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Home My WebLink AboutOrdinance - 9863-1995 - $6,505,000 General Obligation Bond Series 1995A - 11/16/1995TELEPHONE: 214/855·8000 f" ACS IM I LE: 214/8!5!5•8200 WRITER'S DIRECT DIAL NUMBER: 214/855-8013 Ms. Debra Forte Assistant City Manager City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 FULBRIGHT & JAWORSKI L.LP. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE SUITE 2800 DALLAS. TEXAS 75201 February 18, 1996 HOUSTON WASHINGTON, D.C. AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES LONDON HONG KONG Re: $6,505,000 "City of Lubbock, Texas, General Obligation Bonds, Series 1995A", dated December 15, 1995 Dear Debbie: Our services relating to the above described bonds having been completed, enclosed herewith please find a transcript of proceedings for the City's records. It has been a pleasure to serve the City of Lubbock in connection with this fmancing. Should you have any questions regarding the enclosure, please advise. EHE:dfc Enclosure 0311094 Sincerely, L#P Ed H. Esquivel No Text Document TRANSCRIPT OF PROCEEDINGS RELATING TO $6,505,000 CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS SERIES 1995A DATED DECEMBER 15, 1995 Number Description of Document 1 Opinion of Bond counsel 2 Resolution approving and authorizing publication of notice of sale/Affidavit of Publication Evidencing Publication of Notice of Sale 3 Bond Ordinance 4 Executed Paying Agent/Registrar Agreement 5 Official Statement 6 General Certificate 7 Certificate as to Tax Exemption 8 Filed Information Report 9 Signature and No-Litigation Certificate 10 Attorney General's Opinion and Comptroller's Registration Certificate 11 Receipt for Payment 12 Certificate as to Official statement No Text 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 .. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ,.., 1 1 1 1 1 1 1 1 1 1 1 1 ,.., 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ,... No Text TELEPHONE: 214/855•8000 f'ACSIMILE: 214/855·8200 FULBRIGHT & uAWORSKI L.L.P. A REGISTERED L.IMITEO L.IASILITY PARTNERSHIP 2200 ROSS AVENUE SUITE 2600 DALLAS, TEXAS 75201 January 11, 1996 HOUSTON WASHINGTOt-1, D.C. AUSTIN SAN ANTONIO DALLAS NE:W YORK LOS ANGE:LE:S LONDON HONG KONG IN REGARD to the authorization and issuance of the "City of Lubbock, Texas, General Obligation Bonds, Series 1995A" (the "Bonds"), dated December 15, 1995 (the "Bond Date"), in the principal amount of $6,505,000, we have examined into the legality and validity of the issuance thereof by the City of Lubbock, Texas (the "City"), which Bonds 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, 1997 through February 15, 2016, unless redeemed prior to maturity in accordance with the terms stated on the Bonds, and bear interest on the unpaid principal amount from the Bond Date at the rates per annum stated in the ordinance authorizing the issuance of the Bonds (the "Ordinance"), such interest being payable on February 15 and August 15 in each year, commencing August 15, 1996, to the registered owners thereof shown on the registration books of the Paying Agent/Registrar on the Record Date (stated on the face of the Bonds). WE HAVE SERVED AS BOND COUNSEL for the City solely to pass upon the legality and validity of the issuance of the Bonds under the Constitution and laws of the State of Texas, and with respect to the exclusion of the interest on the Bonds 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 Bonds 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 Bonds, including the Ordinance, customary certifieations and opinions of officials of the City and other pertinent showings, and an examination of the Bond 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 the Bonds have been duly authorized by the City in compliance with the Constitution and laws of the State of Texas now in force, and the Bonds issued in compliance with the provisions of the Drdinance are valid, legally binding and enforceable obligations of the City, payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon ·all taxable property in the City, except to the extent that the enforceability thereof may be affected by bankruptcy, insolvency, reorganization, moratorium, or other No Text Page 2 of Legal Opinion of Fulbright & Jaworski L.L.P. Re: $6,505,000 "City of Lubbock, Texas, General Obligation Bonds, Series 1995A", dated December 15, 1995 similar laws affecting creditors' rights or the exercise of judicial discretion in accordance with general principles of equity. IT IS FURTHER OUR OPINION THAT, 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 Bonds, interest on the Bonds 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 hereof, of the owners thereof pursuant to section 103 of such Code, existing regulations, published rulings, and court decisions thereunder, and (2) 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 Bonds, 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 corporations, 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 section 55 of the Code and the environmental tax imposed by section 59A of the Code is 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 Bonds. Ownership of tax-exempt obligations such as the Bonds 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. EHE:dfc No Text j j j j j j j j j j j j j j j ~ j I j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j ·. j j j ,.j j j j j rJ j j j j j ,..j j j j j rj j j j j 1 j j j j ·j j j j j j j j j j j j j j j j j j j j j j j j j j I j • CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK s s s s s I, the undersiqned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. That on the 19th day of October, 1995, a reqular meetinq of the City council of the City of Lubbock, Texas, was held at the reqular meetinq place of the city Council within the City; the duly constituted members of the Council beinq as follows: DAVID LANGSTON MAYOR RANDY NEUGEBAUER MAYOR PRO TEM ALEX "TY" COOKE ) VICTOR HERNANDEZ ) COUNCILMEMBERS MAX INCE ) T.J. PATTERSON ) WINDY SITTON ) and all of said persons were present at said meetinq, except the followinq: None • Amonq other business considered at said meetinq, the attached resolution entitled: A RESOLUTION by the City Council of the City of Lubbock, Texas, approvinq and authorizinq publication of notice of intention to issue certificates of obliqation and notices of sale with respect to such certificates of obliqation and with respect to qeneral obliqation bonds. was introduced and submitted to the council for passaqe and adoption. After presentation and due consideration of the resolution, and upon a motion beinq made by councilmember Patterson and seconded by Councilmember Cooke, the resolution was finally passed and adopted by the Council to be effective immediately by the followinq vote: 7 voted "For" 0 voted 11Aqainst" 0 abstained all as shown in the official Minutes of the council for the meetinq held on the aforesaid date. 2. That the attached resolution is a true and correct 955425/0282150 No Text copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meeting are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of the meeting was given to each member of the Council; and that said meeting and the deliberation of the aforesaid public business was open to the public and written.notice of said meeting, including the subject of the above entitled resolution, was posted and given in advance thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551. IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 19th day of October, 1995. 2ItYecreti City of Lubbock, Texas (City Seal) 955425/0282150 -2- No Text Resolution No. 5000 October 19, 1995 Item 1118 A RESOLUTION by the City Council of the City of Lubbock, Texas, approvinq and authorizinq publication of notice of intention to issue certificates of obliqation and notices of sale with respect to such certificates of obliqation and with respect to qeneral obliqation bonds. WHEREAS, the City Council of the City of Lubbock, Texas, has determined that certif !cates of obliqation should be , issued in accordance with the provisions of V.T.C.A., Local Government Code, Subchapter c of Chapter 271, for the purpose of payinq contractual obliqations to be incurred for (i) public safety improvements, includinq construction and equipment of fire stations, fire traininq facilities, and administrative and maintenance/supply facilities for the fire department and (ii) professional services rendered in connection therewith; and WHEREAS, the City Council of the City of Lubbock, Texas, has determined that qeneral obliqation bonds should be issued in accordance with the provisions of qeneral law and the City's charter for the purpose of payinq contractual obliqations to be incurred for street improvements, park improvements, and costs of issuinq such bonds; and WHEREAS, prior to the issuance of said certificates of obliqation, this council is required to qive notice o( its intention to issue the same in the manner and time provided by law and deems it appropriate to publish a notice of sale with respect to such bonds and certificates in accordance with the procedure set forth in the City's charter; now, therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS: Section 1: That the City Secretary is hereby authorized and directed to cause notice to be published of this Council's intention to issue certificates of obliqation in the principal amount not to exceed $10,000,000 for the purpose of payinq contractual obliqations to be incurred for (i) public safety improvements, includinq construction and equipment of fire stations, fire traininq facilities, and administrative and maintenance/supply facilities for the fire department and (ii) professional services rendered in connection therewith, such certificates to be payable from ad valorem taxes and a limited pledqe .of the revenues of the City's waterworks system. The notice hereby approved and authorized to be qiven shall read substantially in the form and content of Exhibit A hereto attached and incorporated herein by reference as a part of this resolution for all purposes. 955425/0279481 No Text Section 2: That such notice of intention to issue certificates of obliqation shall be published once a week for two consecutive weeks in a newspaper havinq qeneral circulation in the City of Lubbock, Texas, the date of the first publication of such notice to be at least fifteen (.15) days prior to the date stated therein for.the passaqe of the ordinance authorizinq the issuance of the certificates of obliqation. Section 3: That the City secretary is hereby authorized and directed to cause a notice of sale to be published relatinq to the sale of certificates of obliqation and qeneral obliqation bonds. The notice of sale hereby approved and authorized to be published shall read substantially in the form and content of Exhibits B and c hereto attached and incorporated herein by reference as a part of this resolution for all purposes. · Section 4: That the City secretary is hereby authorized and directed to cause the notices of sale approved in Section 3, above, to be published once each we eriod of thirty days. ATTEST: Texas , City of Lubbock, Texas (SEAL) 955425/0279481 -2- No Text .. Exhibit A NOTICE OF INTENTION TO ISSUE CITY OF LUBBOCK. TEXAS. CERTIFICATES OF OBLIGATION TAKE NOTICE that the City Council of the City of Lubbock, Texas, shall convene at 10:00 o'clock A.M. ·on the 7th day of December, 1995, at 1625 13th Street, Lubbock, Texas, and, during such meeting, the City Council will consider the passage of an ordinance authorizing the issuance of certificates of obligation in an amount not to exceed Ten Million Dollars ($10,000,000) for the purpose of paying contractual obligations to be incurred for (i) public safety improvements, including construction and equipment of fire stations, fire training facilities, and administrative and maintenance/supply facilities for the fire department and (ii) professional services rendered in connection therewith, such certificates to be payable from ad valorem taxes and a limited pledqe of the revenues of the city's waterworks system. The certificates are to be issued, and this notice is qiven, under and pursuant to the provisions of V.T.C.A., Local Government Code, Subchapter c of Chapter 271. city of Lubbock, Texas 955425/0279481 -3- No Text .. Exhibit B NOTICE OF SALE CITY OF LUBBOCK, TEXAS The City Council of the City of Lubbock, Texas, will receive sealed bids at the City council Chambers, Municipal Complex, 1625 13th Street, Lubbock, Texas, until 11:00 A.M., December 7, 1995, for the followinq described Certificates of Obliqation: S1o.ooo,ooo City of Lubbock. Texas Tax and waterworks System (Limited Pledge> Revenue Certificates of Obligation, Series 1995 Dated December 15, 1995; principal due February 15 of each year as follows: $500, ooo in each of the years 1997 through, and includinq, 2016; interest payable Auqust 15, 1996, and each February 15 and Auqust 15 thereafter. certificates havinq stated maturities on and after February 15, 2007, will be subject to redemption at the option of the City, in whole or in part in principal. amounts of $5,000 or any inteqral multiple thereof, on February 15, 2006, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. Further information may be obtained from the Division of Finance, city of Lubbock, P.o. Box 2000, Lubbock, Texas 79457; or from First Southwest company, 1700 Pacific Avenue, Suite 500, Dallas, Texas 75201, Financial Consultants to the City. City of Lubbock, Texas (City Seal) 955425/0279481 -4- No Text Exhibit C NOTICE OF SALE CITY OF LUBBOCK, TEXAS The City Council of the City of Lubbock, Texas, will receive sealed bids at the City Council Chambers, Municipal Complex, 1625 13th Street, Lubbock, Texas, until 11:00 A.M., December 7, 1995, for the followinq described Bonds: $6.505,000 City of Lubbock. Texas general Obligation Bonds. ~eries 1995A Dated December 15, 1995; principal due February 15 of each year as follows: $325,000 in each of the years 1997 throuqh, and includinq, 2015, and $330,000 in the year 2016; interest payable Auqust 15, 1996, and each February 15 and Auqust 15 thereafter. Bonds havinq stated maturities on and after February 15, 2007, will be subject to redemption at the option of the City, in whole or in part in principal amounts of $5,000 or any inteqral multiple thereof, on February 15, 2006,· or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. Further information may be obtained from the Division of Finance, City of Lubbock, P.O. Box 2000, Lubbock, Texas 79457; or from First Southwest Company, 1700 Pacific Avenue, suite 500, Dallas, Texas 75201, Financial Consultants to the City. (City seal) 955425/0279481 -5- No Text .. AFFIDAVIT OF PQBLICATION THE STATE OF TEXAS S COUNTY OF LUBBOCK S CITY OF LUBBOCK S BEFORE ME, the undersigned authority, on this day personally appeared T .. I. Aufill , who, after being by me duly sworn, deposes and says that ( s) he is the Controller of the Lubbock Avalanche-Journal, which is a newspaper published and having general circulation in the City of Lubbock, Texas, and that a true and correct copy of the "NOTICE OF SALE," hereto attached, was published in said paper on the following dates: November 5 1 1995; November 12 1 1995; November 19 1 1995; November 26 1 1995; December 3 , 1995; the date of the first publication of said notice being at least thirty (30) days prior to the date of the public sale for the obligations referred to therein. SWORN TO AND SUBSCRIBED BEFORE ME, this the 4 day of December 1 1995. (Notary Seal) No Text THE STATE OF TEXAS COUNTY OF LUBBOCK CERTIFICATE s s 5 I, the undersigned, of the LUbbock Avalanche-Jorzrnal (the aNewspaper"), DO HEREBY CERTIFY that the Newspaper is of general circulation in the city of LubbOck, Texas, and the Newspaper devotes not less than twenty-five percent (25%) of its total column lineage to items of general interest, is published not less frequently than once each week, entered as second-class postal matter in the county where it is published and has been published regularly and continuously for not less than twelve (12) months prior to.November 5, 1995, the date of the first publication of "NOTICE OF INTEN'l'ION '.1'0 ISSUE CITY OF LtmBOCK, TEXAS, CERTIFICATES OF OBL:IGATIONa. Title~:' SWOlU{ '1'0 AND SUBSCRIBED BEFORE ME, this the 3 day of January, 1996. /} j J Y-!&iL ~ Jcvt;- Notary Public;"' State of Texas (Notary Seal) GSiliiiO ,. No Text No Text ..• . * •. CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS § § COUNTY OF LUBBOCK § s CITY OF LUBBOCK S I, the undersigned, city Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. On the 16th day of November, 1995, the City council of the City of Lubbock, Texas, c.onvened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: DAVID R. LANGSTON RANDY NEUGEBAUER VICTOR HERNANDEZ T. J. PATTERSON WINDY SITTON MAX INCE ALEX "TY" COOKE ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: None. Among other business considered at said meeting, the attached ordinance (the "Ordinance") entitled: ORDINANCE NO. 9863 "AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1995A'; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date.11 was introduced and submitted to the Council for first reading. After presentation and due consideration of the Ordinance, and upon a motion being made by Victor Hernandez and seconded by Max Ince, the Ordinance was approved on first reading by the council by the following vote: No Text '· all voted "For" none voted uAgainst" none abstained all as shown in the official Minutes of the council for the meeting held on the aforesaid date. 2. On the 7th day of December, 1995, the city council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the council being as follows: DAVID R. LANGSTON RANDY NEUGEBAUER VICTOR HERNANDEZ T. J. PATTERSON WINDY SITTON MAX INCE ALEX "TY11 COOKE ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: T. J. Patterson. Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by Alex 11Ty11 Cooke and seconded by Victor Hernandez, the Ordinance was duly passed and adopted on second re·ading to be effect! ve immediately by the following vote: all voted 11For" none voted "Against" none abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said city on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written notice of said meetings, including the subject of the above entitled Ordinance, was posted and given in advance thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended. -2- No Text IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 7th day of December, 1995. City of Lubbock, Texas (City seal) -3- No Text ORDINANCE NO. 9863 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS 1 GENERAL OBLIGATION BONOS, SERIES 1995A"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date. WHEREAS, the City Council of the City of Lubbock, Texas, hereby finds and determines that $6,505,000 in principal amount of general obligation bonds approved and authorized to be issued at an election held on May 1, 1993 (as shown below), should be issued and sold at this time; a summary of the general obligation bonds authorized at elections previously held, the principal amount authorized, amounts heretofore issued and being issued pursuant to this ordinance and amounts remaining to be issued subsequent hereto being as follows: Principal Amounts Date Amount Heretofore Amounts Unissued purpose Authorized Authorized Issued aelng Issued aaiSOCi! Waterworks System 10..17-87 2,810,000 200,000 -0-2,610,000 Sewer System 5-21-77 3,303,000 2,175,000 .().. 1,128,000 Street Improvements 5-1-93 10,170,000 5,156,000 5,010,000 4,000 Parks 5-1-93 5,385,000 3,~90,000 1.4~5,000 -().. $~1.6681000 $11.4211000 $§.505.000 $317421000 AND WHEREAS, the City Council hereby reserves and retains the right to issue the balance of unissued bonds approved at said elections in one or more installments when, in the judgment of the Council, funds are needed to accomplish the purposes for which such bonds were voted; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: Authorization -Designation-Principal Amount- pyrpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $6,505,000, to be designated and bear the title "CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONOS, SERIES 1995A" (hereinafter referred to as the "Bonds"), for the purpose of making permanent public improvements and public purposes, ·to wit: $5,010,000 for the construction of street improvements, including signalization, 02889M ,- lighting and rights-of-way, and $1,495,000 for park improvements, including neighborhood parks, athletic fields and swimming pools, all in accordance with authority conferred at the aforesaid election and under and in strict conformity with the Constitution and laws of the state of Texas, including Article 1175, V.A.T.c.s. and Article VIII Section 1 of the City Charter of the City of Lubbock, Texas. SECTION 2: fUlly Registered Obligations -Bond Date -Authorized Denominations-stated Maturities-Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated December 15, 1995 (the "Bond Date") , shall be in denominations of $5,000 or any integral multiple (within a stated Maturity) thereof, and shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities'') in accordance with the following schedule: Year of Principal Interest Stated Maturity AmOUnt Rate 1997 $325,000 5.75% 1998 325,000 5.75% 1999 325,000 5.75% 2000 325,QOO 5.75% 2001 325,000 5.75% 2002 325,000 5.75% 2003 325,000 5.75% 2004 325,000 5.75% 2005 325,000 5.75% 2006 325,000 5.75% 2007 325,000 4.90% 2008 325,000 4.90% 2009 325,000 5.00% 2010 325,000 5.00% 2011 325,000 4.80% 2012 325,000 4.75% 2013 325,000 4.75% 2014 325,000 4.75% 2015 325,000 4.75% 2016 330,000 4.75% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the per annum rates shown above (computed on the basis of a 360-day year of twelve 30-day months); such interest shall be payable on February 15 and August 15 in each year, commencing August 15, 1996. SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall -2- No Text be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at ·the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Norwest Bank Texas, National Association, Dallas, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of ~ "Paying Agent/ Registrar Agreement", substantially in the form attached hereto as Bxhibit A, and such reasonable rules and · regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute ~nd deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a :bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the 'duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable .at the stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Minneapolis, .. Minnesota (the "Designated Payment/Transfer Office"). Interest on .. the Bonds shall be paid to the Holders whose name appears in the · Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest 'payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United states Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the ·Holder. If the date for the payment of the principal of or interest on the Bonds shall be a saturday, sunday, a legal holiday, or a day on which banking institutions in the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next -3- No Text succeeding day which is not such a Saturday, sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (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 (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by united States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) optional Redemption. The Bonds having Stated Maturities on and after February 15, 2007, shall be subject to redemption prior to maturity, at the option of the city, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2006 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption option. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar) , the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the city to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the city. (c) Selection of Bonds for Redemption. If less than all outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Hotice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the -4- No Text Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively pre·sumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall ( i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration -Transfer/Exchange of Bonds- Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this. ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. -5- No Text ... At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearinq the same rate of interest and of like agqreqate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment/Transfer Office of the Payinq Aqent/Registrar. Whenever any Bonds are surrendered for exchange, the Payinq Aqent/Reqistrar shall reqister and deliver new Bonds to the Holder requestinq the exchanqe. All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Desiqnated Payment/Transfer Office of the Paying Aqent/Registrar or sent by United states Mail, first class, postaqe prepaid to the Holders, and, upon the reqistration and delivery thereof, the same shall be the valid obliqations of the City, evidencinq the same obliqation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchan9e. All transfers or exchanqes of Bonds pursuant to this Section shall be made without expense or service charqe to the Holder, except·as otherwise herein provided, and except that the Payinq Agent/Registrar shall require payment by the Holder requesting such transfer or exchanqe of any tax or other qovernmental charges required to be paid with respect to such transfer or exchange. Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencinq all or a portion, as the case may be, of the same obliqation to pay evidenced by the new Bond or Bonds reqistered and delivered in the exchanqe or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond shall be deemed to evidence the same obliqation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assiqnee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchanqe by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstandinq the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfertexchanqe of the Bonds, the City hereby approves and authorizes the use of ·6· No Text "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the requirements and procedures identified in the Letter of Representation, by and between the City, the Paying Agent/Registrar and DTC (the "Depository Agreement") relating to the Bonds. PUrsuant to the Depository Agreement and the rules of OTC, the Bonds shall be deposited with OTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial owners") being recorded in the records of DTC and DTC Participants. In the event OTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general· or the City determines that OTC is incapable of properly discharging its duties as securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bonds to be issued and delivered to OTC Participants and Beneficial owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Bond shall be entitled to any right or benefit under this ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9C, manually -7- No Text executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 90, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. SECTION B: Initial Bond(sl. The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount of $6,505,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as twenty (20) fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s) ") and, in either case, the Initial Bond(s) shall be registered in the .name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser (s), or the designee thereof., and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by -8- No Text the officers executinq such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithoqraphed, or enqraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executinq such Bonds as evidenced by their execution thereof. B. Form of Definitive Bond. REGISTERED REGISTERED NO. $ ______ __ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1995A Bond Date: Interest Rate: Stated Maturity: CUSIP NO: December 15, 1995 Reqistered owner: Principal Amount: DOLLARS The City of Lubbock (hereinafter referred to as the 11 City"), a body corporate and political subdivision in the County of Lubbock, State of Texas, for value received, acknowledqes itself indebted to and hereby promises to pay to the Reqistered owner named above, or the reqistered assiqns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Bond Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest beinq payable pn February 15 and Auqust 15 in each year, commencinq Auqust 15, 1996. Principal of this Bond is payable at its stated Maturity or redemption to the reqistered owner hereof, upon presentation and surrender, at the Desiqnated Payment/Transfer Office of the Payinq Aqent/Reqistrar executinq the reqistration certificate appearinq hereon, or its successor. Interest is payable to the reqistered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the -9- No Text "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $6,505,000 (herein referred to as the "Bonds") for the purpose of making permanent public improvements and public purposes, to wit: $5,010,000 for the construction of street improvements, including signalization, lighting and rights-of-way, and $1,495,000 for park improvements, including neighborhood parks, athletic fields and swimming pools, all in accordance with authority conferred at an election and under and in strict conformity with the Constitution and laws of the state of Texas and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after February 15, 2007, may be redeemed prior to their Stated Maturities, at the option of the city, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2006, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption and upon 30 days prior written notice being sent by United states Mail, first class postage prepaid, to the registered owners of the Bonds to be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. · In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon -10- No Text presentation and surrender of this Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar and there shall be issued to the registered owner hereof, without charge, a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum hereof. If this Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this Bond · to an assiqnee of the req istered owner within 4 5 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchanqe by the reqistered owner of the unredeemed balance hereof in the event of its redemption in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Desiqnated Payment/Transfer Office of the Paying Agent/Reqistrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the riqhts, duties, and obligations of the City and the Payinq Aqent/Reqistrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer outstandinq thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the meanings assiqned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Reqister only upon its presentation and surrender at the Oesiqnated Payment/Transfer Office of the Payinq Aqent/Registrar, with the Assiqnment hereon duly endoz:sed by, or accompanied by a written instrument of transfer in form satisfactory to the Payinq Aqent/Reqistrar duly executed by, the registered owner hereof, or his duly authorized aqent. When a transfer on the security Reqister occurs, one or more new fully registered Bonds of the same stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aqqreqate principal amount will be issued by the Payinq Aqent/Reqistrar to the desiqnated transferee or transferees. The City and the Payinq Agent/Reqistrar, and any aqent of either, shall treat the reqistered owner whose name appears on the Security Reqister (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this -11- No Text .. - - Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the.Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (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 (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United states Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. -12- No Text .. .. IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. CITY OF LUBBOCK, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) c. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bondlsl only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS ( ( ( ( REGISTER NO. I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my (SEAL) *NOTE TO PRINTER: signature • and seal of office Comptroller of Public Accounts of the State of Texas Do Not Print on Definitive Bonds -13- this ... No Text ' .. o. Form of Certificate of Paying Agent/Registrar to appear on Bonds <other than a single fully registered Initial Bondl • REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and reqistered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and desiqnated series oriqinally delivered havinq been approved by the Attorney General of the State of Texas and reqistered by the comptroller of Public Accounts, as shown by the records of the Paying Aqent/Reqistrar. The desiqnated offices of the Payinq Aqent/Reqistrar in Minneapolis, Minnesota is the "Designated Payment/Transfer Office" for this Bond. Registration date: E. Form of Assignment. NORWEST BANK TEXAS NATIONAL ASSOCIATION, Dallas, Texas, as Paying Aqent/Reqistrar By ------------~----~----Authorized Signature ASSIGNMENT FOR VALUE RECEIVED the undersiqned hereby sells, assiqns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) ••••••••••.••••••.••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Social Security or other identifying number: •••••••.••••• •••••••••••••••• ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ••••••••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: . . . . . . . . . . . . . . . . . . signature quaranteed: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOTICE: The siqnature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. No Text .. F. The Initial BondCsl shall be in the form set forth in paragraph B of this Section, except that the form of the single fully registered Initial Bond shall be modified as follows: (i) immediately under the name of the bond the headings "Interest Rate " and "Stated Maturity --------" shall both be omitted. (ii) Paragraph one shall read as follows: Registered OWner: Principal Amount: Collars The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the county of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered ~wner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: YEAR OF MATURITY PRINCIPAL INSTALLMENTS (Information to be inserted from schedule in Section 2 hereof). INTEREST RATE (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 3 0-day months; such interest being payable on February 15 and August 15 in each year, commencing August 15, 1996. Principal installments of this Bond are payable in the year of maturity or on a prepayment date to the registered owner hereof by Norwest Bank Texas, National Association, Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in Minneapolis, Minnesota (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such -15- No Text ... other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United states of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the city, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds· each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and . disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 1995A Bond Account11 (the "Interest and Sinking Fund11 ) maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. Provided, however, in regard to the interest payment to become due on the Bonds on August 15, 1996, sufficient current funds will be available and are hereby appropriated to make such payments; and proper officials of the City are hereby authorized and directed to transfer and deposit to the credit of the Interest and Sinking Fund, a sufficient amount of current funds in process -16- No Text of collection which, together with the accrued interest received from the purchaser, will be adequate to pay the interest due on the Bonds on Auqust 15, 1996. SECTION 11: Mutilated-Destroyed-Lost and stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar, subject to City approval and in its discretion, may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or .stolen Bond, only upon (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every replacement Bond issued pursuant to this section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. The provisions of this section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 12: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof, together -17- - No Text ... with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Payinq Aqent/Reqistrar, or an authorized escrow aqent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Payinq Aqent/Reqistrar, or an authorized escrow aqent, which Government Securities have been certified by an independent accountinq firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, toqetherwith any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly qiven or waived or if irrevocable arranqements therefor acceptable to the Payinq Aqent/ Reqistrar have been made) the redemption date thereof. The city covenants that no deposit of moneys or Government securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitraqe bonds" within the meaninq of Section 148 of the Internal Revenue Code of 1986, or requlations adopted pursuant thereto. Any moneys so deposited with the Payinq Aqent/Reqistrar, or an authorized escrow aqent, and all income from Government Securities held in trust by the Payinq Aqent/Reqistrar, or an authorized escrow aqent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Payinq Aqent/Reqistrar for the payment of the principal of and interest on the Bonds and remaininq unclaimed for a period of four (4) years after the Stated Maturity, or applicable redemption date, of the Bonds for which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City aqainst a written receipt therefor. Notwithstandinq the above and foreqoinq, after a period of four ( 4) years after Stated Maturity, any remitta.nce of funds from the Payinq Aqent/Reqistrar to the City shall be subject to any applicable unclaimed property laws of the state of Texas. The term "Government securities", as used herein, means direct obliqations of, or obliqations the principal of and interest on which are unconditionally quaranteed by, the United states of America, which are non-callable prior to the respective Stated Maturities of the Bonds and may be United States Treasury Obliqations such as the State and Local Government series and may be in book-entry form. SECTION 13: Ordinance a Contract -Amendments -outstanding Bonds. This Ordinance shall constitute a contract with the -18- No Text ... Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains outstanding except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiquity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds canceled by the Agent/Registrar or delivered to the Agent/Registrar for cancellation; Paying Paying (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14: Coyenants to Maintain Tax-Exempt status. 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. -19- No Text "Computation Date" has the meaninq 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 meaninq 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 qovernmental purposes of the Bonds. "Rebate Amount" has the meaninq 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 throuqh 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Requlation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation desiqned to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaninq set forth in Section 1.148-5 of the Regulations; and (2) the Bonds has the meaninq set forth in Section 1.148-4 of the Requlations. 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 qross income, as defined in section 61 of the Code, of the owner thereof for federal income ·tax purposes. Without limitinq the qenerality of the foreqoinq, unless and until the City receives a written opinion of counsel nationally recoqnized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the 02889811 -20- No Text :,... 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 Requlations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a·member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. D. No Private Loan. Except to the extent permitted by section 141 of the Code and the Requlations 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. -21- ..... I ~ I -1 -' I .-.I .. I E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. F. Not 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. Information Report. The City shall timely file the information required by section 149 (e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the secretary may prescribe. H. Rebate of Arbitrage Profits. 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 -22· No Text 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 pay to the United States out of the Interest and Sinking FUnd or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final computation Date as defined in Section 1.148-3(e) (2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and 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 paragraphs (2) and (3), 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 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. I. Not to Divert Arbitrage Profits. 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 earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, and Assistant City Manager, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the -23- No Text certificate as to Tax Exemption or similar or other appropriate certificate, form or document. SECTION 15: Sale of the Bonds. Pursuant to a public sale for the Bonds, the bid submitted by Rauscher Pierce Refsnes, Inc. (herein referred to as the "Purchasers") is declared to be the best bid received producinq the lowest net effective interest cost to the City, and the sale of the Bonds to said Purchasers at the price of par and accrued interest to the date of delivery, plus a premium of $0.00, is hereby approved and confirmed. Delivery of the Bonds to the Purchasers shall occur as soon as possible upon payment beinq made therefor in accordance with the terms of sale. SECTION 16: Control and Custody of Bonds. The Mayor of the city shall be and is hereby authorized to take and have charqe of all necessary orders and records pendinq investiqation by the Attorney General of the state of Texas, includinq the printinq and supply of definitive Bonds, and shall take and have charqe and control of the Initial Bond(s) pendinq the approval thereof by the Attorney General, the reqistration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, City secretary, City Manaqer, and Assistant City Manaqer, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents relatinq to the City and its financial affairs as may be necessary for the issuance of the Bonds', the approval of the Attorney General and the reqistration by the Comptroller of Public Accounts and, toqether with the City's financial advisor, bond counsel and the Payinq Aqent/Reqistrar, make the necessary arranqements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchanqe thereof for definitive Bonds. SECTION 17: Official Statement. The Official Statement prepared in the initial offerinq and sale of the Bonds by the city, toqether with all addendas, supplements and amendments thereto issued on behalf of the City, is hereby approved as to form and content, and the City Council hereby finds that the information and data contained in said Official Statement pertaininq to the City and its financial affairs is true and correct in all material respects and no material facts have been omitted therefrom which are necessary to make the statements therein, in liqht of the circumstances under which they were made, not misleadinq. The use of such Official Statement in the reofferinq of the Bonds by the Purchasers is hereby approved and authorized. SECTION 18: Proceeds of Sale. The proceeds of sale of the Bonds, excludinq the accrued interest ·and premium, if any, -24- No Text received from the purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sale of the Bonds, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. SECTION 19: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if. in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. · In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 20: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 21: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, 0211898:1 -25- No Text Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart thereof shall accompany the global Bonds deposited with the Depository Trust Company. SECTION 22: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 23: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 24: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and' the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 25: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 26: Effect of Headinss. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 27: Construction of Terms, If appropriate in the context of this Ordinance, words of the sinqular number shall be considered to include the plural, words of the plural number shall be considered to include the sinqular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 28: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be -26- No Text valid, and the City council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 29:· Continuing Disclosure Undertaking. (a) De£initions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1996) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 17 of this Ordinance, being the information described in Exhibit B hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit B hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. -27- No Text The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 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; s. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax- exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; s. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give the notice -28- No Text required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisfons of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting 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, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds 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 (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or 02889M -29- No Text (b) a Person that is unaffiliated with the City (such as nationally recoqnized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any chanqe in the type of financial information or operatinq data so provided. SECTION 30: Public Meeting. It is officially found, determined, and declared that the meetinq ~t which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was qiven, all as required by Chapter 551, Texas Government Code, as amended. SECTION 31: Effective Date. This Ordinance shall be in force and effect from and after its passage on second and final readinq and IT IS SO ORDAINED. PASSED AND ADOPTED ON FIRST READING, this November 16, 1995. PASSED AND ADOPT day of December, 199 • ATTEST: ~#tas;rL (City seal) COND AND FINAL READING, this the 7th -30- f • EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of December 7, 1995 (this "Agreement n) , by and between the City of Lubbock, Texas (the "Issuer"), and Norwest Bank Texas, National Association, Dallas, Texas, a banking association duly organized and existing under the laws of the United States of America (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of Lubbock, Texas, General Obligation Bonds,. Series 1995A" (the "Securities") in the aggregate principal amount of $6,505,000, such Securities to be delivered to the initial purchasers on or about January 11, 1996; and WHEREAS, the Issuer has selected the Bank to serve as paying agent, registrar and transfer agent with respect to such Securities; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and is duly qualified and otherwise capable of performing the duties and services contemplated by this Agreement with respect to the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. 0289180 No Text Section 1.02. Compensation. As compensation for the Bank's services as Payinq Aqent/Reqistrar, the Issuer hereby aqrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the remainder of the Fiscal Year durinq which the Aqreement is executed and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Payinq Aqent/Reqistrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the followinq Fiscal Year. This aqreement assumes retention by the Payinq Aqent of the float on uninvested funds held in accounts by the Payinq Aqent. In addition, the Issuer aqrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (includinq the reasonable compensation and the expenses and disbursements of its aqents and counsel). ARTICLE TWO DEFINITIONS Section 2. 01. Definitions. For all purposes of this Aqreement, except as otherwise expressly provided or unless the context otherwise requires: 028111110 "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the principal office of the Bank as indicated on paqe 11 hereof. The Bank will notify the Issuer in writinq of any chanqe in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the qoverninq body of the Issuer pursuant to which the Securities are issued, certified by the secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, endinq September 30th. "Holder" and "Security Holder" each means the Person in whose name a Security is reqistered in the Security Reqister. "Issuer Request" and "Issuer Order" means a written request or order siqned in the name of the Issuer by the Mayor, City Manaqer, Assistant City Manaqer, or City -2- EXHIBIT A No Text Secretary, any one or more of said officials, and delivered to the Bank. "Leqal· Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated orqanization or qovernment or any aqency or political subdivision of a qovernment. "Predecessor Securities" of any particular Security means every previous Security evidencinq all or a portion of the same obliqation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been reqistered and delivered in lieu thereof pursuant to section 4.06 hereof and the Resolution). "Redemption Date" when used with respect to any security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performinq functions similar to those performed by any of the above desiqnated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledqe of and familiarity with the particular subject. "Security Reqister" means a reqister maintained by the Bank on behalf of the Issuer providinq for the registration and transfers of Securities. "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2. 02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)" have the meaninqs assiqned to them in the recital paraqraphs of this Agreement. 0289180 EXH181T A No Text The term "Payinq Aqent/Reqistrar" refers to the Bank in the performance of the duties and functions of this Aqreement. ARTICLE THREE PAYING AGENT Section 3.01. Puties of Paying Agent. As Payinq Aqent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the followinq address: Norwest Bank National Association Corporate Trust Services Sixth and Marquette Minneapolis, Minnesota 55479-0113 As Payinq Aqent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computinq the amount of interest to be paid each Holder and makinq payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date. All payments of principal and/or interest on the Securities to the reqistered owners shall be accomplished O.) by the issuance of checks, payable to the reqistered owners, drawn on the fiduciary account provided in Section 5. 05 hereof, sent by United states mail, first class, postaqe prepaid, to the address appearinq on the Security Reqister or (2) by such other method, acceptable to the Bank, requested in writinq by the Holder at the Holder's risk and expense. Section 3 • 02 • Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01. Security Register -Transfers and Exchanges. The Bank aqrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Reqister") for recordinq the names and addresses of the Holders of the Securities, the transfer, exchanqe and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containinq such other information·as may be reasonably required by the Issuer and subject to such reasonable requlations as the Issuer and Bank 0239180 -4- EXH\B\T A , .... ,... may prescribe. All transfers, exchanges and replacement of securities shall be noted in the Security Register. The Bank represents and warrants its office in Dallas, Texas will at all times have immediate access to the Security Register by electronic or other means and will be capable at all times of producing a hard copy of the Security Register at its Dallas office for use by the Issuer. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. · Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4. 02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. 02891110 EXHIBIT A No Text The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Hutilated. pestroyed. Lost or Stolen securi- ~. The Issuer hereby instructs the Bank, subject to the provisions of Section 11 of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. 02891110 EXHIBIT A No Text Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. ARTICLE FIVE THE BANK Section 5. 01• Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on pocuments, Etc. conclusively rely, as to the truth of the correctness of the opinions expressed therein, on opinions furnished to the Bank. (a) 'Ihe Bank may statements and certificates or (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to· it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. 02891110 -7- EXHIBIT· A No Text (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered,.or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any .of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5. 03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Moneys Held by Bank -Fiduciary Account/ Collateralization. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the State of Texas and the laws of the United States of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for four years after final maturity of the security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only 0289180 -8- EXHIBIT A No Text to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Indemnification. To the extent permitted by law, the Issuer aqrees to indemnify the Bank for, and hold it harmless aqainst, any loss, liability, or expense incurred without neqliqence or bad faith on its part, arisinq out of or in connection with its acceptance or administration of its duties hereunder, includinq the cost and expense aqainst any claim or liability in connection with the exercise or performance of any of its powers or duties under this Aqreement. Section 5.07. Interpleader. The Issuer and the Bank aqree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and aqree that service of process by certified or reqistered mail, return receipt requested, to the address referred to in Section 6. 03 of this Aqreement shall constitute adequate service. The Issuer and the Bank further aqree that the Bank has the riqht to file a Bill of Interpleader in any court of competent jurisdiction to determine the riqhts of any Person claiminq any interest herein. Section 5.08. DT Services, It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust company" services or equivalent depository trust services by other orqanizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arranqements", effective December 12, 1994, which establishes requirements for securities to be eliqible for such type depository trust services, includinq, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6. 01. Amendment. This Aqreement may be amended only by an aqreement in writinq siqned by both of the parties hereto. Section 6. 02. Assignment. This Aqreement may not be assiqned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be qiven or furnis~ed to the Issuer or the Bank 0289110 -9- EXHIBIT A No Text shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on paqe 11. Section 6.04. Effect of Headings. The Article and Section headinqs herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and aqreements herein by· the Issuer shall: bind its successors and assiqns, whether so expressed or not. Section 6.06. severability. In case any provision herein shall be invalid, illeqal, or unenforceable, the validity, leqality, and enforceability of the remaininq provisions shall not in any way be affected or impaired thereby. Section 6. 07. Benefits of Agreement. Nothinq herein, express or implied, shall qive to any Person, other than the parties hereto and their successors hereunder, any benefit or any leqal or equitable right, remedy, or claim hereunder. Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute the entire aqreement between the parties hereto relative to the Bank acting as Payinq Aqent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an oriqinal and all of which shall constitute one and the same Aqreement. Section 6.10. Termination. This Aqreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Payinq Aqent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice qiven to the Holders of the Securities of the appointment of a successor Paying Aqent/Reqistrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Aqreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Reqister (or a copy thereof), toqether with other pertinent books and records relating 0289180 -10- EXH\BlT A .... to the Securities, to the successor Payinq Aqent/Reqistrar de~iqnated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect followinq the termination of this Aqreement. Section 6.11. Governing Law. This Aqreement shall be construed in accordance with and qoverned by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Aqreement as of the day and year first above written. [SEAL] Attest: Title: (CITY SEAL) ATTEST: City Secretary 0289110 NORWEST BANK TEXAS, NATIONAL ASSOCIATION, Dallas, Texas BY Title: Address: 935 Thanksqivinq Tower 1601 Elm Street Dallas, Texas 75201 CITY OF LUBBOCK, TEXAS BY ---------------------------Mayor Address: P. o. Box 2000 Lubbock, Texas 79457 -11- EXHIBIT A l" ,.. DESCRIPTION OF ANNUAL FINANCIAL INFORMATION Exhibit B to Ordinance The following information is referred to in Section 29 of this Ordinance. Annual Financial statements and operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official statement as Appendix B, but for the most recently concluded fiscal year. 2. The information under Tables 1 through 15. Accounting Principles The accounting principles referred to in such Section are the generally · accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. 0288986 No Text No Text "" I' I" • ' .. I '. - PAYING AGENt/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of December 7, 1995 (this "Agreement"), by and between the City of Lubbock, Texas (the "Issuer"), ·and Norwest Bank Texas, National Association, Dallas, Texas, a banking association duly organized and existing under the laws of the United ~tates of America (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of Lubbock, Texas, General Obliqation Bonds, Series 1995A" (the ••securities") in the aggregate principal amount of $6,505,000, such Securities to be delivered to the initial purchasers on or about January 11, 1996; and WHEREAS, the Issuer has selected the Bank to serve as paying aqent, registrar and transfer agent with respect to such Securities; and . WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and is duly qualified and otherwise capable of performing the duties and services contemplated by this Agreement with respect to the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the securities, and, as Payinq Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the securities and, as Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchanqe thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. 0219180 No Text ,.. Section 1.02. Compensation. As compensation for the Bank's services as Payinq Aqent/Reqistrar, the Issuer hereby aqrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the remainder of the Fiscal Year durinq which the Aqreement is executed and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Payinq Aqent/Reqistrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the followinq Fiscal Year. This aqreement assumes retention by the Payinq Aqent of the float on uninvested funds held in accounts by the Payinq Aqent. In addition, the Issuer aqrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (includinq the reasonable compensation and the expenses and disbursements of its aqents and counsel). ARTICLE TWO DEFINITIONS Section 2. 01. Definitions. For all purposes of this Aqreement, except as otherwise expressly provided or unless the context otherwise requires: 0239110 "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the principal office of the Bank as indicated on paqe 11 hereof. The Bank will notify the Issuer in writinq of any chanqe in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the qoverninq body of the Issuer pursuant to which the securities are issued, certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, endinq September 30th. "Holder" and "Security Holder" each means the Person in whose name a security is reqistered in the Security Reqister. "Issuer Request" and "Issuer Order" means a written request or order siqned in the name of the Issuer by the Mayor, city Manaqer, Assistant City Manaqer, or City -2- No Text Secretary, any one or more of said officials, and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Resolution). "Redemption Date" when used with respect to any security to be redeemed means the date fixed for such redemption p~rsuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board pf Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02. other Definitions. The terms "Bank," "Issuer," and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. 0289180 -3- No Text The term ."Payinq Aqent/Reqistrar" refers to the Bank in the performance of the duties and functions of this Aqreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paying Agent. As Payinq Aqent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the followinq address: Norwest Bank National Association corporate Trust services Sixth and Marquette Minneapolis, Minnesota 55479-0113 As Payinq Aqent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computinq the amount of interest to be paid each Holder and makinq payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date. All payments of principal and/or interest on the securities to the reqistered owners shall be accomplished (1) by the issuance of checks, payable to the reqistered owners, drawn on the fiduciary account provided in Section 5. OS hereof, sent by United States mail, first class, postaqe prepaid, to the address appearinq on the security Reqister or (2) by such other method, acceptable to the Bank, requested in writinq by the Holder at the Holder's risk and expense. Section 3. 02. Payment pates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01. Security Register -Transfers and Exchanges. The Bank aqrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Reqister") for recordinq the names and addresses of the Holders of the Securities, the transfer, exchanqe and replacement of the Securities and the payment of the principal of and interest on the securities to the Holders and containinq such other information as may be reasonably required by the Issuer and subject to such reasonable requlations as the Issuer and Bank 0289110 No Text may prescribe. All transfers, exchanqes and replacement of Securities shall be noted in the Security Reqister. The Bank represents and warrants its office in Dallas, Texas will at all times have immediate access to the Security Reqister by electronic or other means and will be capable at all times of producinq a hard copy of the Security Reqister at its Dallas office for use by the Issuer. All transfers, exchanqes and replacement of Securities shall be noted in the Security Reqister. Every Security surrendered for transfer or exchanqe shall be duly endorsed or be accompanied by a written instrument of transfer, the siqnature on which has been quaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his aqent duly authorized in writinq. The Bank may request any supportinq documentation it feels necessary to effect a re•reqistration, transfer or exchanqe of the securities. To the extent possible and under reasonable circumstances, the Bank aqrees that, in relation to an exchanqe or transfer of Securities, the exchanqe or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assiqnee of the Holder in not more than three (3) business days after the receipt of the securities to be cancelled in an exchanqe or transfer and the written instrument of transfer or request for exchanqe duly executed by the Holder, or his duly authorized aqent, in form and manner satisfactory to the Payinq Aqent/Reqistrar. section 4. 02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanqes thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeepinq pendinq their use and reasonable care will be exercised by the Bank in maintaininq such Securities in safekeepinq, which shall be not less than the care maintained by the Bank for debt securities of other qovernments or corporations for which it serves as reqistrar, or that is maintained for its own securities. Section 4.03. Form of security Register. The Bank, as Reqistrar, will maintain the security Reqister relatinq to the reqistration, payment, transfer and exchanqe of the Securities in accordance with the Bank's qeneral practices and procedures in effect from time to time. The Bank shall not be obliqated to maintain such Security Reqister in any form other than those which the Bank has currently available and currently utilizes at the time. 0289110 -5- No Text The Security Reqister may be maintained in written form or in any other form capable of beinq converted into written form within a reasonable time. section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Reqister. The Issuer may also inspect the information contained in the security Reqister at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listinq or to convert the information into written form. The Bank will not release or disclose the contents of the Security Reqister to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the security Reqister, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the security Reqister. section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchanqe for which · other Securities have been issued, or which have been paid. · Section 4.06. Mutilated. Destroyed. L9st or Stolen Securi- ili.§. The Issuer hereby instructs the Bank, subject to the provisions of Section 11 of the Bond Resolution, to deliver and issue Securities in exchanqe for or in lieu of mutilated, destroyed, lost, or stolen Securities as lonq as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearinq a number not contemporaneously outstandinq, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filinq by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishinq to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charqes associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. 0288110 No Text section 4.07. fransaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchanqe of any Securities pursuant to section ·4.01, and Securities it has delivered in exchanqe for or in lieu of mutilated, destroyed, lost, or stolen securities pursuant to Section 4.06. ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and aqrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents, EtC. conclusively rely, as to the truth of the correctness of the opinions expressed therein, on opinions furnished to the Bank. (a) 'l11e Bank may statements and certificates or (b) The Bank shall not be liable for any error of judqment made in qood faith by a Responsible Officer, unless it shall be proved that the Bank was neqliqent in ascertaininq the pertinent facts. (c) No provisions of this Aqreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its riqhts or powers, if it shall have reasonable qrounds for believinq that repayment of such funds or adequate indemnity satisfactory to it aqainst such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in actinq or refraininq from actinq upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be qenuine and to have been siqned or presented by the proper party or parties. Without limitinq the qenerality of the foreqoinq statement, the Bank need not examine the ownership of any securities, but is protected in actinq upon receipt of Securities containinq an endorsement or instruction of transfer or power of transfer which appears on its face to be siqned by the Holder or an aqent of the Holder. The Bank shall not be bound to make any investiqation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. 0289110 No Text (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5. 03 • Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights'it would have if it were not the Paying Agent/Registrar, or any other agent. section 5.05. Honeys Held by Bant -Fiduciary Account/ Collateralization. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the state of Texas and the laws of the United States of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at ·its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for four years after final maturity of the security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only 02811110 -8- No Text to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. section 5.06. Indemnification. To the extent permitted by law, the Issuer aqrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without neqliqence or bad faith on its part, arisinq out of or in connection with its acceptance or administration of its duties hereunder, includinq the cost and expense aqainst any claim or liability in connection with the exercise or performance of any of its powers or duties under this Aqreement. Section 5.07• Interpleader. The Issuer and the Bank aqree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and county where either the Bank Office or the administrative offices of the Issuer is located, and aqree that service of process by certified or reqistered ,mail, return receipt requested, to the address referred to in Section 6.03 of this Aqreement shall constitute adequate service. The Issuer and the Bank further aqree that the Bank has the riqht to file a Bill of Interpleader in any court, of competent jurisdiction to determine the riqhts of any Person claiminq any interest herein. Section 5.08. PT Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other orqanizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arranqements", effective December 12, 1994, which establishes requirements for securities to be eliqible for such type depository trust services, includinq, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6. 01. AD\endment. This Aqreement may be amended only by an aqreement in writinq siqned by both of the parties hereto. Section 6. 02. 6ssignment. This Aqreement may not be assiqned by either party without the prior written consent of the other. section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be qiven or furnished to the Issuer or the Bank 0289110 -9- No Text shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on paqe 11. section 6.04. Effect of Headings. The Article and Section headinqs herein are for convenience only and shall not affect the constructi~n hereof. Section 6. 05. successors and Assigns. All covenants and aqreements herein by the Issuer shall bind its successors and assiqns, whether so expressed or n~t. section 6.06. severability. In case any provision herein shall be invalid, illeqal, or unenforceable, the validity, leqality, and enforceability of the remaininq provisions shall not in any way be affected or impaired thereby. Section 6. 07. Benefits of Agreement. Nothinq herein, express or implied, shall qive to any Person, other than the parties hereto and their successors hereunder, any benefit or any leqal or equitable riqht, remedy, or claim hereunder. Section 6.08. Entire Agreement. This Aqreement and the Bond Resolution constitute the entire aqreement between the parties hereto relative to the Bank actinq as Payinq Aqent/Reqistrar and if any conflict exists between this Aqreement and the Bond Resolution, the Bond Resolution shall qovern. Section 6.09. Counterparts. This A~eement may be executed in any number of counterparts, each of which shall be deemed an oriqinal and all of which shall constitute one and the same Aqreement. Section 6.10. Termination. This Aqreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Aqreement by either party shall not be effective until (a) a successor Payinq Aqent/Reqistrar has been appointed by the Issuer and such appointment accepted and (b) notice qiven to the Holders of the Securities of the appointment of a successor Payinq Aqent/Reqistrar. Furthermore, the Bank and Issuer mutually aqree that the effective date of an early termination of this Aqreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Aqreement, the Bank aqrees to promptly transfer and deliver the Security Reqister (or a copy thereof), toqether with other pertinent books and records relatinq 0289110 -10- /" - to the securities, to the successor Payinq Aqent/Reqistrar desiqnated and appointed by the Issuer. The provisions of section 1.02 and of Article Five shall survive and remain in full force and effect followinq the termination of this Aqreement. section 6.11. Governing Law. This Aqreement shall be construed in accordance with and qoverned by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Aqreement as of the day and year first above written. [SEAL] Attest: C7i1 .