years the City has legally defeased certain outstanding general obligation debt In
placing funds Into irrevocable trusts pledged to pay all future debt service payments of the refunded
debt. Accordingly, the trust pledged to pay all future debt service payaments of the refunded debt
and the liability for the defeased issues are not included in the City's financial statements. As of
September 30, 1995 the following outstanding bonds were legally defeased:
Series Type Amounts
1985 Combination Tax and
Revenue Certificates
of Obligation $ 1,535,000
1990 Certificates of Obligation 745,000
1990 General Obligation 2,070.000
$ 4,350,000
Note 7. Retirement Plan
Plan Description
The City provides pension benefits for all of its full -time employees through a nontraditional, joint
contributory, defined contribution plan in the state -wide Texas Municipal Retirement System
(TMRS), one of over 650 administered by TMRS, an agent multiple- employer public employee
ret':•ement system. It is the opinion of the TMRS management that the plans In TMRS are
substantially defined contribution plans, but they have elected to provide additional voluntary
disclosure to help foster a better understanding of some of the nontraditional characteristics of the
plan.
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the
City- financed monetary credits, with Interest. At the date the plan began, the City granted monetary
credits for service rendered before the plan began of a theoretical amount equal to two times what
would have been contributed by the employee, with interest, prior to establishment of the plan.
Monetary credits for service since the plan began are a percent (100 %, 150 %, or 200 %) of the
employee's accumulated contributions. In addition, the City can grant as often as annually another
type of monetary credit referred to as an updated service credit which is a theoretical amount
which, when added to the employee's accumulated contributions and the monetary credits for
service since the plan began, would be the total monetary credits and employee contributions
accumulated with Interest if the current employee contribution rate and City matching percent had
always been In existence and If the employee's salary had always been the average of his salary
in the last three years that are one year before the effective date. At retirement, the benefit Is
calculated as if the sum of the employee's accumulated contributions with Interest and the
employer - financed monetary credits with interest were used to purchase an annuity.
27
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 7. Retirement Plan - continued
Plan Description - continued
Members can retire at ages 60 and above with 10 or more years of service or with 25 years of
service regardless of age. The plan also provides death and disability benefits. A member Is
vested after 10 years, but he must leave his accumulated contributions In the plan. If a member
withdraws his own money, he is not entitled to the employer - financed monetary credits, even if he
was vested. The plan provisions are adopted by the governing body of the City, within the options
available In the state statutes governing TMRS and wfthin the actuarial constraints also in the
statutes.
Contributions
The contribution rate for the employees is 6 %, and the City matching percent Is currently 200 %,
both as adopted by the governing body of the City. Under the state law governing TMRS, the City
contribution rate Is annually determined by the actuary. This rate consists of the normal cost
contribution rate and the prior service contribution rate, both of which are calculated to be a level
percent of payroll from year to year. The normal cost contribution rate finances the currently
accruing monetary credits due to City matching percent, which are the obligation of the City as of
an employee's retirement date, not at the time the employee's contributions are made. The normal
cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the
obligation of the City to each employee at the time his retirement becomes effective. The prior
service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's
25 -year amortization period. When the City periodically adopts updated service credits and
Increases In annuities In effect, the Increased unfunded actuarial liability is to be amortized over
a new 25 -year period. Curry ntly, the unfunded actuarial liability Is being amortized over the 25 year
period which began January, 1995. The unit credit actuarial cost method Is used for determining
the City contribution rate. Contributions are made monthly by both the employees and the City.
Since the City needs to know its contribution rate in advance to budget for ft, there Is a one -year
lag between the actuarial valuation that is the basis for the rate and the calendar year when the rate
goes into effect.
The City's total payroll in fiscal year 1995 was $3,735,169 and the City's contributions were based
on a payroll of $3,642,670. Both the City and the covered employees made the required
contributions, amounting to $239,504 (5.93% of covered payroll for the months in calendar year
1994, 4.82% normal cost plus 1.1% to amortize the unfunded actuarial liability, and 6.75% for the
months in calendar year 1995, 5.68% normal cost plus 1.07% to amortize the unfunded actuarial
liability) for the City and $210,726 (6 %) for the employees. The City adopted changes in the plan
since the previous actuarial valuation, which had the effect of increasing the City's contribution rate
for 1995 by 1.53% of payroll. There were no related -party transactions.
28
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 7. Retirement Plan - continued
Funding Status and Progress
Even though the substance of the City's plan is not to provide a defined benefit in some form, some
additional voluntary disclosure is appropriate due to the nontraditional nature of the defined
contribution plan which had an Initial unfunded pension benefit obligation due to the monetary
credits granted by the City for services rendered before the plan began and which can have
additions to the unfunded pension benefit obligation through the periodic adoption of Increases in
benefit credits and benefits. Statement No. 5 of the Governmental Accounting Standards Board
(GASB 5) defines pension benefit obligation as a standardized disclosure measure of the actuarial
present value of pension benefits, adjusted for the effects of protected salary Increases, estimated
to be payable In the future as a result of employee service to date. The measure is intended to help
users assess the funding status of public employee pension plans, assess progress made in
accumulating sufficient assets to pay benefits when due, and make comparisons among public
employee pension plans.
The pension benefit obligation shown below is similar in nature to the standardized disclosure
measure required by GASB 5 for defined benefit plans except that there is no need to project salary
increases since the benefit credlts earned for service to date are not dependent upon future
salaries. The calculations were made as part of the annual actuarial valuation as of December 31,
1994. Because of the money - purchase nature of the plan, the Interest rate assumption, currently
8.5% per year, does not have as much Impact on the results as it does for a defined benefit plan.
Market value of assets is not determined for each City's plan, but the market value of assets for
TMRS as a whole was 98.6% of book value as of December 31, 1994.
Pension Benefit Obligation
Annuitants currently receiving benefits $ 27,492
Terminated employees 63,525
Current employees
Accumulated employee contributions
Including allocated Invested earnings 810,833
Employee- financed vested 805,264
Employer- financed nonvested 538.304
Total $ 2,245,418
Net assets available for benefits, at book value $ 1,579,673
Unfunded pension benefit obligation 665.745
2,245,418
The book value of assets is amortized cost for bonds and original cost for short-term securities and
stocks. The actuarial assumptions used to compute the actuarially determined City contribution rate
are the same as those used to compute the pension benefit obligation. The numbers above reflect
the adoption of changes in the plan since the previous actuarial valuation, which had the effect of
Increasing the pension benefit obligation by $230,896.
29
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 7. Retirement Plan - continued
Trend Information
Trend information gives an indication of the progress made In accumulating sufficient assets to pay
benefits when due. Ten year trend information for TMRS Is available in the System's
Comprehensive Annual Financial Report for its fiscal year ending December 31. Trend Information
as it relates to the City of Southlake may be found in the supplementary Information of the City's
Comprehensive Annual Financial Report.
For the year ended December 31, 1994, 1993, and 1992, respectively, which Is the latest available
Information, available assets were sufficient to fund 70.35 %, 79.07 %, and 91.28% of the pension
benefit obligation. The unfunded pension benefit obligation represented 18.3 %, 10.1 %, and 3.5 %,
of the payroll for employees covered by the plan for the years ended December 31, 1994, 1993 and
1992. Showing overfunded and unfunded pension benefit obligation as a percentage of annual
covered payroll approximately adjusts for the effects of inflation for analysis purposes.
Note 8. Deferred Compensation Plan
The City offers its employees a deferred compensation plan created In accordance with Internal
Revenue Code Section 457. The plan, available to all City employees, permits them to defer a
portion of their salary until future years. The deferred compensation is not available to employees
until termination, retirement, death, or unforeseeable emergency. The Plan is administered by
PEBSCO and ICMA and assets and liabilities are reported at approximate market value.
All amounts of compensation deferred under the plan, all property and rights 7urchased with those
amounts, and all Income attributable to those amounts, property and rights purchased with those
available to the employee or other beneficiary) solely the property and rights of the City (without
being restricted to the provisions of benefits under the plan), subject only to the claims of the City's
general creditors. Participant's rights under the plan are equal to those of general creditors of the
City In an amount equal to the fair market value of the deferred account for each participant.
It is the opinion of management of the City that there is no liability for losses under the plan but that
they do have the duty of due care that would be required of an ordinary prudent Investor. The City
believes that It Is unlikely that It will use the assets to satisfy the claims of general creditors In the
future.
30
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 9. Commitments and Contingencies
The City has entered various contracts with the Trinity River Authority (TRA) and other cities.
Terms of the agreements provide the City will pay an amount equal to Its proportional share of
maintenance and operations and debt service based upon volumes of wastewater transported,
treated or disposed of. The City's proportional share of future costs under these contracts is
undeterminable and has not been recorded. Payments to the TRA under these contracts for the
year ended September 30, 1995 was $187,462.
The City has authorized various contracts obligating future funds of the City as the contracted
services are performed. Significant amounts unexpended under such contracts at year end are
reflected as reserves for authorized contracts In the applicable funds.
Note 10. Risk Financing and Insurance
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. During the fiscal year
1990, the City Joined the Texas Municipal League Group Benefits Risk Pool and the Texas municipal
League Workers Compensation Joint Insurance Fund for risks related to employees. Premiums are
paid to these Pools, which retain a limit of loss. Reinsurance companies Insure the risks beyond
those limits. The City retains, as a risk, only the deductible amount of each policy. The City
continues to carry commercial Insurance for other risks including general liability, property and
errors and omissions.
Note 11. Contributed Capital
Subsequent to the Issuance of the 1994 financial statements It was discovered that assets
contributed to the water and sewer system by developers had not been recognized as contributed
capital. Beginning contributed capital has been restated to reflect these contributed assets and the
related accumulated depreciation on such assets.
The changes in contributed capital are as follows:
Balance, beginning $ 6,643,496
Prior period adjustments:
Developer contributions 7,882,467
Accumulated depreciation on contributed
assets at September 1, 1994 ( 369.593)
Balance, beginning (as restated) 14,156,370
Impact fees 848,139
Development contributions 2,742,127
Depreciation on contributed assets ( 277,605)
Other 27,226
Balance, ending $ 17,496,257
31
/
outbid
32
APPENDIX C
FORM OF BOND COUNSEL'S OPINION
THIS PAGE LEFT BLANK INTENTIONALLY
FULBRIGHT & JAWORSKI
L. L. P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP HOUSTON
2200 Ross AVENUE WASHINGTON, D.C.
AUSTIN
SUITE 2800 SAN ANTONIO
DALLAS
TELEPHONE: 214/855 -8000 DALLAS, TEXAS 75201 NEW YORK
FACSIMILE: 214/855 -8200 LOS ANGELES
LONDON
WRITER'S DIRECT DIAL NUMBER: HONG KONG
214/855 -8013
IN REGARD to the authorization and issuance of the "City of Southlake, Texas,
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 1997 (the "Certificates "), dated February 15, 1997 (the "Certificate
Date "), in the principal amount of $9,670,000, we have examined into the legality and
validity of the issuance thereof by the City of Southlake, Texas (the "City "), which
Certificates are issuable in fully registered form only, in denominations of $5,000 or any
integral multiple thereof (within a maturity), have stated maturities of February 15,
1998 through February 15, 2017, unless redeemed prior to maturity in accordance with
the terms stated on the Certificates, and bear interest on the unpaid principal amount
from the Certificate Date at the rates per annum stated in the ordinance authorizing
the issuance of the Certificates (the "Ordinance "), such interest being payable on
February 15 and August 15 in each year, commencing February 15, 1998, to the
registered owners shown on the registration books of the Paying Agent/Registrar on the
Record Date (stated on the face of the Certificates).
WE HAVE SERVED AS BOND COUNSEL for the City solely to pass upon the
legality and validity of the issuance of the Certificates under the Constitution and laws
of the State of Texas, and with respect to the exclusion of the interest on the
Certificates from gross income for federal income tax purposes and none other. We
have not been requested to investigate or verify, and have not independently
investigated or verified, any records, data or other material relating to the financial
condition or capabilities of the City. Our examinations into the legality and validity of
the Certificates included a review of the applicable and pertinent provisions of the
Constitution and laws of the State of Texas, a transcript of certified proceedings of the
City relating to the authorization and issuance of the Certificates, including the
Ordinance, customary certifications and opinions of officials of the City and other
pertinent showings, and an examination of the Certificates executed and delivered
initially by the City, which we found to be in due form and properly executed.
BASED ON OUR EXAMINATIONS, IT IS OUR OPINION that, under the
applicable law of the United States of America and the State of Texas in force and
effect on the date hereof:
1. The Certificates have been duly authorized by the City, and the
Certificates issued in compliance with the provisions of the Ordinance are
valid, legally binding and enforceable obligations of the City, payable from
an ad valorem tax levied, within the limits prescribed by law, upon all
taxable property in the City and additionally payable from a limited
pledge of the Net Revenues (as defined in the Ordinance) of the City's
combined Waterworks and Sewer System in the manner and to the extent
0401111
Page 2 of Legal Opinion of Fulbright & Jaworski L.L.P.
Re: $9,670,000 "City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1997 ", dated
February 15, 1997
provided in the Ordinance; except to the extent that the enforceability
thereof may be affected by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting creditors' rights or the
exercise of judicial discretion in accordance with the general principles of
equity.
2. Assuming continuing compliance after the date hereof by the
City with the provisions of the Ordinance and in reliance upon
representations and certifications of the City made in a certificate of even
date herewith pertaining to the use, expenditure, and investment of the
proceeds of the Certificates, interest on the Certificates for federal income
tax purposes (a) will be excludable from gross income, as defined in
section 61 of the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code "), of the owners thereof pursuant to section 103 of the
Code and existing regulations, published rulings, and court decisions
thereunder, and (b) will not be included in computing the alternative
minimum taxable income of individuals or, except as hereinafter described,
corporations. Interest on all tax- exempt obligations, such as the
Certificates, owned by a corporation will be included in such corporation's
adjusted current earnings for tax years beginning after 1989 for purposes
of calculating the alternative minimum taxable income of such
corporation, other than an S corporation, a qualified mutual fund, a real
estate mortgage investment conduit (REMIC), or a real estate investment
trust (REIT). A corporation's alternative minimum taxable income is the
basis on which the alternative minimum tax imposed by the section 55 of
the Code will be computed.
WE EXPRESS NO OPINION with respect to any other federal, state, or local
tax consequences under present law or any proposed legislation resulting from the
receipt or accrual of interest on, or the acquisition or disposition of, the Certificates.
Ownership of tax- exempt obligations such as the Certificates may result in collateral
federal tax consequences to, among others, financial institutions, life insurance
companies, property and casualty insurance companies, certain foreign corporations
doing business in the United States, S corporations with subchapter C earnings and
profits, individual recipients of Social Security or Railroad Retirement Benefits,
individuals otherwise qualifying for the earned income tax credit, and taxpayers who
may be deemed to have incurred or continued indebtedness to purchase or carry, or
who have paid or incurred certain expenses allocable to, tax- exempt obligations.
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0401111
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Financial Advisory Services
Provided By
FIRST SOUTHWEST COMPANY
INVESTMENT BANKERS
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BancAmerica Securities, Inc. Page 1
City of Southlake, Texas
Tax and Waterworks
and
Sewer System Revenue
Certificates of Obligation
Series 1997
Dated Date 02/18/1997
Delivery Date 03/18/1997
Sources of Funds:
Par Amount of Bonds $9,670,000.00
Accrued Interest from 02/15/97 to 03/18/97 $44,730.70
Total Sources of Funds $9,714,730.70
Uses of Funds:
Net to Issuer $9,573,335.05
Original Issue Discount (OID) $28,832.20
Issuance Expenses:
Total Underwriter's Discount (0.701%) $67,832.75
Deposit to Debt Service Fund $44,730.70
Total Uses of Funds $9,714,730.70
BancAmerica Securities, Inc. Page 2
City of Southlake, Texas
Tax and Waterworks
and
Sewer System Revenue
Certificates of Obligation
Series 1997
Debt Service Schedule
Total
Debt Service
Date Principal Coupon Interest Requirements
02/15/98 $45,000.00 3.750% $487,971.25 $532,971.25
02/15/99 $310,000.00 4.000% $486,283.75 $796,283.75
02/15/00 $325,000.00 4.100% $473,883.75 $798,883.75
02/15/01 $340,000.00 4.250% $460,558.75 $800,558.75
02/15/02 $355,000.00 4.300% $446,108.75 $801,108.75
02/15/03 $375,000.00 4.400% $430,843.75 $805,843.75
02/15/04 $390,000.00 4.500% $414,343.75 $804,343.75
02/15/05 $410,000.00 4.600% $396,793.75 $806,793.75
02/15/06 $435,000.00 4.700% $377,933.75 $812,933.75
02/15/07 $455,000.00 4.800% $357,488.75 $812,488.75
02/15/08 $480,000.00 5.000% $335,648.75 $815,648.75
02/15/09 $505,000.00 5.125% $311,648.75 $816,648.75
02/15/10 $535,000.00 5.250% $285,767.50 $820,767.50
02/15/11 $565,000.00 5.300% $257,680.00 $822,680.00
02/15/12 $595,000.00 5.300% $227,735.00 $822,735.00
02/15/13 $630,000.00 5.400% $196,200.00 $826,200.00
02/15/14 $670,000.00 5.400% $162,180.00 $832,180.00
02/15/15 $705,000.00 5.600% $126,000.00 $831,000.00
02/15/16 $750,000.00 5.600% $86,520.00 $836,520.00
02/15/17 $795,000.00 5.600% $44,520.00 $839,520.00
Total $9,670,000.00 $6,366,110.00 $16,036,110.00
Yield Statistics
Accrued Interest from 02/15/97 to 03/18/97 $44,730.70
Bond Year Dollars $120,940.00
Average Life 12.507 Years
Average Coupon 5.2638582%
Net Interest Cost (NIC) 5.3437862%
True Interest Cost (TIC) 5.3330289%
BancAmerica Securities, Inc. Page 1
City of Southlake, Texas
Tax and Waterworks
and
Sewer System Revenue
Certificates of Obligation
Series 1997
Initial Pricing
February 18, 1997
9:00 A.M.
Year Principal Coupon Price/Yield
1998 $45,000.00 3.750% 3.750%
1999 $310900.00 4.000% 4.000%
2000 $325900.00 4.100% 4.150%
2001 $340900.00 4.200% 4.250%
2002 $355900.00 4.300% 4.350%
2003 $375,000.00 4.400% 4.450%
2004 $390,000.00 4.500% 4.550%
2005 $410900.00 4.600% 4.650%
2006 $435900.00 4.700% 4.750%
2007 $455900.00 4.800% 4.850%
2008 $480900.00 5.000% 5.000%
2009 $505,000.00 5.000% 5.100%
2010 $535900.00 5.100% 5.200%
2011 $565,000.00 5.200% 5.300%
2012 $595,000.00 5.300% 5.350%
2013 $630,000.00 5.375% 5.400%
2014 $670,000.00 5.400% 5.450%
2017 $2,250,000.00 5.500% 5.550%
BancAmerica Securities, Inc. Page 1
City of Southlake, Texas
Tax and Waterworks
and
Sewer System Revenue
Certificates of Obligation
Series 1997
Final Pricing
February 18, 1997
4:00 P.M.
Year Principal Coupon Yield Dollar Price
1998 $45,000.00 3.750% 3.750% 100.000%
1999 $310,000.00 4.000% 4.000% 100.000%
2000 $325,000.00 4.100% 4.150% 99.861%
2001 $340,000.00 4.250% 4.250% 100.000%
2002 $355,000.00 4.300% 4.350% 99.777%
2003 $375,000.00 4.400% 4.450% 99.739%
2004 $390,000.00 4.500% 4.550% 99.702%
2005 $410,000.00 4.600% 4.650% 99.668%
2006 $435,000.00 4.700% 4.750% 99.636%
2007 $455,000.00 4.800% 4.850% 99.606%
2008 $480,000.00 5.000% 5.000% 100.000%
2009 $505,000.00 5.125% 5.150% 99.774%
2010 $535,000.00 5.250% 5.250% 100.000%
2011 $565,000.00 5.300% 5.350% 99.508%
2012 $595,000.00 5.300% 5.400% 98.979%
2013 $630,000.00 5.400% 5.450% 99.467%
2014 $670,000.00 5.400% 5.500% 98.902%
2017 $2,250,000.00 5.600% 5.600% 100.000%
Investment Services Research Report
CITY OF SOUTHLAKE TEXAS
Tax and Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation
Moody's: Aaa Expected (AMBAC)
S &P: AAA Expected (AMBAC)
SALE: February 18, 1997 (expected) FIRST INTEREST: February 15, 1998
AMOUNT: $9,670,000 INTEREST PAID: February 15 & August 15
DATED: February 15, 1997 FIRST OPTIONAL CALL: February 15, 2006 @ par
DUE: February 15, 1998 - 2017 REGISTRATION: Book -Entry Only
*See 'Redemption Provisions."
