14-018 /4 — 6/3
A RESOLUTION by the City Council of the City of Southlake, Texas, relating to
the "Southlake Parks Development Corporation Sales Tax Revenue
Refunding Bonds, Series 2014"; approving the resolution of the Southlake
Parks Development Corporation authorizing the issuance of such Bonds;
resolving other matters incident and related to the issuance of such
Bonds; and providing an effective date.
WHEREAS, Southlake Parks Development Corporation (the "Issuer ") was created by
the City of Southlake, Texas (the "City "), pursuant to the provisions of Chapters 501, 502 and
505 of the Texas Development Corporation Act, Texas Local Government Code, Title 12,
Subtitle C1, as amended (formerly Vernon's Ann.Civ.St., Section 4B of Article 5190.6, as
amended, and referred to herein as the "Act "); and
WHEREAS, the Issuer is empowered to issue bonds for the purpose of refunding
outstanding bonds issued on account of a "project" defined as such by the Act; and
WHEREAS, the Issuer has determined to refund the following described outstanding
bonds of the Corporation totaling in principal amount $17,295,000 (hereinafter collectively
referred to as the "Refunded Bonds "), to wit:
(1) Southlake Parks Development Corporation Refunding and Improvement
Sales Tax Revenue Bonds, Series 1997, dated February 15, 1997,
maturing on August 15 in each of the years 2014 through 2021, inclusive,
and aggregating in principal amount $1,305,000;
(2) Southlake Parks Development Corporation Sales Tax Third Lien Revenue
Refunding Bonds, Series 2005, dated March 15, 2005, maturing on
August 15 in each of the years 2014 through 2027, inclusive, and
aggregating in principal amount $12,825,000; and
(3) Southlake Parks Development Corporation Sales Tax Subordinate Lien
Revenue Bonds, Series 2006, dated January 15, 2006, maturing on
August 15 in each of the years 2014 through 2025, inclusive, and
aggregating in principal amount $3,165,000;
AND WHEREAS, Section 501.204 of the Act requires the City Council of the City
approve the resolution of the Issuer providing for the issuance of the Bonds no more than
sixty (60) days prior to the delivery of the Bonds; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: The Resolution authorizing the issuance of "Southlake Parks
Development Corporation Sales Tax Revenue Refunding Bonds, Series 2014 ", adopted by the
Issuer (the "Issuer Resolution ") on May 6, 2014 and submitted to the City Council this day, is
hereby approved in all respects. The Bonds are being issued to refund the Refunded Bonds
(identified in the preamble hereof).
SECTION 2: The approvals herein given are in accordance with Section 501.204 of the
Act and the Issuer's bylaws, and the Bonds shall never be construed an indebtedness or pledge
of the City, or the State of Texas (the "State "), within the meaning of any constitutional or
statutory provision, and the owner of the Bonds shall never be paid in whole or in part out of any
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funds raised or to be raised by taxation (other than sales tax proceeds as authorized pursuant to
the Act) or any other revenues of the Issuer, the City, or the State, except those revenues
assigned and pledged by the Issuer Resolution.
SECTION 3: The City hereby agrees to promptly collect and remit to the Issuer the
Gross Sales Tax Revenues (as defined in the Issuer Resolution) in accordance with the terms
of the Issuer Resolution and the Act to provide for the prompt payment of the Bonds, and to
assist and cooperate with the Issuer in the enforcement and collection of sales and use taxes
imposed on behalf of the Issuer.
SECTION 4: The City hereby acknowledges and recognizes that the Bonds are being
issued as tax exempt obligations under and pursuant to section 103(a) of the Code (as defined
below) and, in connection therewith, the City hereby makes the following representations and
warranties to the Issuer:
(a) Definitions. When used in this Section, the following terms have the following
meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148 -1(b)
of the Regulations, and any replacement proceeds as defined in Section
1.148 -1(c) of the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code,
and 103 of the Internal Revenue Code of 1954, which are applicable to the
Bonds. Any reference to any specific Regulation shall also mean, as
appropriate, any proposed, temporary or final Income Tax Regulation designed
to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-
5 of the Regulations and (2) the Bonds has the meaning set forth in Section
1.148 -4 of the Regulations.
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(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds (including property financed with
Gross Proceeds of the Refunded Bonds), and not use or permit the use of such
Gross Proceeds (including all contractual arrangements with terms different than
those applicable to the general public) or any property acquired, constructed or
improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with the Gross Proceeds of the Refunded Bonds),
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the
40575206.2 / 11402170 3
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in
section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof)
and shall retain all records of accounting for at least six years after the day on
which the last outstanding Bond is discharged. However, to the extent permitted
by law, the City may commingle Gross Proceeds of the Bonds with other money
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall remit to the Issuer for payment to the United States
the amount described in paragraph (3) above and the amount described in
paragraph (4) below, at the times, in the manner and accompanied by such
forms or other information as is or may be required by Section 148(f) of the Code
and the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors
are made in the calculations and payments required by paragraph (2), and if an
error is made, to discover and promptly correct such error within a reasonable
amount of time thereafter (and in all events within one hundred eighty (180) days
after discovery of the error), including the amount remitted to the Issuer for
payment to the United States of any additional Rebate Amount owed to it,
interest thereon, and any penalty imposed under Section 1.148 -3(h) of the
Regulations.
(h) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the
Bonds were issued, the Corporation reasonably expected to spend at least 85% of the
spendable proceeds of such bonds within three years after such bonds were issued and (2) not
more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in
Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or
more.
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(1) Current Refunding. The Bonds are a current refunding of the Refunded Bonds
as the Bonds will be issued within 90 days of the redemption of the Refunded Bonds.
SECTION 5: It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and
subject matter of the public business to be considered at such meeting, including this
Resolution, was given, all as required by Texas Government Code, Chapter 551, as amended.
SECTION 6: This Resolution shall be in force and effect from and after its passage on
the date shown below.
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40575206.2 / 11402170 5
PASSED AND ADOPTED, this May 6, 2014.
CITY OF SOUTHLAKE, TEXAS
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Mayor
ATTEST:
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City Secretary ? >- _ 1�
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(City Seal)
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