• 'd~ \)" t\..tJJV I Title: · · ,, ) P-.sB,! "t ···~~ .. • •r·lf~·.~u"tiut (CITY SEAL) ATTEST: 0289110 BY Tit BANK TEXAS, NATIONAL Dallas, Texas· Address: Norwest Bank Texas, NA 1601 Elm Street, #4300 Dallas, Texas 75201 Address: P. o. Box 2000 Lubbock, Texas 79457 -11- No Text I. n. CITY OF LUBBOCK, TEXAS GENERAL QBLIGATION BONDS SERIES 1995A $6,505,000 CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM (LTD PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995 Fee Proposal for Paying Agent and Registrar Senrjces Acceptance Fee $200 per issue Our acceptance fee covers the review, acceptance and assumption of all responsibilities and duties as Paying Agent under the agreement, participation in document conferences, establishing records and accounts, authentication and delivery of bonds, receipt of funds, consultation with counsel and attendance at closings. This one time charge is payable at closing of the financing. Administration Fee $125 per issue This annual fee includes the nonnal day-to-day administration of the issue performed in accordance with the governing documents, maintenance of all administrative records, and the duties and functions associated with the Paying Agent agreement. Our annual admiriistration fee is billed annually in advance. Ill. Out-of-Pocket Expenses At cost as incurred All out-of-pocket expenses incurred in connection with the acceptance of the paying agent appointment and annual administration will be billed at actual cost as incurred. Expenses for which we are normally reimbursed include, but are not limited to postage, express mail, mail insurance, long distance calls, fax charges, travel expenses, and wire charges. IV. Extraordinary Senices Fees indicated in this schedule are based upon services rendered in accordance with established procedures and during nonnal business hours. Unusual or extraordinary services such as those provided upon an Event of Default are subject to additional charges based on the duties, responsibilities, and other factors involved. Our proposal is subject in aH respects to our review and acceptance of the governing documents which set forth our duties and responsibilities. No Text No Text .. · ·THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK GENERAL CERTIFICATE s s s s s WE, the undersiqned, Assistant City Manager and City Secretary, respectively, of the City of Lubbock, Texas, DO H~REBY CERTIFY as follows: 1. The total principal amount of indebtedness of the City, includinq the proposed $6,505,000 "City of Lubbock, Texas, General Obliqation Bonds, Series 1995A11 , dated December 15, 1995 (the "Bonds") and $10,000,000 "City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 199511 , dated December 15, 1995 (the ••certificates"), payable from ad valorem taxes levied and collected by the City is as follows: OUTSTANDING INDEBTEDNESS ------------------$148,178,752 THE CERTIFICATES ---------------------------10,000,000 THE BONDS -~----------~---------------------6.505,000 TOTAL INDEBTEDNESS ------------------------$164,683,752 2. A debt service requirement schedule for all outstanding tax debt of the City, including the Certificates and the Bonds, is attached hereto as Exhibit A and made a part of this certificate for all purposes. 3. Certain duly qualified and actinq officers of said City are as follows: DAVID R. LANGSTON RANDY NEUGEBAUER BOB CASS QUENTIN THOMAS DEBRA B. FORTE BETTY M. JOHNSON ANITA BURGESS MAYOR MAYOR PRO TEM CITY MANAGER ASSISTANT CITY MANAGER ASSISTANT CITY MANAGER CITY SECRETARY CITY ATTORNEY 4. That the assessed value of all taxable property (net of exemptions) in the City, as shown by the tax rolls for the year 1995, and which have been duly approved and are the latest official assessment of taxable property in the City is as follows: TOTAL ASSESSED TAXABLE VALUES OF REAL AND PERSONAL PROPERTY ------------$5,399,872,909 No Text 5. The City is incorporated under the General Laws of the State of Texas, and is operating under the Home Rule Amendment to the Texas Constitution, Section 5, Article XI, as amended in 1912. The City Charter was originally adopted at an election held on December 27, 1917, and said Charter has not been amended or revised in any respect since May 7, 1988, the date of the last Charter Amendment Election. 6. The City has sufficient current funds available to pay the interest to become due on the Bonds on August 15, 1996 and there will be deposited in the special fund created for the payment of the Bonds such amount of current funds which, together with the accrued interest received from the purchasers of the Bonds, will be sufficient to pay the amounts to become due on the Bonds on August 15, 1996. WITNESS OUR HANDS AND THE SEAL OF THE CITY OF LUBBOCK, TEXAS, this the 7th day of December, 1995. CITY OF LUBBOCK, TEXAS De~' Assistant City Manager City Secretary (City Seal) -2- No Text l ) ) ) l ) ) ) ) ) l crrY OF UJBBOCK, TEXAS GENERAL OBUGA110N DEBT SIR.VICE REQUIREMENTS FISCAL YEAR. ENDtNO OUTSTANiliNG DEIIT 111 mE GaiERAL Ol!UGA'ItON I!ONDS ·nre CEJmFICATI!S OF OBUGAl'ION GIW'mroTAL 9-10 l"'ttNCCl'AL ~T TOI'AL I'RINCII'AL _!!!!L JKI'I!RESt 'roi'AL l'RDICIPAL RATE lM'I1'ItEST l'OfAL PRIMCJPAt. 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The interest rate with respect to each maturity of Bonds and the initial reoffering price/yield for each matmity are as follows: Amount $325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 Maturity February 15 1997 1998 1999 2000 2001 2002 2003 2004 200S 2006 Rate 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% MATURITY SCHEDULE Initial Reoffering Price or Yield 3.80% 4.00% 4.15% 4.25% 4.35% 4.45% 4.55% 4.65% 4.75% 4.85% Amount $ 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 330,000 Maturity February 15 2007 2008 . 2009 2010 2011 2012 2013 2014 2015 2016 Rate 4.90% 4.90% 5.00% 5.00% 4.80% 4.75% 4.75% 4.75% 4.75% 4.75% Initial Reoffering Price or Yield 4.90% 5.00% 5.10% 5.15% 5.20% 5.25% 5.30% 5.30% 5.35% 5.35% The initial reoffering prices/yields were supplied to the City by the Purchasers and such initial reoffering prices/yields for one or more matmities may be changed at any time and from time to time by the Purchasers and other dealers. The Purchasers have indicated in their bid form that the Bonds will not be insured. Subject to circumstances occurring subsequent to the date hereof, this Supplement together with the Official Statement noted above, dated November 16, 1995, constitute the "Final Official Statement" within the meaning of SEC Rule 1Sc2-12. Dated: December 7, 1995 No Text . ,... Ratings: Moody's: "Aa" Standard & Poor's: "AA" SUPPLEMENT TO OFFICIAL STATEMENT relating to $10,000,000 CITY OF LUBBOCK, TEXAS (Lubbock County) TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBUGATION, SERIES 1995 On December 7, 1995, the above-captioned certificates (the "Certificates") were awarded to an underwriter or group of underwriters managed by Rauscher Pierce Refsnes, Inc. & Associates (the "Purchasers"). The interest rate with respect to each maturity of Certificates and the initial reoffering price/yield for each maturity are as follows: MATURITY SCHEDULE Initial Initial Reoffering Reoffering Maturity Price or Maturity Price or Amount February 15 Rate Yield Amount February 15 Rate Yield $500,000 1997 5.75% 3.80% $ 500,000 2007 4.90% 4.90% 500,000 1998 5.75% 4.00% 500,000 2008 4.90% 5.00% 500,000 1999 5.75% 4.15% 500,000 2009 5.00% 5.10% 500,000 2000 5.75% 4.25% 500,000 2010 5.00% 5.15% 500,000 2001 5.75% 4.35% 500,000 2011 4.80% 5.20% 500,000 2002 5.75% 4.45% 500,000 2012 4.75% 5.25% 500,000 2003 5.75% 4.55% 500,000 2013 4.75% 5.30% 500,000 2004 5.75% 4.65% 500,000 2014 4.75% 5.30% 500,000 2005 5.75% 4.75% 500,000 2015 4.75% 5.35% 500,000 2006 5.75% 4.85% 500,000 2016 4.75% 5.35% The initial reoffering prices/yields were supplied to the City by the Purchasers and such initial reoffering prices/yields for one or more maturities may be changed at any time and from time to time by the Purchasers and other dealers. The Purchasers have indicated in their bid form that the Certificates will not be insured. Subject to circumstances occurring subsequent to the date hereof, this Supplement together with the Official Statement noted above, dated November 16, 1995, constitute the "Final Official Statement• within the meaning of SEC Rule 15c2-12. Dated: December 7, 1995 No Text .... . .i!.. . ,/ 'i\ l; t OFFICIAL STATEMENT Dated November 16, 1995 NEW ISSUE-Book-Entry-Qnly Ratings: Moody!s: AppUed· For S&P: Applie(l For: . . .. See eother Information Ratings" herein) In the opinion of Bond Counsel, interest' on the Bonds will be excludable from gross income for. federal income tax purposes under existing law, subject to .. the matters described under "Tax Exemption" ~rein. including the alternative minimum tax on. corporations. ' 1HE BONDS WILL NOT BE DESIGNATED AS "QUAUFIED TAX-EXEMPT OBLIGATIONS" . fOR FINANCIAL INSTITUTIONS . . .$6,505,QOO , . , . CITY OF LUBBOC~ TEXAS. (Lubbock County) GENERAL OBLIGATION BONDS, SERIES 1995A Dated Date: December IS, 1995 Due: February 15, as shown below PAYMENT TERMS .•• Interest on the $6,505,000 City of Lubbock, Texas (the "City"), General Obligation Bonds, Series 1995A (the "Bonds") will accrue from the dated date shown above, will be payable February 15 and August IS of each year commencing August 15, 1996, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The defmitive Bonds 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. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery or the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent Registrar to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the Bonds. See "The Obligations-Book-Entry-Only System" herein. The initial Paying Agent/Registrar is Norwest Bank Texas, National Association, Dallas, Texas (see "The Obligations -Paying Agent/Registrar"). AUTHORITY FOR ISSUANCE ..• The Bonds are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") including particularly Article 1175, Vernon's Texas Codes Annotated ("V.T.C.A."), as amended, and are direct and voted obligations of the City, payable from a continuing ad valorem tax levied on all taxable property within the City, within the limits prescribed by law, as provided in the ordinance authorizing the Bonds (the "Bond Ordinance") (see "The Obligations -Authority for Issuance"). PURPOSE ... Proceeds from the sale of the Bonds will be used to pay for (i) street and park improvements and (ii) the costs associated with the issuance of the Bonds. SEE MATURITY SCHEDULE REVERSE OF THIS PAGE REDEMPTION OPTION ... The City reserves the right, at its option, to redeem Bonds 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 Obligations-Optional Redemption"). LEGALITY ... The Bonds are offered for delivery when, as and if issued and received by the initial purchaser(s) 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"). DELIVERY ... It is expected that the Bonds will be available for delivery through The Depository Trust Company on January ll, 1996. MATURITY SCHEDULE Price Price or or ,AJneunt MaturitY'' Bate Yield Amount Maturity Rate Yield $ 325,000· ' 1997 ·. $ 325,000 2007 . 325,000 1998 325,000 2008 325,000 1999 325,000 2009 325,000 2000 325,000 2010 ·325,000 2001 325,000 20ll 325,000' 2002 325;ooo ~ r• 2012 325,000 2003 325,000 2013 325,000 2004 .325.~ 2Q14 325,000 ·2005' 315,000 2015 325,000 2006 1 ' · 33o,ooo~ 2016 (Aecrued·lnterest froni Decem'ber 15, 1995 to be added) ~ ·~. ,,i ·.·: .. :~ i •. ·: ! :: '.-•. f' ', ,-.. . --~ ' r--r:; 1;. 1 li i • - 'f"'. '· '. ' j . i l' .·· .- .,... . f"". omCIAL STATEMENT Dated November 16,1995 NEW ISSUE -Book-Entry-Only Ratings: Moody's: Applied For S&P: Applied For See ("Other Information 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. THE CERTIFICATES WILL NOT BE DESIGNATED AS "Q!JALIFIED TAX-EXEMPT OBUGATIONS" FOR FINANCIAL INSTIUJTIONS $10,000,000 CITY OF LUBBOCK, TEXAS (Lubbock County) TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995 Dated Date: December 15, 1995 Due: February 15, as shown below PAYMENT TERMS ••• Interest on the $10,000,000 City of Lubbock. Texas (the "City''), Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 199S (the "Certificates") will accrue from the dated date shown above, will be payable February IS and August IS of each year commencing August IS, 1996, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The defmitive Certificates 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. Beneficial ownership of the Certificates may be acquired in denominations of$5,000 or integral multiples thereof. No physical delivery oftbe 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 beneficial owners of the Certificates. See "The Obligations· Book-Entry-Only System" herein. The initial Paying Agent/Registrar is Norwest Bank Texas, National Association, Dallas, Texas (see "The Obligations • Paying Agent/Registrar''). AU11IORITY FOR IssuANCE ... The Certificates are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as amended, and are direct obligations of the City of Lubbock. Texas, payable from a continuing ad valorem tax levied on all taxable property within the City, within the limits prescribed by law and a limited pledge (not to exceed $SOO) of surplus net revenues of the City's Waterworks and Sewer System, as provided in the ordinance authorizing the Certificates (the "Certificate Ordinance") (see "The Obligations -Authority for Issuance"). PuRPOSE . . . Proceeds from the sale of the Certificates will be used for (i) public safety improvements including construction and equipping of ftre stations, frre training facilities, administrative and maintenance/supply facilities for the frre department, and (ii) the costs associated with the issuance of the Certificates. SEE MA11JRITY SCHEDULE REVERSE OF TinS PAGE REDEMPTION OPTION ... 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 Obligations -Optional Redemption"). LEGALITY . . . The Certificates are offered for delivery when, as and if issued and received by the initial purchaser(s) 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"). DELIVERY . . . It is expected that the Certificates will be available for delivery through The Depository Trust Company on January 11, 1996. MATURITY SCHEDULE Price Price or or Amount Maturity Rate Yield Amount Maturity Rate Yield $ 500,000 1997 $ 500,000 2007 500,000 1998 ·500,000 . 2008. 500,000 1999 500,000 2009 500,000 2000 500,000 2010 500,000 2001 500,000 2011 500,000 2002 500,000 2012 500,000 2003 500,000 2013 500,000 2004 500,000 2014 500,000 2005 500,000 2015 500,000 2006 500,000 2016 (Accrued Interest from December IS, 1995 to be added) ,... This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an ojfor to buy in any jurfs,dictir;JIJ lrJ any persf~ to. who!" it is ~nlf[Wful to make such o./for, 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, anil, if given or made, sit.ch other inforniation or representations. m'ust noi be relied upon. ' . · ~ · ' · · The information set forth herein has been obtained from ihe City and other sources believed to be reliable, butiuch t,iformation 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 parttestimaies 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 OFFICIAL STATEMENT ............................................... 1 DEsCRlP110N0FTHEBONDS ........ ; ................................ 1 DESCRJP110N OF THE CERTIFICATES .............................. 3 CITY OFFICIALS, STAFF AND CONSULTANTS ..... 8 ELECTED OFFICIALS ....................................................... 8 SELECTED ADMINISTRATIVE STAFF ................................ 8 CONSULTANTS AND ADVISORS ....................................... 9 INTRODUCTION ............................................. 10 TilE OBLIGATIONS ........................................ 10 TAX INFORMATION ................................................... 15 TABLE 1 • VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT ................................................. 19 TABLE 2 • TAXABLE ASSESSED VALUATIONS BY CATEGORY ............................................................. 2l TABLE 3A • VALUATION AND GENERAL OBLIGATION DEBT HISTORY ....................................................... 22 TABLE 3B-DERIVATION OF GENERAL PuRPoSE . FuNDED TAX DEBT ................................................ 22 TABLE 4 -TAX RATE, LEVY AND COlLECTION HISTORY ................................................................ 22 TABLE 5 -TEN LARGEST TAXPAYERS ........................ 23 TABLE6 -TAXADEQUACY ........................................ 23 TABLE 7 • ESTIMATED OVERLAPPING DEBT ............... 24 DEBT INFORMATION ................................................. 2S TABLE 8A-PRo-FORMA GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS ........................................ 25 TABLE 8B -DMSION OF DEBT SERVICE REQUIREMENTS ...................................................... 26 TABLE 9 • INTEREST AND SINKING FUND BUDGET PROJECTION ........................................................... 26 TABLE 10-COMPUTATION OF SELF-SUPPORTING DEBT ..................................................................... 27 THE WATERWORKS SYS1EM .................................... 27 THE SEWER SYS1EM ................................................ 27 THE SoLID WASTE DISPOSAL SYS1EM ..................... 28 THE HOTEL OccUPANCY TAX ................................. 28 TABLE ll • AUTIIORIZED Bur UNISSUED GENERAL 0BLIGATIONBONDS ................................ ; ........... ~ •• 28 TABLE 12 -01liER OBLIGATIONS .................................. 29 PENsiON FuNDs ........................................................... 29 s FINANCIAL INFORMATION ..................................... 31 TABLE 13 • GENERAL FuND REvENUEs AND EXPENDITURE HISTORY ......................................... 31 TABLE 14 -MUNICIPALSALESTAXHISTORY ............ 32 CAPITAL IMPROVEMENT PROGRAM .............................. 32 FINANCIAL POLICIES ................................................... 32 TABLE 1 S ·CURRENT INVESTMENTS ........................... 35 TAX MATTERS TAX EXEMPTION ......................................................... 38 TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN OBLIGATIONS .................... 38 OTHER INFORMATION ............................................. 40 RATINGS ..................................................................... 40 LtnGATION ................................................................. 40 REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE ........................................ 40 LEGAL INVESTMENTS AND ELIGmlUIY TO SECURE PuBLIC FuNDS IN TExAs ........................... 40 LEGAL OPINIONS AND No-LtnGATION CERTIFICATE .... 40 AUIHENTICITY OF FINANCIAL DATA AND 0rn:ER INFORMATION ........................................................ 41 CONTINUING DISCLOSURE OF INFORMATION ................ 41 FINANCIAL ADVISOR ................................................... 42 CERTIFICATION OF THE OFFICIAL STATEMENT .............. 42 APPENDICES GENERAL INFORMATION REGARDING THE CITY ............ A EXCERPTS FROM THE ANNuAL FINANCIAL REPORT ..... B FORM OF BOND COUNSEL'S OPINIONS.......................... C The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement. OFFICIAL STATEMENT SUMMARY This summary is subject in all respec:ts to the more complete information and defmitions contained or incorporated in this Official Statement. The offering of the Bonds and the Certificates (collectively the "Obligations"). to potential investors is made only by means of this entire Official Statement. No person is a.uttimii:ed to detach this summary from this Official Statement or to otherwise use it without the entire Official Statemen1l. THE CI1Y ................................. The City of Lubbock is a political subdivision and municlpafl corporation of the State, located in .Lubbock County, Texas. The City co~ BJ)Proximately I 04 square miles (see "Introduction -Description of City"). THE BONDS ...................... ; ...... The Bonds are issued as $6,505,000 General Obligation Bonds, Series 1995A. The Bonds are issued as serial bonds maturing February 15, 199Tthrough February 15, 2016 (see "The Obligations-General"). THE CERTIFICATES ........... The Certificates are issued as $10,000,000 Certificates of Obligation, Series 1995. The Certificates are issued as serial certificates maturfug February 15, 1997 through February 15, 2016 (see "The Obligations-General") .. PAYMENT OF INTEREST ........ Interest on the Obligations accrues from December 15, 1995, and is payable August 15, 1996, and each February 15 and August IS thereafter until maturity or prior redemption (see "The Obligations -General" and "The Obligations -Optional Redemption"). AUTHORITY FOR ISSUANCE ............................... The Bonds were authorized at an election held May I, 1993, and are issued pursuant to the general laws of the State, including particularly Article 1175, V.T.C.A., and a Bond Ordinance passed by the City Council of the City (see "The Obligations - Authority for Issuance"). SECURITY FOR mE The Certificates are issued pursuant to the general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificates of Obligation Act of 1971), as amended, and a Certificate Ordinance passed by the City Council of the City (see "The Obligations -Authority for Issuance"). OBLIGATIONS ......................... The Bonds constitute direct and voted obligations of the City, payable from the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, 'on all taxable property located within the City (see "The Obligations - Security and Source of Payment''). 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 $500) of surplus net revenues of the City's Waterworks System (see "The Obligations -Security and Source ofPayment"). OPTIONAL REDEMPTION .... .. The City reserves the right, at its option, to redeem Obligations 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 Obligations-Optional Redemption"). · · TAX EXEMPTION.................... In the opinion of Bond Counsel, the interest on the Bonds or ,Certificates, as the case may be, 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, inc1uding the alternative minimum tax on corporations. 6 ' j UsEOFPROCEEDS ................. Proceeds from the sale of the Bonds will be used for (i) street and park improvements and (ii) the costs associated with the issuance of the Bonds . . . Proceeds from the . sale of the Certificates will be used for (i) public safety improvements ihcluding construction ~d equipping of fire stations, fU'e training facilities and administrative and maintenance/supply facilities for the fU"e department, and (ii) the costs associated with the issuance of the Certificates. RATINGS ................................ The presendy outstancfutg tax supported debt of the City is rated "Aa .. by Moody's Investors Service, Inc. ("Moody's") and "AA'' by Standard /JI:.. Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc. (''S&P"). Applications ,..,., for contract ratings on the Obligations have been made to Moody's and s&P (see "Other lnfolniation -Ratings''); · · · BOOK-ENTRY-ONLY SYSTEM ................................... The· defmitive Obligations 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 Obligations may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the Obligations (see "The Obligations -Book-Entry-Only System") . PAYMENT RECORD ............... The City has never defaulted,. SELECTED FINANCIAL INFORMATION Ratio Fiscal Per Capita General Per Tax Debt Year Estimated Taxable Taxable Purpose Capita to Taxable %of Ended Gity Assessed Assessed Funded G. 0. Tax Assessed Total Tax 9/30 Population (I) Valuation Valuation Tax Debt (2) Debt Valuation Collections 1991 187,137 $ 4,718,788,593 $ 25,216 $ 43,144,916 $ 231 0.91% 99.42% 1992 187,493 4,741,607,780 25,290 43,593,202 233 0.92% 99.38% 1993 187,981 4,667,750,168 24,831 39,585,305 211 0.85% 99.72% 1994 190,038 4,910,763,048 25,&41 55,909,058 294 1.14% 100.64% 1995 191,020 5,087,312,020 26,632 58,0~5,015 . 304. 1.14% 99.91% (3) 1996 191,020 5,399,872,909 . 28,269 67,438,562 (4) 380 ( .. ) 1.25% (4) NIA (l) Source: Estimates by City of Lubbock, Texas. (2) Does not include self-supporting debt (see "Table 8B for an identification of debt service for each self-supporting system). · ,... (3) Unaudited. · (4) Projected. (5) In process of collection; . GENERAL FUND CONSOLIDATED STATEMENT SUMMARY ·. 1995 (I) Beginning Balance $ 14,746,780 Total Revenue 57;437,232·' · Total ExpenditUres 62,737,515 Net Transfers 6,750,648 Fund Balance at End ofYear $ 16,197,145 Less: Reserves and Designations (701,640) Undesignated Fund Balance $ 15,495,505 (1) Unaudited. 1994 $ 12,385,233 .. 55,114,287 61,369,385 8,616,645 $ 14,746,780 (1,056,628) $ 13,690,152 7 1993 $ 10,801,437 50,731,078 59,425,136 10,277,854 $ 12,385,233 (1,254,118) $ 11,131,115 1992 $ 9,&48,110 48,274,891 58,004,344 10,682,780 $ 10,801,437 (1,274,992) $ 9,526,445 1991 $ 9,343,076 46,776,704 55,455,196 9,247,738 $ 9,848,110 (1,769,507) $ 8,078,603 (5) CITY OFFICIALS, STAFF AND CONSULT ANTS ELECTED OmcJAL.S Length of City Council Service Tenn Expires . Occupation David R. Langston 3 Years May, 1996 Attorney-at-Law Mayor. Randy Neugebauer 3 Years May, 19?8 Land Development Mayor Pro Tern and Councilmember Victor Hernandez 1 Year May, 1998 ...... Attorney-at-Law Councilmember T .J. Patterson J 1 Years May, 1996 Co-Publisher • Councilmember, Windy Sitton I Year May, 1998 Businesswoman Councilmember ' , Maxlnce. 3 Years . May, 1996 Insurance Agent Councilmember ,... Alex "Ty" Cooke 3 Years May, 1996 Business Councilmember SELECTED ADMINISTRATIVE STAI'F Length of Employment Length of Employment Name Position in Current Position · with City of Lubbock BobC8Ss City Manager Since September, 1992 · ~ince April. 1976 John (;. Ross, Jr. City.AttO\t'liliey Since August, 1978 Since AuguSt, 1978 Betty M. Johnson City secraa.ry Since March, 1993 Since April, 1990 · Gavino Sotelo First Assistant City Manager Since March, 1995 Since March, 1995 Quentin Thomas Assistant City Manager· Since May, 1994 Since May, (994 ~ Debra Forte Assistant City Manager Since January 1995 Since January; 1995 Carolyn Al,iamus Director of Culture, Leisure and Recreation Since March, 1994 · Since March, 1994 Doug Goodman Director ofHealth and Community Services Since August, 1993 Since June; 1980 Mary Andrews Director ofHuman Resources Since March, 1994 · Since AugUst, 1988 .• Tom Tuning Director oflnfonnation and 1, •• Communication Services Since October, 1993 Since October, i989 Anna Mosqueda Director ofManagement Since December, 1994 Since November, 1989 Jim Bertram Services . · .. · . . . Director of Strategic Planning Since November, 1993 Since September, 1970 Terry Ellerbrook . Director of Water Utilities . Since December, 1994 Since March, 1982 . Dori Stevens Fire Chief···· Since August, 1986 Since August, 198(i . I<.en 'walker Chief ofPQlice Since March, 1994 Since March, 1994 Betsy Wood, C.P.A. Chief Aceountant Since February, i993 Since January, 19~ ·. ,. 8 CONSULTANTS AND ADVISORS Auditors .................................................................................................... Robinson Burdette Martin & Cowan, L.L.P. Lubbock, Texas Bond Counsel ........................................... : ........................................................................ Fulbright & Jaworski, L.L.P. Dallas, Texas Financial Advisor ................................................................................................................... First Southwest Company For additional information regarding the City, please contact: Ms. Debra Forte Assistant City Manager City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 (806) 767-2015 phone {806) 767-2051 fax Mr. Joe W. Smith First Southwest Company or P. 0. Box 2754 Abilene, Texas 79604-2754 (915) 672-8432 phone (915) 675-6218 fax 9 Dallas, Texas Mr. Vince Viaille First Southwest Company or 100 1 Main Street Suite 802 Lubbock, Texas 79401 {806) 749-3792 phone {806) 749-3793 fax TJDS PAGE INTENTIONALLY LEFT BLANK OFFICIAL STATEMENT RELATING TO $6,505,000 CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION BONDS, SERIES 1995A AND $10,000,000 CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995 INTRODUCTION This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of$6,505,000 City of Lubbock, Texas, General Obligation Bonds, Series 1995A and $10,000,000 City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1995 (collectively the "Obligations"). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the Bond Ordinance or the Certificate Ordinance, as the case may be, to be adopted on the date of sale of the Obligations which will authorize the issuance of the Obligations, ·except as otherwise indicated herein. Collectively, the Bond Ordinance and Certificate Ordinance are hereafter sometimes referred to as the "Ordinance." There follows in this Official Statement descriptions of the Obligations and certain information regarding the City and its fmances. 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 mE 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 was incorporated in 1909, and first adopted its Home Rule Charter in 1917. The City operates under a CounciVManager form of government with a City Council comprised of the Mayor and six Councilmembers. The term of office is two years with the terms of the Mayor and three of the Councilmembers' terms expiring in even-numbered years and the other terms of the three Councilmembers expiring in odd-numbered years. The City Manager is the chief administrative officer for the City. Some of the services that the City provides are: public safety (police and frre 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 186,206, while the estimated, 1995 population is 191,020. The City covers approximately 104 square miles. THE OBLIGATIONS DESCRIPTION OF mE OBUGATIONS ... The Obligations are dated December 15, 1995, and mature on February 15 in each of the years the Bonds and Certificates mature and in the amounts shown on the inside of the respective covers 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 August 15, 1996. The Obligations 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 deUvery of the Obligations will be made to the owners thereof. Principal of, premium, if any, and interest on the Obligations will be payable by the ·Paying Agent Registrar to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the Obligations. See "Book-Entry-Only System" herein. AUTHORITY FOR ISSUANCE ... The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Article 1175, as amended; election held May 1, 1993, and passed by a majority of the participating voters; and the Bond Ordinance. 10 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 a Certificate Ordinant:e'passed by the City Council. SECURITY AND SoURCE OF PAYMENT .•• The Bonds constitute direct and voted obligations~ ofthe City, payable from the levy and collection of a dfrect and continuing ad valorem tax, within the limits prescribed by law, on all taxable property located within the City. 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 $500)ofsurplus net revenues of the City's Waterworks System. 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. Administratively, the Attorney General of the State ofTexas will permit allocation.of$1.50 of the $2.50 maximum tax rate for all General Obligation debt service, as calculated at the time of issuance. OPTIONAL REDEMPTION ... The City reserves the right, at its option, to redeem Obligations 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 Obligations are to be redeemed, the City may select the maturities of Obligations to be redeemed. If less than all the Obligations of any maturity are to be redeexped, the Paying Agent/Registrar (or DTC while the Obligations are in Book-Entry-Only form) shall determine by lot the Obligations, or portions thereof, within such maturity to be redeemed. If an Obligation (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Obligation (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 Obligations, the City shall cause a notice of redemption to be sent by United States mail, frrst class, postage prepaid, to the registered owners of the Obligations 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 OBLIGATIONS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY OBLIGATION OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH OBLIGATION 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 Obligations. The Obligations 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 Obligations 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 17 A 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 ll 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 ofSecurities 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 Obligations 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 Obligation ("Beneficial Owner'') is in turn to be recorded on the Direct or Indirect Participants' records. Beneficial Owners will not receive written confmnation from DTC of their purchase, but Beneficial Owners are expected to receive written confmnations 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 Obligations are to be accomplished by entries made on the book of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Obligations, except in the event that use of the book-entry system described herein is discontinued. To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name ofDTC's partnership nominee,Cede & Co. The deposit of Obligations 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 Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Obligations 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 Obligations. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date (hereinafter defmed). The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Obligations are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Obligations 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 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 Obligations at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Obligations 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, Obligations 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 Obligations 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 Obligations, 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. 12 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 Norwest Bank Texas, N.A., Dallas, Texas. In the respective Ordinances, the City :retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Ageut!Registrar at all times until the Bonds or Certificates, as the case may be, 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 Obligations. Upon any change in the Paying Agent/Registrar for the Bonds or Certificates, as the case ma:y be, the City agrees to promptly cause a written notice thereof to be sent to each registered owner affected by the change 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 for either the Bonds or Certificates or both, the transfer and exchange of such securities on the registration books of the Paying Agent/Registrar can be accomplished 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. Obligations may be assigned by the execution of an assignment form on the respective Obligations or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Bonds or Certificates, as the case may be, will be delivered by the Paying Agent/Registrar, in lieu of the Obligations being transferred or exchanged, at the pnncipal 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 Obligations issued in an exchange or transfer of Obligations 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 Obligations 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 Bonds or Certificates, as the case may be, 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 Bonds or 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 Obligations. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Obligation 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 an Obligation. RECORD DATE FOR INTEREST PAYMENT ... The record date ("Record Date") for the interest payable .on Obligations 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 nave 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 an Obligation 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 ofsuch notice. BONDHOLDERS' REMEDIES ... The respective Ordinances obligates the City to annually assess and collect the ad valorem taxes sufficient to pay principal and interest when due on the Bonds or Certificates, as the case may be. The respective Ordinances provide no other security for the payment of the Bonds or Certificates, as the . case may be, and, in the event of default, there are no expressed remedies for registered owners to pursue and no provision is made·for the acceleration of the maturity of the Bonds or Certificates,·as the case may be, or for the appointment of a trustee to protect the rights of the registered owners. ' ~.; l Although a registered owner could presumably obtain a judgment against .the City in the event of a default in the payment of principal or interest on the Bonds or Certificates, as the case may be, such judgment could not be satisfied by execution against any property of the City. A registered owner could, in the event of default, .ask a· court l3 for a mandamus or court order compelling the City to levy, assess· and collect sufficient ad valorem taxes to pay principal and interest as it falls due on the Bonds or the Certificates, as the case may be, or to perform the City's other obligations under the applicable Ordinance. Such remedy might need to be enforced on a periodic basis. The enforcement of a claim for payment of principal or interest on the Bonds or Certificates, as the case may be, would be subject to the applicable provisions of the federal bankruptcy laws and to any other similar taws affecting the rights of creditors of political subdivisions generally. 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 iriterest 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 any remedies against the City 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 Bonds are qualified with respect to the customary rights of debtors relative to their creditors. USE OF BOND PROCEEDS ..• Proceeds from the sale of the Bonds are expected to be expended as follows: Sources: Proceeds from sale of The Bonds Uses: Estimated costs of street improvements Estimated costs of park improvements Total Uses (l) Includes the costs of issuance of$32,000. $ 6,505,000 $ 5,010,000 1,495,000 $ 6,505,000 (l) USE OF CERTIFICATE PROCEEDS .•. Proceeds from the sale of the Certificates are expected to be expended as follows: Sources: Proceeds from the sale of The Certificates Uses: Estimated costs of fire department improvements Estimated costs of issuance Total Uses 14 $ 10,000,000 $ 9,956,900 43,100 $ 10,000,000 TAX INFORMATION AD VALOREM TAX LAw ... The ·appraisal of property within the City is the responsibility af the Lubbock Central Appraisal District (the "Appraisal Dfstrict") .. 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 l!!asis 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 Boar(i, 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. In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy would impair the obligation of the contract by which the debt was created. 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 $1 ,500 to a maximum of$3,000. 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 fann 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 defmed 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. 15 -. EFFECTIVE TAX RATE AND ROLLBACK TAX RATE .•. By each September I or as soon thereafter as practicable, the City Council adopts a tiiX rate per $100 taxable value for the current year. The tax rate ,consists of tWo components: (1) a rate for funding of maintenance arid 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% ofthe 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. The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize up to 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 defmitive requirements for the levy and collection of ad valorem taxes and the calculation of the various defmed tax rates. ,...... PROPERTY AssESS!\<IENT 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 1. Oil and gas reserves are assessed on the basis of a valuation process which uses an average of the daily price of oil and gas for the prior year. 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 fmal 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 s lS 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. 16 CITY APPLICATION OF TAX Conr. ~ . The City grants an. exemption to the market valae of the residence homestead of persons 65 years of" age or older of $16,700; the disabled are also Sra.nted an exemption of $10,000. The City does not grant an additionaliexemption of up to 20% of the market value of residence homesteads. 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. The City does not permit split payments, and discounts are not allowed. The City does tax freeport property. The City collects an additional one-eighth cent sales tax for reduction of ad valorem taxes. The City has adopted a tax abatementpolicy. TAX ABATEMENT POLICV •.. Tlie City has established a tax abatement program to encourage economic development. In order to be considered for tax abatement,. a project must be located in a reinvestment zone or enterprise zone (a commercial project· must be in an enterprise zone) and must meet several criteria pertaining to job creation and property value enhancement. The amount and term of abatement shall be determined on a case by case basis, however, in no event shall taxes be abated for a term in excess of ten (I 0) years. An itemization of the abatements are as follows: Number of Abatement Date Abatement Years Total Amount for Nature of Abatement Begins In Abatement Value of Tax Year Name Business Granted Tax Year Granted Property (I) 1995 (l) A venue H Properties LTD Brewery 8125194 1995/96 5 $ 162,500 $ 144,430 Brady, J.R./Dairy Queen #2 Restaurant 12/16/93 1994/95 5 541,716 330,095 Cactus Theater, Inc./Cactus Theater Theater 7/28/94 1995/96 2 282,392 251,947 Davis, Gordon W. Education 8/25/94 1995/96 5 385,394 86,095 Gary Products/Industrial Molding Corp. Plastics 3/10/94 1995/96 10 2,819,962 2,259,743 McLane Food Service Wholesale Foods 12/17/92 1994/95 8 11,076!054 5,530,220 Palladian/Thompson, Ronald E. Entertainment 5/19/94 1995/96 5 239,462 118,670 Town & Country Food #202/Town & Convience Country Food Stores, Inc. Store 3/24/94 1995/96 5 447,334 291,870 Total $15,954,814 $9,013,070 (I) Includes Real and Personal Property, Other abatement agreements which have been entered into by the City but do not take effect until Tax Year 1996 are as follows: Date Exemption Abatement Begins T ot:al Value Name Granted in Tax Year of Property Economy Mills 5/19/95 1996/97 $ 602:,050 Industrial Molding (#2} 3/9/95 1996/97 750,000 Red River·commodities 4/13/95. 1996/97' 500,000 . 17 -- ,-. ...... r- TAX INCREMENT DISTRICI .... Together with othertaxing units, the City participates in a Tax Increment District (''TID") pursuant to Article 1066e, V.T.C.S. The TID covers an approximately 0.71 square-mile area which includes part of the central business district, the Overton Addition and the J:lroadway Corridor of the City. The base taxable values of the TID are frozen at the level of taxable values for 1986, the year of creation. Any ad valorem taxes relating to growth of the TID's tax base above the frozen base may be used only to finance improvements within the TID. The tax base for the TID for 1986 was $98,180,307; the 1995 taxable assessed value of property in the TID is less than the tax base and there is no current tax increment. 18 TABLE 1 -VALUATION, EXE.MI"m)NS AND ~ENERAL OBLIGATION DEBT J 995 Market Valuation Established:by Lubbock Central Appraisal District (excluding totally exempt propert~Ha5 of 1-1-95) . . Less Exemptions/Reductions at 10~ Market Value: Residential Homestead Exemptions · Disabled Veterans AgriculturaVOpen-Space Land Use Reductions Tax Abatement Reductions (I) 1995 Taxable Assessed Valuation City Funded Debt Payable from Ad'Valorem Taxes General Obligation Debt (as of 9-30-95) <2> The Bonds The Certificates Total Funded Debt Payable from A'd Valorem Taxes Less Self-Supporting Debt: (3) Waterworks System General Obligation Debt Sewer System General Obligation· Debt Solid Waste Disposal System General Obligation Debt Hotel Occupancy Tax Certificates of Obligation Debt General Purpose Funded Debt Payable From Ad Valorem Taxes General Obligation Interest and SinkingFund as of9-30-95 [unaudited] Ratio Total Funded Debt to Taxable Assessed Valuation Ratio General Purpose Funded Debt to Taxable Assessed Valuation 1995 Estimated Population-191,020 <4> Per Capita 1995 Taxable Assessed Valuation-$28,269 $ 18'1l,36l,665 . 3',603,160 37,305,943 9;!)13,070 $ 148~178,752 6~505,000 10,000,000 $ 27,333,157 59,773,540 2,987,041 2,000,000 Per Capita Total Funded Debt Payable from Ad Valorem Taxes-$862 Per Capita General Purpose Funded Debt Payable from Ad Valorem Taxes-$380 (I) See above, "Tax Infonnation-Tax Abatement Policy" $5,634,156,747 234,283,838 $5,399,872,909 $ 164,683,752 92,093,738 $ 72,590,014 $ 1,037,257 3.05% 1.34% (2) The statement of indebtedness does not include outstanding $29,149,965 Electric Light and Power System Revenue Bonds as these are payable solely from the net revenues of the System. The Waterworks System, the Sewer System and the Solid Waste Disposal System have no outstanding Revenue Bond debt. (3) The City provides for debt service on general obligation debt issued to fund Waterworks System improvements, Sewer System improvements, Solid Waste Disposal System improvements, and Hotel Occupancy improvements from surplus revenues of these Systems (see "Debt Infonnation", "Interest and Sinking Fund Budget Projection", "Computation of Self- Supporting Debt") "Waterworks System General Obligation Debt" includes $14,433,157 principal amount of outstanding general obligation bonds and $12,900,000 principal amount of outstanding Combination Tax and Waterworks System Subordinate Lien Revenue Certificates of Obligation. The City bas no outstanding Waterworks System Revenue Bonds. "Sewer System General Obligation Debt" includes $10,163,540 principal amount of outstanding general obligation bonds and $49,610,000 principal amount of outstanding Combination Tax and Sewer System Subordinate Lien Revenue Certificates of Obligation. The City has no outstanding Sewer System Revenue Bonds. "Solid Waste Disposal System General Obligation Debt" includes $2,302,041 principal amount of outstanding general obligation debt (bonds and certificates of obligation) and $685,000 principal amount of outstanding Combination Tax and Solid 19 ,..... ,.... Waste Disposal System Revenue Certificates of Obligation. The City has no outstanding Solid .Waste Disposal System Revenue Bonds . .. Hotel Occupancy Tax Certificates ofObligation" includes $2.000,000 principal amount of outstanding general obligation debt. (4) Source: City ofLubbock, Texas. 20 TABLE l -TAXABLE ASSESSED V A.LUATIONS BY CATEGORY Taxable Appraised Value for Fiscal Yeatr.Ehded September 30, 1996 1995 1994 %of %o:f Category Amount Total Amount Total' Amount Real, Residential, Single-Family $ 2,933,814,784 52.07% $ 2,754,503,815 51.84%, $ 2,667,702,100 Real, Residential, Multi-Family 342,785,637 6.08% 337,977,738 6.36~ 318,160,996 Real, Vacant Lots/Tracts 102,325,087 1.82% 99,547,319 1.87%J 100,240,564 Real, Acreage (Land Only) 48,457,195 0.86% 45,954,067 0.86% 45,288,322 Real, Farm and Ranch Improvements 11,513,821 0.21% 12,739,995 0.24% 11,784,081 Real, Commercial and Industrial 1,090,617,874 19.36% 1,039,190,164 19.56% 1,020,680,238 Real, Oil, Gas and Other Mineral Reserves 9,722,690 0.17% 15,018,920 0.28% 22,178,990 Real and Tangible Personal, Utilities 161,811,254 2.87% 159,462,546 3.00% 152,961 ,630 Tangible Personal, Commercial and Industrial 903,724,030 16.04% 819,836,742 15.43% 763,606,589 Tangible Personal, Other 9,588,811 0.17% 9,479,831 0.18% 8,120,819 Real Property, Inventory (J} 19,795,564 0.35% 20,069,741 0.38% 16,600,495 Total Appraised Value Before Exemptions $ 5,634,156,747 100.00% $ 5,313,780,878 100.00% $ 5,127,324,820 Less: Total Exemptions/Reductions 234,283,838 226,468,858 216,561,776 Taxable Assessed Value $ 5,399,872,909 $ 5,087,312,000 $ 4,910,763,048 Taxable Appraised Value for Fiscal Year Ended September 30, 1993 1992 %of %of Category Amount Total Amount Total Real, Residential, Single-Family $ 2,479,218,812 50.80% $ 2,449,828,200 49.49% Real, Residential, Multi-Family 304,357,639 6.24% 304,256,344 6.15% Real, Vacant Lots/Tracts 107,622,422 2.20% 111,914,454 2.26% Real, Acreage (Land Only) 47,932,220 0.98% 48,816,013 0.98% Real, Farm and Ranch Improvements 13,987,009 0.29% 13,063,630 0.26% Real, Commercial and Industrial 1,012,208,927 20.74% 1,073,602,333 21.69% Real, Oil, Gas and Other Mineral Reserves 24,858,113 0.51% 25,638,500 0.52% Real and Tangible Personal, Utilities 149,994,794 3.07% 147,789,832 2.98% Tangible Personal, Commercial and Industrial 717,385,702 14.70% 755,234,901 15.26% Tangible Personal, Other 7,690,791 0.16% 7,363,639 0.15% Real Property, Inventory 15,190,587 0.31% 12,759,249 0.26% Total Appraised Value Before Exemptions $ 4,880,447,036 100.00% $ 4,950,267,095 100.00% Less: Total Exemptions/Reductions 212,696,868 208,659,315 Taxable Assessed Value $ 4,667,750,168 $4,741,607,780 NOTE: Valuations shown are certified taxable assessed values reported by the Lubbock Central Appraisal District to the State Controller of Public Accounts. Certified Talues are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. 21 %of Total'- 52.03% 6.21% 1.96% 0.88% 0.23% 19.91°A 0.43% 2.98% 14.89% 0.16o/;' 0.32% 100.00% ,- ,... TABLE 3A • VALUATION AND GENERAL OBLIGATION DEBT HISTORY Ratio of General General ·Purpose Purpose General Funded Funded Purpose Fiscal Taxable Tax Debt Tax Debt Funded Year Taxable Assessed Outstanding to Taxable Debt Ended Estimated Assessed Valuation at End Assessed Per 9/30 Population <1> Valuation (Z) Per Capita of Year (l) Valuation Capita 1991 187,137 $4,718,788,593 $ 25,216 $43,144,916 0.91% $ 231 1992 187,493 4,741,607,780 25,290 43,593,202 0.92% 233 1993 187,981 4,667,750,168 24,831 39,585,305 0.85% 211 1994 190,038 4,91 0, 763,048 25,841 55,909,058 1.14% 294 1995 191,020 5,087,312,020 26,632 58,085,015 1.14% 304 1996 191,020 (4) 5,399,872,909 28,269 67,438,562 (S) 1.25% (S) 353 (S) (1) Source: City ofLubbock, Texas. (2) As reported by the Lubbock Central Appraisal District on City's annual State Property Tax Board Reports; subject to change during the ensuing year. (3) Funded Tax Debt less Self-Supporting Funded Tax Debt (see Table 3B). (4) This figure used for illustration only. (5) Projected. TABLE 3B • DERIVATION OF GENERAL PURPOSE FvNDED TAX DEBT Fiscal Funded Tax Debt Less: General Purpose Year Outstanding Self-Supporting Funded Tax Debt Ended at End Funded Tax Outstanding 9/30 of Year Debt at End of Year 1991 $ 95,783,752 $ 52,638,836 $ 43,144,916 1992 131,813,752 88,220,550 43,593,202 1993 137,358,752 97,773,447 39,585,305 1994 152,693,752 96,784,694 55,909,058 1995 148,178,752 90,093,737 58,085,015 1996 (1) 151,763,752 84,325,190 67,438,562 ( 1) Projected. TABLE4 -TAX RATE, LEVY AND COLLECTION HisTORY Fiscal Year Distribution Ended Tax General Economic Interest and %Current 9/30 Rate Fund Development Sinking Fund Tax Levy Collections 1991 $ 0.6400 $ 0.3468 $ 0.0300 $ 0.2632 $ 30,200,247 96.58% 1992 0.6400 0.3754 0.0300 0.2346 30,313,029 97.38% 1993 0.6400 0.4045 0.0355 0.2000 29,879,149 97.53% 1994 0.6400 0.4170 0.0231 0.1999 31,334,334 97.89% 1995 0.6400 0.4254 0.0300 0.1846 32,558,797 98.12% 1996 0.5859 0.3965 0.0300 0.1594 31,637,855 N/A (1) In process of collection. 22 %Total Collections 99.42% 99.38% 99.72% 100.64% 99.91% (I) N/A (I) TABLES -TENLARGESTTAXPA\'ERS 1995/96 %ofTotal Taxable Taxable Assessed Assessed Name of Taxpayer Nature of Property Valuation Valuation Texas Instruments, Inc. Electronics Manufacturer $ 89,306,600' 1.65% South Plains Mall Regional Shopping Mall 79,394,42¢ 1.47% Southwestern Bell Telephone CoL Telephone Utility 73,542,9sa; 1.36% Southwestern Public Service Co. · Electric Utility 47,090,3:B 0.87% Eagle-Picher Industries, Inc. Heavy Equipment Manufacturing 38,585,04'2' 0.72% Methodist Hospital Hospital and Medical Office Buildings 30,149,752 0.56% Plains Co-op Oil Mill, Inc. Agricultural Processing 29,759,783 "0.55% Fleming Companies, Inc. Wholesale Groceries 24,649,88:7 0.46% Southern Cotton Oil Agricultural Processing 22,626,000 0.42% Sessions, H.A. Commercial Property and Other Real Estate 20,559,742 0.38% Total $ 455,664,506 8.44% 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"). TABLE6 -TAXADEQUACY Maximum Principal and Interest Requirements, All General Obligation Debt (Pro-Forma), 1997 <•> .................................................................... $ $1.4116 Tax Rate at 97% Collections;I?toduces ................................................................................ $ Maximum Principal and Interest Requirements, General Purpose General Obligation Debt (Pro-Forma), 1997 (I) ................... : .......................... $ $0.1816 Tax Rate at 97% Collection Produces ...................................................... : .......................... $ (1) See Tables SA and 8B. c.,. 23 21,558,973 21,559,101 9,506,749 9,511,984 ,.... ,.... ,.... ,.... 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 fmance 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 and from the Lubbock Central Appraisal District. 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 1995/96 Total Overlapping Taxable 1995/96 Funded Estimated G.O.Debt Assessed Tax Debt As of % As Of Taxing Jurisdiction Value Rate 9130/95 Applicable 9/30/95 City of Lubbock $ 5,399,872,909 $ 0.58590 $ 72,590,014 (I) 100.00% $ 72,590,014 (1) $ Lubbock Independent School District 4,901,210,428 1.46500 64,715,393 98.91% 64,009,995 Lubbock County 6,410,902,198 0.16893 3,040,000 82.94% 2,521,376 Lubbock County Hospital District 6,410,902,198 0.10349 6,305,000 82.94% 5,229,367 High Plains Underground Water Conservation District No. I 6,410,902,198 0.00840 -0· 82.94% -0· Frenship Independent School District 559,755,772 1.42410 38,313,739 64.44% 24,689,373 Idalou Independent School District 114,771,121 1.38688 2,620,000 1.10% 28,820 Lubbock.CooperindependentSchool District 189,976,964 1.58000 8,849,555 15.300/o 1,353,982 New Deal Independent School District 80,841,203 1.45500 -0-0.03% -0- Roosevelt Independent School District 97,724,213 1.45000 -0-4.72% -0- Total Direct and Overlapping Funded Debt $ 170,422,927 Ratio of Direct and Overlapping Funded Debt to Taxable . 3.16% Assessed Valuation Per Capita Overlapping G. 0. Debt $ 892 (I) General Purpose Funded Debt; includes The Obligations. 24 Authorized But Unissued Debt As Of9/30/95 3,742,000 17,920,275 500,000 -0- -0· 10,050,000 -0· -0- -0- ·0- DEBT INFORMATION TABLE 8A • PRo-FORMA GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS Fiscal Year The Gene~l Obligation Bonds Ill %of Ending Outstanding Debt Ul The Certificates of Obligation I'll Grand Total Requirements Principal 9-30 Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Retired 1996 $ 12,920,000 $ 7,787,508 $ 20,707,508 $ ..(). $ 260,200 $ 260,200 s ..(). $ 400,000 $ 400,000 $ 12,920,000 s 8,447,708 $ 21,367,708 1997 12,694,434 7,073,589 19,768,023 325,000 380,550 105,550 500,000 585,000 1,085,000 13,519,434 8,039,139 21,558,573 1998 12,445,076 6,351,670 18,796,746 325,000 361,050 686,050 500,000 555,000 1,055,000 13,270,076 7,267,720 20,537,796 1999 12,266,493 5,652,518 17,919,011 325,000 341,550 666,550 500,000 525,000 1,025,000 U,09J,49J 6,519,068 J!l,610,561 2000 9,754,986 6,980,163 16,735,149 325,000 322,050 647,050 500,000 495,000 995,000 10,579,986 7,797,213 18,377,199 38.49-k 2001 9,154,442 6,006,902 15,161,344 325,000 302,550 621,550 500,000 465,000 965,000 9,979,442 6,774,452 16,753,894. 2002 8,328,639 4,857,419 13,186,058 325,000 283,050 608,050 5oo,ooo· 435,000 935,000 9,153,639 5,515,469 14,729,108 2003 7,844,682 3,958,364 11,803,046 325,000 263,550 588,550 . 500,000 405,000 905,000 8,669,682 4,626,914 13,296,596 2004 6,195,000 3,090,807 9,885,807 325,000 244,050 569,050 500,000 375,000 815,000 7,620,000 3,709,857 11,329,857 N 2005 6,790,000 2,730,269 9,520,269 325,000 224,550 549,550 500,000 345,000 845,000 7,615,000 3,299,819 10,914,819 64.62% VI 2006 6,775,000 2,366,810 9,141,810 325,000 205,050 530,050 500,000 315,000 815,000 7,600,000 2,886,860 10,486,860 2007 6,755,000 2,002,854 8,757,854 325,000 185,550 510,550 500,000 285,000 185,000 7,580,000 2,473,404 10,053;404 2008 6,110,000 1,657,239 7,767,239 325,000 166,050. 491,050 500,000 255,000 755,000 6,935,000 2,078,289 9,013,289 ..• 2009 5,845,000 1,337,746 7,182,746 325,000 146,550 471,550 500,000 225,000 725,000 6,670,000 1,709,296 8,379,296 2010 5,285,000 1,041,484 6,326,484 325,000 127,050 452,050 500,000 195,000 695,000 6,110,000 1,363,534 7,473,534 85.81% 2011 5,290,000 767,076 6,057,076 325,000 107,550 432,550 500,000 165,000 665,000 6,11S,OOO 1,039,626 7,154,626 2012 4,075,000 533,521 4,608,521 325,000 88,050 413,050 500,000 135,000 635,000 4,900,000 156,511 5,656,511 2013 4,045,000 336,732 4,381,732 325,000 68,550 393,550 500,000 105,000 605,000 4,870,000 510,282 5,380,282 2014 4,045,000 141,632 4,186,632 325,000 49,050 374,050 500,000 75,000 515,000 4,870,000 265,682 5,135,682 2015 960,000 22,188 982,188 325,000 29,551}: 354,550 500,000 45,000 545,000 1,785,000 96,738 1,881,738 99~50% 2016 ..(). ..(). ..(). 330,000 9,900 339,900 500,000 15,000 515,000 830,000 24,900 854,900 100.00% Total $148,178,752 $64,696,491 s 212,875,243 $6,505,000 $4,166,050. $10,671,050 $10,000,000 $6,400,000 $16,400,000 $164,683,752 $75,262,541 s 239,946,293 . (I) "Outstanding Debf' does not include lease/purchase obligations, but does include selfksupporting debt. (2) Interest on The Obligations has been calculated at the rate of 6.00"A. for purposes of illustration. l ) ) ' } ) ) ) ) ) ) TABLE 8B • DIVISION OF DEBT SERVICE REQUIREMENTS Less: Less: Less: Less: Solid Waste Hotel Waterworks Sewer Disposal Occupancy ,... Fiscal System System System Tax Year General General General General Ending Combined Requirements (I) Obligation Obligation Obligation . Obligation 9-30 Principal Interest Total Requirements Requirements Requirements Requirements 1996 $ 12,920,000 $ 8,447,708 $ 21,367,708 $ 4,546,059 $ 6,897,262 $ 717,021 $ 384,219 1997 13,519,434 8,039,139 21,558,573 4,290,392 6,695,799 680,513 385,120 ,.... 1998 13,270,076 7,267,720 20,537,796 4,066,121 6,499,370 487,400 387,775 1999 i3,091,493 6,519,068 19,610,561 3,795,326 6,284,062 466,186 387,415 2000 10,579,986 7,797,213 18,377,199 3,430,160 6,035,265 443,797 390,903 2001 9,979,442 6,774,452 16,753,894 3,119,722 5,454,795 416,526 393,663 2002 9,153,639 5,575,469 14,729,108 2,639,351 5,159,796 285,994 ..().. 2003 8,669,682 4,626,914 13,296,596 2,296,807 4,896,444 1,891 ..().. 2004 7,620,000 3,709,857 11,329,857 1,741,752 4,665,435 ..().. ..().. ,..... 2005 7,615,000 3,299,819 10,914,819 1,675,860 4,477,530 ..().. ..().. 2006 7,600,000 2,886,860 10,486,860 1,596,820 4,309,291 ..().. -0- 2007 7,580,000 2,473,404 10,053,404 1,518,710 4,140,685 -0-..().. 2008 6,935,000 2,078,289 9,013,289 1,216,791 3,665,138 ..().. ..().. 2009 6,670,000 1,709,296 8,379,296 1,130,703 3,507,350 ..().. ..().. 2010 6,110,000 1,363,534 7,473,534 977,024 3,259,615 ..().. ..().. 2011 6,115,000 1,039,626 7,154,626 926,801 3,128,766 -0-..().. ,.... 2012 4,900,000 756,571 5,656,571 90,652 2,939,536 ..().. ..().. 2013 4,870,000 510,282 5,380,282 87,356 2,776,974 ..().. ..().. 2014 4,870,000 265,682 5,135,682 84,059 2,645,513 ..().. ..().. 2015 1,785,000 96,738 1,881,738 -0-741,313 ..().. ..().. 2016 830,000 24,900 854,900 ..().. ..().. -0-..().. Total $ 164,683,752 $ 75,262,541 $ 239,946,293 $ 39,230,466 $ 88,179,939 $ 3,499,328 $ 2,329,095 ,.... (1) Includes The Obligations. As stated above, interest on The Obligations bas been calculated at 6.00% for purposes of illustration. TABLE 9 -INTEREST AND SINKING FuND BuDGET PROJECfiON General Obligation Debt Service Requirements, Fiscal Year Ending 9-30-96 Fiscal Agent, Tax Collection and Other Uses Total Requirements Sources of Funds Interest and Sinking Funds (9-30-95) [unaudited] ,... Budgeted Ad Valorem Tax Receipts Budgeted Transfers From: Water Fund (I) Sewer Fund <•> Solid Waste Fund (I) Hotel Occupan<;y Tax Fund (I) ,...., Airport Fund Budgeted Interest Earned Budgeted Appropriations from General Capital Projects Fund Estimated Appropriations from For Interest Payable on the Obligations (8-15-96) Total Sources of Funds Estimated Balance, 9-30-96 (1) See "Table 10 -Computation of Self-Supporting Debt." 26 $ 21,367,708 97,207 $ 21,464,915 $ 1,037,257 8,604,865 3,876,045 4,377,290 717,021 384,219 753,853 990,452 370,870 660,200 $ 21,772,072 $ 307,157 General Purpose General Obligation Requirements $ 8,823,147 9,506,749 9,097,130 8,677,572 8,077,074 7,369,188 . 6,643,967 6,101,454 4,922,670 4,761,429 4,580,749 4,394,009 4,131,360 3,741,243 3,236,895 3,099,059 2,626,383 2,515,952 2,406,110 1,140,425 854,900 $ 106,707,465 TABLE 10 -COMPUTATION OF S£LF-5UPPORTING DEBT THE WATERWORKS SYSTEM (t) Net System Revenue Available, Fiscal Year Ended 9-30-95 [unaudited] Less: Requirements for Revenue Bonds, Fiscal Year Ended 9-30-96 Balance Available for Other Puposes Requirements for System Tax Bonds, Fiscal Year Ending 9-30-96 Percentage of System General Obligation Bonds Self-Supporting $ 15,498,134 -0- $ 15 . .498,134 4,546,059 100.00% (1} Through Fiscal Year Ended 9-30-91 it was the City's policy each Fiscal Year to transfer from Water Enterprise Fund surplus to the General Fund an amount at least equivalent to debt service requirements on Waterworks System General Obligation Debt. Beginning with Fiscal Year Ending 9-30-92 the City budgeted and commenced a multi-year planned shift to direct support of Waterworks System General Obligation Debt by transfer from Water Enterprise Fund surplus to the General Obligation Interest and Sinking Fund; for Fiscal Year Ending 9-30-96 $3,876,045 is a budgeted transfer to the Interest and Sinking Fund for Waterworks System General Obligation debt service. This staged shift is anticipated to continue through Fiscal Year Ending 9-30- 97 with total Waterworks System General Obligation debt service for each year thereafter to be provided by direct transfer from Water Enterprise Fund surplus. The multi-year staged shift is necessary to avoid exceeding the City's "rollback tax rate" (see "Tax Rate Limitation") as a portion of the Interest and Sinking Fund Tax Rate formerly levied for Waterworks System General Obligation debt service is shifted each year to the General Fund tax rate. The effect of this reallocation, beginning with Fiscal Year Ending 9-30-92, can be seen in the distribution of the Tax Rate under "Tax Rate, Levy and Collection History" and in "Interest and Sinking Fund Budget Projection". The City has no outstanding revenue bonds payable from a lien on the net revenues of the Waterworks System. · THE SEWER SYSTEM (t) Net System Revenue Available, Fiscal Year Ended 9-30-95 [unaudited] Less: Requirements for Revenue Bonds, Fiscal Year Ending 9-30-96 Balance Available for Other Puposes Requirements for System Tax Bonds, Fiscal Year Ending 9-30-96 Percentage of System General Obligation Bonds Self-Supporting (1) State Reyolying Fund ("SRF") Loans $ 9,782,983 -0- $ 9,782,983 6,897,262 100.00% The City has received three loans totaling $50,600,000 from the Texas Water Development Board ("TWDBfl) under the SRF loan program to fuiance major wastewater treatment and disposal improvements. Three separate series of Combination. Tax and Sewer System Subordinate Lien Revenue Certificates of Obligation (the "Sewer System Certificates") were delivered to TWDB to evidence these loans as follows: Sewer As of9-30-95* System Project Principal Loan Certificate Loan Closing Completion Outstanding Maturity Project Amount Series Date Date Principal (Due 2-15) ,A $ 1,655,000 1991 January, 1992 1993 $ 1,415,000 1996-2012 B 34,520,000 1992 June, 1992 1994 32,795,000 1996-2014 c 14,425,000 1993 June, 1993 November, 1995** 14,425,000 1996-2015. $ 50,600,000 $ 48,635,000 * Principal of each series of Certificates matures in an approximately equal amount each year over the years of principal maturity shown. Debt service requirements on these Sewer System Certificates is being paid from System net revenues by direct deposit to the General Obligation Interest and Sinking Fund. For Fiscal Year Ending 9-30-96 debt service on the Sewer System Certificates is $4,920,298 of which $4,377,290 is from budgeted transfer to the Interest and Sinking Fund w,ith the $543,008 ~ance being provided from ilccumulated Interest and Sinking Fund. · · ** Anticipated. 27 ,.. - Other Sewer System General Obliption Debt For Sewer System General Obligation debt service other than·for the SRF loans discussed above it.has been the City's policy each Fiscal Year to transfer from Sewer Enterprise Fund surplus to the General Fund an amount at least equivalent to debt service requirements on this Sewer System General Obligation Debt; for Fiscal Year Ending 9-30-95 this debt service was $2,067,847. Beginning in Fiscal. Year Ending 9-30-96, similarly to that described under •The Waterworks System", above, a staged shift to direct support of this debt service will be initiated from Sewer Enterprise Fund surplus to the General Obligation Interest and Sinking Fund; this staged shift is anticipated to continue through Fiscal Year Ending 9-30-97 with total Sewer System General Obligation debt service for each year thereafter to be provided by direct transfer from Sewer Enterprise Fund surplus. · The City has no outstanding revenue bonds payable from a lien on the net revenues of the Sewer System. THE SOLID WASTE DISPOSAL SYSTEM (tl Net System Revenue Available, Fiscal Year Ended 9-30-95 [unaudited] Less: Requirements for Revenue Bonds, Fiscal Year Ending 9-30-96 Balance Available for Other Puposes Requirements for System Tax Bonds, Fiscal Year Ending 9-30-96 Percentage of System General Obligation Bonds Self-Supporting 6,574,182 -0- 6,574,182 717,021 100.00%1 (I) Each Ftscal Year the City transfers from net revenues of the Solid Waste Enterprise Fund to the General 0 ligation Interest and Sinking Fund an amount equal to debt service requirements on System general obligation debt. THE HOTEL OCCUPANCY TAX (t) Revenue Available, Fiscal Year Ended 9-30-95 [unaudited] Less: Requirements for Revenue Bonds, Fiscal Year Ending 9-30-96 Balance Available for Other Puposes Requirements for Tax Bonds, Fiscal Year Ending 9-30-96 Percentage of General Obligation Bonds Self-Supporting $1,800,000 (Z) -0- $1,8oo,ooow 384,219 100.00% (1) Each Fiscal Year the City transfers revenues of the Hotel/Motel Special Revenue Fund to the General 0 ligation Interest and Sinking Fund an amount equal to debt service requirements on Hotel Occupancy Tax obligations. (2) Estimate: Based on collections from October,1994 to 1une,1995 plus estimated collections from July to S tember, 1995. TABLE 11 -AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS Amount Amount Date Amount Previously Being j u::.ssued Purpose Authorized Authorized Issued Issued B ance Waterworks System 10-17-87 $ 2,810,000 $ 200,000 $ -0-$ 2 10,000 Sewer System 5-21-77 3,303,000 2,175,000 -0-1128,000 Street Improvements 5~1-93 10,170,000 5,156,000 5,010,000 ! 4,000 Parks 5-1-93 5,385,000 3,890,000 1,495,000 31742,~~ $ 21,668,000 $ 11,421,000 $ 6,505,000 $ i ANTICIPATED IsSUANCE OF GENERAL OBLIGATION DEBT ... The City has no present plans foti the issuance of additional general obligation debt within the next twelve months. · ) \ 28 TABLE ll-01HER OBLIGATIONS (1) The City bas entered into lease agreements for the purpose of acquiring certain properties and equipment. As of 9-30-95 [unaudited] capital leases wee as follows: Fiscal Year Ending 9-30 Balance Payable from: 1996 1997 1998 1999 Interest Outstanding . Enterprise Fund Solid Waste-Scraper $ 5,574 $ -0-$ -0-$ -0-$ (36) $ 5,538 Internal Service Fund Computer Equipment $113,194 $373,194 $342,094 $ -0-$ (76,862) $ 1,011,620 Communications Fund Radio Equipment $:592,762 $592,762 $592,762 . $592,762 $ (224,403) $ 2,146,645 PENSION FUNDS TEXAS MUNICIPAL RETIREMENT SYSTEM o> ... All permanent, full-time City employees who are not firefighters are covered by the Texas Municipal Retirement System. The System is an agent, multiple-employer, public-employee retirement system which is covered by a State statute and is administered by six trustees appointed by the Governor of Texas. The System operates independently of its member cities. The City of Lubbock joined the System in 1950 to supplement Social Security. All City employees except firefighters are covered by Social Security. Options offered under the System, and adopted by the City, include current, prior and antecedent service credits, ten Year vesting, updated service credit, occupational disability benefits and survivor benefits for the spouse of a vested employee. An employee who retires receives an annuity based on the amount of the employees contributions over-matched two for one by the City. Employee contribution rate.is 6% of gross salary. The City's contribution rate is calculated each year using actuarial techniques applied to experience. The 1995 contribution rate was ll.48%; the 1996 contribution rate is 12.03%. Enabling statutes prohibit any member city from adopting options which impose liabilities that cannot be amortized over 25 years within a specified statutory rate. On December 31, 1994, assets held by the System, not including those of the Supplemental Disability Fund which is "pooled", for the City of Lubbock were $101,453,897. Unfunded accrued liabilities on December 31, 1994 were $26,608,856, which is being amortized over a 25-year period beginning January, 1996. Total contributions by the City to the System for Calendar Year 1994 were $4,457,659. <2l FIREMEN'S RELIEF ANil. RETIREMENT FQND <tl ••• City of Lubbock firefighters are members of the locally administered Lubbock Firemen's Relief and Retirement Fund, operating under an act passed in 1937 by the State Legislature and adopted by City firefighters, by vote of the department, in 1941. Firefighters are not covered by Social Security. The Fund is governed by seven trustees, three firefighters, two outside trustees (appointed by the other trustees), the Mayor or his representative and the chief financial officer or his representative. Execution of the act is monitored by the Firemen's Pension Commissioner, who is appointed by the Governor. Benefits of retired. frremen. 8re determined on a "formula" Or a ,;fmal salary" plan. ActWrrial reviews ar.~ performed every two years, and the fund is audited annually. Firefighters contribute 11% of full salary ·into the fund and the City must contribute a like amount; however, the city contributes on a basis of the percentage of salary which is a ration adjusted annually that bears the same relationship to the frrefighter's contribution rate that the City's rate paid into the Texas Municipal Retirement System and FICA bears to the rate other employees pay into the Texas Municipal Retirement System and FICA. The City's contribution rate for 1995 was 15.42%. 29 l"" As of December 31, 1993, unfunded liabilities were $15,006,685 which is being amortized over a28 year period beginning January I, 1993. · · · · -. (I) For historical information concerning the retirement plans. see Appendix B, "Excerpts from the City's Annual Financial Report"-Note #lll, Subsection E, "Retirement Plans.") (2) Source: Texas Municipal Retirement System, Comprehensive Annual Financial R£portfor Year Ended December 31, 1994, "City of Lubbock, Texas". ·· 30 FINANCIAL INFORMATION TABLE 1'3 -GENERAL FuND REVENtfES AND EXPENDITURE H15f0RY Fiscal Years EndedSeptember 30,. Budget 1996 (l) 1995 (l) 1994 1993 1992 1991 Revenues: Ad Valorem Taxes $21,404,197 $21,115,161 $ 20,211,459 $ 18,780,657 $ 17,689,820 $ 16,213,919 Sales Taxes 22,398,033 19,971,022 19,467,903 17,731,784 16,386,350 15,907,117 Franchise Taxes 5,052,708 4,764,633 5,247,351 4,498,921 4,196,663 3,488,691 ,.. Miscellaneous Taxes 610,000 832,341 631,158 561,774 616,722 667,478 Licenses and Permits 990,385 1,137,116 1,038,772 882,878 753,667 768,924 Intergovernmental 898,635 1,298,728 1,310,604 1,280,182 1,286,662 1,227,449 Charges for Services 2,757,754 3,109,088 2,326,521 2,160,504 2,287,530 2,081,955 Fines 2,495,000 1,862,633 2,141,811 2,421,749 2,152,145 2,378,986 Miscellaneous 3,091,660 3,346,510 2,738,708 2,412,629 2,905,332 4,042,185 ,... Operating Transfers 13,701,054 13,173,583 13,810,921 14,044,552 13,796,281 13,890,216 Total Revenues and Transfers $ 73,399,426 $70,610,815 $ 68,925,208 $ 64,775,630 $ 62,071,172 $ 60,666,920 Expenditures: General Government $ 4,187,042 $ 3,158,101 $ 2,731,960 $ 2,664,896 $ 2,382,947 $ 2,412,645 Financial Services 1,786,382 1,680,990 2,071,418 2,065,725 2,023,360 1,910,799 ,_ Management Services 2,616,286 2,343,054 1,989,477 2,037,481 2,368,479 2,579,610 Development Services 7,610,733 6,710,076 6,662,148 6,397,086 6,593,869 6,274,866 Public Safety and Services 50,658,135 48,544,068 47,253,201 45,611,706 44,624,486 42,247,744 Non-Departmental -0-301,226 661,181 648,242 11,203 29,532 Operating Transfers 6,540,848 6,422,935 5,194,276 3,766,698 3,113,501 4,642,478 Total Expenditures and r Transfers $ 73,399,426 $69,160,450 $ 66,563,661 $ 63,191,834 $ 61,117,845 $ 60,097,674 Excess of Revenues and Transfers (in) Over Expenditures (out) $ -0-$ 1,450,365 $ 2,361,547 $ 1,583,796 $ 953,327 $ 569,246 Residual Equity Transfer -0--0--0--0--0-(64,212) ,_ Fund Balance at Beginning of Year 16,197,145 14,746,780 12,385,233 10,801,437 9,848,110 9,343,076 Fund Balance at End of Year 16,197,145 16,197,145 $ 14,746,780 $ 12,385,233 $ 10,801,437 $ 9,848,110 Less: Reserves and Designations (701,640) (701,640) (1,056,628) (1 ,254, 118) (1,274,992) (1,769,507) ,_ Undesignated Fund Balance $ 15,495,505 (J) $ 15,495,505 $ 13,690,152 $ 11,131,115 $ 9,526,445 $ 8,078,603 (1) As adopted. (2) Unaudited. 