PURPOSE
Certificate proceeds will be used to finance improvements and extensions to the City's water and sewer
facilities, improvements to municipal buildings, streets and drainage, and to finance the purchase of
materials, equipment and machinery for various city departments.
SECURITY
The Certificates are direct obligations of the City, secured and payable from ad valorem property taxes
within the limits prescribed by law. The Certificates are additionally secured by a limited pledge (not to
exceed $1,000) of surplus net revenues of the City's Waterworks and Sewer System.
SALES POINTS
• The ultimate security for the Certificates is a municipal bond insurance policy issued by
AMBAC. As of September 30, 1996, AMBAC reported total admitted assets of $2.5 billion and
statutory capital of $1.4 billion
• The City of Southlake is located in northeastern Tarrant County near the Dallas-Fort Worth
International Airport. Due to its proximity to the Dallas-Fort Worth Metroplex, Southlake has
experienced very strong growth in residential construction, population and assessed value.
• The area economy is substantial and diversified, and key wealth characteristics high. The largest
employers in the City include AMR/Sabre Group, Walmart, and the Caroll Independent School
District.
• The City's financial position is strong, characterized by ample reserve levels and good revenue
growth. The City ended the 1996 fiscal year with a general fund balance of $2.3 million,
representing a healthy 27.1% of revenues and a 36.2% increase from the prior year's balance.
BA Investment Services, Inc.
A BankAmerica Company
REDEMPTION PROVISIONS
• Optional Redemption: Beginning February 15, 2006, in whole or in part on any date, from
any source of available funds, at a redemption price of par plus accrued interest.
THE CITY
The City of Southlake is located in the northeast portion of Tarrant County near the Dallas -Fort
Worth International Airport, approximately 15 miles northwest of the City of Dallas and 10 miles
northeast of the City of Fort Worth. Southlake is primarily residential in character, and rapid
residential development in recent years has led to significant increases in both the City's population
and tax base. The City's 1997 population totals 16,235, a very strong 129.2% increase over the
1990 level of 7,082. Tax base growth has been even stronger, with assessed value more than
doubling since 1993 to its current $1.3 billion. The tax base is also well diversified, as the top ten
taxpayers comprise only 8% of total assessed value. Southlake also benefits from its location within
Tarrant County, which boasts a substantial and diverse economic base with a well established trade
and service sector. Wealth levels are also well above average. .f
FINANCIAL OPERATIONS
The City's financial position is strong, characterized by ample reserve levels and good revenue
growth. Since fiscal 1992, the City's general fund reserves have comprised in excess of 26% of
fund revenues, reaching a high of 35% of revenues in fiscal 1994. For the fiscal year ending
September 30, 1996, the City reported a general fund balance of $2.3 million, representing 27.1%
of fund revenues and a 36.2% increase from the prior year's balance. Revenue growth has likewise
been strong, with general fund revenues more than doubling between 1992 and 1996, from $3.9
million to $8.5 million. The City's primary source of general fund revenue is taxes - primarily
property and sales taxes - which accounted for over 58% of fiscal 1996 revenues. Licenses and
permits contributed 31.1% of the total, and fines and forfeitures 3 %.
Barbara Todd
February 12, 1997
SOUTHLKI
This memorandum is based on information available to the public obtained from sources that we believe to be reliable, but no representation is made that it is accurate
or complete. Opinions and projections found in this memorandum reflect our opinion as of the date of this memorandum and are subject to change without notice. This
memorandum is not an offer to buy or sell any security. BankAmerica Corporation, its broker - dealer subsidianes and other subsidiaries, and their respective directors,
officers and employees, may have positions in, and may effect transactions in, securities of companies mentioned herein and may also perform or seek to perform
services for companies mentioned herein
Daily Market Summary En
7.3
U.S. Treasury Yields .
7.0
6.3
Y _
i .
.6.0 •
A 5,3 rommumm "' Mo miCim "Yer All I.
.
3.0
4.s'
O/N 3mo bee 1Ye 2Yr 3Yr SYr 1OYr . 30Yr
BOND EQUIVALENT YIELDS .
O/N 3mo 6mo lYr 2Yr 3Yr SYr 10Yr 30Yr
Today's Open 5.41 5.07 5.13 5.39 5.75 5.87 6.03 6.23 6.51
Prior Day's Open 5.01 5.07 3.14 S.39 5.75 5.67 6.03 6.25 6.52
Week Ago 5.23 5.11 ' 5.25 5.46 5.85 5.95 6.16 6.41 6.71
Month Ago 5.25 5.15 5.32 5.58 5.92 6.05 6.26 6,48 6.71
Year Ago 5.15 4.91 4.91 4.91 5.01 5.13 5.36 3.62 6.29
3-Month Low 4.68 4.90 5.13 5.34 5.57 5.67 5.81 6.02 6.32
3 -Month High 6.70 5.19 5.32 5.61 6.07 6.18 6.42 6.66 6.96
SWAPS Spread (ones) 19 20 25 34
360-DAY BASIS MONEY MARKET I' YIELDS (Discount rates in parentheses)
Fed Funds Today's Open: 5 7/16 Prior Day's Range: 5 ce 5 1R Prior Day's Fdectlte: 5.15
Secondary Marta Opening Bids
1 Month 2 Months 3 Mont* 6 Months
Treasury BM (4.84) 4.86 (4.94) 4.98 (4.97) 5.03 (4.96) 5.09
Agency Dist Notes (5.19) 5.21 (5.19) 5.24 (5.11) 5.25 (5.17) 5.31
Top Domestic BA's (5.27) 5.29 (5.27) 5.32 (5.27) 5.34 (5.28) 5.42
Japanese BA's (5.38) 5.40 (5.50) 5.55 (5.50) 5.58 (5.50) 5.66
Dealer Pieced CP (5.34) 5.36 (5.36) 5.41 (5.39) 5.46 (5.37) 5.52
Top Domestic CD's 5.30 5.32 5.34 5.41
Japanese Euro CD's 5.40 5.46 5.56 5.67
LIBOR 5 3/8 5 7/16 5 15/32 5 11/32
BOA New Issue Posed Rates
BAC Commeedal Paper (5.22) 5.24 (5.23) 5.2.8 (5.23) 5.30 (5.24) 5.38
BotA Negodabk CD's 4.80 4.83 4.86 4.96
Bo(A E1tro Time Deposit 5 3/16 5 3/16 5 1/4 5 5/16
BancAmerica Securities, Inc.
' 2/1* 7 010131 Capitol Martel Grafi,
8•,
ER BOA RATES '
ETHER
PRIMA INTEREST CHECKING COR Investment Account " -
INTBRESl'MAXIMIZER
PERSONAL/BUSINESS
Under 510,000: 1.00 1.01 550,000.599,999 : 3.00 3.05 Under 52,500: 2.00 2.02
510,000 - 124,999: 1.25 1.26 5100,000 - S499,999 : 3.80 187 62,55 • 59,999: 2.40 2.43
525,000. 1.50 1.51 8500,000.51,999,999 : 4.40 4.50 510,000 - 524,999: 4.00 4.08
550,000 • S99,999: 1.75 1.77 52,000,000 or more: 4.60 4.71 :25,000 - 549,999: 4.25 4.34
5100,000 or mon: 100 2.02 550,000.599,999: 4.40 4.50
5100,000 or more: 4.50 4.6o
Bank of America Reference Rale : 8.25
EQUITY MARKETS
•
New York (yesterday's dose)
BAC Stock: • 120 1/8 -2 7/8 DJIA: 6,988.96 -33.48 S&P 500: 808.41 -3.1$
Worldwide (ovnrai kt dose)
Nikkei DOW: 18,470.75 - 251.25 Hong Kong: 13,102.94 -10.32 London (midday): 4,339.20 4.10
ICIPAL NOTES AND BONDS
Tax Free Yields Tax Equivalent Ytdds'
NOTES
Maturity (months) w y (months)
Rating 1 3 6 12 Mating 1 3 6 12
MIG1/VMIG1 3.40 3.45 3.50 3.55 MIG1/V1HIG1 5.86 5.94 6.03 6.12
'Aroma 41.95% combined Mall l and State tax bracket
BONDS
Maturity (year') Maturity (years)
Grade 1 5 10 20 Grade 1 5 10 20
AAA 3.49 4.23 4.73 5.27 AAA 6.01 7.29 8.15 9.01
AA 3.62 4.34 4.84 5.38 M 6.24 7.48 8.34 9.2'
A 3.75 4.49 4.99 5.53 A 6.46 7.73 8.60 9.5;
Bu 3.93 4.81 5.32 5.82 Bat 6.77 8.29 9.16 10.01
'Maumee 41.95% combined Federal and State tax btaokat
FOREIGN EXCHANGE. PRECIOUS METALS and OIL PRICES
Foreign Exchange Precious Meade OK Prices
DoOtr
DM Yea Sterling Ioddt Gold Silver WTI Crude
1.6990 124.10 1.6025 95.63 345.90 5.23 22.35
NAME and/or ADDRESS CHANGES =
Please correct muting label for name and/or address changes and return to
Daily Market Susmary
Ea»tMerlea Securities, I. 110071
•
FO ' i - - - 4`T AL I SE • Y ._ ,
()ND B UYER®
TILE DAILY NEWSPAPER OF MUNICIPAL F IN A NCE
Tuesday, February 18, 1997
F avorable Data, But for now, the week's largest sale is a
$260 million issue for the Hempstead, N.Y.,
Rally Momentum InatrstriaJ t A
be priced tomorrow Developmen by book- runner uthority Smith due to
Barney Inc.
Help Munis Finish The bonds will be insured by MBIA In-
O n a Strong M � �1 Piper Jaffray Inc. will price
Note a $79.8 million Arapahoe County, ,Colo
By Niamh Ring general obligation refunding issue out of the
firm's Denver office today.
Municipal bond prices ended the week The bonds, which are for the Cherry
Creek School District No. 5, are rated Aa2
on an uptick Friday, as tax- exempts were
quoted up a' /, to 1/2 point, aided by favor- by'Moody's Investors Service and AA by
able economic data and follow - through Standard & Poor's. Fitch Investors Ser-
from Thursday's rally. vice does not rate Arapahoe GOs.
The steepest drop in producer prices in
more than two years Tomorrow, J.P. Mo rg an Securities Inc.
. threw fuel on a
will price an $86 million refunding bond is-
bond market still sue from the M-S-R Public Power Agency
111111 buoyant after t still i l l for the San Juan project in California The is-
day am after Thu
s- sue, which contains a single term maturity
sion. due in 2020, is rated A3 by Moody's and A
The overall produc- by Standard & Poor's. Fitch does not rate the
er price index fell power agency.
0.3% in January, Elsewhere, a $78 million issue containing
- while the core PPI both senior and subordinate lien debt from
0 1 - _,,,- `- - " number was un- Harms County, Tex., has been postponed
changed from De- until next week, said Faye Christopher, di-
x ., cember, The drop in rector of financial services for the county.
broad PPI came as "Our Commissioner's Court does not meet
a surprise and con- next week because of Presidents Day,"
M UNICIPAL tradicted a consen- Christopher said Friday. She said the court
sus expectation for needs to give final authorization for the sale.
MARKET a 0.2% rise. The bonds will instead come to market
Much of Friday's n hers. ersenior manager Lelunan
activity, however, was concentrated in the Brothers•
morning due to the shortened pre- holiday The issue, which will refinance outstanding
session. debt associated with Houston's Astrodome
"It really got quiet, it's a little sleepy sports complex, will be MBIA- insured
right now," said a trader speaking at about The Bond Buyer's 30-day visible supply of
noon Friday. However, traders noted a new issues expected to come to market with_
"firmer" tone in early trading. in the next month totaled $3 billion, down
Late in the session Friday, the bench- $200.5 million. That comprised $1.77 billion
mark long bond was up over 1/2 point, at 1% of competitive issues, down $155.3 million,
to yield 6.52%. and $1.22 billion of negotiated issues, down
In the debt futures market, the March mu- $45.2 million.
crpai contract closed up 2 1/22 to 117afrz The Standard & Poor's Blue List of dealer in-
m March MOB spread was 125 compared with a thin $9hn $ rose $13.3 million but remains at
123 Thursday. a t6 million. 0
- Meanwhile, after a brief respite from the
rticent lack of new paper, the new -issue cal-
endar is lean again this week, in part because
of the holiday, players said.
"Hopefully now with the yields getting a
little lower, we'll see some refunding deals
come to market," said one municipal play-
er.
SOUTHWEST
Arkansas • Colorado ♦ Kansas ♦ New Mexico • Oklahoma ♦ Texas
Impact Fees Help Fund Booming C Infrastructure Needs
F"-t.isa Sanders
M ore and more these days, local Southlake's population has swelled ter size and range from $1,136 to $87,112
governments in the Southwest are from 7,050 in 1990 to an estimated 16,200 per residence.
turning to impact fees to finance today. "We have tried to remain market -sen-
their multiplying infrastructure needs. As recently as April, Southlake officials sitive to costs, and have discounted our
For a number of years, people have added impact fees for roads at a cost of fees to about 50% of what the law allows,"
flocked to states in the region for their $1,150 per single - family dwelling to help said Frank Turner, Plano's director of
quality of life and increased job opportu- maintain the city's streets. Officials have development services. "Some cities don't
nities. But that migration has also put a also discussed a drainage impact fee, but discount as heavily as we do. We don't
strain on many communities, as growth have taken no action to impose one yet. want to discourage new development —
outstrips sources of financing for such es- Heath said much of the revenue derived we want to help fund the cost of infra -
sentials as water and sewer systems. from the fees is dedicated to retiring debt. structure."
Hence, communities are using impact Indeed, the city plans to come to market Marion, Ark., Mayor Frank Fogelman
fees — assessed on developers of resi- today with $9.7 million of certificates of also supports that view, but he goes one
dertial or commercial property, based on obligation to pay for infrastructure im- step further.
such factors as the size of the water meter provements. The portion that pays for im- `The people that have been there
— to help offset the cost of debt service provements to the water and sewer sys- shouldn't have to pay for growth," Fogel -
on capital improvements.
"I think that [impact man said.
fees] are an element to Marion, a town
some financings," said west of Memphis
Paul Devine, a vice pres- with a population
ident at Moody's In- � of 6,000, began to
vectors Service. "It's part ere in the throes of figuring out what to do about growth, assess water and
of the whole trend that but in times of growth, we need to avail ourselves of revenues, sewer fees v l o p -
dential dev
those who benefit incur + el
some of the costs:' says Albuquerque, N.M., economist Lee Reynis. mein[ in the late
Southlake, Tex., north- • 1980s. Now, as the
east of Fort Worth, began bedroom commu-
to grow when the city pity readies itself
converted its septic tank for industrial and
commercial
s; .tem into a sewer system in 1990, ac- tem will be backed by water and sewer growth, officials are discussing impact
cording to LouAnn Heath, the city's fi- revenues, with a secondary pledge of wa- fees for water and sewers, for streets, and
nance director. As a result, city officials ter and sewer impact fees. maybe even for fire and police, in non -
chose to assess water and sewer impact Plano, another fast - growing city north residential areas.
fees on housing developers, totaling of Dallas, uses its impact fees for similar While Marion debates the issue, offi-
$2,250 per single - family dwelling built, purposes. With more than 100,000 peo- vials in Albuquerque, N.M., wait for their
to keep up with demands on the system ple, the city has had its present water and opportunity to take further advantage of
and spare taxpayers some of the cost of sewer impact fee program in place since the financing mechanism. For several
debt service. 1990. Since then, it has added impact fees years, the city has imposed impact fees
"It's a vehicle for growing cities," Heath for city parks to developers' costs, charg- for water and sewer improvements as well
said. "Some things are so capital - inten- ing $500 per single - family home. Water as parks. But the city is reviewing its com-
sive up front." and sewer impact fees are based on me- prehensive plan for transportation, land
use, and water and
sewer programs, and
will not assess addi-
tional fees on devel-
opment until the re-
view is complete.
Although Albu-
' querque is growing at
a rate of only 1.6% a
year, residents are
feeling the pinch, said
Lee Reynis, the city's
economist.
"Impact fees have
been discussed for
three years," Reynis
said. "We're in the
throes of figuring out
what to do about
growth, but in times of
growth, we need to
avail ourselves of rev-
enues. Impact fees
would complement
other tools in imple-
menting the growth
r
r
r
,..
MN
r
r
•r
SIM
r
•
IN
•
r
PRELIMINARY OFFICIAL STATEMENT
CD CD
LL o
o 7, Dated February 10, 1997
— Ratings:
a N Moody's: Applied For
S &P: Applied For
m ° See ( "Other Information
NEW ISSUE - Book - Entry -Only Ratings" herein)
• ° • A In the opinion of Bond Counsel, interest on the Certificates will be excludable from gross income for federal income tax
° purposes under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum
° 3 tax on corporations.
c
° — m THE CERTIFICATES WILL NOT BE DESIGNATED AS "QUALIFIED TAX - EXEMPT OBLIGATIONS" FOR FINANCIAL
o
o j INSTITUTIONS
$9,670,000
E o Y CITY OF SOUTHLAKE, TEXAS
(Tarrant and Denton Counties)
° L 1" TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
0
CERTIFICATES OF OBLIGATION, SERIES 1997
2 Dated Date: February 15,1997 Due: February 15, as shown on inside cover
0=
w PAYMENT TERMS ... Interest on the $9,670,000 City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited
• Q Pledge) Revenue Certificates of Obligation, Series 1997 (the "Certificates ") will accrue from the dated date shown above, will
E ° o be payable February 15 and August 15 of each year commencing February 15, 1998, and will be calculated on the basis of a
C 360 -day year consisting of twelve 30 -day months. The definitive Certificates will be initially registered and delivered only to
U Cede & Co., the nominee of The Depository Trust Company ( "DTC ") pursuant to the Book - Entry-Only System described
N herein. Beneficial ownership of the Certificates may be acquired in denominations of $5,000 or integral multiples thereof. No
c E physical delivery of the Certificates will be made to the owners thereof. Principal of, premium, if any, and interest on the
° E' Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to
t 8 2 the participating members of DTC for subsequent payment to the beneficial owners of the Certificates. See "The Certificates -
`- E o Book- Entry-Only System" herein. The initial Paying Agent/Registrar is Texas Commerce Bank N.A., Dallas, Texas (see "The
°' a Certificates - Paying Agent/Registrar").
AUTHORITY FOR ISSUANCE ... The Certificates are issued pursuant to the Constitution and general laws of the State of Texas,
E (the "State ") particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of
0 0 1971), as amended, and constitute direct obligations of the City of Southlake, Texas (the "City"), payable from a combination of
.2 (i) the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property
o within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Waterworks and Sewer
• E o System, as provided in the ordinance authorizing the Certificates (the "Ordinance ") (see "The Certificates - Authority for
E 3 Issuance ").
o a
• N N PURPOSE ... Proceeds from the sale of the Certificates will be used for (i) improvements and extensions to water and sewer
o facilities; (ii) street and drainage improvements; (iii) improvements to municipal buildings; (iv) the purchase of materials,
▪ o equipment and machinery for various city departments; and (v) paying the costs associated with the issuance of the Certificates.