31 I ,... TABLE 14 • MUNICIPAL SALES TAX HISTORY The City bas 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 Obligations. In addition, in January, 1995, the voters of the City approved the imposition of an additional sales and use tax of one-eighth of a cent as authorized by VATCS, Tax Code, Chapter 323, as amended. Collection for the additional tax commenced in October, 1995 with the proceeds from the one-eighth cent sales tax designated for the use and benefit of the City to replace property tax revenues lost as a result of the adoption of the tax; the revenues ·of the· tax are not pledged to the payment of the Obligations. 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. Revenue from the 1% Local Sales and Use Tax, for the years shown, bas been: Fiscal Year %of Ended Total Ad Valorem 9-30 Collected .Tax Levy 1991 $ 15,907,117 52.67Dio 1992 16,386,350 54.06% 1993 17,731,784 59.35% 1994 19,467,903 62.13% 1995 {2) 19,971,022 61.34% (I) Based on population estimates of the City. (2) Unaudited. The sales tax breakdown for the City, effective 10-1-95, is as follows: City: City Sales & Use Tax Property Tax Relief County Sales & Use Tax State Sales & Use Tax Total CAPITAL IMPROVEMENT PROGRAM The City bas not adopted a fonnal Capital Improvement Program. FINANCIAL POLICIES Equivalent of Ad Valorem Tax Rate $ 0.3371 0.3456 0.3799 0.3964 0.3926 1.000¢ 0.125¢ 0.500¢ 6.250¢ 7.875¢ Per Capita {J) $ 85.00 87.40 94.33 102.44 104.55 Basis afAccounting ... The accounting policies of the City confonn to generally accepted accounting principles of the Governmental Accounting Standards Board and program standards adopted by the Government Finance Officer's Association of the United states and Canada ("GFOA"). The GFOA bas awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Lubbock for each of the fiscal years ended September 30, 1984 through September 30, 1993. The City's 1994 report bas been submitted to GFOA to determine its eligibility for another certificate. General Fund Balance ... The City's objective is to achieve and maintain a General Fund balance equivalent to two months operating costs of the General Fund Budget. This should be sufficient to provide fmancing for necessary projects, unanticipated contingencies, and fluctuations in anticipated revenues. Debt Service Fund Balance ... A reasonable debt service fund balance is maintained in order to compensate for unexpected contingencies. 32 Budgetary Procedures ... The City follows these procedures in establishing operating budgets: I) Prior to August 1, the Cit}.' Manager submits to the City Council a proposed operating budget for the .fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of fmancing them. 2) Public hearings are conducted to obtain taxpayer comments. 3) Prior to October I, thebudget is legally enacted through passage of an ordinance. 4) The City Manager is authorized to transfer budgeted amounts between departments and fundS. Expenditures may not legally exceed budgeted appropriations at the fund level. 5) Formal budgetary integration is employed as a management control device during the year for the Convention and Tourism,. Cri:tninal Investigation, and Capital Projects Funds. Budgets are adopted on an annual basis. Formal budgetary integration is not employed for Debt Service funds because effective budgetary control is alternatively achieved through general obligation bond indenture and other contract provisions. 6) The Budget ·for the General Fund is adopted on a basis consistent with generally accepted accounting principles ("GAJ\.P''). 7) Appropriations for the General Fund lapse at year end.' Unencumbered balances for the Capital Projects Funds continue as authority for subsequent period expenditures. 8) Budgetary comparison is presented for the General Fund in the combined financial statement section of the Comprehensive Annual financial Report. The City has also received the GFOA's award for Distinguished Budget Presentation for the following budget years: October I, 1983-88 and October I, 1990-94. The City will submit the current budget to the GFOA to determine its eligibility for another award. Insurance ... Except for Airport liability insurance, the City is self-insured for liability, workers' compensation, and health benefits coverage. Insurance policies are maintained with large deductibles for fire and extended coverage and boiler coverage. An Insurance Fund has been established. in the Internal Service Fund to account for insurance programs and budgeted transfers are made to this fund based upon estimated payments for claim losses. At 9-30-95 the reserves had the following balances [unaudited]: Reserve for self-insurance -health Reserve for self-insurance -other than health $ $ 2,100,551 461,401 INvEsTMENTS ••• The City invests its investable funds in investments authorized by Texas law in accordance with investment policies as adopted by the City Council and approved by the City Council and monitored by the Investment Review Committee ofthe City. Both state law and the City's investment policies are subject to change. LEGAL INVESTMENTS ..• The following are eligible investments as authorized by V.T.C.A., Government Code, Section 2256 (the Public Funds Investment Act) as .amended: (I) Obligations of the United States or its agencies and instrumentalities, (2) Direct obligations of this state 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 and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, this state 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 frrm not less than A or its equivalent, (6) Certificates of deposit issued by a state or national bank domiciled in this state or a savings and loan association domiciled in this state and guaranteed by the Federal Deposit Insurance Corporation or its successor,. secured by obligations authorized by this subchapter, or secured in any other manner and amount provided by law for deposits of the investing entity, (7) Repurchase 33 -.,' .,... ,.... agreements with a defmed termination date; and secured by obligations authorized by V.T.C.A., Government Code 2256.009 (a)(l); a pledged to'the City, held in the City's name, and deposited at the time the investment is made with the City or with a third party selected and approved by the City; placed through a primary goveniment securities dealer, as defined by the Federal Reserve, or a fmancial institution doing business in this state, The term of any reverse repurchase agreementS may not exceed 90 days after the date the reverse security repurchase agreement is delivered. Money received by the City under the terms of a reverse security repurchase agreement shall be used to acquire additional authorized investments, but the term of the authorized investments acquired must mature not later than the expiration date stated in the reverse security repurchase agreement, (8) Bankers' acceptances with a stated maturity of 270 days or fewer from the date of its issuance; and liquidated fu full at maturity; and eligible for collateral for borrowing from a Federal Reserve Bank; and accepted by a bank organized and existing under the laws of the United States or any state, if the short-term obligations of the bank, or of a bank holding company of which the bank is the largest subsidiary, are rated not less than A-1 or P-1 or an equivalent rating by at least one nationally recognized credit rating agency, (9) Commercial paper with a stated maturity of270 days or fewer from the date of its issuance, and rated not less than A-1 or P-1 or an equivalent rating by at least two nationally recognized credit rating agencies or one nationally recognized credit rating agency and fully secured by an irrevocable letter of credit issued by a bank organized and existing under the laws of the United States or any state, (10) No-load money market mutual funds regulated by the Securities and Exchange Commission, and with a dollar-weighted average stated maturity of less than two years, invested exclusively in obligations approved by this subchapter, continuously rated as to investment quality by at least one nationally recognized investment rating flrm of not less than AAA or its equivalent, and conforms to the requirements of V.T.C.A., Government Code, Section 2256.016(b) and (c), (11) Investment pools authorized by the City's governing body which invests in eligible securities as authorized by this subchapter. The following investments are prohibited by V.T.C.A., Government Code, Section 2256: (1) Obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal, i.e. interest-only collateralized mortgage obligations (IO's), (2) Obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest, i.e. principal-only collateralized mortgage obligations (PO's), (3) Collateralized mortgage obligations that have a stated fmal maturity date of greater than 10 years, (4) Collateralized mortgage obligations. the interest rate of which is determined by an index that adjusts opposite to the changes in a market index, i.e. CMO inverse floaters, (5) Investment in the aggregate of more than 80 percent of the entity;s monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service, in money market mutual funds or mutual funds; investment in the aggregate of more than 15 percent ()fits monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service, in mutual funds; investment of any portion of bond proceeds, reserves, and funds held for debt service, in mutual funds; and investment of its funds or funds under its control, including bond proceeds and reserves and other funds held for debt service, in anyone mutual fund in an amount that exceeds 10 percent of the total assets of the mutual fund. In addition to the ineligible securities designated above, the City prohibits any investment in derivatives as defmed by the City, money market mutual funds, and mutual funds as well as securities lending and reverse repurchase agreements. . 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 and that address investment diversification, yield, maturity, and the quality and capability of investment management, and all City funds must be invested in investments that protect principal, are consistent with the operating requirements of the City, and yield the highest possible rate of return. Under Texas law, City investments must be made "with judgement 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." No person may invest City funds without express written authority from the City Treasurer. The City maintains the minimum amount of cash in its bank accounts to . meet daily needs, and to protect its principal while receiving the highest yield possible from investing all temporary excess cash. There are flve objectives which the Investment Policy addresses. The flrst objective is to conform to all Federal, State, and other legal requirements. The second objective of the investment policy is to preserve the capital in the overall portfolio. Each investment transaction seeks to frrst ensure that capital losses are avoided, whether they be from securities defaults or erosion of market value. The third objective is to maintain sufficient liquidity to meet the City's needs. The City is required to maintain 10% of its portfolio in instruments that mature in 180 days or less. 34 The fourth objective is diversify to avoid incurring unreasonable risks regarding securitii::s ovvned. The fifth ~ ' ' . objective is to obtain the highest yield on investments within the other four objectives. 1lte: day to day investment activities are performed by jhe City's Assistant Treasurer. The City may invest to the following limits as a percentage of its total portfolio: I 00% in United States Treasury obligations 50% in Certificates of Deposit 400/o in Federal Instrumentalities or Agencies 300/o in Repurchase Agreements collateralized by Federal Instrumentalities, or 100% in Repurchase Agreements collateralized by United States Treasury obligations Investments in a qualifying Investment Pool (in accordance with Resolution dated May 28, t992) should be limited to no more than 5% of the total assets in the pooJ. Diversification protects interest income from the volatility of interest rates and the avoidance of undue concentration of assets in a specific maturity sector; therefore, portfolio maturities are staggered. Securities are also selected which provide for stability of income. The asset allocation of the portfolio is flexible depending upon the outlook for the economy and the securities market. Should conditions warrant, these guidelines can be exceeded by approval of the Investment Review Committee. TABLE 15-CURRENT INVESTMENTS (UNAUDITED) As of9-30-95, the City's investible funds were invested in the following categories of investment: Estimated Fair Book Value Market Value (I) %ofTotal Weighted Book %ofBook Average Type Par Value Value Value Value Value Maturity U.S. Treasury Obligations $ 51 ,400,000 $ 51,064,301 35.63% $ 51,402,875 100.66% 23 months U.S. Agency Obligations 50,000,000 49,836,488 34.78% 49,641,520 99.61% 12 months Repurchase Agreements Collateralized by 4 days (2) U.S. Treasury Obligations 39,000,000 39,000,000 27.21% 39,000,000 100.00% Bank Certificates of Deposit 283,600 283,600 0.20% 283,600 100.000/o 10 months TexPool (local government investors pool managed by the Texas State Treasury} 3,124,372 3,124,372 2.18% 3,124,372 100.000/o 1 day $ 143,807,972 $ 143,308,761 100.000/o $143,452,367 100.100/o. 12 months ( 1) As determined by the City by reference to published quotations, dealer bids, and comparable information. (2) The City's policy is to limit repurchase agreements to a one-week maturity; on 9-30-95 the maturity of the City's outstanding agreements was 4 days. ~ (a) Average portfolio yield for the twelve-month period ending 9-30-95 was 5.690%. (b) ·The City holds au· investments to maturity which minimizes the risk of market price volatility. As of such date, the market value of such investments (as determined by the City by reference to published quotations, dealer bids, and comparable information) was approximately 100.00% of their book value .. No funds of the City are invested in mortgage-backed securities. There are no investments in derivatives except for a $2,000,000 Federal Home Loan Bank Agency Floating Rate Note maturing July, I 996, which adjusts quarterly based on the following formula: I ()..year Constant Maturity Treasury rate ("CMT'') plus I 60 Basis Points minus 3- Month London Interbank Offered Rate ("LIBOR"); market value on 9-30-95 was approximately $1,940,000 (1.35% of the market value of the City's portfolio); 35 During the 1995 Texas legislative session, substantial changes were enacted to the Public Funds Investment Act effective September I, 1995. Much of the modification was clarification of past sections, however some of the changes will require specific changes to the investment procedures of most Texas entities. Specific changes to the City's policy and reporting procedure were required, however significant portfolio changes were not necessary. The following list highlights the substantive changes to the Act: I) Specifically addressing the maximum allowable stated maturity of any individual investment and the weighted average maturity of each internal pool in the adopted Investment Policy. 2) Formally adopting an "Investment Strategy Statement'' that specifically addresses each fund's investment. That Strategy Statement will describe its objectives concerning: a) suitability of investment type, b) preservation and safety of principal, c) liquidity, d) marketability of each investment, e) diversification of the portfolio, and t) yield. 3) Creating the requirement for the governing body to annually review the Policy and Strategy. 4) Requiring any Investment Officers' with personal business relationships or relatives with fmns seeking to sell securities to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the entity's governing body. 5) Requiring the registered principal offmns seeking to sell securities to the entity to: a) receive and review the 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 6) Requiring an annual internal audit of the management controls on investments and adherence to the entity's Investment Policy; the annual audit can be an internal or an external at the entity's discretion. 7) Requiring specific investment training for the Treasurer, Chief Financial Officer and Investment Officers. 8) Restricting specific mortgage securities as investments, deposit collateral and repurchase agreement securities. 9) Allowing insured and collateralized deposits in savings and loan and credit union institutions domiciled in the state of Texas. I 0) Restricting reverse repurchase agreements to not more than 90 days and restricting the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement. 11) Allowing money market mutual funds without restriction to investment type. 12) Allowing investing up to 15% of the entity's monthly average fund balance in mutual bond funds that are registered, have an average life less than two years and are AAA rated. 13) Requiring local government investment pools that conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements. 14) Requiring a quarterly written report to the entity's governing body that must include: a) detailed position report, b) signatures of all of the Investment Officers, c) beginning period market value and book value, d) additions and changes to market value and book value, e) ending period market value and book value, t) stated maturity dates of each separately invested asset, 36 g) allocation of each investment to a fund or pool, and h) a statement of compliance with the Investment Policy and Strategy. .- 37 TAXMAITERS TAX EXEMPTION ••. The delivery of the Obligations is subject to the opinions of Bond Counsel to the effect that interest on the Bonds or Certificates, as the case may be, 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 opinions 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 Obligations, owned by a corporation will be included in such corporation's adjusted cUITent 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 and the environmental tax imposed by Section 59 A ofthe 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 Obligations pertaining to the use, expenditure, and investment of the proceeds of the Obligations and will assume continuing compliance by the City with the provisions of the Ordinance subsequent to the issuance of the Obligations. The respective Ordinances contain covenants by the City with respect to, among other matters, the use of the proceeds of the Obligations and the facilities fmanced therewith by persons other than state or local governmental units, the manner in which the proceeds of the Obligations 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 Obligations to be includable in the gross income of the owners thereof from date of the issuance of the Obligations. 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 Obligations. Prospective purchasers of the Bonds or Certificates, as the case may be, should be aware that the ownership of tax-exempt obligations may result in collateral federal tax consequences to, among others, fmancial 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 incUITed 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 OBLIGATIONS ... The initial public offering price of certain Bonds or Certificates, as the case may be, (the "Discount Obligations") may be less than the amount payable on such Obligations at maturity. An amount equal to the difference between the initial public offering price of a Discount Obligation (assuming that a substantial amount of the Discount Obligations 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 Obligation. A portion of such original issue discount allocable to the holding period of such Discount Obligation by the initial purchaser will, upon the disposition of such Discount Obligation (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 Obligations 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 Obligation, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Obligation 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 and the environmental 38 tax imposed by Sections 55 and 59A, respectively, of the Code, and the amount of the branch:profrts 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 insuranee 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 Obligation by the initial owner prior to maturity, the amount realiZed by such owner in excess of the basis of such Discount Obligation in the hands of such owner (adjusted upward by· the portion of the original issue discount allocable to the period for which such Discount Obligation was held) is includable in gross income. Owners of Discount Obligations should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Obligations for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Obligations. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Obligations 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 of the Bonds or Certificates, as the case may be, (the "Premium Obligations") may be greater than the amount payable on such Obligations at maturity. An amount equal to the difference between the initial public offering price of a Premium Obligation (assuming that a substantial amount of the Premium Obligations 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 Obligations. The basis for federal income tax purposes of a Premium Obligation 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 Obligation. 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 Obligations should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Obligations for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Obligations. 39 OTHER INFORMATION RATINGS The presently outstanding tax supported debt of the City is rated "Aa" by Moody's and "AA" by S&P. Applications 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 ratings reflect 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 oftime 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 may have an adverse effect on the market price of the Obligations. 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 fmancial impact upon the City or its operations. REGISTRATION AND QUALIF1CATION OF OBLIGATIONS FOR SALE The sale of the Obligations 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 Obligations have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Obligations been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Obligations under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations 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 Obligations "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 Obligations 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 Obligations 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 Obligations 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 Obligations, including the unqualified approving legal opinions of the Attorney General of Texas approving the Initial Bond or Certificate, as the case may be, and to the effect that.the Bonds or Certificates, as the case may be, 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 Bonds or Certificates, as the case may be, 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 Exemption" 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 flied or is then pending to restrain the issuance and delivery of the Obligations, or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Obligations will also be furnished. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement, and 40 such fmn 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 fmn has reviewed the information describing the Bonds and the Certificates in the Official Statement to verify that such description conforms to the provisions of the respective Ordinances. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations. is contingent on the sale and delivery of the ObligatiOM .. The legal opinions will accompany the Obligations deposited with DTC or will be printed on the Bonds or Certiftca.Des, as the case may be, in the event of the discontinuance of the Book-Entry-Only System. . AUTHENTICITY OF FINANCIAL DATA AND OrnER INFORMATION The fmancial data and other information contained herein have been obtained from City records, audited fmancial 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 respective Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of the Bonds or Certificates, as the case may be. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds or Certificates, as the case may be. 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 fmancial information and operating. data to certain information vendors annually. The information to be updated includes all quantitative fmancial information and operating data with respect to the City of the general type included in this Official Statement under Tables numbered I through 15. The City will update and provide this information within five (5) months after the end of each fiscal year ending in or after 1996. 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 ofthe 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 includeaudited financial statements, if the City commissions an audit and it is completed by the required time. If audited fmancial statements are not available by the required time, the City will provide audited financial statements when and if the audit report becomes available. Any such fmandal 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 end is September 30. Accordingly, it must provide updated information by February 28 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 Bonds or Certificates, as the case may be, if such event is material to a decision to purchase or sell the Bonds or Certificates, as the case may be: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting fmancial difficulties; (4) unscheduled draws on credit enhancements reflecting fmancial difficul~ies; (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 Bonds or Certificates, as the case may be; (7) modifications to rights of holders of the Bonds or Certificates, as the case may be; (8) redemption calls of the Bonds or Certificates, as the case may be; (9) defeasances; ( l 0) release, substitution, or sale of property securing repayment of the Bonds or Certificates, as the case may be; and ( 11) rating changes. Neither the Bonds or Certificates, as the case may be, nor the Ordinance make any provision for debt service reserves, credit enhancement, liquidity enhancement, or early 41 ,-..! redemption. In addition, the City will provide timely notice • of any failure by the City to provide information,' ·data, or fmancial statements in accordance with its agreement described Bbove 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 Bonds or Certificates, as the case may be, 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. 0. Box 2177, Austin, Texas 78768-2177, and its telephone 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 presentation of its fmancial 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 Bonds or Certificates, as the case may be, 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 Bonds or Certificates, as the case may be, 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 Bonds or Certificates, as the case may be, 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 Bonds or Certificates, as the case may be, 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 Bonds or Certificates, as the case may be. If the City so amends the agreement, it has agreed to include with the next fmancial 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 fmancial information and operating data so provided. COMPLIANCE Wim PRIOR UNDERTAKINGS ..• The City has not previously made a continuing disclosure agreement in accordance with SEC Rule 15c2-12. ,.... FINANCIAL ADVISOR First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. First Southwest Company will not submit a bid for the Obligations, either independently or as a member of a syndicate organized to submit a bid for the Obligations. 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 Obligations, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. CERTIFICATION OF TilE OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds or Certificates, as the case may be, the City will furnish a certificate, executed by proper officers, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in its Official Statement, and any addenda, supplement or amendment thereto, on the date of such Official Statement, on the date of sale of said Bonds or Certificates, as the case may be and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including 42 its financial affairs,. are. concerned,. such Official Statement did not. and does not contain an untrue. statement. of a material fact or omit to state a material fact required to be stated therein or necessary,to make the statements therein, in thelight rifthe circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, iriclriding financial data, of or pertaining to entities,' other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and .the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the fmancial condition of .the City since the date of the last audited fmancial statements of the City .. The respective Ordinances authorizing the issuance of the Bonds and Certificates, as the case· may be, will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use iri their reoffering of the Bonds or Certificates, as the case may be, by the Purchaser(s ). A1TEST: J..~ I " ;. ·" Betty Johnson City Secretary 43 David R. Langston Mayor City of Lubbock, Texas ,.., APPENDIX A GENERAL INFORMATION REGARDING THE CITY .. Amarillo • City of Lubbock Fort Worth• •DaDas • * Austin San Antonio \/ THIS PAGE INTENTIONALLY LEFT BLANK THE CITY Location The City of Lubbock, County Seat of Lubbock County, Texas, is located on the South l'lains of West Texas. Lubbock is the economic, educational, cultural and medical center of the area. Popu1ation Lubbock is the ninth largest City in Tew:< 1910Census 1920 Census 1930 Census 1940 Census 1950Census 1960Census 1970Census 1980 Census 1990 Census 1993 (Estimated) (I) 1994 (Estimated) (I) 1995 (Estimated) (I) City of Lubbock {Corporate Umits) 1,938 4,051 20,520 31,853 71,390 128,691 149,701 173,979 186,206 187,981 190,038 191,020 Metropolitan Statistjcal Area (~MSA •) a,.ubi:Jock County) Ol 1970 Census 179,295 1980 Census 211,651 1990 Census 222,636 1995 (Estimated) 228,394 (1) Source: City of Lubbock, Texas Agriculture; Business and Industry LubbOck is the center of a highly mechanized agriculniral area with a majority of the crops irrigated with water from underground sources. Principal crops are cotton and grain sorghums with livestock a major additional source of agricultural income. ·In 1994 cotton production in the 25-county area in and around Lubbock was 3.09 million bales; 1993 production was 3.45 million bales; estimated 1995 production is 3.1 to 3.2 million bales.U> Two major vegetable oil plants l!}Cated in Lubbock have a combined weekly capacity of over 1, 811 tons of cottonseed and. soybean oil. Several major seed comprurles are headquartered in .Lubbock. Over 200 manufacturing plants in Lubbock produce . such products as semiconductors, vegetable oils, heavy earth-moving machinery, irrigation equipment and pipe, farm equipment, paperboard boxes, foodstuffs, mobile and prefabricated homes, poultry and livestock feeds, boilers and pressure vessels, automatic sprinkler system heads, structural steel fabrication and soft drinks. (1) Source: Plains Cotton Growers, Inc., Lubbock, Texas. Lubbock MSA Labor Force F&timates Ill August July 1995(2) 1995 Civilian Labor Force 120,500 122,400 Total Employment 114,900 116,600 Unemployment 5,600 5,800 Percent Unemployment 4.6% 4.7% (1) Source: Texas Employment Commission. (2) Subject to revision. June 1995 122,500 116,000 6,500 5.3% August July June 1994 1994 1994 118,600 120,700 119,800 111.300 114,400 113,200 8,300 6,300 6,600 6.9% 5.2% 5.5% Estimated non-agricultural wage and salaried jobs in various categories as of April, 199S, were: Manufacturing Mining Coostruction Transportation Trade Finance, Insurance and Real Estate Services 7,900 200 4,000 5,500 30,300 4,700 29,100 23,800 105,500 Government Total Major employers in Lubbock (with 300 employees or more) are: (ll Company Texas Tech University Methodist Hospital Lubbock Independent School District· TIU Health Sciences Center Reese Air Force Base City of Lubbock St. Mary of the Plains Hospital.' University Medical Center United Supermarkets Texas Instruments, Incorporated Caprock Home Health Services Texas Department of Criminal ,J~ Psychiatric Hospital Lubbock State School Furrs Cafeterias State Department of Human Services U.S. Postal Service Lockheed Support Systems, Inc. United Parcel Service State Department ofHighways . . Norwest Bank Texas, National Association Southwestern Bell Telephone Company Lubbock Regional MHMR Center lndustrial Molding Corporation ARA Food Service Pay & Save Corporation McDonald's · Marriott SchOOl. Services Dillards Department Stores Fleming Foods of Texas Lubbock A valanche-Joumal Wal-Mart Rip Griffm Truck Service Center State University Hospital Product Public Schools . Medical and Allied Health school U. S. Military Insfallatlon City Government · Hospital Hospital S~rmarkets SemiconductorS· Home Health Care Service Psychiatric Hospital School for Mentally Retarded Cafeterias Social Services · Post Office Aircraft-Transportation Equipment Courier Services Highway· and· Street· Construction Bank Telephone Utility 'Soeial Services Manufacturing/Plastic PrOducts Food Broker Lowe's Retail Groceries Restaurants Hotel/Housekeeping and Hotel Department Store Wholesale Groceries · Newspaper Discount Retailer Truck Travel Centers (1) Source: .Business De.velopment Support Service, City of Lubbock, Te~. Estimated Employees September, 1995 6,768 (i) 3,478 3,374 2,007 2,440 (3) 2,000 1,880 1,800 1,300 1,156 (4) 1,084 (S) 1000 (6) 980 642 611 603 500 480 476 460 '446 400 395 384 380 356 350 350 330 323 319 302 ro~and~~ · · .··· .· .· .