N
N r
_
cv C O
m n
• E a`) SEE MATURITY SCHEDULE ON REVERSE OF THIS PAGE
L • U O
▪ U _
C O 7
- C N
C
° ° E REDEMPTION OPTION ... The City reserves the right, at its option, to redeem Certificates having stated maturities on and after
a 3 February 15, 2007, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2006 or
E any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Certificates - Optional
E o
5 Redemption ").
2. C' ) 7°- LEGALITY ... The Certificates are offered for delivery when, as and if issued and received by the Underwriters and subject to
the approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaworski L.L.P., Bond Counsel, Dallas,
Texas (see Appendix C, "Form of Bond Counsel's Opinion "). Certain legal matters will also be passed upon for the Underwriters
• `° by McCall, Parkhurst & Horton L.L.P., Dallas, Texas.
E a DELIVERY ... It is expected that the Certificates will be available for delivery through The Depository Trust Company on March
18, 1997.
ia E N
° N N
0 UP
$ANCAMERICA SECURITIES, INC.
N - o
E Oiv
• m) • M ESTRADA HINOJOSA & COMPANY, INC.
• E g'
MATURITY SCHEDULE
Price Price
or or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$ 45,000 1998 $ 480,000 2008
310,000 1999 505,000 2009
325,000 2000 535,000 2010
340,000 2001 565,000 2011
355,000 2002 595,000 2012
375,000 2003 630,000 2013
390,000 2004 670,000 2014
410,000 2005 705,000 2015
435,000 2006 750,000 2016
455,000 2007 795,000 2017
(Accrued Interest from February 15, 1997 to be added)
2
This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the
solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale.
No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other
than those contained in this Official Statement, and, if given or made, such other information or representations must not be
relied upon.
The information set forth herein has been obtained from the City and other sources believed to be reliable, but such information
is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the Financial
Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact,
and no representation is made as to the correctness of such estimates and opinions, or that they will be realized.
The information and expressions of opinion contained herein 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.
TABLE OF CONTENTS
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE
OFFICIAL STATEMENT SUMMARY 4 PUBLIC FUNDS IN TEXAS 25
CITY OFFICIALS, STAFF AND CONSULTANTS 6 LEGAL OPINIONS AND No- LITIGATION CERTIFICATE.. 25
ELECTED OFFICIALS 6 AUTHENTICITY OF FINANCIAL DATA AND OTHER
SELECTED ADMINISTRATIVE STAFF 6 INFORMATION 26
CONSULTANTS AND ADVISORS 6 CONTINUING DISCLOSURE OF INFORMATION 26
FINANCIAL ADVISOR 27
INTRODUCTION 7 UNDERWRITING 27
THE CERTIFICATES 7 APPROVAL OF OFFICIAL STATEMENT 27
TAX INFORMATION 11 APPENDICES
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL GENERAL INFORMATION REGARDING THE CITY A
OBLIGATION DEBT 13 EXCERPTS FROM THE ANNUAL FINANCIAL REPORT.. B
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY FORM OF BOND COUNSELS OPINION C
CATEGORY 14
TABLE 3 - VALUATION AND GENERAL OBLIGATION The cover page hereof, this page, the appendices included
DEBT HISTORY 15 herein and any addenda, supplement or amendment hereto,
TABLE 4 - TAX RATE, LEVY AND COLLECTION are part of the Official Statement.
HISTORY 15
TABLE 5 - TEN LARGEST TAXPAYERS 15
TABLE 6 - TAX ADEQUACY 16
TABLE 7 - ESTIMATED OVERLAPPING DEBT 16
DEBT INFORMATION 17
TABLE 8 - PRO -FORMA GENERAL OBLIGATION DEBT
SERVICE REQUIREMENTS 17
TABLE 9 - INTEREST AND SINKING FUND BUDGET
PROJECTION 17
TABLE 10 - COMPUTATION OF SELF - SUPPORTING
DEBT 17
TABLE 1 1 - OTHER OBLIGATIONS 18
FINANCIAL INFORMATION 19
TABLE 12 - GENERAL FUND REVENUES AND
EXPENDITURE HISTORY 19
TABLE 13 - MUNICIPAL SALES TAX HISTORY 20
TABLE 14 - CURRENT INVESTMENTS 22
TAX MATTERS 23
OTHER INFORMATION 25
RATINGS 25
LITIGATION 25
REGISTRATION AND QUALIFICATION OF CERTIFICATES
FOR SALE 25
3
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions contained or incorporated in this
Official Statement. The offering of the Certificates to potential investors is made only by means of this entire Official Statement.
No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official
Statement.
THE CITY The City of Southlake is a political subdivision and municipal corporation of the State,
located in Tarrant and Denton Counties, Texas. The City covers approximately 23 square
miles (see "Introduction - Description of City").
THE CERTIFICATES The Certificates are issued as $9,670,000 Tax and Waterworks and Sewer System (Limited
Pledge) Revenue Certificates of Obligation, Series 1997. The Certificates are issued as serial
certificates maturing February 15, 1998 through February 15, 2017 (see "The Certificates -
Description of the Certificates ").
PAYMENT OF INTEREST Interest on the Certificates accrues from February 15, 1997, and is payable February 15, 1998,
and each February 15 and August 15, thereafter until maturity or prior redemption (see "The
Certificates - Description of the Certificates" and "The Certificates - Optional Redemption ").
AUTHORITY FOR ISSUANCE The Certificates are issued pursuant to the general laws of the State, particularly Subchapter C
of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as
amended, and an Ordinance passed by the City Council of the City (see "The Certificates -
Authority for Issuance ").
SECURITY FOR THE
CERTIFICATES The Certificates constitute direct obligations of the City, payable from a combination of (i) the
levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law,
on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus
net revenues of the City's Waterworks and Sewer System (see The Certificates - Security and
Source of Payment ").
OPTIONAL REDEMPTION The City reserves the right, at its option, to redeem Certificates having stated maturities on
and after February 15, 2007, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof, on February 15, 2006, or any date thereafter, at the par value thereof
plus accrued interest to the date of redemption (see "The Certificates - Optional
Redemption ").
TAX EXEMPTION In the opinion of Bond Counsel, the interest on the Certificates will be excludable from gross
income for federal income tax purposes under existing law, subject to the matters described
under the caption "Tax Matters" herein, including the alternative minimum tax on
corporations.
USE OF PROCEEDS Proceeds from the sale of the Certificates will be used for (i) improvements and extensions to
water and sewer facilities; (ii) street and drainage improvements; (iii) improvements to
municipal buildings; (iv) the purchase of materials, equipment and machinery for various city
departments; and (v) paying the costs associated with the issuance of the Certificates.
RATINGS The presently outstanding tax supported debt of the City is rated "A" by Moody's Investors
Service, Inc. ( "Moody's ") and "A" by Standard & Poor's Ratings Services, A Division of The
McGraw -Hill Companies, Inc. ( "S &P "). The City also has twelve issues outstanding which
are rated "Aaa" by Moody's and "AAA" by S &P through insurance by various commercial
insurance companies. Application for contract ratings on the Certificates have been made to
Moody's and S &P (see "Other Information - Ratings ").
4
BOOK - ENTRY -ONLY
SYSTEM The definitive Certificates will be initially registered and delivered only to Cede & Co., the
nominee of DTC pursuant to the Book - Entry-Only System described herein. Beneficial
ownership of the Certificates may be acquired in denominations of $5,000 or integral
multiples thereof. No physical delivery of the Certificates will be made to the beneficial
owners thereof. Principal of, premium, if any, and interest on the Certificates will be payable
by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so
paid to the participating members of DTC for subsequent payment to the beneficial owners of
the Certificates (see "The Certificates - Book- Entry-Only System ") .
PAYMENT RECORD The City has never defaulted in payment of its general obligation tax debt.
SELECTED FINANCIAL INFORMATION
Ratio
G.O.
Fiscal Per Capita Per Tax Debt
Year Estimated Taxable Taxable General Capita to Taxable % of
Ended City Assessed Assessed Obligation G. O. Tax Assessed Total Tax
9/30 Population Valuation Valuation Tax Debt Debt Valuation Collections
1993 8,700 619,564,581 71,214 11,186,137 1,286 1.81% 104.41%
1994 10,400 685,069,698 65,872 18,076,137 1,738 2.64% 103.88%
1995 12,750 821,386,985 64,423 24,196,137 1,898 2.95% 102.49%
1996 (2) 14,195 1,064,449,048 74,988 25,946,137 1,828 2.44% 101.87%
1997 (3) 16,235 1,309,488,163 80,658 34,561,137 2,129 2.64% N/A
(1) Source: North Central Texas Council of Governments and the City Staff.
(2) Preliminary figures furnished by the City Staff.
(3) Projected. Includes the Certificates.
GENERAL FUND CONSOLIDATED STATEMENT SUMMARY
Fiscal Year Ended September 30
1996 (I) 1995 1994 1993 1992
Beginning Balance $ 1,689,295 $ 2,059,031 $ 1,521,101 $ 1,136,448 $ 875,223
Total Revenue 8,474,051 6,375,681 5,587,324 4,678,980 3,907,393
Total Expenditures 8,166,749 7,040,649 5,774,667 4,453,773 3,836,342
Net Transfers 308,866 318,860 725,273 159,446 190,174
Other Miscellaneous Adjust. - (23,628) - - -
Net Funds Available 616,168 (369,736) 537,930 384,653 261,225
Ending Balance $ 2,305,463 $ 1,689,295 $ 2,059,031 $ 1,521,101 $ 1,136,448
(1) Preliminary, unaudited figures furnished by the City Staff.
For additional information regarding the City, please contact:
Mr. Curtis E. Hawk Mr. James S. Sabonis
Ms. Lou Ann Heath Mr. Jeff W. Robert
City of Southlake or First Southwest Company
667 N. Carroll Avenue 1700 Pacific Avenue
Southlake, Texas 76092 Suite 500
(817) 481 -5581 Dallas, Texas 75201
(214) 953-4000
5
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
Length of Term
City Council Service Expires Occupation
Rick Stacy 1 Year 5 / 97 Owner, Furniture Store
Mayor
W. Ralph Evans 1 Year 5 / 99 Insurance
Mayor Pro Tem
Pamela Muller 2 Years 5 / 98 Community Volunteer
Deputy Mayor Pro Tem
Wayne Moffat 1 Year 5 / 97 Firefighter
Councilmember
David Harris 1 Year 5 / 98 Attorney
Councilmember
Gary Fawks 1 Year 5 / 98 Sales
Councilmember
Scott Martin 1 Year 5 / 99 Architect
Councilmember
SELECTED ADMINISTRATIVE STAFF
Length of
Name Position Service
Curtis E. Hawk City Manager 8 Years
Lou Ann Heath Director of Finance 6 Years
Sandra L. LeGrand City Secretary 19 Years
CONSULTANTS AND ADVISORS
Auditors Weaver and Tidwell L.L.P.
Dallas, Texas
Engineers Cheatham & Associates
Arlington, Texas
Bond Counsel Fulbright & Jaworski L.L.P.
Dallas, Texas
Financial Advisor First Southwest Company
Dallas, Texas
6
OFFICIAL STATEMENT
RELATING TO
$9,670,000
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION, SERIES 1997
INTRODUCTION
This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of
$9,670,000 City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 1997. Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the
Ordinance to be adopted on the date of sale of the Certificates which will authorize the issuance of the Certificates, except as
otherwise indicated herein.
There follows in this Official Statement descriptions of the Certificates and certain information regarding the City and its
finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to
each such document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company,
Dallas, Texas.
DESCRIPTION OF THE CITY ... The City is a political subdivision and municipal corporation of the State, duly organized and
existing under the laws of the State, including the City's Home Rule Charter. The City first adopted its Home Rule Charter in
1987. The City operates under a Council/Manager form of government with a City Council comprised of the Mayor and six
Councilmembers who are elected for staggered three -year terms. The City Council formulates operating policy for the City
while the City Manager is the chief administrative officer. Some of the services that the City provides are: public safety (police
and fire protection), highways and streets, electric, water and sanitary sewer utilities, health and social services,
culture- recreation, public transportation, public improvements, planning and zoning, and general administrative services. The
1990 Census population for the City was 7,065, while the estimated 1997 population is 16,235. The City covers approximately
23 square miles.
THE CERTIFICATES
DESCRIPTION OF THE CERTIFICATES ... The Certificates are dated February 15,1997, and mature on February 15 in each of the
years and in the amounts shown on the cover page hereof. Interest will be computed on the basis of a 360 -day year of twelve 30-
day months, and will be payable on February 15 and August 15, commencing February 15, 1998. The definitive Certificates
will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered
and delivered only to Cede & Co., the nominee of The Depository Trust Company ( "DTC ") pursuant to the Book - Entry-Only
System described herein. No physical delivery of the Certificates will be made to the owners thereof. Principal of, premium,
if any, and interest on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make
distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the
Certificates. See "Book- Entry-Only System" herein.
AUTHORITY FOR ISSUANCE .. .The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas,
particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as amended,
and the Ordinance.
SECURITY AND SOURCE OF PAYMENT ... All taxable property within the City is subject to a continuing direct annual ad valorem tax
levied by the City sufficient to provide for the payment of principal of and interest on all obligations payable in whole or in part from
ad valorem taxes, which tax must be levied within limits prescribed by law. Additionally, the Certificates are payable from and
secured by a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Waterworks and Sewer System, as provided
in the Ordinance authorizing the Certificates.
TAX RATE LIMITATION ... All taxable property within the City is subject to the assessment, levy and collection by the City of a
continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax
debt within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its
maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home Rule Charter of
the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed Valuation.
OPTIONAL REDEMPTION ... The City reserves the right, at its option, to redeem Certificates having stated maturities on and
after February 15, 2007, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15,
2006, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the
Certificates are to be redeemed, the City may select the maturities of Certificates to be redeemed. If less than all the Certificates
7
of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Certificates are in Book - Entry-Only form)
shall determine by lot the Certificates, or portions thereof, within such maturity to be redeemed. If a Certificate (or any portion
of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such
Certificate (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest
thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and
accrued interest thereon are held by the Paying Agent/Registrar on the redemption date.
NOTICE OF REDEMPTION ... Not less than 30 days prior to a redemption date for the Certificates, the City shall cause a notice of
redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Certificates to be
redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying
Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO
MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE
REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE CERTIFICATES
CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND
NOTWITHSTANDING THAT ANY CERTIFICATE OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR
PAYMENT, INTEREST ON SUCH CERTIFICATE OR PORTION THEREOF SHALL CEASE TO ACCRUE.
BOOK- ENTRY -ONLY SYSTEM . . . The Depository Trust Company ( "DTC "), New York, New York, will act as securities
depository for the Certificates. The Certificates will be issued as fully- registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully- registered certificate will be issued for each maturity of the Certificates in the aggregate
principal amount of each such maturity and will be deposited with DTC.
DTC is a limited - purpose trust company organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning
of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 1 7A of the
Securities Exchange Act of 1934. DTC holds securities that its participants ( "Direct Participants ") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The Rules
applicable to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of Certificates under the DTC system must be made by or through DTC Participants, which will receive a credit for
such purchases on DTC's records. The ownership interest of each actual purchaser of each Certificate ("Beneficial Owner ") is in
turn to be recorded on the Direct or Indirect Participants' records. Beneficial Owners will not receive written confirmation from
DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interest in the Certificates are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Certificates, except in the event that use of the book -entry system described herein is
discontinued.
To facilitate subsequent transfers, all Certificates deposited by Direct Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Certificates with DTC and their registration in the name of Cede & Co. effect
no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Certificates; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Certificates are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject
to any statutory or regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Certificates. Under its usual procedures, DTC mails an
Omnibus Proxy to the City as soon as possible after the Record Date (hereinafter defined). The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose accounts the Certificates are credited on the Record Date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Certificates will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered
8
in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City,
subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to
DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC,
and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Certificates at any time by giving
reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained,
Certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository).
In that event, Certificates will be printed and delivered.
Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that
while the Certificates are in the Book - Entry-Only System, references in other sections of this Official Statement to registered
owners should be read to include the person for which the Participant acquires an interest in the Certificates, but (i) all rights of
ownership must be exercised through DTC and the Book - Entry-Only System, and (ii) except as described above, notices that are
to be given to registered owners under the Ordinance will be given only to DTC.
Information concerning DTC and the Book - Entry-Only System has been obtained from DTC and is not guaranteed as to
accuracy or completeness by, and is not to be construed as a representation by the City or the Purchasers.
PAYING AGENT /REGISTRAR ... The initial Paying Agent/Registrar is Texas Commerce Bank N.A., Dallas, Texas. In the
Ordinance, the City retains the right to replace the Paying Agent /Registrar. The City covenants to maintain and provide a Paying
Agent/Registrar at all times until the Certificates are duly paid and any successor Paying Agent/Registrar shall be a commercial
bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to
serve as and perform the duties and services of Paying Agent/Registrar for the Certificates. Upon any change in the Paying
Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each registered owner
of the Certificates by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying
Agent/Registrar.
TRANSFER, EXCHANGE AND REGISTRATION . . . In the event the Book - Entry-Only System should be discontinued, the
Certificates may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation
and surrender thereof to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to
the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration,
exchange and transfer. Certificates may be assigned by the execution of an assignment form on the respective Certificates or by
other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Certificates will be delivered by the
Paying Agent/Registrar, in lieu of the Certificates being transferred or exchanged, at the principal office of the Paying
Agent /Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the
extent possible, new Certificates issued in an exchange or transfer of Certificates will be delivered to the registered owner or
assignee of the registered owner in not more than three business days after the receipt of the Certificates to be canceled, and the
written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in
form satisfactory to the Paying Agent/Registrar. New Certificates registered and delivered in an exchange or transfer shall be in
any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Certificates surrendered for
exchange or transfer. See "Book -Entry-Only System" herein for a description of the system to be utilized initially in regard to
ownership and transferability of the Certificates. Neither the City nor the Paying Agent/Registrar shall be required to transfer or
exchange any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided,
however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a
Certificate.
RECORD DATE FOR INTEREST PAYMENT ... The record date ( "Record Date ") for the interest payable on the Certificates on any
interest payment date means the close of business on the last business day of the preceding month.
In the event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment
of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the
past due interest ( "Special Payment Date ", which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of
a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day
next preceding the date of mailing of such notice.
BONDHOLDERS' REMEDIES ... The Ordinance does not establish specific events of default with respect to the Certificates.
Under State law there is no right to the acceleration of maturity of the Certificates upon the failure of the City to observe any
covenant under the Ordinance. Although a registered owner of Certificates could presumably obtain a judgment against the City
if a default occurred in the payment of principal of or interest on any such Certificates, such judgment could not be satisfied by
9
execution against any property of the City. Such registered owner's only practical remedy, if a default occurs, is a mandamus or
mandatory injunction proceeding to compel the City to levy, assess and collect an annual ad valorem tax sufficient to pay
principal of an interest on the Certificates as it becomes due. The enforcement of any such remedy may be difficult and time
consuming and a registered owner could be required to enforce such remedy on a periodic basis. The Ordinance does not
provide for the appointment of a trustee to represent the interests of the bondholders upon any failure of the City to perform in
accordance with the terms of the Ordinance, or upon any other condition. Furthermore, the City is eligible to seek relief from its
creditors under Chapter 9 of the U.S. Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest
represented by a specifically pledged source of revenues, the pledge of taxes in support of a general obligation of a bankrupt
entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision
that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or bondholders of
an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from
creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be
heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary
powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all
opinions relative to the enforceability of the Ordinance and the Certificates are qualified with respect to the customary rights of
debtors relative to their creditors.
USE OF CERTIFICATE PROCEEDS ... Proceeds from the sale of the Certificates are expected to be expended as follows:
Certificates
Deposit to Project Fund $
Deposit to Interest & Sinking Fund
Underwriters Discount
Original Issue Discount
Bond Insurance
Other Costs of Issuance
Total $
10
TAX INFORMATION
An VALOREM TAx LAW ... The appraisal of property within the City is the responsibility of the Tarrant County Appraisal District
(the "Appraisal District "). Excluding agricultural and open -space land, which may be taxed on the basis of productive capacity, the
Appraisal District is required under the Property Tax Code to appraise all property within the Appraisal District on the basis of 100%
of its market value and is prohibited from applying any assessment ratios. The value placed upon property within the Appraisal
District is subject to review by an Appraisal Review Board, consisting of three members appointed by the Board of Directors of the
Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three
years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of
property within the City by petition filed with the Appraisal Review Board.