·. (3) Military and civilian (see "Government and Military~ following tor a description of recent actions of the' Ba!Je Closure and Realignment Commission relative t6 the base). . I . . . . . ' (4) As projected by Texas Instruments ("TI") for November, 1995, following restiucturing anriouriced iti March, i995; present employment is approximately 1,350. The personal productivity products division (consumer and peripheral products) and the custom manufacturing service division (circuit board assemblies) will be consolidated at the Colporate'sites inAustiri>temple and Dallas over the next seven months. TI officials stated that they have no intention of closing the LubboCk plant's · semiconductor fabrication unit, which bas 850 full-time employees; the plant is the second largest TI facility of its kind in the United States and the sole producer of EPROM memory chips. A -2 (5) · State-wide employment. (6) See "Texas Department of Criminal Justice ("TDCJ") Prison Psychiatric Hospital" following for more detailed information. Education -Texas Tecll University Established in Lubbock in 1923, Texas Tech University is the fifth largest State-owned University in Texas and had a Fall, 1995, enrollment of 24,185. Accredited by the Southern Association of Colleges and Schools, the University is a co-educational, State- supported institution offering a bachelor's degree in 158 major fields, the master's degree in 107 major fields, the doctorate degree in 64 major fields, lind a professional degree in 2 major fields (law and medicine). · The University proper is situated on 451 acres of the 1,829 acre campus, and has over 160 permanent buildings with additional construction in progress. Fall, 1995, faculty membership was 786 full-time and 142 part-time. Health Sciences Center faculty membership for 1995 is 907 full-time and 121 part-time. Including the Health Sciences Center, the University's operating budget for 1995/96 is' $509.7 million of whicb $168.4 million is from State appropriations; book value of physical plant assets, including the Health Sciences. Center, is in excess of $696 million. The medical school had an enrollment of 441 for Fall, 1995, not including residents; there were 36 graduate students. The School of Nursing had a Fall, 1995, enrollment of 336 including the Permian Basin Program, located in Midland/Odessa; there were 65 graduate students. The Allied Health School had a Fall, 1995, enrollment of 408. Source: Texas Tech University. Other Education Information Tbe Lubbock Independent School District, with an area of 87.5 square miles, includes over 90% of the City of Lubbock. There are approximately 3,230 total employees, including 2,512 certified (professional) personnel and 718 other employees. Tbe District operates four senior high schools, ten junior high schools, 40 elementary schools and other educational programs. Scholastic Membership History (ll School Year 1990-91 1991-92 1992-93 1993-94 1994-95 Average Daily Attendance 27,795 28,090 28,357 28,111 28,089 (1) Source: Superintendent's Office, Lubbock Independent School District. Lubbock Christian University, a privately owned, co-educational senior college located in Lubbock, had an enrollment of 1,230 for the Fall Semester, 1995. South Plains College, Levelland, Texas (South Plains Junior College District) operates a major off-campus learning center in a downtown Lubbock, 7-story building owned by the College. College offerings cover technical/vocational subjects; Fall Semester, 1995, enrollment was 1,370 including a major off-campus learning center at Reese Air Force Base. The State of Texas School for the Mentally Retarded, located on a 226-acre site in Lubbock, consists of 40 buildings with bed- capacity for 440 students; 400 students were in residence. The School's operating budget for 1995/96 is in excess of $20.5 million; there are approximately 980 professional and other employees. Transportation Scheduled airline transportation at Lubbock International Airport is furnished by Southwest Airlines, Atlantic Southeast Airlines, United Express and American Eagle; non-stop service is provided to Dallas-Fort Worth International Airport, Dallas Love Field, Denver, El Paso, Austin, Amarillo and Albuquerque. Passenger hoardings for 1994 totaled 611,497. Extensive private aviation services are located at the airport. · Rail transportation is furnished by the Burlington Northern Santa Fe Railroad with through service to Dallas, Houston, Kansas City, Chicago, Los Angeles and San Francisco. Short-haul rail service is also furnished by the Seagraves, Whiteface and Lubbock A-3 Railroad. Texas, New Mexico and Oklahoma Bus Lines, a subsidiary of Greyhound Corporation, provides bus service. Several motor freight common carriers provide service. Lubbock has a well developed highway network incl'nding Interstate 27 (Lubbock-Amarillo), 4 U.S. Highways, 1 State Highway, a controlled-access outer loop and a county-wide system of paved fann-to-market roads. , Government and Military m Reese Air Force Base (•Reese•), located adjacent to the western boundary of Lubbock, is an undergradllate pilot training as the 64th Flying Training Wing. The Base covers over 3,000 acres and has approximately 1,440 military and 1,000 civilian and contract personnel. On March 1, 1995, the Secretary of the Air Force announced that Reese was included in the list of bases recommended for closure submitted to the Base Closure and Realignment Commission ("BRAC"). BRAC reevaluated Reese along with all other undergraduate pilot training bases, however, Reese was included in the final list of bases recommended for closure. The final recommendation was submitted to the President in July, 1995. The President and Congress have approved the recommendations fromBRAC. As a result, the City is developing a re-use plan for the facilities. Reese Air Force Base represents approximately 2.6% of the local work force. While closure of the base will not have a positive impact on the Lubbock economy, the current growth in other economic sectors should minimize or neutralize closure of the base. In addition, there could be a positive economic impact from the re-use of the base. (1) Source: City of Lubbock, Texas. State of Texas . . . More than 25 State of Texas boards, departments,. agencies and commissions have offices in Lubbock; several of these offices have multiple units or offices. Federal Government . . . Several Federal departments and various other administrations and agencies have offices in Lubbock; a Federal District Court is located in the City. Texas Department of Criminal Justice ("TDCJ") Prison Psychiatric Hospital TDCJ constructed a 550-bed Prison Psychiatric Hospital on a 1,303 aCre· site in southeast Lubbock. The Hospital will employ approximately 680 with an annual estimated payroll of $16.4 million and an estimated remaining annual operating budget of $19.6 million. Included in construction of the Hospital is a 400-bed capacity ''trustee" facility to house prison trustees some of whom will work at the hospital. In addition TDCJ is constructing a 48-bed regional prison hospital on this site. The total payroll for all facilities is approximately $20.0 million and the total operating budget for all facilities is approximately $50.0 million. Total employment by TDJC is approximately 1,000. Hospitals and Medical Care There are six hospitals in the City with over 2,200 beds. Methodist Hospital is the largest and also operates an accredited nursing school. Lubbock County Hospital District, with boundaries contiguous with Lubbock County, owns the University Medical Center which it operates as a teaching hospital for the Texas Tech Health ScienCes Center .. There are numerous clinics .and over 600 practicing physicians and surgeons (M.D.) plus the Texas Tech UniversitY Medical School Staff, and over 100 ·dentists. A radiology center for the treatment of malignant diseases is located in the City. Recreation arid Entertainment Lubbock's Mackenzie Regional Park and over 70 City parks and playgrounds provide recreation centers, shelter buildings, a garden and art center, swimming pools, a golf course, tennis and volley ball courts, baseball diamonds and picnic areas, including the Yellowhouse Canyon Lakes system of four lakes and 500 acres of adjacent parkland extending from northwest to southeast Lubbock along the Yellowhouse Canyon. There are several privately-owned public swimming pools and golf courses, and country cl. . The City of Lubbock has developed a 36 square block area of approximately 100 acres adjacent to downtown Lubbock under the Lubbock Memorial Civic Center program. Approximately 50 acres contain the 300,000 square foot Lubbock Memorial Civic Center, the main City library building and State Department of Public Safety offices; a 50-acre peripheral area has been redeveloped privately with office buildings, hotels and motels, a hospital, and other facilities. A-4 ,-... ·,...., Available to residents are Texas Tech University programs and events, Texas Tech University Museum, Planetariwn and Ranching Heritage Center exhibits and programs, Lubbock Memorial Civic Center and its events, Lubbock Symphony Orchestra programs, Lubbock Theatre Center, Lubbock Civic Ballet, Municipal Auditoriwn and colisewn programs and events, the library and its branches, the annual Panhandle-South Plains Fair, college and high school football, basketball, and other sporting events as well as modem movie theatres. Lubbock is now the home of a professional minor-league baseball team, the Lubbock Crickets. They are an expansion team in the Texas-Louisiana Baseball League. In the 1995 season the Crickets played 100 games, including 50 games on their homefield, Dan Law Field at Texas Tech University. Cburcltes Lubbock has approximately 300 churches representing more than 25 denominations. Utility Services Water and Sewer· City of Lubbock. Gas • Energas Company. Electric • City of Lubbock {Lubbock Power & Light) and Southwestern Public Service Company; and, in a small area, South Plains Electric Co-operative. Economic Indices Ill Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 Building Permits $ 168,740,229 139,317,252 100,046,309 105,159,525 105,363,072 140,855,719 131,333,756 142,921,124 174,346,368 162,427,737 Utility Connections Water 60,051 60,751 61,027 61,628 61,857 62,178 62,267 62,898 (3) 63,006 64,921 Gas 56,600 56,900 57,266 57,886 60,312 61,700 60,803 60,208 61,448 62,670 Electric (LP&L Only)<2) 40,506 41,759 42,696 ' 43,781 44,518 45,301 46,245 47,194 48,526 49,391 (1) All data as of 12-31, except where noted; Source: City of Lubbock. (2) Electric connections are those of City of Lubbock owned Lubbock Power and Light ("LP&L ") and do not include those of Southwestern Public Service Company or South Plains Electric Cooperative. (3) As of 9-30-92. BuDding Pennits by Classification Cll Residential Pennits Commercial, Single Family Multi-Family Total Residential Public Total Calendar No. No. Dwelling No. Dwelling and Other Building Year Units Value Units (2> Value Units (2J Value Pennits Pennits 1985 601 50,100,350 162 5,250,300 763 55,350,650 113,389,579 168,740,229 1986 599 49,329,236 14 566,000 613 49,895,236 89,422,016 139,317,252 .-.. 1987 508 44,466,937 ..().. ..().. 508 44,466,937 55,579,372 100,046,309 1988 414 35,588,945 ..().. ..().. 414 35,588,945 69,570,580 105,159,525 1989 368 31,345,375 12 440,800 380 31,786,175 73,576,897 105,363,072 1990 368 35,652,140 8 416,000 376 36,068,140 t04,7in.579 .-. 140,855,719 1991 424 38,574,190 ..().. ..().. 424 38,574,190 92,759,566 131,333,756 1992 603 58,530,190 44 (3) 1,743,000 647 60,273,190 82,647,934 142,921,124 1993 673 72,894,295 58 2,313,197 731 75,207,492 99,138,876 174,346,368 ,.... 1994 686 73,318,480 260 6,271,150 946 79,589,630 82,838,107 162,427,737 (1) Source: City of Lubbock, Texas. (2) Data shown under "No. Dwelling Units" is for each individual dwelling unit, and is not for separate buildings; includes duplex, triplex, quadrup1ex and apartment pennits. (3) Includes one retirement center with 40 dwelling units. A-6 'f"" .. ·; !' APPENDIXB EXCERPTS FROM TilE CITY OF LUBBOCK, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30,1994 The infonnation contained in this Appendix consists of excerpts ftom the City of Lubbock, Texas Annual Financial Report for the Year Ended September 30, 1994, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further infonnation. '' TABLE OF CONTENTS Auditor's Opinion ............... -................................................................................ _ ............. 3- General Purpose Financial Statements: Combined Balance Sheet-Primary Government Fund Types, Account Groups and Discretely Presented Cotnp011ent Units ................................................................ -............... 6 Combined Statement of Revenue, Expenditures and Changes in Fund Balances-- Primary Government Fund Types, Expendable Trust Funds and Discretely Presented Component Units . ··--···· ............................................................................................ 18 Combined Statement of Revenues, Expenditures and Changes in Fund Balances--Budget (GAAP Basis) and Actilal-General Fund ............................................ 21 Combined Statement of Revenues, Expenses and Changes in Equity-- AU Proprietary Fund Types a.nd Discretely Presented Component Units .................................. 22 Combined Statement of Cash flows-All ProprietaryFund Types and Discretely Presented Component Units·: .............. : ...... : .. ~ ........... : ................................................. 24 Notes to the Combined Financial Statements .................... :: .. ~ ........ : ........................................... 26 Robinson Burdette Martin &Cowan,L.L.P. certified public accountants INDEPENDENT AUDITOR'S REPORT The Honorable David R. Langston Mayor of Lubbock Members of City Council City of Lubbock, Texas We have audited the accompanying general purpose financial statements of the City of Lubbock, Texas, as of September 30, 1994, and for the year then ended, as listed in the Table of Contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of t:rulterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimate made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Lubbock, Texas, as of September 30, 1994, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. As discussed in Note III N. to the general purpose financial statements, in 1994 the City changed its method of accounting for closure and postclosure care costs of municipal landfills to conform with Governmental Accounting Standards Board Statement No. 18. As discussed in Note VI to the general purpose financial statements, in 1994 the City restated its beginning fund balance/retained earnings to conform with Governmental Accounting Standards Board Statement No. 14. January 20, 1995 Lubbock, Texas ,i;~rl.H¥1 tfwr~;e /11;r/-J"r! .r Cle-t/,;1~ L. L. I! THIS PAGE INTENTIONALLY LEfT JJLAm{ ·; -i -. ,· "f"~ ,-:~···~ ·~ - CITY OF LUBBOCK, TEXAS ,...., COMBINED BALANCE SHEET-PRIMARY GOVERNMENT FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS September 30, 1994 With Comparative Totals for September 30,1993 ,...., Governmental Fund Types Special Debt Capital General Revenue Service Projects - Assets Pooled cash and cash equivalents $ 9,100,485 $ 4,296,882 $ 140.881 $ 35,809,025 Receivables (net, where applicable, of allowance for uncollectibles7~ Taxes, including interest. penalities, and liens 3,939,437 80,783 338,997 Accounts, notes, and mortgages 771,491 13,505 Interest 364,487 12,988 53,870 Due from other funds 3,880,500 25.000 5,000 ~ Due from other governments Due from other agencies 42,925 1,284 Prepaid items 36,757 Advances to other funds 1,019,872 ,...., Inventory, at average cost Restricted assets: Pooled cash and cash equivalents Accounts receivable Interest receivable ,.... Deferred charges Fixed assets (net of accumulated depreciation) Other assets (net of accumulated ,..., amortization) Amount available in Debt Service Funds Amount to be provided for retirement of general long-term debt and payment of notes and leases payable ,.... Total assets $ 19,155,954 $ 4,404,158 $ 558,748 $ 35.815,309 ,..., 6 '-, .... '\ . . ,....., GENERAL PURPOSE FINANCIAL STATEMENTS 5 Proprietary Fund Types Internal Enterprise Service $ 14,913,468 $ 1,516 $ 8,488,350 44,200 501,704 251,977 5,574 36,453 2,976,012 153,516 2,036,082 81,022,664 10,516,702 83,600 75,009 124,261 56,851 1,770,032 378,058,999 . 5,218,364 ,... 22,840,539 •f i. Fiduciary Fund Type Trust and Agency 6,507,901 $ 1,045,514 1,594,707 157,510 806,720 Account Groups General General Long-term Fixed Assets Debt Totals Primary Government (Memorandum Only) 1994 -$ -$ 70,770,158 4,359,217 10,363,060 933,049 3,910,500 1,846,684 44,209 78,784 "3,995.884 2,189,598 91,696,876 158,609 181,112 :t,770,032 201,556,282 585,640,365 22,840,539 413,768 413,768 ,... 56,482,588 ·. 56,482,588 $ 511,190,696 $ . 17j985,177 $ . 1"0,112,352 $ 201,556,282 $ 56,896,356 $ 857,675,032 (continued) See accompanying notes to financial statements 7 CITY OF LUBBOCK, TEXAS COMBINED BALANCE SHEET-PRIMARY GOVERNMENT FUND TYPES, ACCOUNT GROUPS AND D1SCRETEL Y PRESENTED COMPONENT UNITS September 30, 1994 With Comparative Totals for September 30, 1993 ,, ~ Pooled cash and cash equivalents Recei~ables (net, where applicable. of allowance for uncollectibtes): Taxes, including interest, penalities, and liens ~ ··, '. :<:: '·. i. :{}ccounts, notes, and mortgages , .. ,Interest '.~·_I ~ ·>. Du!e from other funds . Due from other governments ', ,, ·-·; .-•? -' ,.Du~. from other agencies '·.:,-;··, . rPrepaid items ,A.dvl\lnces to other funds .lgventory, at average cost ·,;;. ', ~ -,-' .. Restricted assets: .cP~~!ed cash and cash equivalents "Accounts receivable • ... ; ·,'. \· r J~terest receivable PE!fe!r.ed charges Fixed assets (net of accumulated c •. depreciation) ·, · -· '·· ....... Other assets (net of accumulated amortization) . Amount available. in,Oebt Service Funds ,.,·,;_; \ ~-~ Amount to be provided for reti'rement of general long-term debt and ,, ~payment of notes and leases payable ... '. . . - Tot~ I ~ssets · ....... . :. 8 Component Units Governmental T)'J?e Visitors and Convention Bureau $ . ; 420,672 $ 338 32,415 $ Proprietary Types. Citibus 157,259 $ 367,908 182,408 4,830,664 • 5,538,239.$ Civic .Lubbock 291,978 19,275 137 26,826 55,797 37 ~··' . r 51,071 .. ' . 445,121 ,-.. - $ ,... ,.. """ $ Totals Component Units 1994 869,909 387,521 137 59,241 238,205 37 4,881,735 6,436,785 Totals Reporting Entity (Memorandum Only) ·1994 1993 $ 71,640,067 $ 53,837,578 4,746,738 3,843,475 10,363,060 8,824,683 933,186 960,272 3,910,500 4,289,750 1,846,684 5,102,844 44,209 124,762 138,025 75,428 3,995,884 3,995,883 2.4?7,803 3,297,154 91,696,913 108,756,498 158,609 134,691 181,112 190,109 1,770,032 1,718,821 590,522,100 544,508,611 22,840,539 23,227,667 413,768 4,228,648 56,482,588 45,245,368 $ 864,111,817 $ 812,362,242 (continued) See accompanying notes to financial statements 9 CITY OF LUBBOCK, TEXAS COMBINED BALANCE SHEET-PRIMARY GOVERNMENT FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS September 30, 1994 With Comparative Totals for September 30, 1993 Governmental Fund Types Special Debt Capital General Revenue Service Projects Liabilities Accounts and vouchers payable .$ 2,539.~56 $ 68,799 $ -$ 223,518 Contracts payable 1.604,364 Due to other funds 30,000 Due to other governments 26,483 Accrued general obligation interest 15.374. Other accrued liabilities 1,653,4~0 8,387 Current portion of general obligation bonds, and contruction obligation. payable Payable from restricted assets: Accounts payable Accrued interest Accrued insurance claims Revenue bonds payable (current portion} Customer deposits Deferred compensation t.-' Deferred revenues 189,875 129,606 Advances from other funds 650,000 Advances from other agencies Accrued insurance claims Notes and leases payable Construction obligation payable General obligation bonds (net of C' .. · (. ~ current portion) i-< Revenue bonds payable Accrued vacation and sick leave Anticipated landill closure and postclosure "" ... ,. Total liabilities $ .. ., 4,409,174 $ 77,186 $ 144,980 $ 2,507.882 ""~. "':/-... .. ,--<. 10 - ,_ ""' - .- -- il CITY OF LUBBOCK, TEXAS COMBINED BALANCE SHEET -PRIMARY GOVERNMENT FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS September 30, 1994 With Comparative Totals for September 30, 1993 Liabilities Accounts and vouchers payable Contracts payable ·. Due to other funds Due to other governments Accrued general obligation interest Other accrued liabilities Current portion of general obligation bonds and contruction obligation payable Payable from restricted assets: Accounts payable Accrued interest Accrued insurance claims Revenue bonds payable (current portion} Customer deposits Deferred compensation Deferred revenues Advances from other funds Advances from other agencies Accrued insurance claims Notes and leases payable Construction obligation payable General obligation bonds (net of · current portion} Revenue bonds payable Accrued vacation and sick leave Anticipated tandill closure and postclosure Total liabilities $ $ 12 Component Umts ...,G"""o_v_e_rn_m_e __ n...,ta:-rl-·----~ ·~ p·rapnetary _______ - Type Types V1sitors and ----·-·~ Convention Bureau 32,815 $ 134 Citibus 547.775 $ 89,800 70,000 Civic Lubbock 228,689 15,575 14,417 32,949 $. 707.575 $ 258,681 -----'-- ,- Totals Totals Component Reporting Entity Units (Memorandum Only) -,... --··m4·--. -. -. 1994 1993 $ 809,279 $ 8.047,079 $ 6,554,957 2,622,033 2,267,233 3.910,500 4,294,750 1". 26,483 26,483 1,227,067 1,306,245 89,934 2,495,552 2,633,851 ,..., 15,575 11,267,106 5,899,099 1,797,176 512,611 .ii. 1,051,466 1,100,669 2,649,198 2,410,865 .• . ~ "" 4,461,507 4,421,507 ; ~ ~c • 371,993 391,491 5,941,113 6,426,305 14,417 333,898 347,925 . ' ,.. 3,995,884 3,995,884. ~ :' 70,000' 70,000 70,000 .. :, ~ 4,779,218 3,997,401 1,419,817 5,540,224 . .;:-!. 23,099,024 23,823,531 ;,.. 142.106,931 132,151,103 81,150,020 85,602,104 10,255.282 10,131,421 ,.. 6.465,141 $ 999,205 $ 319,543,488 $ 303,905,659 '' :·"' ~;. :~ '- (continued} See accompanying notes'to financial statem4:mts ) ~ .. ' ; . . ,. ,.. 13 CITY OF LUBBOCK, TEXAS COMBINED BALANCE SHEET· PRIMARY GOVERNMENT FUND TYPES. ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS September 30, 1994 With Compar~tive,Totals tor September 30, 19~3 Governmental Fund :Special Debt Cap1tal General Revenue Service · ... ProJects fVJl<LE_guJ!Y _and Other Credits Contnbuted capital $ -$ -s - $ Investment 1n general f1xed assets Reta1ned earnings: Reserved for capital projects Reserved for permanent capital maintenance Reserved for system improvements Reserved for rate stabilization Reserved for economic development Reserved per bond indentures Reserved for self insurance • health Reserved for self insurance • other than health Reserved for leasing Unreserved Fund balances: Reserved for prepaid items 36,757 Reserved for advances to other funds : 1,019,871 Reserved for debt service 413,768 Reserved for capital projects 100,000 33,817,268 Reserved for industrial development 1.044,999 Reserved for Federal housing programs Unreserved: Designated for subsequent year's expenditures 811.664 Oes1gnated for operating leases ~. 500.000 Designated for capital projects Undesignated 13.690.152 -· ~-----·---- 1.870.309 (~9_9,841) Total retamed earnings/ fund balances 14,746.780 ___ _:~-:~~~· 97_2_: 413,768 33.307,427 -·--..... ---··-·--------~-------·->< ------ Total fund eqUity and other credits ___ !_4.74~.780 __ 4,;~~2~.:~7~-• 413c768 33,307,427 .. ,.·.·-·-·. --------- Totalliabihttes and fund equ1ty and other cred1ts $ 19.155,954 $ 4,404.158 $ 558 748 $ 35 815.309 ::;;:;.::::-;._·.-=:-:.:.--.·.:.:.-=-==:= :...~-:-:=:..-=--·===--:..-::-.::.=·.~ =---=--'7--..::.:..-:..-:: :~:-== ~.:...:.=...~~-d~;:::--~-:...::.-:-·- 14 ..- .- ,... -r"" ,... ,... Proprietary Fiduciary Fund Types Fund TyPe Internal Trust and Enterprise Service Agency $ 118,346,746 $ 3.677.032 $ • $ 42,264.625 1,406,760 8,359,662 124.116 4,006,440 8,949,595 775,730 9,220,367 2.075,335 3,989,332 117,759 86,754,339 (6,790,081) 2,008,964 Account Groups General General Long-term Fixed Assets Debt • $ 201,556,282 ·• .·• '· ·;.-\ -· otats Pnmary Government (Memorandum Only) -1994-- • $· .. -- . - 122'.023,778 201 ,556.262 43,671,385 6.483,778 4,006,'440 '8,949,595 775,730 9,220.367 2,075,335 3,989,332 . 117,759 79,904,258 36,757 1,019,871 413,768 33,917,268 1,044,999 2,008,964 . 811,664 ." 500,000 (507,201) ----------. 14,543.419 .. 160,330,758 ... '278,677,504 923.221 '1,501,763 -----'-- . '.4,600,253 •"". 1;501,763 ·,_' _ _; s 511;190,696~-s .. -17,98W7 s_·. '10,112,352.$ 201,556,282_$~ . 56,896,356 s_. B._?.!.·~J~.._Q32 (continued) See accompanying notes to financial statements 15 CITY OF LUBBOCK, TEXAS COMBINED BALANCE SHEET -PRIMARY GOVERNMENT FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS September 30, 1994 With Comparative Totals for September 30, 1993 Fund Egutty a.rul.Qther Credits Contributed c~pital .. Investment in general fixed assets_ Retamed earnings: Reserved for capital projects Reserved for permanent capital maintenance Reserved for system improvements Reserved for rate stabilization Reserved for economic development Reserved per bond indentures -Reserved for self insurance • health Reserved for self insurance - -o.ther than health Reserved for leasing Unreserved Fund balances: Reserved for prepaid items Reserved for advances to other funds Reserved for debt service . · Reserved for capital projects Reserved for industnal development Reserved for Federal housing programs Unreserved: Desrgnated for subsequent year's expenditures -. Desrgnated for operating leases Desrgnated for cap1tal projects Undes1gnated Total retained earmngs/ fund balances Total fund equrty and other credrts T otalllab1lities and fund equity and other cred1ts 16 .$ ~~_;:Component Units Governmental -----· --~-Pr-oj:metary-- Type __ ])~pe~--- Visttors ancr- Convention Bureau Citibus . $ 4,830.664 $ 420,476 420.476 ------·------------- . 420,476 4.830.664 -··-··*-----·-- Ctvic Lubbock 37 186,403 1_86.440 186,440 -------·--- -· ,.... Totals Component Units -· ---;gg4 $ 4.830,664 $ 37 186,403 •: 420,476 606,916 5,437,580 Totals Reporting Entity (Memorandum Only) --. 19-94 i993 126,854,442 $ 201 .556,282 43,671.422 8,483,778 4,006,440 8,949,595 775,730 9,220,367 2,075,335 3,989,332 117,759 80.150,661 36,757 1,019,871 413,768 33,917,268 1,044,999 2.008,964 1,232,140 500.000 14,543,419 --:--;"'"':~.-,. ' 216.157,605 ~4,5~8.329 122,746,912 195,205,517 63,711,610 10,179,938 4,653,618 7,963,593 975,108 5,888,592 2.010,004 3,331,852 912,759 49,115,829 45,290 1,019,871 4,228,648 19,022,104 1,044,999 1,349,396 ~00.000 .. · 198,004 14,352.939 190.504,154 508,456,583 s. -_6,436,785 . . $ -···-~-~1:.:!_1!,817 $. 812,362,242 See accompanying notes to financial statements · 17 18 ',..... Totals Component Fiduciary Primary Unit Totals Fund Type Govemment Governmental T~ Reporting Entity (Memorandum Visitors and (Memorandum Only) Expendable On!J} Convention _,.... Trust 1994 Bureau 1994 1993 $ -$ 60,035,260 s 790,367 $ 60,825,627 s 56,142,297 1,038,772 1,038,772 882.878 7,124.575 8.435,179 8.435,179 8,040.811 2,369,813 2,369,813 2.372.145 2,141,811 2,141,811 2,421.749 33.500 589,761 5,384.928 9,312 5,394,240 4,102.484 7,714,336 79,405,763 799.679 80,205,442 73,995.864 8.785,254 12,442.217 599,565 13,041,782 10.353,434 2,071,418 2,071,418 2,065,725 1,989,477 1,989,477 2,037,481 6,662,148 6,662,148 6.397,086 47,253,201 47,253,201 45.611,706 698,181 609 698,790 648.242 487,544 8,988,030 8,988.030 8,687,684 ,..., 10,289,840 10,289,840 3,979,594 3,664,807 3,664,807 3.210,974 67,700 67,700 128,940 9,272,798 94,127.019 600,174 94,727,193 83.120.866 (1,558.462) {14,721,256) 199,505 ~141521,751) ~9.125,002) 17,209,000 17,209.000 267,201 30.692.077 30,692,077 26,107,407 (145,302) (22.432.355) (22.432,355) (15.406,143) 121,899 25,468,722 25,468,722 10,701.264 •'i ~'' (1 ,436,563) 10,747,466 1s~.'sds··· 10,946,971 1,576,262 929,362 41,761.251 41,761.2.51 40,184,989 2,008,964 1,787,993 220,971 21008.964 2,938,326 43,549.244 220,971 43,770.215 40,184,989 14,944 (14,944) s 1.501.763 $ 54.296.710 s 420,476 $ 54,717.186 $ 41,761.251 See ac:companying notes 10 financial statements 19 -"' .. _,_ ':~~,:,;. . ' ,·.;. 20 ,.... ,... ,... . ,...., CITY OF LUBBOCK, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET (GAAP BASIS) AND ACTUAL GENERAL FUND Year Ended September 30, 1994 General Fund Budget Actual Revenues: Taxes· $ 44,340,013 $ 45,557,871 Licenses and permits 974,985 1,038,772 Intergovernmental 1,284,139 1,310,604 Charges for services 2,221,476 2,326,521 . Fines and forfeits 2,321,000 2,141,811 Miscellaneous 2,681,331 2,738,708 Total revenues 53,822,944 55,114,287 Expenditures: Current: General government 2,863,740 2,731,960 Financial services 2,110,113 2,071,418 Management ser:vices 2,071,146 1,989,477 Development services 7,058,091 6,662,148. Public safety and services 47,604,982 47,253,201 Non-departmental 669,920 661,181 Total expenditures 62,377,992 61,369,385 Deficiency of revenues under expenditures (8,555,048) (6,255,098) Other financing sources (uses): Operating transfers in 13,710,654 13.810,921 Operating transfers out (5,603,735) (5,194,276) Total other financing sources 8,106,919 8,616,645 Excess (deficiency) of revenues and other financing sources over (under) expenditures (448,129) 2,361,547 Fund balance at beginning of year 12,385,233 12,385,233 Fund balance at end of year $ 11,937,104 $ 14,746,780 See accompanying notes to financial statements • r .. 21 $ $ Variance- favorable (unfavorable) 1,217.858 63.787 26.465 105,045 (179,189) 57,377 1,291.343 131,780 38,695 81,669 395,943 351,781 8,739 1,008,607 2,299,950 100,267 409,459 509,726 2,809,676 2,809,676 CITY OF LUBBOCK, TEXAS COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN EQUITY ALL PROPRIETARY FUND TYPES AND DISCRETELY PRESENTED COMPONENT UNITS Year Ended September 30, 1994 With Comparative Totals for Year Ended September 30, 1993 Totals Pnmary Government ,... {Memorandum Proprieta~ Fund T~~es On!~) Internal Enterprise Serv1ce 1994 Operating revenues: Charges for servaces $ 104,772,984 $ 23,515.699 s 128.288,683 New taps and reconnects 272,969 272.969 .-j Effluent water sales 770,730 770.730 Commodity sales 502,321 502.321 Landing fees 579.274 579,274 Parking 1,393,640 1,393.640 Greenfees and memberships 282,959 282,959 Pro shop sales 56,115 56.115 Rentals 1,506,400 1,506.400 Concessions 786,786 786.786 Adminastrative charges 69,906 69.906 Total operating revenues 110,924,178 23.585.605 134.509,783 Operat1ng expenses: Personal serv1ces 16,789.142 4,162.336 20,951.478 Insurance 11,516,769 11,516,769 Supplies 2,592.363 167,682 2,760,045 /- Materials 6.821,778 6.821,778 Maintenance 4,521,719 587,505 5,109.224 Uncollectible accounts 810,157 810.157 Purchase of fuel and power 29,939.848 29.939,848 Collection expense 1 ,532,121 1,532,121 Other services and charges 11,618,912 559,178 12.178.090 Depreciation 11,057.576 530,661 11.588,237 Total operating expenses 78.861,838 24.345.909 103,207,747 Operating income (loss) 32.062,340 (760.304) 31.302.036 Nonoperating revenues (expenses): Interest 4,624,732 343,058 4,967,790 Disposition of properties 122.875 71.427 194,302 Miscellaneous 1,729,814 27.423 1,757.237 Interest and fiscal charges (10,937,107) (73,666) (11 ,010,773) Cash grants and reimbursements Total nonoperating revenues (expenses) !4.459.686) 368.242 (4.091.444) Income (loss) before operating transfers 27,602.654 (392.062) 27.210,592 Transfers: Operating transfers in 12.794,840 1,363,418 14,158.258 Operating transfers out (22,237,980) (180.000) (22,417 ,980) Total transfers in (out) (9,443,140) 1,183,418 !8.259, 722~ Net income before extraordinary item 18,159.514 791,356 18i950,870 Extraordinary item-loss on extinguishment of debt 715,288 715,288 Net income (loss) 17,444,226 791.356 18,235,582 Depreciation on fixed assets acquired by contributions 545,386 545,386 Retained earnings at beginning of year as prev1ousty reported 148,611,038 131,865 148.742,903 Change in accounting principle (See Note VI.) {6.269.892) (6.269,892) . .- Retained earnings at beginning of year as restated 142,341,146 131,865 142,473,011 Residual equity transfer in Retained earnings at end of year 160,330,758 923.221 161,253.979 Contributions at beginning of year as previously reported 119,069,880 3,677,032 122,746,912 Change in accounting principle (See Note VI.) p,365.551) (3.365,551) Contributions at beginning of year as restated 115,704·,329 3,677,032 119,381,361 Capital contributions 3,187,803 3,187,803 Residual equity transfer out Depreciation on capital contributions {545.386) {545,386) Contributions at end of year 118,346,746 3.677,032 122,023,778 Total equity at end of year s 278,677,504 $ 4 600 253 $ 283,277,757 22 ,..., ComJ!onent Units Totals Totals Component Reporting Entity Pro~rieta~ Types Units {Memorandum Onl;r:~ Civic Lubbock, Citibus Inc Fund 1994 1994 1993 s 1,130,940 s 1,065,144 s 2,196,084 s 130,484,767 s 121,572,582 ,... 272,969 259,904 770,730 466,954 502,321 515,750 579.274 692.051 1,393,640 1,285.899 282,959 412.864 56,115 69.588 1,506,400 2.675.959 786,786 105.637 69,906 68,705 1,130,940 1,065,144 2,196,084 136,705.867 128,125,893 891,650 1,583,610 2,475,260 23,426,738 23,001,788 271.802 218,150 489,952 12,006,721 11,991,817 ,... 2.760,045 2,694,929 6,821.778 6,433,727 699,035 699,035 5,808.259 5,853,137 810,157 639,851 29,939,848 28,403,182 1,532,121 1,610,250 792,159 792,159 12,970,249 12,689,198 41,771 207,720 249,491 11,837,728 10,662,940 1,205.223 3.500,674 4,705897 107,913,644 103,980.819 (74.283) (2.435,530) (2,509,813) 28,792,223 24,145,074 4,623 4,623 4,972,413 5,779,562 194,302 (349;827) 1,757,237 2,719,082 ,... (2.958) (3,136) (6,094) (11,016,867) (10,338,896) 2.230,946 2,230,946 2,230,946 11606,687 1.665 2.227.810 2,229,475 {1,861,969) {583,392) (72,618) (207,720) (2801338) 261930,254 23,561,682 14,158,258 11,088,284 . ~22,411,980} ,211185,537) ,8,259. 722} {10,097,253) (72.618) (207,720) (280,338) 18,670,532 13,464,429 715 288 (72,618) (207,720) (280,338) 17,955,244 13,464,429 207,720 207,720 753,106 796,834 148,742,903 134,453,750 ,... 259,058 2591058 (61010,834) 259,058 259,058 142,732,069 134,453,750 27,890 186.440 186,440 161:440,419 148,742,903 122,746.912 116,482,255 3,365,551 3,365,551 3,365,551 3.365,551 122,746,912 116,482,255 1,672,833 1,672,833 4,860,636 7,254,744 (193.253) {207,720) {207.J20) {!53,106) ~796,834) 4.830,664 4,830,664 126,854,442 122,746,912 $ 186,440 $ 4.830.664 s 5.017,104 s 288.294.861 $ 271.489.815 See accompanying notes to financial statements 23 CITY OF LUBBOCK, TEXAS I" COMBINED STATEMENT OF CASH FLOWS- ALL PROPRIETARY FUND TYPES AND DISCRETELY PRESENTED COMPONENT UNITS Years Ended September 30, 1994 With Comparative Totals for Year Ended September 30. 1993 Totals Pnmary Government """" Pro~rieta!Y Fund Types (Memorandum Internal Onl:t) Enterprise Service 1994 Cash flows from operatmg activities: -operating income (loss) s 32,062.340 $ (760,304) $ 31.302.036 Adjustments to reconcile net income to net cash from operating activities: ~ Depreciation 11,057,576 530.661 11.588.237 Increase (decrease) in long-term payables not requiring cash flow (239.476) 669,520 430.044 Other income 1,701,314 697 1,702.011 Change in current assets and liabilities: Accounts receivable (696,71 1) (49,161) (745.872) ,-. Inventory 145,676 701,755 847.431 Due from other governments 356,845 356,845 Prepaid expenses 770' (36.453) (35.683) Accounts payable 900.632 544.444 1.445,076 Due to other funds (575,000) (320.000) (895,000) Other accrued expenses (218.480) (22.015) (240.495) Sales tax payable (75,947) (75,947) Customer deposits (19,498) (19.498) Deferred revenue Net cash provided by operating activities 44,400.041 1.259,144 45.659.185 Cash flows from capital and related financing activities: Payments for gas reserves (51,211) (51.211) Purchases of property, plant and equipment (46,984,508) (1,240,947) (48,225,455) Sale of property, plant and equipment 202.154 75.303 277,457 ,- Payments on leases (59,108) (59,108) Principal paid on revenue bonds (4,438,212) (4,438.212) Interest paid on revenue bonds (6,667,358) (6.667,358) Principal paid on general obligation bonds (5,140,319) (5,140,319) Interest paid on general obligation bonds (4,398,131) (4.398,131) Issuance of general and certificate of obiligation bonds 9.651,000 9,651,000 Principal paid on long-term debt 148,941 148,941 ,..... Interest paid on long-term debt (73,666) (73,666) Receipts from building rent 26,726 26.726 Contributed capital 1.852,671 1,852,671 Net cash used for capital and related financing activities {55,884,081) {1,212,584) (57,096,665) Cash flows from noncap1tal and related financing activities: Operating transfers in from other funds 10,998,341 1,363.418 12,361,759 Operating transfers out to other funds (22.237,980) (180,000) (22.417.980) Payments on advance from general fund 1,796.499 1,796.499 Cash grants and reimbursements Net cash provided (used) by noncapital and related financing activities (9,443.140) 1,183,418 {8.259,722) Cash flows from investing activities: Interest earnings on cash and investments 4,605.567 343,044 4,948,611 Net cash provided by investing activities 4,605.567 343,044 4,948,611 Net i11crease (decrease) in pooled cash and cash equivalents (16,321,613) 1,573,022 (14,748,591) Pooled cash and cash equivalents at beginning of year as previously reported 112,627,382 8,945.196 121,572,578 Change in accounting principle (See Note VI.) !369,637} {369,637) Pooled cash and cash equivalents at beginning of year as restated 112,257,745 8,945,196 121.202,941 Pooled cash and cash equivalents at end of year $ 95.936.132 s 10.518.218 $ 106.454,350 Supplemental cash flow information: Cash paid by primary government during fiscal1994 for interest was $11,139,155. 24 Comeonent Umts ProE!rieta!Y T~s Civic Lubbock, Inc. s (74,283) $ ,..... 41,771 11,257 7,538 (1.963) . 60,668 (11,664) {1.208) 32,116 (1,718) (29,746) (2.958) {34,422) 4,623 4,623 2,317 289,698 ,.... 289,698 $ 292,015 $ Totals Component Citibus Units Fund 1994 {2.435,530) $ (2,509,813) $ '. 207,720 249,491 {13,934) (2,6n) 14,380 21,918 5,275 3,312 83,991 144,659 (11,664) (34,243) (34,243) (1.208) ~2. 172,341) {2. 140,225) {1,718) (29,746) (3.136) (6.094) {3.136) {37,558) 638,007 638,007 1.614,790 1,614,790 2,252,797 2,252,797 4623 4,623 77,320 79,637 79.939 369.637 79.939 369.637 157 259 $ 449,274 $ See accompanying notes to financial statements 25 Totals Reporting Entity {Memorandum Onl~) . 1994 1993 28,792.223 s 24,145,074 11.837,728 10.655,423 430.044 1,733,341 1,702,011 2.639,553 (748,549) (1 ,380.411) '869,349 151.585 356,845 {396,195) .. (32,371) (9,181) 1,589,735 593.290 (906,664) (1,051.131) (274,738) 15,300 (75,947) (14,724) (19,498) (11 ,328) [1,208). [546,754) 43,518.960 36,523,842 (51,211)' (48,227,173) (61,904,928) 277,457 . 