Reference is made to the V.T.C.A., Property Tax Code, for identification of property subject to taxation; property exempt or which
may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and
limitations applicable to the levy and collection of ad valorem taxes.
Article VIII of the State Constitution ( "Article VIII ") and State law provide for certain exemptions from property taxes, the valuation
of agricultural and open -space lands at productivity value, and the exemption of certain personal property from ad valorem taxation.
Under Section 1 -b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant: (1) An
exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the
disabled from all ad valorem taxes thereafter levied by the political subdivision; (2) An exemption of up to 20% of the market value
of residence homesteads. The minimum exemption under this provision is $5,000.
State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or
children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal
property with the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000.
Article VIII provides that eligible owners of both agricultural land (Section 1 -d) and open -space land (Section 1 -d -1), including
open -space land devoted to farm or ranch purposes or open -space land devoted to timber production, may elect to have such property
appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1 -d
and 1 -d -1.
Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body
of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation.
Article VIII, Section 1-j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as
goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication.
Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal.
The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones, under which the
tax values on property in the zone are "frozen" at the value of the property at the time of creation of the zone. The City also may
enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to
construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value
attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up to 10
years.
EFFECTIVE TAX RATE AND ROLLBACK TAX RATE . . . By each September 1 or as soon thereafter as practicable, the City
Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for
funding of maintenance and operation expenditures, and (2) a rate for debt service.
Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate ". The
City Council may not adopt a tax rate that exceeds the lower of the rollback tax rate or 103% of the effective tax rate until it has
held a public hearing on the proposed increase following notice to the taxpayers and otherwise complied with the Property Tax
Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election
be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate.
"Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values
(adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included
in this year's taxable values.
"Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's
values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted)
divided by the anticipated tax collection rate.
11
The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize
an additional one -half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the
rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year.
Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the
calculation of the various defined tax rates.
PROPERTY ASSESSMENT AND TAX PAYMENT ... Property within the City is generally assessed as of January 1 of each year.
Business inventory may, at the option of the taxpayer, be assessed as of September. Taxes become due October 1 of the same
year, and become delinquent on February 1 of the following year. Taxpayers 65 years old or older are permitted by State law to
pay taxes on homesteads in four installments with the first due on February 1 of each year and the final installment due on
August 1.
PENALTIES AND INTEREST ... Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows:
Cumulative Cumulative
Month Penalty Interest Total
February 6% 1% 7%
March 7 2 9
April 8 3 11
May 9 4 13
June 10 5 15
July 12 6 18
After July, penalty remains at 12 %, and interest increases at the rate of 1% each month. In addition, if an account is delinquent
in July, a 15% attorney's collection fee is added to the total tax penalty and interest charge. Under certain circumstances, taxes
which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no
additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels,
pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against
an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities,
including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents
governmental units from foreclosing on property and prevents liens for post - petition taxes from attaching to property and
obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many
cases post - petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court.
CITY APPLICATION OF TAX CODE ... The City grants an exemption to the market value of the residence homestead of persons
65 years of age or older of $50,000, the disabled are also granted an exemption of $50,000.
The City has not granted any party the additional exemption of up to 20% of the market value of residence homesteads;
minimum exemption of $5,000.
See Table 1 for a listing of the amounts of the exemptions described above.
Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt.
The City does not tax nonbusiness personal property; and Tarrant County collects taxes for the City.
The City does allow permit split payments of taxes, and discounts for early payment of taxes are not allowed.
The City does not tax freeport property.
The City does not collect the additional one -half cent sales tax for reduction of ad valorem taxes.
The City has adopted a tax abatement policy, and reviews applications for abatements on a case by case basis.
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TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT
1996/97 Market Valuation Established by Tarrant County Appraisal District $1,376,438,373
(excluding totally exempt property)
Less Exemptions/Reductions at 100% Market Value:
Residential Homestead Exemptions $12,469,593
Disabled Veterans 421,500
Agricultural Use Reductions 54,059,117 66,950,210
1996/97 Taxable Assessed Valuation $ 1,309,488,163
General Obligation Debt Payable from Ad Valorem Taxes (as of 12/31/96)
General Obligation Debt $25,946,137
The Certificates 9,670,000
General Obligation Debt Payable from Ad Valorem Taxes $35,616,137
Less: Self Supporting Debt (2)
Water and Sewer System General Obligation Debt $5,510,000
Net General Obligation Debt Payable from Ad Valorem Taxes $30,106,137
General Obligation Interest and Sinking Fund as of 1/31/97 $1,261,997
Ratio General Obligation Tax Debt to Taxable Assessed Valuation 2.30%
1997 Estimated Population - 16,235
Per Capita Taxable Assessed Valuation - $80,658
Per Capita Net General Obligation Debt Payable from Ad Valorem Taxes - $1,854
(1) The above statement of indebtedness does not include currently outstanding $366,000 revenue bonds, as these bonds are
payable solely from the net revenues of the Waterworks and Sewer System (the "System "), as defined in the ordinances
authorizing the bonds.
(2) General obligation debt in the amounts shown for which repayment is provided from revenues of the respective revenue
systems. The amount of self supporting debt is based on the percentages of revenue support as shown in Table 10. It is the
City's current policy to provide these payments from respective system revenues; this policy is subject to change in the future.
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TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY
Taxable Appraised Value for Fiscal Year Ended September 30,
1997 (1 1996 1995
%o1 %ot %of
Category Amount Total Amount Total Amount Total
Real, Residential, Single - Family $ 927,115,146 66.91% $ 761.024,177 66.60% $ 577,696,109 64.37%
Real, Residential, Multi - Family 658,700 0.05% 561,500 0.05% 614,200 0.07%
Real, VacantLots/Tracts 85,420,513 6.16% 55,009,903 4.81% 57,685,194 6.43%
Real, Acreage (Land Only) 104,823,268 7.56% 100,812,646 8.82% 91,554,754 10.20%
Real, Farm and Ranch Improvements 35,600,458 2.57% 34,673,059 3.03% 33,596,522 3.74%
Real, Commercial 85,587,491 6.18% 66,209,220 5.79% 54,294,403 6.05%
Real, Industrial 3,028,765 0.22% 2,940,720 0.26% 2.917,596 0.33%
Real and Tangible Personal, Utilities 24,694,474 1.78% 21,306,442 1.86% 19,493,995 2.17%
Tangible Personal, Commercial 75,433,951 5.44% 70,206,281 6.14% 46,391,044 5.17%
Tangible Personal, Industrial 2,293,240 0.17% 2,173,982 0.19% 2.890,595 0.32%
Tangible Personal, Mobile Homes 284,206 0.02% 338,465 0.03% 368,436 0.04%
Real Property, Inventory 40,755,167 2.94% 27,416,400 2.40% 9.999,760 1.11%
Total Appraised Value Before Exemptions $ 1,385,695,379 100.00% $ 1,142,672,795 100.00% $ 897,502,608 100.00%
Less: Total Exemptions /Reductions 76,207,216 85,058,184 75,165,337
Taxable Assessed Value $ 1,309,488,163 $ 1,057,614,611 $ 822,337,271
Taxable Appraised Value for Fiscal Year Ended September 30,
1994 1993
% of % of
Category Amount Total Amount Total
Real, Residential, Single- Family $ 426,027,224 55.54% $ 351,986,570 50.14%
Real, Residential, Multi- Family 658,833 0.09% 658.833 0.09%
Real, Vacant Lots/Tracts 45,148,647 5.89% 56,672,267 8.07%
Real, Acreage (Land Only) 108,806,557 14.18% 117,937,875 16.80%
Real, Farm and Ranch Improvements 30,412,430 3.96% 32,478,408 4.63%
Real, Commercial 58,096,250 7.57% 54,841,649 7.81%
Real, Industrial 2,741,714 0.36% 3,320,610 0.47%
Real and Tangible Personal, Utilities 18,153,968 2.37% 13,867,224 1.98%
Tangible Personal, Commercial 51,498,065 6.71% 53,675,164 7.65%
Tangible Personal, Industrial 3,079,770 0.40% 3,262,097 0.46%
Tangible Personal, Mobile Homes 455,118 0.06% 448,175 0.06%
Real Property, Inventory 22,007,436 2.87% 12,806,222 1.82%
Total Appraised Value Before Exemptions $ 767,086,012 100.00% $ 701,955,094 100.00%
Less: Total Exemptions/Reductions 84,528,251 86,017,191
Taxable Assessed Value $ 682,557,761 $ 615,937,903
NOTE: Valuations shown are certified taxable assessed values reported by the Tarrant County Appraisal District to the State
Controller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and
the Appraisal District updates records.
(1) Previous years as stated on the State Property Tax Board Report at the beginning of the Tax Year. Any difference between
these figures and the final Taxable Assessed Valuations are due to adjustments and corrections to the respective tax rolls.
(2) Taxable Assessed Valuation includes cases in arbitration equal to $9,257,006.
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TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY
G.O. Ratio of
Fiscal Taxable Tax Debt G.O. Tax Debt G.O. Tax
Year Taxable Assessed Outstanding to Taxable Debt
Ended Estimated Assessed Valuation at End Assessed Per
9/30 Population Valuation (2) Per Capita of Year Valuation Capita
1993 8,700 $619,564,581 (3) $71,214 $11,186,137 1.81% $1,286
1994 10,400 685,069,698 (3) 65,872 18,076,137 2.64% 1,738
1995 12,750 821,386,985 64,423 24,196,137 2.95% 1,898
1996 14,195 1,064,449,048 74,988 25,946,137 2.44% 1,828
1997 16,235 1,309,488,163 80,658 34,561,137 (4) 2.64% 2,129
(1) Source: North Central Texas Council of Governments and City Staff.
(2) As reported by the Tarrant County Appraisal District on the City's Annual State Property Tax Board Reports; subject to
change during ensuing year.
(3) Revaluation.
(4) Projected. Includes the Certificates.
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY
Fiscal Interest
Year and
Ended Tax General Sinking % Current % Total
9/30 Rate Fund Fund Tax Levy Collections Collections
1993 $ 0.4550 $ 0.3223 $ 0.1327 3,914,196 97.74% 104.41%
1994 0.4550 0.3013 0.1537 3,077,688 99.17% 103.88%
1995 0.4490 0.2729 0.1762 3,688,030 98.64% 102.49%
1996 0.4220 0.2629 0.1592 4,526,038 98.06% 101.87%
1997 (1) 0.4220 0.2496 0.1724 5,517,334 49.82% (2) 51.29% (2)
(1) Preliminary figures furnished by the City Staff.
(2) Collections for part year only, through December, 1996.
TABLE 5 - TEN LARGEST TAXPAYERS
1996 / 97 % of Total
Taxable Taxable
Assessed Assessed
Name of Taxpayer Nature of Property Valuation Valuation
MTP -IBM Phase lI & III JV Office Building $ 23,828,848 1.82 %
IBM Corporation Office Buildings 19,799,338 1.51
Walmart Stores, Inc. Retail 14,495,445 1.11
Texas Utilities Electric Electric Utility 12,478,750 0.95
Anderson Industries, Inc. Manufacturer 9,523,712 0.73
T & M Southlake Dev. Co. Real Estate 5,805,244 0.44
Crossroads Square Ltd. Retail 5,405,353 0.41
Darr Equipment Co. Office Buildings 4,800,000 0.37
Southlake JV Real Estate 4,270,000 0.33
General Telephone Co. of SW Telephone Utility 4,121,459 0.31
$ 104,528,149 7.98 %
GENERAL OBLIGATION DEBT LIMITATION ... No general obligation debt limitation is imposed on the City under current State
law or the City's Home Rule Charter (see "Tax Rate Limitation ").
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TABLE 6 - TAX ADEQUACY
1997 Principal and Interest Requirements $2,020,293
$0.15584 Tax Rate at 99% Collection Produces $2,020,293
Average Annual Principal and Interest Requirements, 1997 -2017 $2,108,847
$0.16270 Tax Rate at 99% Collection Produces $2,109,232
Maximum Principal and Interest Requirements, 1998 $2,824,292
$0.21786 Tax Rate at 99% Collection Produces $2,824,322
TABLE 7 - ESTIMATED OVERLAPPING DEBT
Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities
on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures.
This statement of direct and estimated overlapping ad valorem tax bonds ( "Tax Debt ") was developed from information
contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts
relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person
should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued
additional bonds since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of
additional bonds, the amount of which cannot be determined. The following table reflects the estimated share of overlapping
Tax Debt of the City.
City's
1996/97 Overlapping
Taxable 1996/97 Total Estimated G.O.
Assessed Tax G.O. Tax % Tax Debt
Taxing Jurisdiction Value Rate Debt Applicable As of 12/31/96
City ofSouthlake $1,309,488,163 0.4220 $35,616,137 (I 100.00% $35,616,137
Denton County 13,127,273,682 0.2669 58,845,000 0.04% 23,538
Tarrant County 47,411,875,822 0.2648 149,355,000 1.21% 1,807,196
Carroll Independent School District 1,447,813,024 1.7400 54,980,254 65.58% 36,056,051
Grapevine - Colleyville Independent School District 4,790,773,567 1.5378 135,782,480 0.80% 1,086,260
Keller Independent School District 1,930,484,802 1.5000 114,779,319 3.75% 4,304,224
Northwest Independent School District 899,391,491 1.6293 24,719,460 0.68% 168,092
Tarrant County Hospital District 47,462,011,277 0.2341 46,789,987 1.21% 566,159
Tarrant County Junior College District 47,818,163,857 0.0577 99,880,000 1.21% 1,208,548
Total Direct and Overlapping G. O. Tax Debt 79,627,657
Ratio of Direct and Overlapping G. O. Tax Debt to Taxable Assessed Valuation 6.08%
Per Capita Overlapping G. O. Tax Debt 5,610
(1) Includes the Certificates.
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DEBT INFORMATION
TABLE 8 - PRO -FORMA GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS
Fiscal Total
Year Less: Self Debt % of
Ending Outstanding Debt This $9,670,000 Issue Grand Total Supporting Service Principal
9/30 Principal Interest Total Principal Interest Total Requirements W &S Debt Requirements Retired
1997 $ 1,055,000 $ 1,550,066 $ 2,605,066 $ 2,605,066 $ 584,773 $ 2,020,293
1998 1,310,000 1,417,365 2,727,365 $ 45,000 $ 771,161 $ 816,161 3,543,526 719,234 2,824,292
1999 1,214,532 1,427,320 2,641,853 310,000 506,335 816,335 3,458,188 718,572 2,739,616
2000 1,126,754 1,364,773 2,491,527 325,000 492,516 817,516 3,309,043 721,754 2,587,289
2001 1,374,851 1,290,547 2,665,398 340,000 477,465 817,465 3,482,863 723,607 2,759,256 19.94%
2002 1,240,000 1,123,918 2,363,918 355,000 461,303 816,303 3,180,221 724,094 2,456,127
2003 1,315,000 1,051,221 2,366,221 375,000 443,960 818,960 3,185,181 723,214 2,461,967
2004 1,325,000 978,966 2,303,966 390,000 425,405 815,405 3,119,371 725,824 2,393,547
2005 1,400,000 906,280 2,306,280 410,000 405,600 815,600 3,121,880 726,765 2,395,115
2006 1,480,000 828,528 2,308,528 435,000 384,258 819,258 3,127,786 726,054 2,401,732 44.44%
2007 1,565,000 745,371 2,310,371 455,000 361,790 816,790 3,127,161 723,674 2,403,487
2008 1,675,000 656,093 2,331,093 480,000 337,695 817,695 3,148,788 734,116 2,414,672
2009 1,780,000 559,429 2,339,429 505,000 311,340 816,340 3,155,769 732,223 2,423,546
2010 1,540,000 455,146 1,995,146 535,000 282,993 817,993 2,813,139 733,151 2,079,988
2011 1,635,000 362,268 1,997,268 565,000 252,601 817,601 2,814,869 736,531 2,078,338 74.58%
2012 1,095,000 273,211 1,368,211 595,000 220,263 815,263 2,183,474 462,174 1,721,300
2013 1,035,000 207,961 1,242,961 630,000 185,805 815,805 2,058,766 460,775 1,597,991
2014 850,000 152,883 1,002,883 670,000 148,913 818,913 1,821,796 462,895 1,358,901
2015 905,000 101,508 1,006,508 705,000 109,725 814,725 1,821,233 458,478 1,362,755
2016 580,000 46,661 626,661 750,000 68,070 818,070 1,444,731 457,413 987,318 96.52%
2017 445,000 14,463 459,463 795,000 23,254 818,254 1,277,717 459,463 818,254 100.00%
$25,946,137 $15,513,978 $41,460,115 $9,670,000 $6,670,450 $16,340,450 $57,800,565 $13,514,784 $44,285,781
(1) "Outstanding Debt" does not include lease /purchase obligations.
(2) Average life of the issue - 12.507 years. Interest on the Certificates has been calculated at the rate of 5.52% for purposes
of illustration.
(3) Includes self - supporting debt.
TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION
Tax Supported Debt Service Requirements, Fiscal Year Ending 9/30/97 $ 2,020,293
Interest and Sinking Fund, 9/30/96 $ 472,913
Budgeted Interest and Sinking Fund Tax Levy (1) 2,249,344
Estimated Investment Income 35,750 2,758,007
Estimated Balance, 9/30/97 $ 737,714
(1) Preliminary information furnished by the City.
TABLE 10 - COMPUTATION OF SELF - SUPPORTING DEBT
Net System Revenue Available Fiscal Year 1996 (1) $ 180,240
Less: Requirements for Revenue Bonds 82,032
Balance Available for Other Purposes $ 98,208
Requirements for System Tax Bonds, Fiscal Year 1997 $ 584,773
Percentage of System General Obligation Bonds Self - Supporting 16.8%
(1) Preliminary figures furnished by the City.
17
AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS
The City has no authorized but unissued general obligation debt.
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT .. .
The City does not anticipate the issuance of additional general obligation debt within the next twelve months.
TABLE 11 - OTHER OBLIGATIONS
The following table illustrates the City's two outstanding lease obligations:
Lease #1 Lease #3
Original date of the loan or lease: November, 1992 Original date of the loan or lease: February, 1996
Purpose of loan or lease: Copy Machine Purpose of loan or lease: Copy Machine
Repayment Schedule: 60 Months Repayment Schedule: 60 Months
Date of Final Payment: November, 1997 Date of Final Payment: January, 2001
Payments made from what source: General Fund Payments made from what source: General Fund
Amount currently outstanding: $5,189 Amount currently outstanding: $12,126
Lease #2 Lease Purchase
Original date of the loan or lease: June, 1993 Original date of the loan or lease: June, 1996
Purpose of loan or lease: Copy Machine Purpose of loan or lease: Computer Equipment
Repayment Schedule: 60 Months Repayment Schedule: 60 Months
Date of Final Payment: June, 1998 Date of Final Payment: May, 2001
Payments made from what source: General Fund Payments made from what source: General Fund
Amount currently outstanding: $8,443 Amount currently outstanding: $84,542
PENSION FUND ... The City provides pension benefits for all of its full -time employees through the Texas Municipal Retirement
System ( "TMRS "), a State -wide administered pension plan. The City makes annual contributions to the plan equal to the
amounts accrued for pension expense. (For more detailed information concerning the retirement plan, see Appendix B,
"Excerpts from the City's Annual Financial Report" - Note #7.)