44,249 (59,108) (70,956) (4,438,212) (4,678,400) (6.667 ,358) (6,631,180) (5,140.319) (4,937,659) (4,398,131) '. (3.864.426) 9,651,000 14,480,000 119.195 (64,428) (79,760) (16,467) 26,726 66,051 1,852,671 4,439,701 ,. {57,134.223) {63,138,443) 12,999,766 11,093,818 (22,417,980) (21,196,189) 1,796,499 (16,511) 1,614,790 1,606.687 (6,006.925.) [8.512, 195) 4,953,234 6,584,965 .4,953.234 6,584,965 (14,668,954) (28.541,831) 121,572,578 150,114,409 121.572,578 150,114,409 106,903.624 $ 121,572.lm~ Cinr OF LUBBo.CK Notes to Financial Statements September 30, 1994 I.· Summary of Significant Accounting Policies .... : ........ -. ................. , ......... 29· A R rt. E. t' . ' ' . . "'9 . .epo 1ng n tty .... : ........................................................................ ... B. Basis .of Presentation -Fund Accounting ......................................... 3 1 C. Basi~ of Accounting ........................................................................ 32 D. Budgetary Accounting .................................................................... 33 E. Encumbrances ................................................................. ~ .............. 33 · · F. Assets, Liabilities and Fund Equity .................................................. 34 G. Risk Management .............................................................................. 3 5 H. Revenues, Expenses and Expenditures ............................................ 35 I. Total Memorandum Only ........................................... : ..................... 37 J. Reclassification ................................................................................ 3 7 II. Stewardship, Compliance and Accountability ......................................... 37 A. Retained Earnings/Fund Balance Deficits ........................................ 3 7 III. Detail Notes on all Funds and Account Groups ...................................... 38 A. Pooled Cash and Investments ..................................... : ... · ................ 38 B. Interfund Transactions.................................................................. 40 · ·C. Deferred Charge ............................................................................. 40 D. Property, Plant and Equipment.. ..................................................... 41 E. Retirement Plans ............................................................................. 42 F. Deferred Compensation .................................................................. 50 G. Surface Water Supply ..................................................................... 50 H. Other Enterprise Fund Activities ..................................................... 51 26 - -·. - ,.... Note I. J. K. L. M. CI1Y OF LUBBOCK Notes to Financial Statements September 30, 1994 Page Segment Information -Enterprise Funds ......................................... 52 Lease Agreements .......................................................................... 52 Long-Term Debt. .......................................................................... 54 Advanced Defeasement. ................................................................ 58 Accrued Insurance Claims ............................................................ 61 N. Landfill Closure and Postclosure Care Cost.. .................................. 61 IV. Contingent Liabilities ........................................................................... 62 A. Federal Grants .............................................................................. 62 B. Litigation ...................................................................................... 62 V. Financial Instruments ........................................................................... 63 VI. Restatement of Beginning Balances ...................................................... 63 VII. Subsequent Event ................................................................................ 64 A. Management Agreement for Golf Operations.. ............................... 64 21 . £j LUBBOCK TEXAS 28 ' ~ -, ' . • ; "·! .,..., ,,..., CI'TY OF LUBB,OCK, TEXAS N6tes to' Firt~ndal Statements ' i ' . ·. . ~ -' September 30. 1994 NOTE 1. .. SUl\fMARY OF SIGNIFICANT~ACCOUNTING POLICIES The financial statements of the City of Lubbock, Lubb~~k County, Texas (City) have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) as applicable to governmental units. The Government Accounting Standards Board (GASB) is the acknowledged standard-sening body for establishing governmental accounting and financial reporting principles. With respect to proprietary activities, including component units, the City has adopted GASB Statement No. 20. "Accounting and Financial Reponing for Proprietary Funds and Other Governmental Entities that use Proprietaf} Fund Accounting." The City has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) Opmions. issued on or before November 30. 1989 unless those pronouncements connict with or contradict GASB pronouncements. The more significant accounting policies are described below. A. REPORTING ENTITY: In June, 1991, the GASB issued Statement No. 14. "The Financial Reporting Entity". In accordance with this statement, the City has presented those entities which comprise the primal}' government along with its discretely presented Component Units in the fiscal year 1994 general purpose financial statements. The effect of the changes on fund equity due to the adoption of GASB Statement No. 14 is included in Note VI. The City is a municipal corporation governed by a Mayor-Council form of government. As required by GAAP. the general purpose financial statements present the reporting entity which consists of the primary government. organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion could cause the City's general purpose financial statements to be misleading or incomplete. BLENDED COMPONENT UNITS The following Component Units have been presented as blended Component Units because the Component Unit's governing body is substantially the same as the governing body of the City, or the Component Unit pro\·ides services almost entirely to the primary government. The Urban Rtmewal Agency (URA) was formed to provide low-income housing to qualifying recipients. Houses are purchased with Community Development Block Grant funds and offered at below-market interest rate mortgages to qualifying recipients. As loans are repaid. monies are accumulated to purchase additional housing. The Mayor, with the consent of the City Council. is empowered by law to appoint the nine member board to govern operations. The agency is funded by . appropriations from the City•s Community Development Block Grant. While URA is legally separate from the City, it is reponed as if it were pan of the primary government because it provides services almost entirely to the primary government. Financial activity is included in the Community Dc:velopment Expendable Trust Fund for fiscal year 1994. Prior to fiscal year 1994, URA did not meet the criteria for inclusion in the City's reporting entity (See Note VI). Lubbock Arts Alliance Grants Review Committee is a subcommittee of the Lubbock Arts Alliance, Inc. This committee recommends projects to be. funded with hotel-motel tax proceeds for approval by the City Council. This committee is funded by appropriations from the City's share of hotel-motel tax proceeds and the financial activity is included in the Arts and Related Items Special Revenue Fund. DISCRETELY PRESENTED COMPONENT UNITS The Component Unit columns in the combined financial statements include the financial data of the City·s other Component Units. They are reported in a separate column to emphasize that they are legally separate from the City. The following Component Units are included in the reporting entity because the primary government is financially accountable and is able to impose its will on the organization. A primary government has the ability to impose its will if it can significantly influence operations and/or activities of an organization. 29 CITY OF LUBBOCK, TEXAS Notes to Fin~nda.l Statements ·September 30, 1994 NOTE I. SUMMARY OF SIGNIFICANTACCOUNTING POLICIES A. REPORTING ENTITY; £CONTINUED) City Transit Management Co., Inc. dba Citibus (Citibus). In 1993. the City renewed a five year management agreement with McDonald Transit Associates, Inc. to manage and operate a City owned transportation system (Citibus). Citibus is a legally separate entity. The City Council appoints th~ seven-member Lubbock Public.Transit Advisory Board, and approves the annual budget. The City is responsible for fupding deficits. Citibus is reported as a proprietary type component unit. Civic. Lubbock, Inc. promotes the cultural and educational usage of the Lubbock Memorial Civic Center and Lubbock Municipal Coliseum. The IS member board is appointed by the City Council with a dual appointment to the Civic Center Board. The City Council approves the budget for Ci' ic Lubbock, _Inc. Civic Lubbock, Inc. is reponed as a proprietary type component unit. Lubbock Convention and Visitor's Bureau, Inc. (LCVB) promotes the City as a convention center and facilitates tourism in Lubbock. Prior to September 30, I994, board members were ... appointed by the Lubbock Chamber of Commerce (Chamber), and operations were managed by the Chamber. On October I. 1994, a new entity was incorporated. the Con\'ention and Tourism Bureau of Lubbock. Inc. (CTBL). The CTBL board is appointed by the City Council. The primary sourc~.: of funding is an allocation of hotel-motel tax collections. The City Council approved th~o: budget for .LCVB and will approve the budget of CTBL. LCVB is reported as a govcrnme~tal type component unit. The combined financial statements present financial statements for each of the three discrctcl) presented component units. Copies offinancial statements of the individual component units may be obtained from their respective administrative offices listed beiO\\. Administrative Offices City Transit Management · Co. Inc. dba Citibus 801 Texas Lubbock. Texas Civic Lubbock, Inc. 150 I 6th Street Lubbock, Texas RELATED ORGANIZATIONS CTBL. Inc. 14th Street and Avenue K Lubbock. Texas The City's officials are also .responsible for appomtmg the members of the boards of other organizations but the City's accountability for these organizations does not extend beyond makin(! the appointments. The following are related organizations which have not been included in the reponing entity: Housing Authority of the City of Lubbock is legally separate. The Mayor with the consent of th~o: City Council appoints the fi\'e-member board. It is the City Attorney's opinion that the Housing Authority is indeJX:ndent of the City of Lubbock. TheAuthority is not fiscally dependent on the City of Lubbock and the City Council is not able to impose its will on the entity. The City of Lubbock has no responsibility for debt issued by the Housing Authority. . . Lubbock Firemen's Retirement and Relief Fund operates under provisions of the firemen's Relief and Retirement Laws of the State of Texas for purposes of providing retirement benefits for the City's firefighters. Its affairs are governed by the Mayor's designee, the Assistant City Manager for Financial Services, three firefighters elected by members of the fund, and two at-large members elected. by the Bo.ard. It is funded by contributions by the firefighters and matched by contributions from the City. As provided by enabling legislation. the City's responsibility to the Fund is limited to matching monthly contributions made by the members. Title to assets is vested in the fund and not in 30 ,....., : .- . """ CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. REPORTING ENTITY; <CONTINUED\ the City. The State Firemen's Pension Commission exercises general oversight authority over the Fund; thus, the City of Lubbock does not significantly influence operations. Lubbock Arts Alliance, Inc. (Alliance) is dedicated to the promotion and improvement of the arts and sponsoring the Annual Lubbock Arts Festival. Except for the Grants Committee. reponed as a Component Unit of the City of Lubbock, the Alliance is not fiscally dependent on the City. and the City is not able to exert its will on the Alliance. Lubbock Health Facilities Development Corporation (LHFDC) promotes health facilities development. The City Council appoints the seven-member board. Bonds issued by LHFDC do not constitute indebtedness of the City. The City does not govern operations ofLHFDC. Omnimax is a theater financed with proceeds from bonds issued by the City. The Omnimax is leased to the Science Spectrum Inc. The City Council is not able to impose its will on the organization. The City has a contractual agreement with Science Spectrum, Inc. for the operation and maintenance of the theater and for a percentage of net revenues to be allocated to the City for debt service reimbursement. Lubbock Housing Finance Corporation, Inc. (LHFC) was formed pursuant to the Texas Housing Finance Corporation Act. to finance the cost of decent, safe, affordable residential housing. The mayor appoints the seven-member board. It is the opinion of the city attorney that LHFC is independent of the City. Indebtedness of the Corporation does not constitute indebtedness of the City. The City is not able to impose its will on the LHFC. B. BASIS OF PRESENTATION -FUND ACCOUNTING The financial transactions of the City are recorded in individual funds and account groups. Each fund is accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities. reserves, fund equity, revenues, and expenditures/expenses. The various funds are classified into three categories: governmental, proprietary and fiduciary. The following fund types and account groups are used by the City: GOVERNMENTAL FUND TYPES General Fund is the general operating fund of the City. It is used to account for all financial transactions except those required to he accounted for in another fund. Special Revenue Funds are used 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 Funds are used to account for the accumulation of financial resources for the payment · of interest and principal on the general long-term debt of the City. Capital Project Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds or Trust Funds). PROPRIETARY FUND TYPES Enterprise Funds are used to account for operations of the City (a) that are financed and operated in a manner similar to private business enterprises, where the intent is to provide goods or services to the 31 CITY OF LUBBOCK, TEXAS Notes to Financi~l Statements September 30, 1994 NOTE I. SUl\iMARY OF SIGNIFICANT ACCOUNTING POLICIES B. BASIS OF PRESENTATION-FUND ACCOUNTING <CONTINUED) general public on a continuing basis, the cost of which is to be recovered in whole or part through user charges; or (b) where the governing body has decided that periodic determination of revenues earned. expenses incurred, and/or net income is appropriate for capital maintenance. public pohcy. management control. accountability, or other purposes. Internal Service Fund is used to account for the financing of goods and services provided b~ one department or agency to other departments or agencies of the City, or to other governmems. on a user charge basis. FIDUCIARY FUND TYPES Transactions related to assets held by the City in a trustee capacity or as an agent for individuals. private organizations, other governments and other funds. are accounted for in fiducia~ fund types. Fiduciary fund types are comprised of: Expendable Trust Funds account for assets received and expended by the City as trustee in essentially the same manner as governmental fund types. Agency Funds are used to account for assets held h~ the City as a custodial trustee. They are accoumed for on the modified accrual basis of accounting, but do not have a measurement focus. as agency funds do not account for operations. ACCOUNT GROUPS General Fixed Assets Account Group represents a summary of the fixed assets of the City. other than those fixed assets reported in the Proprietary Funds. Capital expenditures of the Capital Projects Fund are the primary source from which the detailed records of the general fixed assets account group are developed. Capital expenditures are carried in this account group as construction in progress until the projects are completed and are then capitalized by function and classification. Infrastructure fixed assets such as streets, highways. bridges, sidewalks. street lighting. traffic poles and signals.-and storm sewers, are accounted for in the General Fixed Assets Account Group and reponed in the Schedule of General Fixed Assets. General fixed assets are not depreciated and are recorded at historical cost at the time of acquisition. Donated assets are recorded at their fair market value on the date donated. General Long-Term Debt Account Group is used to account for the City's liability for general long- term debt presently consisting of general obligation bonds, certificates of obligation. long-term notes payable, long-term leases. and obligations for employee vacation. sick-leave benefits, insurance claims and rebatablc arbitrage. other than those reported in the Proprietary Funds. C. BASIS OF ACCOUNTING The modified accrual basis of accounting and the flow of current financial resources is followed for the governmental fund types, special revenue funds. debt service funds. capital project funds. expendable trust funds. and agency funds. Under this basis of accounting. expenditures. other than interest on long-term debt in the Debt Service Fund which is recorded when due, are recorded when the liability is incurred. Revenues are recorded when received in cash unless susceptible to accrual. Revenues under the modified accrual basis must be both measurable and available to finance current year appropriations. Revenues considered to be susceptible. to accrual under the modified accrual basis are property and sales taxes. cenain grant revenue and investment income. The accrual basis of accounting and the flow of economic resources is followed in 'the enterprise funds and internal service funds. Under this method of accounting, revenues are recognized when earned and expenses are recorded when a liability is incurred. 32 - CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. BASIS OF ACCOUNTING tCONTINUEDl Governmental fund types and expendable trust funds are accounted for using a current financial resources measurement focus. Under the current financial resources measurement focus. only current assets and current liabilities are included on the balance sheet. Net current assets or fund balance is considered a measure of available spendable resources. The flow of financial resources measurement focus is concerned primarily with the measure of interperiod equity (e.g. whether current year revenues were sufficient to pay for. current year services). Enterprise funds and internal service funds are accounted for using an economic resource measurement focus. All assets and liabilities including fixed assets and long-term debt are included on the balance sheet. Fund equity is segregated into its contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses J in net total assets. D. BUDGETARY ACCOUNTING Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except for special revenue funds and capital project funds. which adopt project-length budgets. All annual appropriations lapse at fiscal year end. Annually, the City Manager submits to City Council a proposed operating budget for the upcoming fiscal year. Public hearings are conducted to obtain taxpayer comments, and the budget is legally enacted through passage of an ordinance by the City Council. Budgetary control is maintained by department and by the following category of expenditures: personnel services. supplies. maintenance, other charges, and capital outlay. All budget supplements must be approved by the City Council. Administrative transfers, and increases or decreases in accounts within categories may be made by management as long as expenditures do not exceed budgeted appropriations at the fund level. Appropriations for budgeted funds lapse at year end. Budgeted amounts shown are from the revised budget, adopted by resolution on September 9, 1994. During the year, the budget was revised to reflect a 1.50% increase in total revenues and I. 16% increase in total operating expenses/expenditures from the original budget. Each year, in accordance with State law, the City Council sets an ad valorem tax levy for a sinking fund (General Obligation Debt Service) which with cash and investments in the fund, would be sufficient to pay all the bonded indebtedness and interest due in the following fiscal year. E. ENCUMBRANCES At the end of the year. encumbrances for which goods and/or services have not been received are canceled. At the beginning of the next year, prior year encumbrances and related appropriations are re-established through a budget amendment. Re-established encumbrances at October I, 1994 for governmental funds of $1.058,333 are as follows: General Fund Special Revenue Funds Capital Projects Funds Expendable Trust Funds Total 33 $ 945,845 395 61,753 50.340 $I 058 333 CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE I. SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES F. ASSETS. LIABILITIES AND FUND EQUlTY Equity in Pooled Cash and Investments· A "Pooled Cash" concept is used to maintain the cash and investment accounts in the accounting records. Under this method, all ·cash is pooled for inYestment purposes and each fund has an equity in the pooled cash amount and earnings therefrom. All amounts included in the pooled cash and investment accounts are considered to be cash and cash equi\alcnts. For purposes of the statement of cash flows, the City considers cash and cash equivalents (including restricted cash and cash equivalents) to be currency on hand. demand deposits with banks. and amounts included in pooled cash .and investment accounts due to their liquid nature. Cash and cash equivalents are included in both unrestricted as well as restricted assets. Investments other than those in the deferred compensation plan are stated at cost or amortized cost. Property Tax Receivable -Property taxes are assessed and liens attach on valuations as of January 1. levied on October I of each year. and become delinquent februar:· I of the followm£. year. Uncollected taxes, net of the estimated uncollectible amount. are recorded as receivables in the General and Debt Service Funds. Deferred revenue is recorded in an amount equal to net delinquent taxes receivable, less taxes collected within 60 days after the end of the fiscal year. Enterprise Fund Receivables-Within the Electric. Water. Sewer and Sohd Waste Enterpris;: Fund~. an amount has been recorded for services rendered but not billed as of the close of the liseal year. Amounts billed are reflected as receivables net of an allowance for uncollectibles. Inventories -Inventories in the Proprietary Fund Types consist of expendable supplies held for consumption. Inventories are valued at cost using the average cost method of valuation. Proprictar: fund Types use the consumption method of accounting, (i.e .• inventor:· is expensed when used rather than when purchased). Prepaid Expenses-Prepaid expenses are accounted for under the consumption method. Restricted Assets • Certain enterprise fund assets are restricted for construction which has been funded through long-term debt, therefore. retained earnings have not been reserved for these amounts. The excess of assets restricted for the payment of debt service over certain liabilities are included as retained earnings reserved for capital projects, rate stabilization. economic development and bond indentures. Fixed Assets and Depreciation -General fixed assets are not capitalized in the funds used io acqUire or construct them. Instead, capital acquisition and construction are .rellected as expenditures m Governmental Funds. and the related assets are reported in the General Fixed Assets Account Group. All purchased f1xed assets are recorded at cost. Donated asset.; arc recorded at the fair value on th~: date of donation. Assets in the General fixed Asset Account Group are not depreciated. Property, plant and equipment of the Proprietary funds are stated at cost or estimated market value for donated assets. Depreciation is computed using the straight-line method over the estimated useful lives as follows: Improvements Buildings Equipment . I 0-50 years 15-50 years 3-15 years Interest Capitalization -The Citv capitalizes interest cost in its Enterprise Funds on bonds used for fixed asset construction. ~et of int~rest income earned on the temporary investment of the tax exempt bond proceeds. Interest costs incurred during the year.\\Cre $16,229.230 of which $2.042.232 has been capitalized. 34 l lrf/1"'\ CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE I.,. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES E. ASSETS. I.IABILITIES AND FUND EQUITY CCONTINUED) Advance to Other funds-Amounts owed to one fund by another which are not due within one vear are recorded as advances to other funds. These are equally offset by a fund balance reserve am~unt which indicates they do not constitute available spendable resources. G. RISK MANAGEMENT The City is self insured for medical and dental coverage. The liability for incurred claims represents estimates for medical and dental claims incurred as ofSeptember 30. 1994. Some of these claims were reponed at September 30, 1994, and others may not be reponed until a later date which are incurred but not reponed (IBNR). IBNR is actuarially determined by the City's independent insurance administrator. The City's self insured worker's compensation and general liability programs are on a cash flow basis, which means that the service contractor processes, adjusts and pays claims from a deposit provided by the City. The City accounts for the worker's compensation program in the Insurance Fund (an Internal Service Fund) by charging premiums based upon losses, administrative fees and reserve requirements. The Fund establishes claim liabilities based on estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reponed but not settled, and of claims that have been incurred but not reponed. The length of time for which such costs must be estimated varies depending on the coverage involved. Estimated amounts of salvage and subrogation and reinsurance recoverable on unpaid claims arc deducted from the liability for unpaid claims. Because actual claim costs depend on such complex factors as inflation, changes in doctrines of legal liability. and damage awards. the process Used in computing claim liabilities does not necessarily result in an exact amount. panicularly for coverages such as general liability. Claim liabilities are recomputed periodically using a variety of actuarial and statistical techniques to produce current estimates that reflect recent settlements, claim frequency. and other economic and social factors. Adjustments to claim liabilities are charged or credited to expense in the period in which they are made. Additionally, propeny. and boiler coverage is accounted for in the Insurance Fund. The propeny insurance policy was purchased from an outside insurance carrier. The policy has a $250,000 deductible per occurrence, and the boiler coverage insurance deductible is $2,.500 to $100,000, dependent upon the unit. Premiums are charged to funds based upon policy premiums and reserve payments. Other small insurance policies, such as surety bond coverage and miscellaneous floaters, are accounted for in the Insurance Fund. Funds are charged expenditures based on premium amounts and administrative charges. The City has had no significant reductions in insurance coverage during the year. Settlements in the current year and preceding two years have not exceeded insurance coverage. H. REVENUES. EXPENSES AND EXPENDITURES lncerest Income on pooled cash and investments is allocated monthly based on the percentage of a fund's average daily equity in pooled cash and investments to the total average daily pooled equity in pooled cash and investments, except for Trust and Agency Funds, cenain SpeciaJ Revenue Funds, Governmental Capital Project Funds, and cenain Internal Service Funds. The interest income on pooled cash and investments of these funds is reponed in the General Fund or the Debt Service Fund. Sales Tax Revenue· The City has a 1% sales tax levy which is collected by the State of Texas and remitted to the City monthly. The tax is collected by the vendor and required to be remitted to the State by the 20th of the month following collection. The tax is then paid to the City by the lOth of the next month. In addition, voters approved a 112 cent sales tax increase to fund land and other incentives for the Depanment of Defense Accounting Office to be located in Lubbock, Texas. When that project was JS CITY OF LUBBOCK, TEXAS Notes .to Financial Statements September 30, 1994 NOTE I.· SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES H. REYENUES. EXPENSES AND EXPENDITURES (CONTINUED> canceled by thr.: U.S .. government, voters repealed. the tax. However, due to the timing of the imposition and revocation of the increased tax, the additional 1/2 cent sales tax was collected for the first quarter of fiscal year 1994. A ponion of the .collected funds was used to defease approximately $3,600.000 of bonds issued to fund the construction of a 550 bed psychiatric hospital for the Texas Depanment of Corrections. The remaining amount is to be used to fund specific projects as approved by the City Council. Grant Revenue from federal and state grants is recognized to th.e extent that the related expense has been incurred. lnterfund Transactions or quasi-external transactions are accounted for as revenues. expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initial!) made from that fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transactions except quasi-external transactions. reimbursements. temporary receivables and payables, and residual equity ~ransfers are reported as operating transfers. Compensated Absences consists of vacation leave and sick leave. Vacation leave of 10·20 days is granted to all regular employees dependent upon the date employed, years of service. and civil service status. Unused vacation leave is lost at the end of the calendar year. The City is obligated to make payment upon retirement or termination for any available, unused vacation leave. Sick leave for employees is accrued at I 1/4 days per month with unlimited accrual status. After 15 . years of continuous full time service for non-civil service personnel, vested sick leave is paid on retirement or termination at the current hourly rate for up to 90 days. Civil service personnel are paid for up to 90 days accrued sick. leave after one year of employment. The Texas Civil Service laws dictate certain benefits and personnel policies above and beyond those policies of the City. In November 1992, the GASB issued Statement No. 16, "Accounting for Compensated Absences". In accordance with this statement, the City has recorded a liability for accumulated vacation. sick leave. and certain salary related payments. such as employer portion of social security and medicare. The cumulative effect of adoption of GASB Statement No. 16 was not significant to the linancial statements of the City . . The liability for the accumulated vacation and sick leave is recorded in the general long-term debt account group for governmental fund employees and as a noncurrent liability in the proprietary fund for proprietary fund employees. Management has determined that the current portion of this liability is not significant to the overall financial position of the City. Post Employment Benefits • Retirees of the City of Lubbock may purchase optional health and life insurance benefits at their own expense. Amounts to cover premiums and administrative costs, with an incremental charge for reserve funding, are determined by. the City's health care administrator. Financial activity is reponed in the Health Insurance Internal Service Fund. 36 CITY 'OF LUBBtiCK, TEXAS · .Notes to Financjlil Statements September3~.! 1994 NOTE II.: STEWARDSHIP, COMPI.:IANCE AND ACCOUNT~I-\BILITY A. RETAINED EARNINGS/FUND BALANCE I>EfiCITS <CONTINUED) September 30, 1994, Community Services has requested and received' an extension for filing the final requests for reimbursement for these funds. These funds have not been accrued a5 certain reimbusement amounts are not measurable at September 30, 1994 which is consistent \\ ith the revenue recognition required by the modified accrual basis of accounting. The deficit of $67,372 in Other Grants Expendable Trust Fond is the result of a timing d1fl~rl.'nce between expenditures incurred and the filing of requests for reimbursements. These funds have not been accrued as certain reimbusement amounts are not measurable at September 30. 1994 which 1> consistent with the revenue recognition required by the modified accrual basis of accounting. No other funds of the City had deficits in either total fund balances or total retained earnings. NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. POOLED CASH AND INVESTMENTS The City's investment polices are governed by State statute and city ordinances. PermiSSible investments include direct obligations of the United States or its agencies and instrumentalities. certificates of deposit, prime domestic banker's acceptances. Commercial paper. repurchase agreements, and deposits in a qualifying investment pool. Collateral is required for demand depos1ts. certificates of obligation, and repurchase agreements at I 02% of all amounts not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the state and its subdivisions. The City's deposits and investmcnt5 are categorized below to indicate the level of risk assumed by the City at September 30. 1994. INVESTMENT CATEGORY OF CREDIT RISK (I) The City's investment category is insured, registered or in securities held by the entity or its agent in the entity's name. (2) Uninsured and unregistered, with securities held by the counter party's trust department or agent in the entity's name. (3) Uninsured and unregistered, with securities held by the counter party or by the trust department or agent but not in the entity's name. DEPOSIT CATEGORY OF CREDIT RISK (A) The City's deposit category is collateralized with securities held by the pledging financial institutions trust department or agent in the enitity's name. (B) Collateralized with securities held by the pledging financial institution's trust department or agent in the entity's name. (C) Uncollateralized. Pooled Cash and Investments The City's pooled cash and investments consist of deposits with financial institutions, certificates of deposit, U.S. government and agency securities, and deposits in qualifying investment pools. These investments have varying maturities ranging from or'le day to five years. The weighted average maturity of the total portfolio is kept to under two years. The following is a schedule of the City's pooled cash and investments at September 30. 1994: 38 (""' I t l CITY oF LUBBOCK, TEXAS ' ·-,. Notes' tv., Financial Statements September 30, 1994 NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES H. REVENUES. EXPENSES AND EXPENDITURES <CONTINUED) The following schedule reflects participation in the City's health care program: Participants Aetive Retired Cobra Active Claims Retired Claims Cobra Claims Total Claims % of Employee Groups to total claims Active Retired Cobra Total% I. TOTAL MEMORANDUM ONLY 1,865 288 ll S5,o78,893 1,804,237 12.453 $6.895 583 73.65% 26.16% .19%, 10000% The Totals (Memorandum Only) columns represent an aggregation of the combined financial statements and do not represent consolidated financial information. ,Data in those columns do not represent financial position and results of operations, in conformity ~ith GAAP and arc presented only to facilitate analysis. J. RECLASSIFICATION Certain 1993 amounts have been reclassified to conform to 1994 presentation. NOTE II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. RETAINED EARNINGS!fUND BALANCE DEFICITS The deficit of $58 in the Canyon Lakes Capital Projects Fund results from necessary expenditures for capital projects. The deficit will be funded in the 1994-95 fiscal year by the Parks Capital Projects Fund. · The deficit of $509,783 in the Storm Sewer and Drainage Capital Projects Fund results from costs incurred to comply with Environmental Protection Agency (EPA) Standards for Stormwater Quality. These costs were incurred prior to the establishment of the Stormwater Utility Enterprise Fund, (established October I. 1993). The reimbursements for these expenditures will be made by the Stormwater Utility Enterprise Fund. The deficit of $3,819.599 in the Airport Enterprise Fund results from the practice of not funding depreciation. Debt service for the airport improvements is funded by property taxes and was never intended to be funded by airport revenues. · The deficit in the Golf Enterprise Fund of $1,001,392 is the result of placing itself in a more competitive position through non-capital course equipment improvements. Future plans for golf operations are described briefly in Note VII. Subsequent Event. The deficit of $74,043 in Community Services Exr. ; . ..!able Trust Fund is the result of a timing difference between expenditures incurred and the filin;. of requests for reimbursements. As of 37 ,.. ,_ CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30,1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. POOLED CASH AND INVESTMENTS <CONTINUED\ nvestments U. S. Treasury and Agency Obligations- (I) Primary Government $144,571,792 Mutual Funds· Primary Government Government Investment in TEXPOOL Mutual Fund-Primary Government Total Investments· Primary Government Cash and Bank Deposits Cash and Bank Deposits-Primary Government Cash and Bank Deposits-Component Units Cash and Bank Deposits • Reporting Entity (A) $11.867,063 599 583 $12.466.646 Category (l) Category (B) s s (3) (C) s $270 363 Cash and Investments are reported in the financial statements as: Primary GI!X~[om~:nt Cash and Investments· Restricted s 91,696,876 Cash and Investments· Non-Restricted ZQ.ZZQ ISS Total Cash and Investments s 162.M22.!l3~ . Carrying amount of deposits s 11,867,063 Carrying amount of investments I SQ.S22.22 I Total Cash and Investments s 162.