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FINANCIAL INFORMATION
TABLE 12 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY
Fiscal Years Ended September 30,
1996 1995 1994 1993 1992
Revenues:
Taxes $ 4,926,209 $ 3,890,459 $ 3,467,579 $ 3,087,297 $ 2,754,104
Licenses and Permits 2,642,353 1,901,245 1,680,918 1,251,287 791,983
Charges for Services 221,003 109,093 56,225 60,328 47,540
Fine and Forfeitures 424,341 274,154 235,591 181,029 207,499
Other Revenues 260,145 200,730 147,011 99,039 106,267
Total Revenues $ 8,474,051 $ 6,375,681 $ 5,587,324 $ 4,678,980 $ 3,907,393
Expenditures:
City Administration $ 2,170,961 $ 1,610,196 $ 1,292,402 $ 1,003,587 $ 863,417
Police Department 1,389,411 1,304,845 1,055,234 895,343 825,242
Fire Department 902,281 783,873 728,480 566,832 531,671
Building Department 351,228 329,647 261,663 154,005 127,329
Streets and Drainage 878,433 1,058,438 1,225,241 857,494 685,700
Municipal Court 245,014 201,965 158,793 144,786 145,345
Parks 623,974 389,861 199,681 138,224 101,924
Public Works Department 352,943 359,623 137,192 102,064 69,674
Public Safety Support 835,010 608,880 434,779 357,268 340,626
Community Development 417,494 393,321 281,202 234,170 145,414
Total Expenditures $ 8,166,749 $ 7,040,649 $ 5,774,667 $ 4,453,773 $ 3,836,342
Excess (deficiency) of Revenues
Over Expenditures $ 307,302 $ (664,968) $ (187,343) $ 225,207 $ 71,051
Bonds Proceeds $ - $ - $ 720,827 $ - $
Budgeted Transfers In $ 686,144 $ 941,860 159,446 159,446 190,970
Budgeted Transfers Out (377,278) (623,000) (155,000) 0 (796)
Total Other Sources (Uses) $ 308,866 $ 318,860 $ 725,273 $ 159,446 $ 190,174
Net Increase (Decrease) $ 616,168 $ (346,108) $ 537,930 $ 384,653 $ 261,225
Beginning Fund Balance 1,689,295 2,059,031 1,521,101 1,136,448 875,223
Reserve for Encumbrances $ - $ (23,628) $ - $ - $ -
Ending Fund Balance $ 2,305,463 $ 1,689,295 $ 2,059,031 $ 1,521,101 $ 1,136,448
(1) Preliminary figures furnished by the City Staff.
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TABLE 13 - MUNICIPAL SALES TAX HISTORY
The City has adopted the Municipal Sales and Use Tax Act, VATCS, Tax Code, Chapter 321, which grants the City the power to
impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to
the payment of the Certificates. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts,
State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. On November 2, 1993,
the voters of the City approved the imposition of an additional sales and use tax of one -half of one percent (' /z% of 1 %) for economic
and park development. Collection for the additional tax went into effect in April, 1994. The sales tax for economic development is
collected solely for the benefit of Southlake Parks Development Corporation (the "Corporation "), and may be pledged to secure
payment of sales tax revenue bonds issued by the Corporation, and is not included in the table below.
Fiscal Equivalent
Year % of of
Ended Total Ad Valorem Ad Valorem Per
9/30 Collected Tax Levy Tax Rate Capita ('
1991 $ 448,149 0.0869% 19.06 60.49
1992 510,035 0.0894% 19.50 63.89
1993 636,738 0.1028% 22.63 73.19
1994 877,615 0.1281% 28.52 84.39
1995 1,033,502 0.1258% 28.02 84.37
1996 (2) 1,476,708 0.1387% 32.87 104.03
1997 (3) 412,343 0.0315% 7.47 25.40
(1) Population Sources: North Central Texas Council of Governments and City Staff.
(2) Unaudited figures provided by City Staff.
(3) Unaudited figures for three months ended December 31, 1996 provided by City Staff
FINANCIAL POLICIES
Basis of Accounting ... All governmental funds and agency funds are accounted for using the modified accrual basis of accounting.
Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets.
Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The
exception to this general rule is that principal and interest on general long -term debt is recognized when due.
The more significant revenues which are treated as susceptible to accrual under the modified accrual basis are property taxes,
intergovernmental revenues, charges for services, and interest. Other revenue sources are not considered measurable and available,
and are not treated as susceptible to accrual.
All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned
and their expenses are recognized when they are incurred.
General Fund Balance ... The City policy is to maintain surplus and unencumbered funds equal to 10% of expenditures in the
General Fund. This allows the City to avoid interim borrowing pending tax receipts.
Use of Bond Proceeds, Grants, etc.... The City's policy is to use bond proceeds, grants, revenue sharing or other non - recurring
revenues for capital expenditures only. Such revenues are never to be used to fund City operations.
Budgetary Procedures ... The City Charter establishes the fiscal year as the twelve -month period beginning October I. The
departments submit to the City Manager a budget of estimated expenditures for the ensuing fiscal year by the first of July. The City
Manager subsequently submits a budget of estimated expenditures and revenues to the City Council by August I. The City Council
then holds a public hearing on the budget. The Council shall then make any changes in the budget as it deems advisable and shall
adopt a budget prior to September 30.
Fund Investments ... The City investment policy parallels state law which govems investment of public funds. The City generally
restricts investments to direct obligations of the United States Government and to insured or collateralized bank certificates of
deposits.
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INVESTMENTS
The City of South lake invests its investable funds in investments authorized by Texas law in accordance with investment policies
approved by the City Council of the City of Southlake. Both state law and the City's investment policies are subject to change.
LEGAL INVESTMENTS ... Under Texas law, the City is authorized to invest in (1) obligations of the United States or its agencies and
instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities, (3) collateralized mortgage
obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed
by an agency or instrumentality of the United States, (4) other obligations, the principal of and interest on which are unconditionally
guaranteed or insured by, or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies
and instrumentalities, (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to
investment quality by a nationally recognized investment rating firm not less than A or its equivalent, (6) certificates of deposit that
are guaranteed or insured by the Federal Deposit Insurance Corporation or are secured as to principal by obligations described in the
preceding clauses or in any other manner and amount provided by law for City deposits, (7) certificates of deposit and share
certificates issued by a state or federal credit union domiciled in the State of Texas that are guaranteed or insured by the Federal
Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations
described in the clauses (1) through (5) or in any other manner and amount provided by law for City deposits, (8) fully collateralized
repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), and are placed
through a primary government securities dealer or a financial institution doing business in the State of Texas, (9) bankers'
acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at
least A -1 or P -1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper that is rated at
least A -1 or P -1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit
rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no -load money market
mutual funds regulated by the Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90
days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-
load mutual funds registered with the Securities and Exchange Commission that: have an average weighted maturity of less than two
years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment quality by at
least one nationally recognized investment rating firm of not less than AAA or its equivalent.
The City may invest in such obligations directly or through government investment pools that invest solely in such obligations
provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service.
The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the
outstanding principal balance of the underlying mortgage- backed security collateral and pays no principal; (2) obligations whose
payment represents the principal stream of cash flow from the underlying mortgage- backed security and bears no interest; (3)
collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage
obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.
INVESTMENT POLICIES ... Under Texas law, the City is required to invest its funds under written investment policies that primarily
emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of
investment management; and that includes a list of authorized investments for City funds, maximum allowable stated maturity of any
individual investment and the maximum average dollar- weighted maturity allowed for pooled fund groups. All City funds must be
invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment.
Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and
safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield.
Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of
prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for
investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment
officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers
jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending
value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the
reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each
individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment
strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council.
ADDITIONAL PROVISIONS ... Under Texas law the City is additionally required to: (1) annually review its adopted policies and
strategies, (2) require any investment officers' with personal business relationships or relatives with firms seeking to sell securities to
the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (3) require the
registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy , (b)
acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c)
deliver a written statement attesting to these requirements; (4) perform an annual audit of the management controls on investments
and adherence to the City's investment policy. (5) provide specific investment training for the Treasurer, Chief Financial Officer and
investment officers; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse
21
repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (7) restrict the investment in mutual
funds in the aggregate to no more than 80% of the City's monthly average fund balance, excluding bond proceeds and reserves and
other funds held for debt service and further restrict the investment in non -money market mutual funds of any portion of bond
proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding
bond proceeds and reserves and other funds held for debt service; (8) require local government investment pools to conform to the
new disclosure, rating, net asset value, yield calculation, and advisory board requirements.
The City of Southlake shall manage and invest its cash with four objectives, listed in order of priority: Safety, Liquidity, Yield,
and Public Trust. The safety of the principal invested always remains the primary objective. All investments shall be designed
and managed in a manner responsive to the public trust and consistent with State and Local law.
TABLE 14 - CURRENT INVESTMENTS
As of December 31, 1996, the City's investable funds were invested in the following categories:
Type of Investment Dollar Value Book Value
Treasuries and Agencies $7,064,585 100.2 %
Certificates of Deposit 3,000,000 100.0 %
Texpool 2,763,027 100.0 %
Totals $12,827,612 100.1 %
As of such date, the average remaining term of investments is 120 days.
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TAX MATTERS
TAX EXEMPTION ... The delivery of the Certificates is subject to the opinion of Bond Counsel to the effect that interest on the
Certificates for federal income tax purposes (1) will be excludable from gross income, as defined in section 61 of the Internal
Revenue Code of 1986, as amended to the date of such opinion (the "Code "), pursuant to section 103 of the Code and existing
regulations, published rulings, and court decisions, and (2) will not be included in computing the alternative minimum taxable
income of the owners thereof who are individuals or, except as hereinafter described, corporations. A form of Bond Counsel's
opinion is reproduced as Appendix C. The statute, regulations, rulings, and court decisions on which such opinion is based are
subject to change.
Interest on all tax- exempt obligations, including the Certificates, owned by a corporation will be included in such corporation's
adjusted current earnings for tax years beginning after 1989, for purposes of calculating the alternative minimum taxable income
of such corporation, other than an S corporation, a qualified mutual fund, a real estate investment trust (REIT), or a real estate
mortgage investment conduit (REMIC). A corporation's alternative minimum taxable income is the basis on which the
alternative minimum tax imposed by Section 55 of the Code will be computed.
In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the City made in a
certificate dated the date of delivery of the Certificates pertaining to the use, expenditure, and investment of the proceeds of the
Certificates and will assume continuing compliance by the City with the provisions of the Ordinance subsequent to the issuance
of the Certificates. The Ordinance contains covenants by the City with respect to, among other matters, the use of the proceeds
of the Certificates and the facilities financed therewith by persons other than state or local governmental units, the manner in
which the proceeds of the Certificates are to be invested, the periodic calculation and payment to the United States Treasury of
arbitrage "profits" from the investment of the proceeds, and the reporting of certain information to the United States Treasury.
Failure to comply with any of these covenants would cause interest on the Certificates to be includable in the gross income of the
owners thereof from date of the issuance of the Certificates.
Except as described above, Bond Counsel expresses no other opinion with respect to any other federal, state or local tax
consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or
disposition of, the Certificates. Prospective purchasers of the Certificates should be aware that the ownership of tax- exempt
obligations such as the Certificates may result in collateral federal tax consequences to, among others, financial institutions, life
insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United
States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement
benefits, individuals otherwise qualifying for the earned income tax credit, and taxpayers who may be deemed to have incurred
or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax- exempt
obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their
particular circumstances.
TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN CERTIFICATES ... The initial public offering price of
certain Certificates (the "Discount Certificates ") may be less than the amount payable on such Certificates at maturity. An
amount equal to the difference between the initial public offering price of a Discount Certificate (assuming that a substantial
amount of the Discount Certificates of that maturity are sold to the public at such price) and the amount payable at maturity
constitutes original issue discount to the initial purchaser of such Discount Certificate. A portion of such original issue discount
allocable to the holding period of such Discount Certificate by the initial purchaser will, upon the disposition of such Discount
Certificate (including by reason of its payment at maturity), be treated as interest excludable from gross income, rather than as
taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the Certificates
described above under "Tax Exemption.' Such interest is considered to be accrued actuarially in accordance with the constant
interest method over the life of a Discount Certificate, taking into account the semiannual compounding of accrued interest, at
the yield to maturity on such Discount Certificate and generally will be allocated to an original purchaser in a different amount
from the amount of the payment denominated as interest actually received by the original purchaser during the tax year.
However, such interest may be required to be taken into account in determining the alternative minimum taxable income of a
corporation, for purposes of calculating a corporation's alternative minimum tax imposed by Sections 55 of the Code, and the
amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there
will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal
income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance
companies, S corporations with "subchapter C" earnings and profits, individual recipients of Social Security or Railroad
Retirement benefits, individuals otherwise qualifying for earned income tax credit, and taxpayers who may be deemed to have
incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax- exempt
obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Certificate by the initial
owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Certificate in the hands of
such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount
Certificate was held) is includable in gross income.
23
Owners of Discount Certificates should consult with their own tax advisors with respect to the determination of accrued original
issue discount on Discount Certificates for federal income tax purposes and with respect to the state and local tax consequences
of owning and disposing of Discount Certificates. It is possible that, under applicable provisions governing determination of
state and local income taxes, accrued interest on Discount Certificates may be deemed to be received in the year of accrual even
though there will not be a corresponding cash payment.
The initial public offering price of certain Certificates (the "Premium Certificates ") may be greater than the amount payable on
such Certificates at maturity. An amount equal to the difference between the initial public offering price of a Premium
Certificate (assuming that a substantial amount of the Premium Certificates of that maturity are sold to the public at such price)
and the amount payable at maturity constitutes premium to the initial purchaser of such Premium Certificates. The basis for
federal income tax purposes of a Premium Certificate in the hands of such initial purchaser must be reduced each year by the
amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for
amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to
be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Certificate. The amount of
premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity.
Purchasers of the Premium Certificates should consult with their own tax advisors with respect to the determination of
amortizable bond premium on Premium Certificates for federal income tax purposes and with respect to the state and local tax
consequences of owning and disposing of Premium Certificates.
24
OTHER INFORMATION
RATINGS
The presently outstanding tax supported debt of the City is rated "A" by Moody's and "A" by S &P. The City also has twelve
issues outstanding which are rated "Aaa" by Moody's and "AAA" by S &P through insurance by various commercial insurance
companies. Application for contract ratings on this issue have been made to Moody's and S &P. An explanation of the
significance of such ratings may be obtained from the company furnishing the rating. The rating reflects only the respective
views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance
that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by
either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such
downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the
Certificates.
LITIGATION
It is the opinion of the City Attorney and City Staff that there is no pending litigation against the City that would have a material
adverse financial impact upon the City or its operations.
REGISTRATION AND QUALIFICATION OF CERTIFICATES FOR SALE
The sale of the Certificates has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the
exemption provided thereunder by Section 3(a)(2); and the Certificates have not been qualified under the Securities Act of Texas
in reliance upon various exemptions contained therein; nor have the Certificates been qualified under the securities acts of any
jurisdiction. The City assumes no responsibility for qualification of the Certificates under the securities laws of any jurisdiction
in which the Certificates may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of
responsibility for 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 exemption from securities registration provisions.
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Section 9 of the Bond Procedures Act provides that the Certificates "shall constitute negotiable instruments, and are investment
securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of law or court decision to
the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations,
savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages,
school districts, and other political subdivisions or public agencies of the State of Texas". The Certificates are eligible to secure
deposits of any public funds of the state, its agencies and political subdivisions, and are legal security for those deposits to the
extent of their market value. For political subdivisions in Texas which have adopted investment policies and guidelines in
accordance with the Public Funds Investment Act (V.T.C.A., Government Code, Chapter 2256), the Certificates may have to be
assigned a rating of "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible
investments for sinking funds and other public funds. No review by the City has been made of the laws in other states to
determine whether the Certificates are legal investments for various institutions in those states.
LEGAL OPINIONS AND NO- LITIGATION CERTIFICATE
The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Certificates,
including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Certificate and to the
effect that the Certificates are valid and legally binding obligations of the City, and based upon examination of such transcript of
proceedings, the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Certificates will
be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters
described under "Tax Matters" herein, including the alternative minimum tax on corporations. The customary closing papers,
including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and
delivery of the Certificates, or which would affect the provision made for their payment or security, or in any manner
questioning the validity of said Certificates will also be furnished. Bond Counsel was not requested to participate, and did not
take part, in the preparation of the Official Statement, and such firm has not assumed any responsibility with respect thereto or
undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such
firm has reviewed the information under the headings and subheadings "Plan of Financing ", "The Bonds" (except the
subheadings "Book- Entry- Only" and Use of Bond Proceeds "), "Selected Provisions of the Bond Resolution ", "Tax Matters ",
"Legal Investments and Eligibility to Secure Public Funds in Texas ", "Legal Opinions and No- Litigation Certificate" and,
"Continuing Disclosure of Information (except for "Compliance with prior Undertakings ")," "Annual Reports," "Material Event
Notices," "Availability of Information from NRMSIRs and SID" and "Limitations and Amendments" and such firm is of the
opinion that the information contained under such captions and subcaptions is an accurate and fair description of the laws and
legal issues addressed therein and, with respect to the Bonds, such information conforms to the Resolution. The legal fee to be
25
paid Bond Counsel far services rendered in connection with the issuance of the Certificates is contingent on the sale and delivery
of the Certificates. The legal opinion will accompany the Certificates deposited with DTC or will be printed on the Certificates
in the event of the discontinuance of the Book - Entry-Only System. Certain legal matters will be passed upon for the
Underwriters by McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Counsel to the Underwriters. The fees of Underwriters'
Counsel are contingent upon the delivery of the Certificates.
AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION
The financial data and other information contained herein have been obtained from City records, audited financial statements and
other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein
will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made
subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete
statements of such provisions and reference is made to such documents for further information. Reference is made to original
documents in all respects.
CONTINUING DISCLOSURE OF INFORMATION
In the Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of the
Certificates. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the
Certificates. Under the agreement, the City will be obligated to provide certain updated financial information and operating data
annually, and timely notice of specified material events, to certain information vendors. This information will be available to
securities brokers and others who subscribe to receive the information from the vendors.
ANNUAL REPORTS ... The City will provide certain updated financial information and operating data to certain information
vendors annually. The information to be updated includes all quantitative financial information and operating data with respect
to the City of the general type included in this Official Statement under Tables numbered 1 through 6 and 8 through 14. The
City will update and provide this information within six months after the end of each fiscal year ending in or after 1997. The
City will provide the updated information to each nationally recognized municipal securities information repository
( "NRMSIR ") and to any state information depository ( "SID ") that is designated by the State of Texas and approved by the State
of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC ").
The City may provide updated information in full text or may incorporate by reference certain other publicly available
documents, as permitted by SEC Rule 15c2 -12. The updated information will include audited financial statements, if the City
commissions an audit and it is completed by the required time. If audited financial statements are not available by the required
time, the City will provide unaudited financial statements at the time of filing and later furnish the audit report when it becomes
available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B
or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation.
The City's current fiscal year ends September 30. Accordingly, it must provide updated information by March 30, in each year,
unless the City changes its fiscal year. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change.
MATERIAL EVENT NOTICES ... The City will also provide timely notices of certain events to certain information vendors. The
City will provide notice of any of the following events with respect to the Certificates, if such event is material to a decision to
purchase or sell Certificates: (1) principal and interest payment delinquencies; (2) non - payment related defaults; (3) unscheduled
draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial
difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events
affecting the tax- exempt status of the Certificates; (7) modifications to rights of holders of the Certificates; (8) Bond calls; (9)
defeasances; (10) release, substitution, or sale of property securing repayment of the Certificates; and (11) rating changes.
Neither the Certificates nor the Ordinance make any provision for debt service reserves. In addition, the City will provide timely
notice of any failure by the City to provide information, data, or financial statements in accordance with its agreement described
above under "Annual Reports." The City will provide each notice described in this paragraph to any SID and to either each
NRMSIR or the Municipal Securities Rulemaking Board ( "MSRB ").
AVAILABILITY OF INFORMATION FROM NRMSIRs AND SID ... The City has agreed to provide the foregoing information only
to NRMSIRs and any SID. The information will be available to holders of Certificates only if the holders comply with the
procedures and pay the charges established by such information vendors or obtain the information through securities brokers
who do so.
The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a
qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street, P. O. Box 2177, Austin, Texas 78768-
2177, and its telephone number is 512/476 -6947.
LIMITATIONS AND AMENDMENTS ... The City has agreed to update information and to provide notices of material events only as
described above. The City has not agreed to provide other information that may be relevant or material to a complete
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presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided,
except as described above. The City makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell Certificates at any future date. The City disclaims any contractual or tort liability for
damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made
pursuant to its agreement, although holders of Certificates may seek a writ of mandamus to compel the City to comply with its
agreement.
The City may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i)
the agreement, as amended, would have permitted an underwriter to purchase or sell Certificates in the offering described herein
in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment,
as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the
outstanding Certificates consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized
bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the
Certificates. The City may also amend or repeal its agreement if the SEC amends or repeals the applicable provisions of SEC
Rule 15c2 -12 or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that
reserving the right to do so does not make unlawful the underwriters' purchase and sale of the Certificates in the offering
described herein. If the City so amends the agreement, it has agreed to include with the next financial information and operating
data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the
reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided.
COMPLIANCE WITH PRIOR UNDERTAKINGS ... The City made a continuing disclosure agreement on February 20, 1996 with
regard to issuance of $2,380,000 Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation,
Series 1996. The City is in compliance with prior undertakings and will submit a disclosure statement prior to March 30, 1997.
FINANCIAL ADVISOR
First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Certificates. The
Financial Advisor's fee for services rendered with respect to the sale of the Certificates is contingent upon the issuance and
delivery of the Certificates. First Southwest Company has agreed, in its Financial Advisory contract, not to bid for the
Certificates, either independently or as a member of a syndicate organized to submit a bid for the Certificates. First Southwest
Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not
assume any responsibility for the information, covenants and representations contained in any of the legal documents with
respect to the federal income tax status of the Certificates, or the possible impact of any present, pending or future actions taken
by any legislative or judicial bodies.
UNDERWRITING
The Underwriters have agreed, subject to certain conditions, to purchase the Certificates from the City, at an underwriting discount of
$ from the initial offering price to the public shown on the inside cover page hereof. The Underwriters will be obligated
to purchase all of the Certificates if any Certificates are purchased. The Certificates to be offered to the public may be offered and
sold to certain dealers (including the Underwriters and other dealers depositing Certificates into investment trusts) at prices lower
than the public offering prices of such Certificates, and such public offering prices may be changed, from time to time, by the
Underwriters.
APPROVAL OF OFFICIAL STATEMENT
The Ordinance authorizing the issuance of the Certificates will also approve the form and content of this Official Statement, and
any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Certificates by the
Underwriters.
RICK STACY
Mayor
City of Southlake, Texas
ATTEST:
SANDRA L. LeGRAND
City Secretary
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APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
•
Amarillo
•
SOUTHL AKE
Fort Worth• aDallas
I Paso
Austin •
• Houst
San Antonio
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LOCATION
The City of Southlake is located in northeast Tarrant County. The City is approximately 15 miles northwest of the City of Dallas on
State Highway 114 and approximately 10 miles northeast of the City of Fort Worth.
POPULATION
Southlake's 1997 population was 16,235 an increase of 129.2% over the 1990 census population of 7,082.
ECONOMY
The City is primarily residential with some commercial and light manufacturing companies. Southlake's growth is due to its
proximity to the Dallas-Fort Worth Metroplex and to the Dallas-Fort Worth International Airport.
Major employers in the City are:
Company Nature of Business Number of Employees
AMR / Sabre Group Transportation 1,200
Carroll Independent School District School District 500
Walmart Retailer 300
TRANSPORTATION
The City is located on State Highways 114 and 26 providing direct access to the Cities of Dallas and Fort Worth and to Dallas-Fort
Worth International Airport. Southlake is approximately 5 miles northwest of Dallas-Fort Worth International Airport, 19 miles from
Dallas Love Field and 10 miles from Alliance Airport.
EDUCATION
The City of Southlake is served primarily by Carroll Independent School District, and additionally by Keller, Grapevine- Colleyville
and Northwest Independent School Districts. There are three elementary schools, one middle school, two intermediate school and
one high school located within the City. The combined enrollment for 1996 -97 was 4,725 students.
Higher education is provided by many institutions located within a 25 -mile radius from Southlake, such as: Texas Christian
University, University of North Texas, Southern Methodist University, Texas Woman's University, University of Texas at Arlington,
University of Texas at Dallas, University of Dallas and Tarrant County Junior College.
RECREATION
The City has four municipal parks. The Bicentennial Park is 48 acres that includes nine baseball fields, eight soccer fields, two tennis
courts, two community buildings and two playgrounds. The Country Walk is 5 acres that includes four practice ball fields. The
Lonesome Dove is 8 acres that includes a pavilion, a playground and two sand volleyball courts. The Bob Jones Park is
approximately 100 acres and is currently undeveloped.
Southlake lies on the southern boundary of Lake Grapevine which offers swimming, camping, boating and fishing.
HISTORICAL EMPLOYMENT (AVERAGE ANNUAL)
December
Area 1996 1995 1994 1993 1992 1991
Fort Worth - Arlington PMSA
Employed 806,883 776,586 760,352 685,200 689,700 695,500
Unemployed 26,982 39,760 44,724 48,700 47,800 38,400
% of Unemployed 3.2% 4.9% 5.6% 6.4% 6.5% 5.2%
Tarrant County
Employed 704,513 678,060 664,713 645,708 633,238 630,504
Unemployed 22,953 34,723 38,866 43,915 47,984 43,560
Source: Texas Employment Commission.
A -1
EFFECTIVE BUYING INCOME
Tarrant County
Effective Buying Income $ 21,934,414
Median Per Household 36,657
Median Age of Population 30.5
Household Earnings:
$20,000 - $34,999 23.3
$35,000 - $49,999 18.9
$50,000 and over 33.3
Source: Sales and Marketing Management, 1996 Survey of Buying Power
BUILDING PERMITS BY CATEGORY
Fiscal
Year
Ended Commercial Residential
9/30 Number Amount Number Amount Grand Total
1992 11 $ 3,273,000 326 $ 68,746,220 $ 72,019,220
1993 21 1,450,900 477 100,406,032 101,856,932
1994 12 9,309,800 629 140,035,538 149,345,338
1995 21 9,309,800 460 107,208,023 116,517,823
1996 77 27,117,000 691 169,959,810 197,076,810
TARRANT COUNTY
Tarrant County (the "County ") is located in North Central Texas with an estimated 1996 population of 1,279,700. The County,
together with Dallas County, is an integral part of the Dallas -Fort Worth Metroplex, one of the largest and fastest growing
metropolitan areas in the nation. The combined Metroplex area has an estimated population in excess of 4.0 million.
A -2
APPENDIX B
EXCERPTS FROM THE
CITY OF SOUTHLAKE, TEXAS
ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 1995
The information contained in this Appendix consists of excerpts from the City of Southlake,
Texas Annual Financial Report for the Year Ended September 30, 1995, and is not intended
to be a complete statement of the City's financial condition. Reference is made to the
complete Report for further information.
THIS PAGE LEFT BLANK INTENTIONALLY
WEAVER AND TIDWELL
AFFILIATIONS CERTIFIED PUBLIC ACCOUNTANTS FORT WORTH OFFICE
,UMMIT INTERNATIONAL A REGISTERED LIMITED LIABILITY PARTNERSHIP 1500 COMMERCE BUILDING
ASSOCIATES, INC. THREE FOREST PLAZA 307 WEST SEVENTH STREET
ASSOCIATED REGIONAL 12221 MERIT DRIVE. SUITE 1700 FORT WORTH, TEXAS 70102
ACCOUNTING FIRMS DALLAS, TEXAS 75251 -2216 (117) 332.71100
(214) 490-1970
FACSIMILE (214) 702 -8321
To Members of the City Council
and City Manager
City of Southlake, Texas
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying combined financial statements of the City of Southlake,
Texas as of and for the year ended September 30, 1995, as listed to the table of contents. These
combined financial statements are the responsibility of the City's management. Our responsibility
is to express an opinion on these combined financial statements based on our audit.
We conducted our audit In accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the combined financial statements are free of material misstatement. An audit Includes
examining, on a test basis, evidence supporting the amounts and disclosures In the combined
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present fairly, In all
material respects, the financial position of the City of Southlake, Texas at September 30, 1995, and
the results of its operations and cash flows of its proprietary fund for the year then ended in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the combined financial
statements taken as a whole. The 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 Southlake, Texas. The
individual fund and account group financial statements and schedules have been subjected to the
auditing procedures applied in the audit of the combined financial statements and, In our opinion,
are fairly stated in all material respects in relation to the combined financial statements taken as
a whole.
The statistical section has not been subjected to the auditing procedures applied In the audit
of the combined financial statements and, accordingly, we express no opinion on such data.
WEAVER AND TIDWELL, LLP.
Dallas, Texas
February 9, 1996
489
1
Duthto e
2
CITY OF SOUTHLAKE, TEXAS
GENERAL PURPOSE FINANCIAL STATEMENTS -
COMBINED FINANCIAL STATEMENTS OVERVIEW
These basic financial statements provide a summary overview of the financial position of all funds
and account groups as well as the operating results of all funds.
Governmental Funds Those through which most Governmental functions are typically
financed. The measurement focus Is upon determination of
financial position and changes in financial position. The
Governmental funds within the City are: the General, Special
Revenue, Debt Service and Capital Projects Fund.
Proprietary Funds To account for the financing, acquisition and maintenance of
Governmental facilltles and services that are supported by user
charges. The measurement focus 1s upon determination of net
income, financial position and cash flows. The Proprietary Fund
within the City Is the Enterprise Fund.
Fiduciary Funds Used to account for assets held by the City as an agent for
individuals, private organizations, other governments, and /or other
funds. Agency funds are custodial in nature and do not Involve
measurement of results of operations. The Agency Funds within
the City are used to account for the Municipal Cash Escrow Fund
and Deferred Compensation Plan.
Account Groups Used to establish accounting control and accountability for the
City's general fixed assets and unmatured principal of the City's
general long -term debt.
3
CITY OF SOUTHLAKE, TEXAS
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 1995
Governmental Fund Types
Special Debt Capital
ASSETS General Revenue Service Projects
Cash and cash equivalents $ 1,918,136 $ 498,923 $ 637,979 $ 4,269,024
Investment in deferred
compensation plan
Receivables (net of allowances
for estimated uncollectibles)
Taxes 304,349 53,282 77,523
Accounts 26,877 11,642
Unbilied services
Special assessments
Due from other funds
Inventories 10,841
Prepaid expenses 1,952
Restricted cash and
cash equivalents
Revenue bond debt service
Water and sewer
capital Improvements
Customer deposits
Bond issue costs, net of
amortization
Capacity rights
Construction -in- progress
Fixed assets, net of accumulated
depreciation
General fixed assets
Amount available In debt
service fund
Amount to be provided for retirement
of general long -term debt
TOTAL ASSETS $ 2,262,155 $ 563,847 $ 715,502 $ 4,269,024
The Notes to Combined Financial Statements
are an Integral part of this statement.
4
Page 1 of 2
Proprietary Fiduciary Totals
Fund Type Fund Type Account Groups (Memorandum Only)
General General
Fixed Long -Term
Enterprise Agency Assets Debt 1995 1994
$ 2,061,963 $ 46,510 $ $ $ 9,432,535 $11,394,347
221,024 221,024 63,182
435,154 321,191
959,577 4,098 1,002,194 919,589
146,224 146,224 64,943
32,896 32,896 36,512
38,232
10,841 8,998
2,867 4,819 4,789
328,268 328,268 248,106
5,187,842 5,187,842 1,682,211
156,180 156,180 131,335
288,293 288,293 251,048
9,514,600 9,514,600 4,460,987
505,812 505,812 654,099
20,502,253 20,502,253 8,908,396
6,769,329 6,769,329 4,844,950
631,660 631,660 549,252
15, 080, 094 15, 080, 094 13, 991.050
$39,686,775 $ 271,632 $ 6,769,329 $15,711,754 $70,250,018 $48,573,217
5
CITY OF SOUTHLAKE, TEXAS
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 1995
Governmental Fund Types
Special Debt Capital
LIABILITIES AND FUND EQUITY General Revenue Service Projects
AND OTHER CREDITS
Liabilities
Accounts payable $ 184,456 $ 7,357 $ $ 350,101
Other accrued liabilities 172,751 6,319
Due to other funds
Deferred revenue 192,026 77,523
Payable from restricted assets
Current portion of revenue bonds
Accrued Interest payable
Customer deposits
General obligation and
governmental revenue bonds
Note payable
Revenue bonds - noncurrent
Contract revenue obligations
Deferred compensation plan payable
Total liabilities 549,233 7,357 83,842 350,101
Fund Equity and Other Credits:
Contributed capital
Investment in general fixed assets
Retained earnings:
Reserved for revenue
bond retirement
Unreserved
Fund balance
Reserved for debt service 631,660
Reserved for recycling 10,835
Reserved for police expenditures 22,673
Reserved for parks 533,817
Reserved for capital projects 3,918,923
Reserved for Inventories and
prepaid expenses 12,793
Reserved for encumbrances
Unreserved
Undesignated 1,689,294
Total fund equity
and other credits 1,712,922 556,490 631,660 3,918,923
TOTAL LIABILITIES AND FUND
EQUITY AND OTHER CREDITS $ 2,262,155 $ 563,847 $ 715,502 $ 4,269,024
The Notes to Combined Financial Statements
are an integral part of this statement.
6
Page 2 of 2
Proprietary Fiduciary Totals
Fund Type Fund Type Account Groups (Memorandum Only)
General General
Fixed Long-Term
Enterprise Agency Assets Debt 1995 1994
$ 587,174 $ 50,608 $ $ $ 1,179,696 $ 1,044,681
183,657 87,617 450,344 232,274
38,232
772,793 1,042,342 982,186
145,000 145,000 75,000
61,350 61,350 91,109
156,180 156,180 131,335
14, 756,137 14, 756,137 14, 471,137
868,000 868,000
5,882,000 5,882,000 1,677,000
11,257,246 11,257,246 6,219,986
221,024 221,024 63,182
19,045,400 271,632 15,711,754 36,019,319 25,026.122
17,496,257 17,496,257 6,643,496
6,769,329 6,769,329 4,844,950
121,918 121,918 81,997
3,023,200 3,023,200 2,967,608
631,660 549,252
10,835 14,316
22,673 23,543
533,817 261,572
3,918,923 5,796,908
12,793 9,509
811,862
1,689,294 1,542,082
20,641,375 6,769,329 34,230,699 23,547,095
$39,686,775 $ 271,632 $ 6,769,329 $15,711,754 $70,250,018 $48,573,217
7
CITY OF SOUTHLAKE, TEXAS
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES
YEAR ENDED SEPTEMBER 30, 1995
Totals
Governmental Fund Types (Memorandum Only)
Special Debt Capital
General Revenue Service Projects 1995 1994
Revenues
Taxes $ 3,890,459 $ 516,750 $ 1,466,318 $ $ 5,873,527 $ 4,704,511
Licenses, permits and fees 1,901,245 159,579 106,737 2,167,561 1,967,777
Charges for services 109,093 109,093 56,225
Fines and forfeits 274,154 274,154 235,591
Miscellaneous 200,730 37,949 50,741 430,094 719,514 366,678
Total revenues 6,375,681 714,278 1,517,059 536,831 9,143,849 7,330,782
Expenditures
Current
City secretary/mayor 197,727 197,727 212,832
City manager's office 348,306 348,306 200,295
Economic development 98,694 98,694
Support services 706,488 706,488 615,511
Finance 258,981 258,981 263,764
Municipal court 201,965 201,965 158,793
Police services 1,304,845 3,239 1,308,084 1,061,372
Fire services 783,873 783,873 728,480
Public safety support 608,880 608,880 434,779
Building Inspection 329,647 329,647 261,663
Public works administration 359,623 359,623 137,192
Parks and recreation 389,861 235,950 625,811 834,875
Streets and drainage 1,058,438 1,058,438 1,225,241
Community development 393,321 393,321 281,202
Capital projects 5,146,959 5,146,959 1,070,234
Debt service
Principal retirement 715,000 715,000 470,000
Interest and fiscal charges 773,101 773,101 578,735
Total expenditures 7,040,649 239,189 1,488,101 5,146,959 13,914,898 8,534,968
Excess (deficiency) of revenues
over expenditures ( 664,968) 475,089 28,958 ( 4,610,128)
( 4,771,049) ( 1,204,186)
Other financing sources (uses)
Operating transfers in 941,860 305,035 918,375 2,165,270 424,613
Operating transfers out ( 623,000) ( 251,310) ( 251,585) ( 295,375)
( 1,421,270) ( 373,679)
Proceeds of bonds 1,838,000 1,838,000 6,896,376
Proceeds of refunding bonds 3,265,318
Payments to refunded bond
escrow agent
( 3,265,318)
Total other financing
sources (uses) 318,860 ( 251,310) 53,450 2,461,000 2,582,000 6,947,310
Excess (deficiency) of revenues and
other sources over expenditures
and other uses ( 346,108) 223,779 82,408 ( 2,149,128) ( 2,189,049) 5,743,124
Fund balance, beginning of year 2,059,030 332,711 549,252 6,068,051 9,009,044 3,265,920
Fund balance, end of year _$1 ,712,922 $ 556,490 $ 631,660 „$3 918923 $ 6,819,995 „$9 009044
The Notes to Combined Financial Statements
are an Integral part of this statement.
8
a iL --
DUthIQ^ e
9
CITY OF SOUTHLAKE, TEXAS
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL -
GENERAL, SPECIAL REVENUE, AND DEBT SERVICE FUND
YEAR ENDED SEPTEMBER 30, 1995
General Fund
Variance -
Favorable
Budget Actual (Unfavorable)
Revenues
Taxes $ 3,883,209 $ 3,890,459 $ 7,250
Licenses, permits and fees 1,857,710 1,901,245 43,535
Charges for services 100,743 109,093 8,350
Fines and forfeits 243,600 274,154 30,554
Miscellaneous 160,300 200,730 40,430
Total revenues 6,245,562 6,375,681 130,119
Expenditures
City secretary/mayor 214,111 197,727 16,384
City manager's office 360,197 348,306 11,891
Economic development 117,245 98,694 18,551
Support services 714,274 706,488 7,786
Finance 261,974 258,981 2,993
Municipal court 211,383 201,965 9,418
Police services 1,330,994 1,304,845 26,149
Fire services 810,736 783,873 26,863
Public safety support 611,988 608,880 3,108
Building Inspection 339,048 329,647 9,401
Public works administration 336,283 359,623 ( 23,340)
Parks and recreation 368,695 389,861 ( 21,166)
Streets and drainage 1,033,062 1,058,438 ( 25,376)
Community development 378,439 393,321 ( 14,882)
Debt service
Total expenditures 7,088,429 7,040,649 47,780
Excess (deficiency) of revenues
over expenditures ( 842867`
( 664,968) 177.899
Other financing sources (uses)
Operating transfers in 941,860 941,860
Operating transfers out ( 623,000) ( 623,000)
Total other financing
sources (uses) 318,860 318,860
Excess of revenues and other
sources over expenditures
and other uses ( 524,007) ( 346,108) 177,899
Fund balance at beginning of year 2,059,030 2,059,030
Fund balance at end of year $ 1,535,023 $ 1,712,922 $ 177,899
The Notes to Combined Financial Statements
are an integral part of this statement.
10
Special Revenue Fund Debt Service Fund
Variance - Variance -
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
$ 510,000 $ 516,750 $ 6,750 $ 1,464,030 $ 1,466,318 $ 2,288
111,500 159,579 48,079
28,955 37,949 8,994 37,500 50,741 13,241
650,455 714,278 63,823 1,501,530 1,517,059 15,529
3,239 ( 3,239)
254,738 235,950 18,788
1,480,480 1,488,101 ( 7,621)
254,738 239,189 15,549 1,480,480 1,488,101 ( 7,621)
395,717 475,089 79,372 21,050 28,958 7,908
305,035 305,035
( 251,310) ( 251,310) ( 251,585) ( 251,585)
( 251,310) ( 251,310) 53,450 53,450
144,407 223,779 79,372 74,500 82,408 7,908
332,711 332,711 549,252 549,252
$ 477,118 $ 556,490 $ 79,372 $ 623,752 $ 631,660 $ 7,908
11
CITY OF SOUTHLAKE, TEXAS
PROPRIETARY FUND TYPE
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
Total
Enterprise (Memorandum
Fund Only)
1995 1994
Operating revenues
Water, sewer and garbage $ 4,588,156 $ 3,866,053
Service fees 245,546 365,284
Other miscellaneous revenues 240,688 79,924
Total operating revenues 5,074,390 4,311,261
Operating expenses
Personal service 454,651 434,166
Contractual services 459,273 410,518
Lease payments 1,276 2,626
Supplies 4,819 3,905
Utilities 1,719,818 1,432,855
Administrative 26,132 23,217
Maintenance 428,367 327,038
Professional benefits 10,512 10,706
Depreciation 876,064 356,063
Total operating expenses 3,980,912 3,001,094
Operating Income 1,093,478 1,310,167
Non - operating revenue (expense)
Interest income 420,451 173,203
Interest expense ( 952,021) ( 594,986)
Total non - operating revenue (expense) ( 531,570) ( 421,783)
Net Income before
operating transfers 561,908 888,384
Operating transfers
Operating transfers In 251,585 300,580
Operating transfers out ( 995,585) ( 351,513)
Total operating transfers ( 744,000) ( 50,933)
Net Income (loss) ( 182,092) 837,451
Add back depreciation on contributed assets 277,605
Retained earnings at beginning of year 3,049,605 2,212,154
Retained earnings at end of year $ 3,145,118 $ 3,049,605
The Notes to Combined Financial Statements
are an Integral part of this statement.
12
CITY OF SOUTHLAKE, TEXAS (1 of 2)
PROPRIETARY FUND
STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
Total
Enterprise (Memorandum
Fund Only)
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and users S 4,941,206 $ 4,382,273
Cash payments to suppliers ( 2,770,318) ( 2,303,392)
Cash payments to employees ( 465,663) ( 444,812)
Net cash provided by
operating activities 1,705,225 1,634.069
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Capital expenditures ( 1,890,246) ( 2,087,350)
Principal payments on bonds, notes
and capital lease obligations ( 267,740) ( 214,330)
Bond proceeds 4,326,790
Interest paid ( 824,195) ( 647,386)
Capital contribution 875.365 1.035.198
Net cash provided by (used for) capital
and related financing activities 2.219,974 ( 1.913,868)
CASH FLOWS FROM NON - CAPITAL
FINANCING ACTIVITIES:
Cash received from other funds 251,585 313,319
Cash paid to other funds ( 1,008,324) ( 351.513)
Net cash provided by (used for)
non - capital financing activities ( 756,739) ( 38,194)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received 420.451 173.203
Net Increase In cash
and cash equivalents 3,588,911 ( 144,790)
Cash and cash equivalents at the
beginning of year 4.145,342 4,290.132
Cash and cash equivalents at the
end of year $ 7,734,253 $ 4145,342
The Notes to Combined Financial Statements
are an Integral part of this statement.
13
CITY OF SOUTHLAKE, TEXAS (2 of 2)
PROPRIETARY FUND TYPE
STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
Total
Enterprise (Memorandum
Fund Only)
1995 1994
RECONCILIATION OF CASH AND CASH
EQUIVALENTS OF STATEMENT OF CASH
FLOWS TO THE BALANCE SHEET:
Current assets $ 2,061,963 $ 2,083,690
Restricted assets 5.672.290 2,061.652
Cash and cash equivalents at
the end of the year $ 7,734,253 $ 4,145,342
RECONCILIATION OF OPERATING
INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Operating Income $ 1,093,478 $ 1,310,167
Adjustments to reconcile operating
Income to net cash provided by
operating activities:
Depreciation 876,064 356,063
Decrease (Increase) in assets
Receivables ( 158,529) 44,847
Prepaid 1,411 ( 2,186)
Increase (decrease) in liabilities
Payables and accruals ( 132,044) ( 100,987)
Customer deposits 24,845 26,165
Net cash provided by
operating activities $ 1,705,225 $ 1,634,069
NONCASH INVESTING, CAPITAL,
AND FINANCING ACTIVITIES:
During the fiscal year ended September 30, 1995 the estimated value of water and sewer Infrastructure
contributed by developers was $2,742,127.
Additionally in 1995, the City Incurred contractual obligations In the amount of $5,230,000. Under the
agreement the Trinity River Authority is utilizing the proceeds to construct a wastewater project on the City's
behalf.
The Notes to Combined Financial Statements
are an Integral part of this statement.
14
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
The combined financial statements of the City of Southlake are presented In accordance with
generally accepted accounting principles applicable to state and local governmental units as set
forth by the Governmental Accounting Standards Board. The following Is a summary of the more
significant accounting policies:
A. Reporting Entity
The City of Southlake operates under a Home Rule Council - Manager form of government. All
powers of the City are vested in an elected council which enacts local legislation, adopts
budgets, determines policies and appoints the City Manager. The City Manager Is responsible
for executing the laws and administering the government of the City.
The City of Southiake's general purpose financial statements include the separate
governmental entitles that are controlled by or are dependent on the Clty. The determination
to include separate governmental entities is based on the criteria of Governmental Accounting
Standards (GASB) Statement 14. GASB Statement 14 defines the reporting entity as the
primary government and those component units for which the primary government is financially
accountable. To be financially accountable, a voting majority of the component unit's board
must be appointed by the primary government, and either (A) the primary government must be
able to Impose its will, or (B) the primary government may potentially benefit financially or be
financially responsible for the component unit.
Based on these criteria the financial Information of the Southlake Parks Development
Corporation is included within the reporting entity.
The Southlake Parks Development Corporation (the 'Corporation') Is a nonprofit industrial
development corporation under the Development Corporation Act of 1979. The Corporation is
organized exclusively to act on behalf of the City for the financing, development and operation
of parks and recreation facilities. The affairs of the Corporation are managed by a board of
directors which is composed of seven persons appointed by the City Council. However, the
annual corporate budget and issuance of debt must be approved by the City Council.
Although it is a legally separate entity, the Corporation Is reported as if it were part of the
primary government because its sole purpose Is to finance and develop parks and recreational
facilities on behalf of the City.
B. Fund Accounting
The City's accounting system is organized and operated on the basis of fund accounting with
each fund and account group being an Independent fiscal and accounting entity with a self -
balancing set of accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses. City resources are allocated to and accounted for In individual
funds based upon the purposes for which they are to be spent and the means by which
spending activities are controlled. The various funds and account groups are summarized Into
six generic fund types, three broad fund categories and two account groups as follows:
15
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
B. Fund Accounting - continued
Governmental Fund Types
General Fund Is the general operating fund of the City. It Is utilized to account for all
financial resources except those required to be accounted for In other funds.
Special Revenue Fund Is utilized to account for the proceeds of specific revenue sources
(other than special assessments, expendable trusts or major capital projects) that are legally
restricted to expenditures for specified purposes.
Debt Service Fund is utilized to account for the accumulation of financial resources for, and
the payment of general long -term debt principal, Interest, and related costs arising from
general obligation bonds.
Capital Protects Fund is utilized to account for financial resources to be used for the
acquisition or construction of capital Improvements (other than those financed by proprietary
funds). Such resources are derived from proceeds of general obligation debt, other sources
designated for capital Improvements and Interest earned on such monies.
Proprietary Fund Type
Enterprise Fund is used to account for the operations that are financed and operated In a
manner simliar to private business enterprises - where the intent of the City is that costs
(expenses including depreciation) of providing services to the general public on a continuing
basis be financed or recovered through user charges.
Fiduciary Fund Types
Agency Funds are used to account for assets held by the City as an agent for individuals,
private organizations, other governments, and /or other funds. Agency funds are custodial
in nature and do not Involve measurement of results of operations.
Account Groups
General Fixed Assets Account Group Is utilized to account for fixed assets In governmental
fund type operations.
General Lona -Term Debt Account Group is utilized to account for the long -term liabilities of
governmental fund types.
16
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
C. Measurement Focus
Measurement focus is the accounting convention which determines which assets and liabilities
are Included on the balance sheet of a fund type and whether a fund type's operating statement
presents 'financial flow or capital maintenance information.
All governmental funds are accounted for on a spending or °financial flow' measurement focus.
This means that only current assets and current liabilities are generally included on their
balance sheets. Their reported fund balance (net current assets) is considered a measure of
'available spendable resources•. Governmental fund operating statements present Increases
(revenues and other financing resources) and decreases (expenditures and other financing
uses) In net current assets. Accordingly, they are said to present a summary of sources and
uses of 'available spendable resources' during a period. Fixed assets used in governmental
fund type operations and long -term liabilities expected to be financed from governmental funds
are accounted for in the General Fixed Assets and General Long -Term Debt Account Groups.
The two account groups are not 'funds'. They are concerned only with the measurement of
financial position. They are not involved with measurement of results of operations.
Proprietary funds are accounted for on a net Income and capital maintenance' measurement
focus. This means that all assets, liabilities, equity, revenues, expenses and transfers relating
to the activity of a proprietary fund are accounted for through the proprietary fund. The
measurement focus Is upon the determination of net Income, financial position and cash flows.
D. Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized in
the accounts and reported in the financial statements. Basis of accounting relates to the timing
of the measurements made, regardless of the measurement focus applied.
All governmental funds and agency funds are accounted for using the modified accrual basis
of accounting. Under the modified accrual basis, revenues are recognized when they become
measurable and available as net current assets. Expenditures are generally recognized under
the modified accrual basis of accounting when the related fund liability is Incurred. The
exception to this general rule is that principal and interest on general long -term debt is
recognized when due.
The more significant revenues which are treated as susceptible to accrual under the modified
accrual basis are property taxes, intergovernmental revenues, charges for services, and
Interest. Other revenue sources are not considered measurable and available, and are not
treated as susceptible to accrual.
All proprietary funds are accounted for using the accrual basis of accounting. Their revenues
are recognized when they are earned and their expenses are recognized when they are
incurred.
17
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
E. Budgets and Budgetary Accounting
The City Manager submits to the City Council, between sixty and ninety days prior to the
beginning of each fiscal year, a proposed budget for all funds of the City. At the meeting of
the City Council at which the budget is submitted, the City Council fixes the time and place of
the public hearing on the budget and causes to be published a notice of the budget hearing.
After the budget hearing the budget may be adopted by a favorable vote of the majority of the
members of the City Council. Upon adoption the budget Is flied with the City Secretary.
During the fiscal year, the City Council may transfer funds allocated to a department to another
department or re- estimate revenues or expenditures. The City Manager may transfer budgeted
funds within a department. Expenditures should not exceed appropriations at the department
level, the classification level as reported in the combined financial statements. Supplemental
appropriations to amend the budget during the year were not material to total appropriations.
The final amended version of the budget was utilized in this report. Unused appropriations
lapse at the end of each fiscal year.
The budgets for the general fund, special revenue funds, and debt service funds are adopted
on a basis consistent with generally accepted accounting principles (GAAP). The final
amended version of these budgets are used In this report.
Control over the expenditures for the capital projects funds are maintained through general
obligation bond Indenture agreements, and authorized construction contracts. Accordingly,
formal budgetary integration is not employed for the capital projects funds.
F. Cash and Investments
Cash and investments are comprised of demand accounts, imprest funds and certificates of
deposit. The City maintains a cash and Investment pool that is available for use by all funds.
Each fund type's portion of this pool is displayed on the combined financial statements as cash
and cash equivalents or restricted cash and equivalents. All City deposits and Investments are
Insured or collateralized by the Federal Deposit Insurance Corporation and pledges of
securities Issued by the State of Texas, other Texas municipalities or the Federal government.
The City's cash and Investments are considered as cash equivalents as they can be readily
converted to cash at their carrying value.
G. Property Taxes
Ad valorem taxes are levied from valuations assessed as of January 1 and are recognized as
revenue beginning on the date of levy, October 1, when they become available. Available
means collected within the current period or expected to be collected soon enough thereafter
to be used to pay current liabilities. Taxes not expected to be collected within sixty days of the
fiscal year ending are recorded as deferred revenues and are recognized when they become
available. Taxes collected prior to the levy date to which they apply are recorded as deferred
revenues and recognized as revenue of the period to which they apply.
18
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
G. Property Taxes - continued
The City's taxable assessed valuation of $826,083,256 and tax rate of .449 per $100 of taxable
assessed valuation resulted in a tax levy of $3,709,114.
Current taxes are due on October 1 and become delinquent If unpaid on February 1. Taxes
unpaid as of February 1 are subject to penalty and Interest as the City Council provides by
ordinance. A lien is created and attaches to property on January 1 each year until taxes are
paid.
Tax collection of the 1994 tax levy and total collections, including collections of prior year
taxes, during the fiscal year ended September 30, 1995 were 98.08% and 101.90% of the
current year tax levy, respectively.
H. Allowance for Uncollectible Accounts
An allowance for uncollectible taxes including penalties and Interest and water and sewer billed
receivables is provided based on an analysis of historical trends. The allowances for
uncollectible taxes and water and sewer billings at September 30, 1995 were $29,950 and
531,857, respectively.
I. Unbilied Services
Utility operating revenues (water, sewer and refuse collection) are billed on monthly cycles.
The City records estimated revenues for services delivered during the current fiscal year which
will be billed during the next fiscal year.
J. Inventories
Inventories are stated at cost (first -in, first -out) and are determined annually by taking a
physical inventory. Inventory in the general fund consists of gasoline and supplies held for
consumption and Is reported on the consumption method. Under the consumption method the
cost is recorded as an expenditure at the time individual inventory items are utilized.
K. Property, Plant and Equipment
Property, plant and equipment of the proprietary fund is stated at cost (estimated cost for
assets contributed). Depreciation expense is calculated principally on the straight -line method.
Depreciation methods are designed to amortize the cost of the assets over their estimated
useful ilves. Estimated useful lives of major categories of property are as follows:
19
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
K. Property, Plant and Equipment - continued
Category Lffe
Buildings 20-30 years
Distribution system 30 years
Storage tanks 30 years
Equipment 5-10 years
Maintenance, repairs, renewals and betterments which do not enhance the value or Increase
the basic productive capacity of assets are charged to expense as Incurred.
L. General Fixed Assets
General fixed assets have been acquired for general governmental purposes from
governmental fund types. Assets purchased in governmental funds are recorded as
expenditures In governmental fund types and capitalized at cost In the general fixed asset
account group, except for Infrastructure fixed assets. Infrastructure fixed assets (roads,
bridges, curbs, gutters, streets, lighting systems, and similar assets that are immovable and
of value only to the City) are not capitalized In the general fixed asset account group. Donated
fixed assets are recorded as general fixed assets at their fair value at the date donated.
No depreciation is provided on general fixed assets.
M. Accrued Vacation
It is the City's policy to permit employees to accumulate a limited amount of earned but unused
vacation which will be payable to City employees upon termination from City service.
The City has no other compensated absence obligations except for vacation benefits.
The City records compensated absences In governmental fund types for the amount expected
to be liquidated with expendable financial resources. The remainder of the liability from
compensated absences of governmental fund types is reported In the general Tong -term debt
account group. Proprietary funds accrue compensated absences In the period for which they
are Incurred.
N. Contributed Capital
Contributed capital In enterprise funds represents the accumulation of contributions in the form
of cash or other assets which generally do not have to be returned to the contributor. Such
contributions are recorded directly to contributed capital and, accordingly, are not recognized
as revenue. The following types of transactions are recorded as contributed capital In the
enterprise fund:
20
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies - continued
N. Contributed Capital - continued
• Assets contributed by City.
• Assets contributed by developers.
• Receipts of federal grants specifically designated for acquisition of assets.
• System development and Impact fees charged to fund the costs of capital Improvements
to the utilities system.
• Special assessments levied to fund costs of capital improvements.
O. Reserves
Reserves indicate portions of fund equity legally segregated for a specific future use.
P. Tax Revenues
The City's tax revenues consist of property tax, franchise tax, and City sales tax. The
ordinance levying property taxes specifies the percentage applicable to the General Fund and
Debt Service Fund. Tax revenues by fund for the year ended September 30, 1995 were as
follows:
General Special Revenue Debt Service
Fund Funds Funds Total
Property taxes $ 2,375,342 $ $ 1,466,318 $ 3,841,660
Franchise taxes 478,633 478,633
Sales taxes 1,033,501 516,750 1,550,251
Mixed beverage taxes 2.983 2,983
Tax revenue $ 3,890,459 $ 316,750 $ 11 466 318 $ 5,873,527
O. Cash Flow Presentation
For the purposes of presenting the Statement of Cash Flows, the City considers all highly liquid
Investments with an original maturity or initial maturity of less than three months to be cash
equivalents.
R. Total Columns
Total columns on the combined financial statements are captioned 'Memorandum Only' to
Indicate they are presented only to facilitate financial analysis. Data in these columns do not
present financial position, results of operations or cash flows In conformity with generally
accepted accounting principles. Neither are such data comparable to a consolidation.
Interfund eliminations have not been made in the aggregation of this data.
S. Comparative Data
Comparative totals for the prior year have been presented in the accompanying combined
financial statements in order to provide an understanding of changes In the City's financial
position and operations.
21
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 2. Deposits and Investments with Financial Institutions
The City's Investment policies are governed by state statutes and City ordinance. Collateral 1s
required for all deposits and Investments not covered by federal deposit insurance. Excess cash
may be Invested In the following:
• Obligations of the United States or its agencies and instrumentalities;
• Direct obligations of the State of Texas or its agencies;
• Other obligations, the principal of and Interest on which are unconditionally guaranteed or
Insured by the State of Texas or the United States;
• Obligations of states, agencies, counties, cities, and political subdivisions of any state
having been rated as to Investment quality by a nationally recognized investment rating firm
and having received a rating of not less than A or Its equivalent;
• Certificates of deposit Issued by state and national banks domiciled In this state that are:
a) Guaranteed or Insured by the Federal Deposit Insurance Corporation; or
b) Secured by obligations described above;
• Local Government Investment Pools as authorized by State Statute.
Maturities on all investments are consistent with the City's cash flow requirements.
The City's deposits and Investments are pooled accounts consisting of the following:
Cost Market
Deposits and financial institutions $ 2,620,458 $ 2,620,458
U.S. Government Agency obligation (at cost) 8,459,326 8,458,060
Government investment pools (at cost) 4,025,041 4,025,041
15,104, 825 15,103, 559
Deferred compensation plans (at market) 221,024 221.024
$ 15,325,849 $ 15,324,583
Deposits with financial institutions are fully Insured or collateralized with securities held by Its
agent in the entity's name.
All Investments were Insured or registered, or securities held by the City or its agent In the City's
name.
Government pool Investments are not categorized because they are not evidenced by securities
that exist In physical or book entry form.
22
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 3. Fixed Assets
General Fixed Assets
All flied assets acquired for governmental fund type operations are capitalized at cost or
estimated historical cost If actual historical cost Is not available. Donated fixed assets are valued
at their estimated fair value on the date donated.
A summary of changes in general fixed assets follows:
Land Buildings
and and
Total Improvements Improvements Equipment
Balance, beginning $ 4,844,950 $ 740,803 $ 1,337,845 $ 2,766,302
Additions 2,134,814 1,306,103 20,044 808,667
Deletions ( 210,435) ( 210,435)
Balance, ending $ 6,769,329 $ 2,046,906 $ 1,357,889 $ 3,364,534
Proprietary Fixed Assets
A summary of proprietary fund fixed assets by type of property is as follows:
Land and improvements $ 280,573
Buildings and Improvements 65,909
Distribution system 23,396,013
Equipment 375,821
24,118,316
Less accumulated depreciation 3,616.063
$ 20,502,253
Note 4. General Long -Term Debt
General long -term debt of the City consists of general obligation bonds and obligations under
compensated absence agreements. General obligation bonds retirement is provided from the debt
service tax within the Debt Service Fund. The retirement of accrued vacation is provided by
financial resources of the General Fund.
23
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 4. General Long -Term Debt - continued
General obligation bonds and governmental revenue bonds outstanding at September 30, 1995
consist of the following:
Date Amount of Amount
Interest Date Series Original Outstanding
Rates Issued Matures Issue 9-30-95
General Obligation Bonds,
Series 1984 9.25 - 11.25% 1984 2001 600,000 $ 45,000
General Obligation
Refunding, Series 1990 6.1 - 7.1 1990 2009 3,076,137 766,137
Public Property Finance Contractual
Obligation, Series 1990 7.0 - 7.13 1990 1996 200,000 45,000
Tax and Water Worlcs and Sewer
System (Limited Pledge) Revenue
Certificates of Obligation,
Series 1990 7.25 - 9.75 1990 2012 1,100,000 245,000
Combined Tax/Revenue Certificates of
Obligation, Series 1991 6.0 1991 1996 200,000 45,000
Tax and Water Works and Sever
System (Limited Pledge)
Revenue CertMcates of
Obligation, Series 1992 6.0 - 8.0 1992 2012 1,300,000 1,215,000
General Obligation Bonds,
Series 1992 5.2 - 8.2 1992 2013 1,500,00 1,460,000
General Obligation Refunding
Bonds, Series 1993 2.8 - 4.7 1994 2013 6,490,000 6,280,000
Public Property Contractual
Obligation, Series 1993 2.6 - 3.65 1994 1999 745,000 560,000
CertMcatss of Obligation,
Series 1994 3.0 - 4.4 1994 1998 320,000 200,000
Sales Tax Revenue Bonds,
Series 1994 6.0 - 6.25 1 2014 2,945,000 2,895,000
Sales Tax Subordinate Uen
Revenue Bonds, Series 1994 6.5 - 15.0 1994 2015 1,000,000 1,000,000
$ 14,756,137
A summary of changes in general long -term debt follows:
General Sales Tax Compensated
Obligation Revenue Absences Note
Total Bonds Bonds Obligation Payable -Land
Balance, beginning $ 14,540,302 $ 11,526,137 $ 2,945,000 t 69,165 $
Additions 1,886,452 1,000,000 18,452 868,000
Deletions 715,000 665,000 50,000
Balance, ending $ 15,711,754 $ 10,861,137 $ 3,895,000 $ 87,617 $ 868,000
24
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 4. General Long -Term Debt - continued
The debt service requirements of general obligation bonds and sales tax revenue bonds are as
follows:
Due Fiscal
Year Ending Principal Interest Total
1996 $ 830,000 $ 814,483 $ 1,644,483
1997 795,000 721,189 1,516,189
1998 840,000 835,822 1,675,822
1999 714,532 953,662 1,668,194
2000 596,754 927,923 1,524,677
2001 -2015 10,979.851 5.419,793 16,399.644
$ 14,756,137 $ 9,672,872 $ 24 9
Note 5. Proprietary Long -Term Debt
Proprietary Tong -term debt consists of revenue bonds and revenue contract obligations. Resources
to retire these obligations are provided from the net revenues of the water and sewer fund and
transfers from the debt service fund.
Revenue Bonds and Combination Tax and Revenue Certificates of Obligations
Revenue bonds were Issued to make improvements to the water and sewer system. Revenue
bonds are payable soley from the net revenues of the water and sewer system. Combination tax
and revenue certificate of obligations are payable from the net revenues of the water and sewer
system and general debt service tax.
Revenue bonds and combination tax and certificate of obligations outstanding at September 30,
1995 consist of the following:
Date Amount of Balance
Interest Date Series Original Outstanding
Rates Issued Matures Issue 9 -30-95
Waterworks and Sewer System
Revenue Bonds, Series 1984 9.80 - 11.75% 1984 2001 $ 500,000 $ 285,000
Waterworks and Sewer System
Revenue Bonds, Series 1987 3.75 1987 2005 217,000 127,000
Tax and Waterworks and Sewer
System Surplus Revenue
Certificates of Obligation,
Series 1992A 5.20 - 8.20 1992 2013 1,300,000 1,265,000
Tax and Waterworks and Sewer
System Revenue Certificates
of Obligation, Series 1994 5.95 - 8.75 1994 2015 4,350,000 4,350.000
6,027,000
25
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 5. Proprietary Long -Term Debt - continued
Contract Revenue Oblistatlons
The City has entered Into various contractual agreements to unconditionally finance the principal
and Interest or a fixed percentage of principal and Interest of Trinity River Authority (TRA) Contract
Revenue Bonds. Under the agreements, the Trinity River Authority utilized the bond proceeds to
administer and construct various sewer and wastewater treatment projects on the City's behalf.
Such agreements provide the City title to the assets upon retirement of the debt or capacity rights
in the use of constructed assets. The City has Included in its financial statements Its proportionate
share of these obligations and Its investment In these assets as capacity rights.
Contract revenue obligations at September 30, 1995 consist of the following:
Amount
Date Date Outstanding
Issued Matures 9 -30-95
TRA - City of Southlake Sewer System
Project - Contract Revenue Obligations
- Series 1990 1990 2011 $ 1 ,130,000
TRA - Big Bear Creek Interceptor -
Contract Revenue Obligation - Series 1990 1990 2011 3,537,246
TRA - Denton Creek Wastewater Pressure
Interceptor - Contract Revenue
Obligation - Series 1990 1990 2012 1,360,000
TRA - Denton Creek Wastewater Pressure
Interceptor - Contract Revenue
Obligation - Series 1994 1994 2017 5230,000
11,257,246
Total principal and interest requirements outstanding for all revenue bonds and contract revenue
obligations for the respective years ending September 30, 1995 are as follows:
Principal Interest Total
1996 $ 358,832 $ 1,380,430 $ 1,739,262
1997 513,924 1,141,676 1,655,600
1998 685,698 1,095,040 1,780,738
1999 728,472 1,041,211 1,769,683
2000 785,246 983,669 1,768,915
2001 -2017 14,212,074 7,506,345 21,718,419
$17,284,246 $13,148,371 $30,432,617
26
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 6. Advance Refunding Resulting in In- Substance Defeasance of Debt
In previous years the City has legally defeased certain outstanding general obligation debt in
placing funds into irrevocable trusts pledged to pay all future debt service payments of the refunded
debt. Accordingly, the trust pledged to pay all future debt service payaments of the refunded debt
and the liability for the defeased Issues are not included in the City's financial statements. As of
September 30, 1995 the following outstanding bonds were legally defeased:
Series Type Amounts
1985 Combination Tax and
Revenue Certificates
of Obligation $ 1,535,000
1990 Certificates of Obligation 745,000
1990 General Obligation 2,070,000
$ 4,350,000
Note 7. Retirement Plan
Plan Description
The City provides pension benefits for all of its full -time employees through a nontraditional, Joint
contributory, defined contribution plan In the state -wide Texas Municipal Retirement System
(TMRS), one of over 650 administered by TMRS, an agent multiple- employer public employee
ret'•ement system. It is the opinion of the TMRS management that the plans in TMRS are
substantially defined contribution plans, but they have elected to provide additional voluntary
disclosure to help foster a better understanding of some of the nontraditional characteristics of the
plan.
Benefits depend upon the sum of the employee's contributions to the plan, with Interest, and the
City - financed monetary credits, wlth Interest. At the date the plan began, the City granted monetary
credits for service rendered before the plan began of a theoretical amount equal to two times what
would have been contributed by the employee, wlth interest, prior to establishment of the plan.
Monetary credits for service since the plan began are a percent (100 %, 150 %, or 200 %) of the
employee's accumulated contributions. In addition, the City can grant as often as annually another
type of monetary credit referred to as an updated service credit which is a theoretical amount
which, when added to the employee's accumulated contributions and the monetary credits for
service since the plan began, would be the total monetary credits and employee contributions
accumulated with interest if the current employee contribution rate and City matching percent had
always been In existence and if the employee's salary had always been the average of his salary
in the last three years that are one year before the effective date. At retirement, the beneflt is
calculated as if the sum of the employee's accumulated contributions with Interest and the
employer - financed monetary credits wlth Interest were used to purchase an annuity.
27
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 7. Retirement Plan - continued
Plan Description - continued
Members can retire at ages 60 and above with 10 or more years of service or with 25 years of
service regardless of age. The plan also provides death and disability benefits. A member is
vested after 10 years, but he must leave his accumulated contributions In the plan. If a member
withdraws his own money, he is not entitled to the employer - financed monetary credits, even if he
was vested. The plan provisions are adopted by the governing body of the City, within the options
available in the state statutes governing TMRS and within the actuarial constraints also In the
statutes.
Contributions
The contribution rate for the employees is 6 %, and the City matching percent is currently 200 %,
both as adopted by the governing body of the City. Under the state law governing TMRS, the City
contribution rate Is annually determined by the actuary. This rate consists of the normal cost
contribution rate and the prior service contribution rate, both of which are calculated to be a level
percent of payroll from year to year. The normal cost contribution rate finances the currently
accruing monetary credits due to City matching percent, which are the obligation of the City as of
an employee's retirement date, not at the time the employee's contributions are made. The normal
cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the
obligation of the City to each employee at the time his retirement becomes effective. The prior
service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's
25 -year amortization period. When the City periodically adopts updated service credits and
increases In annuities in effect, the Increased unfunded actuarial liability is to be amortized over
a new 25 -year period. Currently, the unfunded actuarial liability Is being amortized over the 25 year
period which began January, 1995. The unit credit actuarial cost method is used for determining
the City contribution rate. Contributions are made monthly by both the employees and the City.
Since the City needs to know its contribution rate In advance to budget for it, there Is a one -year
lag between the actuarial valuation that is the basis for the rate and the calendar year when the rate
goes into effect.
The City's total payroll in fiscal year 1995 was $3,735,169 and the City's contributions were based
on a payroll o4 $3,642,670. Both the City and the covered employees made the required
contributions, amounting to $239,504 (5.93% of covered payroll for the months In calendar year
1994, 4.82% normal cost plus 1.1% to amortize the unfunded actuarial liability, and 6.75% for the
months in calendar year 1995, 5.68% normal cost plus 1.07% to amortize the unfunded actuarial
liability) for the City and $210,726 (6 %) for the employees. The City adopted changes in the plan
since the previous actuarial valuation, which had the effect of increasing the City's contribution rate
for 1995 by 1.53% of payroll. There were no related -party transactions.
28
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 7. Retirement Plan - continued
Funding Status and Progress
Even though the substance of the City's plan is not to provide a defined benefit in some form, some
additional voluntary disclosure Is appropriate due to the nontraditional nature of the defined
contribution plan which had an Initial unfunded pension benefit obligation due to the monetary
credits granted by the City for services rendered before the plan began and which can have
additions to the unfunded pension benefit obligation through the periodic adoption of Increases in
benefit credits and benefits. Statement No. 5 of the Governmental Accounting Standards Board
(GASB 5) defines pension benefit obligation as a standardized disclosure measure of the actuarial
present value of pension benefits, adjusted for the effects of projected salary Increases, estimated
to be payable in the future as a result of employee service to date. The measure is Intended to help
users assess the funding status of public employee pension plans, assess progress made In
accumulating sufficient assets to pay benefits when due, and make comparisons among public
employee pension plans.
The pension benefit obligation shown below is similar in nature to the standardized disclosure
measure required by GASB 5 for defined benefit plans except that there is no need to project salary
Increases since the benefit credits earned for service to date are not dependent upon future
salaries. The calculations were made as part of the annual actuarial valuation as of December 31,
1994. Because of the money - purchase nature of the plan, the Interest rate assumption, currently
8.5% per year, does not have as much Impact on the results as it does for a defined benefit plan.
Market value of assets is not determined for each Cfty's plan, but the market value of assets for
TMRS as a whole was 98.6% of book value as of December 31, 1994.
Pension Benefit Obligation
Annuitants currently receiving benefits $ 27,492
Terminated employees 63,525
Current employees
Accumulated employee contributions
Including allocated invested earnings 810,833
Employee- financed vested 805,264
Employer - financed nonvested 538.304
Total $ 2,245,418
Net assets available for benefits, at book value 8 1,579,673
Unfunded pension benefit obligation 665,745
$ 2,245,418
The book value of assets is amortized cost for bonds and original cost for short -term securities and
stocks. The actuarial assumptions used to compute the actuarially determined City contribution rate
are the same as those used to compute the pension benefit obligation. The numbers above reflect
the adoption of changes In the plan since the previous actuarial valuation, which had the effect of
increasing the pension benefit obligation by $230,896.
29
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 7. Retirement Plan - continued
Trend Information
Trend Information gives an Indication of the progress made In accumulating sufficient assets to pay
benefits when due. Ten year trend information for TMRS Is available In the System's
Comprehensive Annual Financial Report for Its fiscal year ending December 31. Trend information
as It relates to the City of Southlake may be found In the supplementary information of the City's
Comprehensive Annual Financial Report.
For the year ended December 31, 1994, 1993, and 1992, respectively, which 1s the latest available
information, available assets were sufficient to fund 70.35 %, 79.07 %, and 91.28% of the pension
benefit obligation. The unfunded pension benefit obligation represented 18.3 %, 10.1 %, and 3.5 %,
of the payroll for employees covered by the plan for the years ended December 31, 1994, 1993 and
1992. Showing overfunded and unfunded pension benefit obligation as a percentage of annual
covered payroll approximately adjusts for the effects of inflation for analysis purposes.
Note 8. Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with internal
Revenue Code Section 457. The plan, available to all City employees, permits them to defer a
portion of their salary until future years. The deferred compensation Is not available to employees
until termination, retirement, death, or unforeseeable emergency. The Plan is administered by
PEBSCO and ICMA and assets and liabilities are reported at approximate market value.
All amounts of compensation deferred under the plan, all property and rights 2 urchased with those
amounts, and all Income attributable to those amounts, property and rights purchased with those
available to the employee or other beneficiary) solely the property and rights of the City (without
being restricted to the provisions of benefits under the plan), subject only to the claims of the City's
general creditors. Participant's rights under the plan are equal to those of general creditors of the
City in an amount equal to the fair market value of the deferred account for each participant.
It is the opinion of management of the City that there is no liability for losses under the plan but that
they do have the duty of due care that would be required of an ordinary prudent Investor. The City
believes that It is unlikely that It will use the assets to satisfy the claims of general creditors in the
future.
30
CITY OF SOUTHLAKE, TEXAS
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 9. Commitments and Contingencies
The City has entered various contracts with the Trinity River Authority (TRA) and other cities.
Terms of the agreements provide the City will pay an amount equal to its proportional share of
maintenance and operations and debt service based upon volumes of wastewater transported,
treated or disposed of. The City's proportional share of future costs under these contracts Is
undeterminable and has not been recorded. Payments to the TRA under these contracts for the
year ended September 30, 1995 was $187,462.
The City has authorized various contracts obligating future funds of the City as the contracted
services are performed. Significant amounts unexpended under such contracts at year end are
reflected as reserves for authorized contracts In the applicable funds.
Note 10. Risk Financing and Insurance
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. During the fiscal year
1990, the City Joined the Texas Municipal League Group Benefits Risk Pool and the Texas municipal
League Workers Compensation Joint Insurance Fund for risks related to employees. Premiums are
paid to these Pools, which retain a limit of loss. Reinsurance companies insure the risks beyond
those limits. The City retains, as a risk, only the deductible amount of each policy. The City
continues to carry commercial Insurance for other risks Including general liability, property and
errors and omissions.
Note 11. Contributed Capital
Subsequent to the issuance of the 1994 financial statements It was discovered that assets
contributed to the water and sewer system by developers had not been recognized as contributed
capital. Beginning contributed capital has been restated to reflect these contributed assets and the
related accumulated depreciation on such assets.
The changes in contributed capital are as follows:
Balance, beginning $ 6,643,496
Prior period adjustments:
Developer contributions 7,882,467
Accumulated depreciation on contributed
assets at September 1, 1994 ( 369,593)
Balance, beginning (as restated) 14,156,370
Impact fees 848,139
Development contributions 2,742,127
Depreciation on contributed assets ( 277,605)
Other 27,226
Balance, ending $ 17,496,257
31
outhla ¢
32
APPENDIX C
FORM OF BOND COUNSEL'S OPINION
THIS PAGE LEFT BLANK INTENTIONALLY
FULBRIGHT & JAWORSKI
L. L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP HOUSTON
WASHINGTON, D.C.
2200 Ross AVENUE AUSTIN
SUITE 2800 SAN ANTONIO
DALLAS
TELEPHONE: 214/855 -8000 DALLAS, TEXAS 75201 NEW YORK
FACSIMILE: 214/855 -8200 LOS ANGELES
LONDON
WRITERS DIRECT DIAL NUMBER:
HONG KONG
214/855 -8013
IN REGARD to the authorization and issuance of the "City of Southlake, Texas,
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 199T (the "Certificates "), dated February 15, 1997 (the "Certificate
Date "), in the principal amount of $9,670,000, we have examined into the legality and
validity of the issuance thereof by the City of Southlake, Texas (the "City "), which
Certificates are issuable in fully registered form only, in denominations of $5,000 or any
integral multiple thereof (within a maturity), have stated maturities of February 15,
1998 through February 15, 2017, unless redeemed prior to maturity in accordance with
the terms stated on the Certificates, and bear interest on the unpaid principal amount
from the Certificate Date at the rates per annum stated in the ordinance authorizing
the issuance of the Certificates (the "Ordinance "), such interest being payable on
February 15 and August 15 in each year, commencing February 15, 1998, to the
registered owners shown on the registration books of the Paying Agent/Registrar on the
Record Date (stated on the face of the Certificates).
WE HAVE SERVED AS BOND COUNSEL for the City solely to pass upon the
legality and validity of the issuance of the Certificates under the Constitution and laws
of the State of Texas, and with respect to the exclusion of the interest on the
Certificates from gross income for federal income tax purposes and none other. We
have not been requested to investigate or verify, and have not independently
investigated or verified, any records, data or other material relating to the financial
condition or capabilities of the City. Our examinations into the legality and validity of
the Certificates included a review of the applicable and pertinent provisions of the
Constitution and laws of the State of Texas, a transcript of certified proceedings of the
City relating to the authorization and issuance of the Certificates, including the
Ordinance, customary certifications and opinions of officials of the City and other
pertinent showings, and an examination of the Certificates executed and delivered
initially by the City, which we found to be in due form and properly executed.
BASED ON OUR EXAMINATIONS, IT IS OUR OPINION that, under the
applicable law of the United States of America and the State of Texas in force and
effect on the date hereof:
1. The Certificates have been duly authorized by the City, and the
Certificates issued in compliance with the provisions of the Ordinance are
valid, legally binding and enforceable obligations of the City, payable from
an ad valorem tax levied, within the limits prescribed by law, upon all
taxable property in the City and additionally payable from a limited
pledge of the Net Revenues (as defined in the Ordinance) of the City's
combined Waterworks and Sewer System in the manner and to the extent
0401111
Page 2 of Legal Opinion of Fulbright & Jaworski L.L.P.
Re: $9,670,000 "City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1997 ", dated
February 15, 1997
provided in the Ordinance; except to the extent that the enforceability
thereof may be affected by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting creditors' rights or the
exercise of judicial discretion in accordance with the general principles of
equity.
2. Assuming continuing compliance after the date hereof by the
City with the provisions of the Ordinance and in reliance upon
representations and certifications of the City made in a certificate of even
date herewith pertaining to the use, expenditure, and investment of the
proceeds of the Certificates, interest on the Certificates for federal income
tax purposes (a) will be excludable from gross income, as defined in
section 61 of the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code "), of the owners thereof pursuant to section 103 of the
Code and existing regulations, published rulings, and court decisions
thereunder, and (b) will not be included in computing the alternative
minimum taxable income of individuals or, except as hereinafter described,
corporations. Interest on all tax- exempt obligations, such as the
Certificates, owned by a corporation will be included in such corporation's
adjusted current earnings for tax years beginning after 1989 for purposes
of calculating the alternative minimum taxable income of such
corporation, other than an S corporation, a qualified mutual fund, a real
estate mortgage investment conduit (REMIC), or a real estate investment
trust (REIT). A corporation's alternative minimum taxable income is the
basis on which the alternative minimum tax imposed by the section 55 of
the Code will be computed.
WE EXPRESS NO OPINION with respect to any other federal, state, or local
tax consequences under present law or any proposed legislation resulting from the
receipt or accrual of interest on, or the acquisition or disposition of, the Certificates.
Ownership of tax- exempt obligations such as the Certificates may result in collateral
federal tax consequences to, among others, financial institutions, life insurance
companies, property and casualty insurance companies, certain foreign corporations
doing business in the United States, S corporations with subchapter C earnings and
profits, individual recipients of Social Security or Railroad Retirement Benefits,
individuals otherwise qualifying for the earned income tax credit, and taxpayers who
may be deemed to have incurred or continued indebtedness to purchase or carry, or
who have paid or incurred certain expenses allocable to, tax- exempt obligations.
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0401111
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