~61.tl:H 39 Carryhtg Amount s 144,571,792 5,941;113 87066 $ IS0,599.971 Carrying Amount s 11,867,063 869946 $12.737.009 Component l!oiu s 37 862.2Q2 s 862.2~6 869,946 s 8622~6 Market Value $ 141.613,692 5,941,113 87.066 s 147,641.871 Bank Balance s 12,280.842 989 742 $13.270 584 Reporting Eo tit! s 91,696,913 11.~!1 062 s 163.3 36.28!1 s 12,737,009 I S!l S22 221 s 16l.ll6.28!l : CITY OF LUBBOCK, TEXAS Notes .to Financial Staternerits September 30,:1994 NOTE HI. DETAIL NOT·ES,ON ALL FUNDS AND ACCOUNT GROUPS B. INTERFUND TRANSACTIONS c. lnterfund receivables. and payables consisting of due from/to and advances to'from other funds at September 3Q, 1994 were as follows: · · lnterfund lnterfund Funds B~:~:~:ivabh::s fanl!l!:5 General Fund. $ 4,900.372 $ Debt Service Funds: Debt Service-City Hall Expansion 25,000 Capital Projects Funds: Parks Capital Projects 5.000 Canyon Lakes Capital Projects 5.000 Storm Sewer & Drainage 650.000 General Permanent Capital Projects 25.000 Enterprise Funds: Electric Enterprise Fund I. 765.512 Water Enterprise Fund 1.210.500 Solid Waste Enterprise Fund 897.()00 Golf Enterprise Fund 1.350.000 Internal Service Fund 2. 9-t8.28-t Expendable Trust Funds: Community Development Fund 1.775.000 Community Services Fund 40.000 Library Fund 107.500 Police Fund 74.000 Other Grant Funds 14 000 Total $ 7.906.384 $ 7 906.38-t DEFERRED CHARGE The deferred charges of$1,770,032 and $1.718.821 at September 30. 199-t and 1993, respectively. represent prepayments for two separate contracts for future delivery of natural gas as contracted for hy the City. In 1988. a contract was entered into for the purchase of proven and unproven reserves. totaling 2.000.000 MMBTU at $1.56 per MMBTU with an option. which the City has exercised. to purchase an additional 2.000.000 MMBTU at the same price. The remaining amount of prepayment relative to this contract at September 30. 1994 is $1.641,333. Quantities in excess of thl! lirst 4.000,000 MMBTU can then be purchased at market value. During 1988, proven reserves of 338.000 MMBTU were purchased at the $1.56 rate. The remaining reserves are being purchased as proven. One-half the rate, or $.78 per MMBTU, is paid upon proven determination of the reserves and the balance is to be paid upon delivery. The prepayments are to be expensed as the gas is taken until the prepaid units of gas have been consumed. At September 30, 1994 and 1993, I ,317,934 and I ,218.590 MMBTU, respectively. had been delivered. and remaining proven reserves at September 30, 1994 and 1993 were 2,104,273 and 2.203,617 MMBTU, respectively. On August 25, I 994, the City contracted for the purchase of natural gas to be delivered in future years. An amount of $128,699 is included in deferred charges which represents a deposit on future gas deliveries. The City is obligated to purchase 3 million MMBTU of gas per year in fiscal years 1995 and 1996 and 4 million MMBTU of gas in fiscal years 1997, and 1998, and 1999 . .;(, CI1Y OF L{JBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE Ill. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS D. PROPERTY. PLANT AND EQUIPMENT General fixed assets of the City for the y~ar ended September 30. 1994,are as follows: Balance J0-1-93 Addili!!D~" Dddi!!D5' 9-30-94 Land s 8,611,411 $ $ $ 8.611.411 Buildings and Improvements 34,316,242 34.316.242 Other Improvements 110,514.798 l78,949 -110.793.747 Equipment 23,933,765 2,251,227 2,430,985 23,754.007 Construction in Progress 17.829.301 8 434 661 2.183.087 24 080 87'\ Total SI2S.20S.~I:Z S I !l.26:U31 · S:MI4.012 S2QUS6 :Z82 • Includes transfers. Co11struction in progress is composed of the following: . Project AutborjzatioD Expended to 9~30-94 ·Unexpended Balance Fire Station . $ 216,820 $ . 188,268 s 28.552 Park Improvements 3,042,732. 1,491,760 1.550.972 Street Improvements 31.611.100 6,409,675 25.201.425 Permanent Street Maintenance 2,535,000 2,278,030 256.970 Storm Sewer and Drainage 940,000 825,628 114,372 General Permanent Capital . Projects 16,540,201 9,746,048 6,794,153 General Permanent Capital Maintenance S.26:11H6 J.H1.:16:Z 2.123.379 Total Life-to-Date Activity $60,150.699 · S2:1,08Q,876 s 36 !l62~1!2J Property, plant, and equipment recorded in the Citys' various proprietary funds (including component units) as of September 30, 1994, is as follows: · · .· Total Total Internal Primary Component Reporting Enterprise 'Swdtt Government Uoits Eritity Land . $ 26.065,447 $ 5,839 . $ 26.071,286 $ . 520,403 $ 26,591,689 Buildings and Improvements 36,829,494 1,791.855 38.621,349 3.818,594 42,439,943 Improvements 276.143,315 197,469 276,340,784 .... 160,782 276,501,566 Equipment 31,305,904 6,971,171 38,277,075 6,492:292 44,769.367 Construction in Progress lSZ 21!2214 2.l:!Sl.ll28 ISS ll~:Z 2~2 ISS Q~Z 2~2 Total 523,334.074 tl,Ol9,362 534,353,436 10,992.071 545,345.507 Less: Accumulated (14 5 215.215) ( li!QQ 2281 £ J S 1 ~QZ~.Q:ZJ l (~.11 0.33~} (I SZ.lllMQ2l Depreciation Total Sl78 058 222 s 5.218.3~~ S31!3.2Z7,l6l $ ~BI!I.ZJS·· Sl 81. J l2.!l21! 41 . CITY OF LUBBOCK, TEXAS NoleS to Financi'al Statements September·JO, 1994 . NOTE Ill. DETAIL 'N'OTES·o~ ALL FUNDS' ANDACCOUNT GROUPS E. RETIREMENT PLANS Each qualified employee is included ·in one of two retirement plans in which the Cit~ of Luohock panicipates. These are the Texas Municipal Retirement System {TMRS) and the firemen· s Reltef and Retirement Fund. The City does not maintain the accounting records. hold th<! inn:stmt:nts or administer either fund. Summary of significant data for each retirement plan follows: TEXAS MUNICIPAL RETIREMENT SYSTEM (TMRS) Plan Description The City provides pension benefits for all of its full-time employees with the exception of firefighters through a nontraditional. joint contributory. defined contribution plan in the stat<!· Wide TMRS. one or over 636 administered by TMRS, an agent multiple-employer public employee retirement system. It is the opinion of the TMRS management that the plans in TMRS are substantiall~ ddincd contribution plans, but they have elected to provide additional voluntary disclosure to h.:-lp fostl!r 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 int.:-rest. and the Cit~. financed monetary credits. with interest. At the date the plan began, the City granted monetary credtb for service rendered before the plan began of a theoretical amount equal to two times what woulJ have been contributed by the employee. with interest, prior to establishment of the plan. Monctar} credits for service since the plan began are 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. When added to the employee's accumulated contributions and the monetary credits for service since the plan began. the updated service credit would be the toial monetary credits and employee comributions 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 arc one ~car 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. Members can retire at ages 60 ~nd 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 alter 10 years. but he must leave his accumulated contributions in the plan. If a member \\ithdraws 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 amonizes the unfunded actuarial liability over the remainder of the plan's 25-year amonization period. When the City periodically adopts updated service credits and increases its annuities in effect, the increased unfunded actuarialliabilit~ i;:. to he amonized over a new 25-year period. Currently. the unfunded actuarial cost method is used f, . d::tt:rmining the City contribution rate. Contributions are CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE Ill. DETAIL' NOTES ON ALL FUNDS AND ACCOUNT GROUPS E. RETIREMENT PLANS (CONTINUED) 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 Jag 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 1994 was $.5.5,813, 743 and the City's contributions were based on a payroll of $42.838.841. Both the City and the covered employees made the required contributions, amounting to $4,454,452 (10.34% of covered payroll for the months in calendar year 1993, 7.32% normal cost plus 3.02% to amortize the unfunded actuarial liability, and 10.42"/o for the months in calendar year 1994, 7.39% normal cost plus 3.03% to amortize the unfunded actuarial liability) for the City and $2,570,333 (6%) for the employees. Of the $4,454.452 employer contributions, approximately $3,1.57,605 was allocated to normal cost while approximately $1.296.847 was allocated to amortize the unfunded actuarial liability. There were no related·pany transactions. 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. GASB Statement No. 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 Statement No. S 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 pan of the annual actuarial valuation as of December 3 I. 1993. 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 docs 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 118.0%ofbook value as of December 31,1993. Pension Benefit Ob!ieatjon Annuitants currently receiving benefits Terminated employees Current employees Accumulated employee contributions including allocated invested earnings Employer-financed vested Employer-financed nonvested Total Pension Benefit Obligation Less: Net Assets Available for Benefits, at Book Value Unfunded Pension Benefit Obligation S II, 702,806 7,023,225 34,645.764 60,886.336 7.235.648 121,493,779 25.946.540 $ 25.547.239 The book value of assets is the amortized cost for bonds and original cost for short·term securities and stocks. The actuarial assumptions used to compute the actuiuiaUy determined City contribution rate are the same as those used to compute·the pension benefit 'obligation. 43 CITY OF LUBBOCK, TEXAS Notes to Financial Statements "September 30,1994 NOTE Ill. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS E. RETIREMENT PLANS iCONTJNUEDl As of D~~:~:mb~:t 31 1984 198.5 1986 1987 1988 1989 1990 1991 1992 1993 Year Ended De~:embu 31 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 TEXAS MUNICIPAL RETIREMENT SYSTEM REQUIRED SUPPLEMENTAL DISCLOSURE I 0 YEAR HISTORICAL INFORMA 'tiON ANALYSIS OF FUNDING PROGRESS Net Assets Pension Available for Benefit Percentage B~:odH~ · Qblie:ati!JD £n.nJk.d $ 32.135.3.58 $ 47,609,76.5 67..5% 36.379,281 .52.393,316 69.4 41.9.54,383 .58,271,284 72.0 47.678,64.5 67.617,486 70.5 .52,910,917 68,298.980 77.5 .59,340,35.5 76,642.544 77.4 67.453,028 88,427,433 76.3 74,489,168 93,745,652 79.5 82,930.899 I 02,4 79,816 80.9 9.5,946,540 121,493,779 78.9 REVENUES BY SOURCE Employee Employer CQntrjbutions Contrjbutjons $ 1,425,568 $ 2.044.264 1,6 71,036 2,3 72,632 1,561.660 2,462,401 1,587.884 2,47.5,870 1,630,.536 2,704,942 1, 732,448 2,965,9.5 I 1,873,498 3,481,188 2,374,887 4,469,819 2,498 . .558 4,661.638 2.6.59,469 4,579,094 Investment lnc!}m!: $ 3,033.240 3.519.432 4,075,372 4,610,402 5,217,750 5,819,041 6,545,398 7,349.501 7,959,300 8,706,022 EXPENSES BY TYPE Transfers Current Service Unfunded Pension Benefit Qblie:ali!lo $1.5.474,407 16.014,03.5 16.316,901 19.938,84 I 1.5.388,063 17,302,189 20.974,405 19.256,484 19.548,917 25.547.239 Dtbu $ - 6.393 (4.50) 32,496 219,632 1.090 494 2,806,169 Year Ended Annuity Administrative D~:Cember31 Reserve Fund Expenses Rdunds 1984 $ 807,921 $ 552.408 $ 468,690 1985 1,655,712 620,760. 477,873 1986 1,959,906 705.430 438,145 1987 1,614,136 776,861 556,240 1988 2,994,355 834,648 541.990 1989 2,656:780 904,570 527,309 1990 2,500,012 '985,269 523,057 1991 5,508,879 U14,763 535,519 1992 4,807.263 1.252,958 618.034 1993 3,880,116 1.329,650 5::.347 44 Unfunded Annual PBO as a% 'Covered of Covered f.u.W! f.amill $28,.5 11.360 5-U~o 33.420.720 47.9 31.233.200 5:!.:! 31.757,680 62.8 32.610,720 47.:! 34,648.960 49.9 37.469,960 55 9 39,581.450 48.6 41,642.633 46.9 44.324,483 57.6 Employer Contribution as a "/o of Covered Iatl!! f.iu:nill $ 6.503,072 7.2% 7.569,493 7.1 8,098,983 7.9 8.674,156 7.8 9.585,724 8.3 10,517,440 8.6 12.119.716 9.3 14,195,297 11.3 15,119,990 11.2 18,750,754 10.3 Iota! $ 1,829,019 2,754,345 3,103,481 2,947,237 4,370,993 4,088.659 4,008.338 7,159,161 6,678,255 5,735,113 ,,..... ,-, CITY OF LUBBOCK, TEXAS Notes to.Finantial Statements September 30, 1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS E. RETIREMENT PLANS CCONTINUED) FIREMEN'S RELIEF AND RETIREMENT FUND Plan Description The Board of Trustees of the Lubbock Firemen's Relief and Retirement Fund is the administrator of a single-employer defined benefit pension plan maintained for members of the City of Lubbock Fire Depanment under provisions of applicable law of the State of Texas. All firefighters in the Lubbock Fire Depanmenl are covered by the Lubbock Firemen's Relief and Retirement Fund. The table below summarizes the membership of the fund at December 31. 1993. I . Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them 2. Current employees a. Vested b. Nonvested Total December 31, l22.l 175 161 81 The Lubbock Firemen's Relief and Retirement Fund provides service retirement, death. disability and withdrawal benefits. These benefits become fully vested after 20 years of credited service. Employees may retire at age 50 with 20 years of service. An early service retirement benefit is provided for employees who terminate employment with 20 or more years of service. A panially vested benefit is provided for employees who terminate employment with at least 10 but less than 20 years of service. The monthly benefit at normal retirement, payable in a Joint and 213 to Spouse form of annuity, is equal to 68.75% of the final 48-month average salary plus $94.00 per month for each year of service in excess of 20 years. This plan of benefits. which is described below as the "New . Plan ... became effective December 30, 1993. It was adopted as a resultof the. December 31. 1992 valuation. Prior to December 20. 1993, th~ "Old Plan'' was in effect. Under that plan the normal service retirement benefit was equal to 66.75% of final 48-month average salal)' plus S82.00 per month for each year of service in excess of 20 years. Under that plan, Lubbock firefighters were required to contribute 11.00% of their pay to the fund. Lubbock firefighters are also required to contribute 11.00% of their pay to the fund .under the New Plan. At the present time, the City's contributions are based on a formula which causes th.e City's contribution rate to fluctuate from year to year. Under the Old Plan the City was required to make contributions which would average not less than 13.500/o of payroll over the 28-year period beginning Janual)' I, 1991. Under the New Plan the City is required to make contributions which will average not less than 14.00% of payroll over the 28-year period beginning Janual)' I. 1993. The benefit and contribution provisions of this plan are authorized by the Te"as Local Firefighters Retirement Act (TELFRA). Summary of Signilicant Accounting Policies and Plan.Asset Matters 1. Basis' of Accocmling The Lubbock Firemen's Relief and Retirement Fund financial statements for years prior to l990, are prepared using the cash basis of accounting.. Subsequent years financial statements are prepared on the accrual basis of account in~?. !he fund's fiscal year is the calendar year. Employee and employer contributions are recogniz·:·' ~s revc:nuc:s in the period in which thc:y are earned by the: fund and expenses are recorded when in~Jnc:d. 45 CITY OF LUBBOCK, TEXAS Notes to Fimindal Statements September 30, 1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS E. RETIREMENT PLANS (CONTINUED> 2. Method Used to Value Investments The Lubbock Firemen's Relief and· Retirement Fund's investments are reported at original cost Discount accretion and premium amortization are record.:d as adjustments to investment income over the life of the security. Investment income is recognized as it is earned. Gains and losses on sales of assets are recognized on the transaction date. Funding Status and Progress The amount shown as "Pension Benefit Obligation" is a standardized disclosure measure of the present value of pension benefits estimated to be payable in the future as a result of employee s.:n 1cc to date. These benefits have been adjusted for the effects of projected salary increases. The .. pension benefit obligation" is the actuarial present value of credited projected benefits and is intended to help users assess the Lubbock Firemen's Relief and Retirement Fund's funding status on a gomg-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due. and mah comparisons among public employee retirement systems. This measure is independent of the actuarial funding method used to perform the actuarial valuation. The pension benefit obligation as of December 3 I, 1992 is based on the actuarial valuation as of December 31, 1992, and the plan in effect on that date. As a result of that valuation a nt:\\ plan of benefits has been adopted effective December 3 I, 1993. Significant actuarial assumptions used include (a) a rate of return on the investment of present and future assets equal to 8.00% per yc:ar compounded annually. {b) projected salary increases of 5.00% per year compounded annually. attributable to inflation, (c) additional projected salary increases which averages approximately 1.00% per year, attributable to promotion and longevity and (d) no postretirement benefit increases. Pension Benefit Ob!ieatjon I. Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits 2. Current employees a. Accumulated employee contributions b. Employer-financed vested c. Employer-financed nonvested 3. Total Pension Benefit Obligation 4. Less net assets available for benefits, at book value (market value at December 31, 1993 is $58,361,528). S. Unfunded Pension Benefit Obligation December 31. 1993 $30,771,954 8,426,962 18.841,299 1,004.308 59,044,523 44.037.838 $15,006 685 The pension benefit obligation as of December 31, 1993 is based on the New Plan. This plan was in effect on that date and was determined as part of an actuarial update as of that date. The actuarial assumptions used are the same as those listed above for the December 31, 1992 valuation. As a result of the adoption of the New Plan, the pension benefit ooligation as of December 31, 1993 increased $2,008,996 over what it would have been under the Old Plan. CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 39, 1~94 NOTE Ill. DETAIL NOrES ON ALL FUNDS AND ACCOUNT GROUPS . . E. RETIREMENT PLANS (CONTINUED) Contributions Required and Contributions Made For the plan in effect December 31, 1992 the funding policy of the Lubbock Firemen's Relief and Retirement Fund required contributions equal to 11.000/o of pay by the firemen and contributions which would average not less than 13.SOO/o of payroll by the City over the 28-year period beginning January 1, 1991. The New Plan adopted as a result of the December 31, 1992 valuation requires firemen contributions of 11.000/o of pay and City contributions which will average not less than 14.00% of payroll over the 28-year period beginning January 1, 1993. For the 1993 calendar year, contributions made were equal to 11.00.% of pay by the firemen and 14.4974% of payroll by the City of Lubbock. While the contribution requirements are not actuarially determined, state law requires that each plan of benefits adopted by the fund must be approved by an eligible actuary. The actuary certifies that the contribution commitment by the firefighters and the City provides an adequate financing arrangement Using the entry age actuarial cost method, the plan's normal cost is determined as a percentage of payroll .. The excess of the total contribution rate over the normal cost rate is used to amortize the plan's unfunded actuarial accrued liability, and the number of years needed to amortize the plan's unfunded actuarial accrued liability is determined using a level percentage of payroll method. For the Old Plan in effect on December 31, 1992, the normal cost is 19.16% of pay and the amortization period is approximately 13 years. For the New Plan adopted in December 1993 the normal cost is 20.33% of pay and the amortization period is approximately 27 years based on a December 31, 1992 valuation date. For the 1992 calendar year, total contributions of $2,222,803 were required and paid into the fund. For the 1993 calendar year, total contributions of S2,3S8,92S were required and paid into the fund. Ten years of the standardized measure of the pension obligation is unavailable; the information will be presented only for as mariy years as the measure is available. Further details concerning the financial position of the Fund and the latest actuarial valuation are available .Oy contacting the Board of Trustees, Firemen's Relief and Retirement Fund, City of Lubbock, P.O. Box 2000, Lubbock, Texas 794S7. 4i 'CITY OF •LUBBOCK:; TEXAS Notes to F'inandal Statements -· Septembet'30, 1994 NOTE III. DETAIL·NOTES'ON ALL FUNDS AND ACCO'UNT GROUPS E. RETIREMENT PLANS (CONTINUED) • •• ••• •••• FIREMEN'S RELIEF AND RETIREMENT FUND ANALYSIS OF FUNDING PROGRESS (4) (6) Unfunded Unfunded Pension (I) (2) (3) Pension (5) Benefit Obligation Net Assets Pension Percentage Benefit Annual as a 0/o Fiscal Available Benefit Funded Obligaiton Covered ofCovered Payroll fiar. For Benefits • Obli~atjon Ul.l..ill ru.:.m flu:r.2!! 14> /C5) X 100% 1987 $42,780,282 $47,785,715 89.5% $5,005,433 $6.524.303 1988 28,739,352 38,112,853 75.4 9,373,501 6.770,331 1989** 32.209,973 42,013,008 76.7 9,803,035 7,338,261 1990 . 34,663,461 45,378,384 76.4 10,714,923 7.737,659 1991* .. 38,071.363 50,923,389 74.8 12.852,026 8,195.215 1992 40,993,483 53,804,511 76.2 12.811,028 8,484.196 1993** .. 44,037.838 59,044,523 74.6 15,006.685 9.250.527 At cost on December 31 of that year . In October 1989. the plan was amended to increase standard retirement benefits from 64.5% to 65% of average salary and to increase additional seniority benefits from $66 to $74 for each year of service in excess of 20 years. The amendment increased the pension benefit obligation as of December 31, 1989 by $1,412,516. In December, 1991 the plan was amended to increase standard retirement benefits from · 65.0% to 66.75% of average salary and to increase additional seniority benefits from $74.00 to $82.00 for each year of service in excess of20 years. The amendment increased the pension benefit obligation as of December 31, 1991 by $2,361,716. In December, 1993 the plan was amended to increase standard retirement benefits from 66.75% to 68.75% of average salary and to increase additional seniority benefits from $82.00 to $94.00 for each year of service in excess of20 years. The amendment increased the pension benefit obligation as of December 31, 1993 by $2.008.996. 18 76.7% 138.1 133.6 138.5 156.8 151.0 162.2 ,... ,... CITYOFLUBBOCK, TEXAS . . . Notes to Financial Statements September 30, 1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS E. RETIREMENT PLANS CCONTINtlEP) REVENUES BY SOURCE Year Ended Employee Employer Investment Dectmber31 Contribution • Contrjbutjon* Income* ....otm Total 1984 s 690,410 s 836,619 $2,447,204 $ 1,891 $3,976.124 1985 720,016 889,620 3,048,840 5 4,658,481 1986 766,468 942,620 2,778,953 2.033 4,490,074 1987 748,051 921,523 2,723,038. 35,411 4,428.023 1988 744,736 936,880 2,897,527 4,579.143 1989 807,209 1,036,997 4,008,844 7,982 5,861,032 1990 851,143 1,152,05 I 2,642,338 4.645.532 1991 935,202 1,294,782 2.753,785 4,983.769 1992 949,968 1,309,442 2.538,095 4,797,505 1993 986,633 1.300.725 2,383,302 4,670.660 EXPENSES BY TYPE Year Ended Administrative Pec:ember3J lkndit~· EXPfD~!:I* Re[uod~ D!tal 1984 s 945,199 $90,131 $34,039 $1,069.369 1985 1,046.806 248,499 1,295,305 1986 1.301.712 470,606 49,358 1,821,676 1987 1.722.194 147,148 40,161 1.909,503 1988 2,040,693 150.934 15,081 2,206.708 1989 2,111,733 278,679 2.390,412 . 1990 2.448.809 118.295 35,122 2.602.226 1991 2.522.540 154.683 2,677,223 1992 2,755,358 211.368 2,966,726 1993 2.845,747 290,511 3,136,258 • Amounts prior to 1990 are shown on the cash basis of accounting. In 1990, the fund changed its basis of accounting to the accrual basis which is in accordance with GAAP. PENSION BENEFIT OBLIGA TION(PBO) AS OF DECEMBER 31, 1993 Pension Benefit Oblization Texas Municipal Retirement System Firemen's Retirement Fund Annuitants currently receiving benefits $ p,702,806 7,023,225 $30,771,954 $ 42,474,760 Terminated Employees Current Employees · Accumulated Employee contributions including allocated investment earnings Employer-financed veSted · · · 34,645,764 60,886,336 8,426,962 18,841,299 7,023,225 43,072,726 79,727,635 Employer Contribution as a "le of CO\'ered an roll 12.Mo 13.0 13.2 14.1 13.8 14.1 15.1 15.6 15.2 14.5 I I I . I CITY OF LUBBOCK, 'TEXAS Notes to Financial Statements September 30~ ·1994 . . . NOTE III. DETAIL NOTES:ON ALL FUNDS ANDACCOUNT GROUPS E. RETIREMENT PLANS <CONTINUED) Pension Benefit Oblintion Employee-financed nonvested Total PBO Less: Net Assets Available for benefits (TMRS: book value, FRRF: cost) Unfunded PBO E. DEFERRED COMPENSATION Texas Municipal Retirement Syscem $ 7.235 648 121,493,779 95.946.540 $ 25.547.239 Firemen's Retirement fund Total $ I 004.308 S 8.139.9'>6 . 59.044,523 180.538.30:! 44 037.838 I W. Q8j. 178 $ 15 006.685 $ 40 553Q24 The City offers its employees' a deferred compensation plan created in accordance "ith Internal Revenue Code Section 457. The plan, available to all City employees, permits thl!m to defer a portion of their salary until future years. The deferred compensation is not available to emplo~ ces until termination, retirement, death or unforeseeable emergency. All amounts of compensation deferred under th1= plan. all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made 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. In management's opinion. the City has no liability for losses under the plan but does have the duty of due care that would be required ofan ordinary prudent investor. The City believes that it is unlike!~ that it will use the assets to satisfy the claims of general creditors in the future. All assets of the plan are held by an independent administrator and valued at .market. The deferred compensation plan is included in the City's financial statements as an agency fund. G. SURFACE WATER SUPPLY Canadian River Munic:ipal Water Authority The Canadian River Municipal Water Authority (CRMW A) is a Conservation and Reclamation District established by the Texas Legislature to construct a dam, water reservoir and aqueduct system for the purpose of supplying water to surrounding cities. The District was created in 195 3 and comprises eleven cities. including the City. The budget, financing and operations of the District are governed by a Board of Directors selected by the ,governing bodies of each of the member cities. each city being entitled to one or two members dependent upon population. At September 30. 1994 the Board was comprised of 18 members, two of which represented the City of Lubbock. The City contracted with the CRMWA to reimburse it for a portion of the cost of the Canadian River Dam and aqueduct system in exchange for surface water. Accordingly, such payments are made solely out of water system revenues and are not general obligations of the City. The City's pro rata share of annual fixed and variable operating and reserve assessments is recorded .as an expense of obtaining surface water. · The long-term debt is owed to the U.S. Bure~u of Reclamation for the cost of construction of the facility, which was completed in 1969. The City's allocation of project cost ,\·as $32,905,862. During the year ended September 30, 1994, principal payments in the amount of $705,927 reduced the amount outstanding due to the authority .•t September 30, 1994 to $23,823.531, due in annual installments of$1,351,543 including intl;'r.:-;: of2.632% until the year 2018. The above cost for the 5': CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE III. DETAIL NOTES.ON ALL FUNDS AND ACCOUNT GROUPS G. SURFACE WATER SUPPLY <CONIINJJED.)' rights are being amonized over 85 years. The cost and debt are recorded in the Water Enterprise Fund. GAAP requires accounting for debt service as a reduction in construction obligation payabLe and related interest expense. However, the contract between the City and CRMW A requires the classification of payments to CRMWA to be reflected as operating expenses of the Water Fund. Accordingly, the adjustment required to 'conven GAAP expenses to the contractual agreement results in an adjustment to increase operating expenses for principal payments in the amount of $705.927. interest in the amount of$645.615 and reduce amonization expense by $387,128. Brazos River Authority-Lake Alan Henry During 1989, the City entered into an agreement with the Brazos River Authority (BRA) for the construction, maintenance and operation of the facilities .known as Lake Alan Henry. The BRA. which is authorized by the State of Texas to provide for the conservation and development of surface \\atcrs in the Brazos River Basin, has issued bonds for the construction of the dam and lake facilities on the South Fork of the Double Mountains Fork of the Brazos River. Total costs are expected to exceed $120 million. The agreement obligates the City .to provide revenues to BRA in amounts sufficient to cover all maintl!n:mce and operating costs. management fees to the authority, as well as funds sufficient to pay all capital costs associated with construction. The City wilt receive surface water for the payments to BRA. Approximately S 191,697 was paid to the BRA for maintenance and operating costs in .fiscal year 1994. The BRA issued $16.970.000 in revenue bonds in 1989 and $39,685,000 in revenue bonds in 1991. Construction of the dam and lake facilities began in 1989. The City is obligated to provide suffiCient funds over the next 30 years to service the debt requirement of these bonds. The financial activity along with the related obligation is accounted for in the·Water Enterprise Fund. At September 30, 1994. cenain mineral rights associated with land owned by individuals located in the Lake Alan Henry site were not acquired by the City. The additional amount·needed lo pun;hase such mineral rights is yet to be determined. H. OTHER ENTERPRISE FUND ACTIVITIES Enterprise Fund Transfers Transfers to the General Fund from the Electric, Water and Sewer Enterprise Funds. in the opinion of management. exceed the amount that would have been paid to the City if these funds were private sector companies engaged in .the same enterprises. In addition to the amount transferred in excess of private sector taxes. there iS also 3n amount iransferred to compensate the General. FLmd' for shared services and .indirect cost. 'I' • f CITY.OF LUBBOCK, TEXAS Notes to. Financial Statements September 30, 19?4 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS •· SEGMENT INFORMATION· ENTERPRISE FUNDS The City maintains seven enterprise funds which provide electric. water, sewer, sanitation. airport. golf, and stormwater drainage. Segment information for the year ended September 30, 1994, was as follows: Solid El~ctric Wat~r Srwtr Waslr Airporl Golf Stormwatrr ..Eimd. fluid ..Eimd. fluid fluid ..Eimd. Eurul Operating Revenues s 54,529,457 s 27.979,503 $13,037,157 S I 0, 772.887 s 4,134,455 s 470,719 s Depreciation Expense 4.062,156 2.292.385 1,798.452 1;104.235 1,690,60i 102,190 7,55' Operating income (loss) 8,742,021 15,020,563 6,296,214 3,482,993 (819.500) (498,783) (161.174) Operating Transfers-in (out) (6,21 0,203) (3,876,492) 35,766 (618.859) (469,547) (100,304) 1.796,499 Net Income (loss) 3,245,116 6,614,354 4,789,654 2,981.127 ( 1.211.573) (600.400) 1,625.348 Current capital comribinions 188,261 375,297 568,453 185,287 1.328.887 (3,768) Property, plant and Eqtupment: Additions: 10,580,763 15,902,482 20,269,064 8,080,808 4,751,993 263.127 167,92~ Deletions· net: . 4,527;817 3.076,112 2.411.552 2,499,243 2.226,271 189,371 41.88(> Net Working Capital 9,800.281 (1,3S2.4l2) (869,968) 294,572 50.878 (1,418,701) 16,160 Allowance for doubtful accounts 392,468 121,530 63,938 83.221 9,930 0 Total assets 132.252,027 !98,469,405 108,971.418 ts.:m.341 50.574,836 1,074.749 1,635,920 Bonds and other long· tmn liabilities payable from operating revenues 29,24S,078 102.598,304 58,461,794 10,080.600 6.)93.011 541.786 2.731 Total Equity s 95,254,082 s 88,345,662 $44,630,786 s 6.23!,235 $43,502.122 s (911.731) $!.625,348 J. LEASE At!BEEMEJSIS The City has entered into lease agreements with independent third parties for the purpose of acquiring certain properties and equipment. These lease agreements qualify as capital leases for accounting purposes, and therefore, have been recorded as purchases at the present value of the future minimum lease payments as of the date of their inception. Obligations under capital leases at September 30. 1994 were as follows: Balance Maturitl: Dale~ lotcml Bl!lc Qu15hmdilu: Enterprise Funds: Scraper 1996 7.50% s 62lll Total Enterprise Funds 62.lll Internal Service Telephone Equipment 1995 8.44% 21.340 Computer and Software 1998 5.06% l.l22.QQ4 Total Internal Service Funds l.l48,l44 Total s 1.417.27~ ('I Total Entrrpris~ ..!:J.Irull s 110.9~4.17~ 11.05~57(> >~.062 .. U(l (9.44J.U0) 17,444.116 2.642.4 t' 60.016.159 14.912.252 6.520.790 ()71,087 511.190.691• 207.3~3.313 s 278.677.50~ !"". CI:fY OF LUBBO(:K, TEXAS Notes to Financial St~tements · September 30, 1994 NOTE Ill. DEl' AIL NOTES ON ALL FUNDS AND ACCOUNT.GROUPS ; • ..c. J. LEASE AGREEMENTS <CONTINUED) Future minimum lease payments are as follows at September 30, 1994: Fiscal Year Ended September 30 1995 1996 1997 1998 Total Minimum Lease Payments ·Less: ·.Interest :Present Value of Future Minimum lease Pay'ments $ 461,810 378,768 373,194 342.094 1,555,866 138 191 $1.4!7.675 The following is a summary of assets acquired .under the' abov~ capital leases at September 30. 1994: Land Betterments Equipment Total ·''Less:· Accumulated ' Amortization Total ' $ 278,961 1.915.108 '' '2,194,069 . (640.516) $1.553.553 Amortizatioh expense ofl' assets under capital leases is included in depreci~tion expense. The City ~ntcrs into monthly leases for various items of equipment for purposes of evaluating a future purchase.'· Accordingly,'ar September 30, 1994, the Ciiy had no material initial or remaining non- cancelable operating leases \vith terms exceeding one year. Rent expense for 1994 was $380,450 . .., :: _\-~ ' . " ; : Civic Lubbock, Inc. leases certain space in a retail shopping area in Lubbock, Texas for the purpose of tic~et !>ales and 50licitlllion of ~ivic and promotional events. Payments under this lease agreement are made monthly and the lease expires in March, 1995. Scheduled lease payments for the year ending September 30, 1995 are $4,158. Total rent expense for the year ended September 30, 1994 wa:s $2·9,723;'· • . ·' ··· ·• · · · · . ;,. '" Citibus 'contracted \Yith Goodyear Tire ana Rtibber Co:(''Goodyear~) to provide tires through August · 1994. 'Cilibus paid a' nat rate per mile for the first 42,000 miles and one-half that rate for excess mileage.' The flat' rate was adjusted' each· six months based on Goodyear's manufacturing costs. The total amount pa:id for 1994 was $58;338., In September t~94, Citib~s entered into a six month lease to provide tires under substantially the same terms. 53 ., ·, CITYbFt.UBBOCK,· TEXAS Nt>t~s: to FinanCial Statements 2 .;:_~ ! ·'September 30, 1994 .. ·NOTE 111. i>'ETAIL NOTES ·oN ALL FUNDS AND Accou~T GRovrs K. LONG· TERM DEBT GENERAL OBLIGATION BONDS AND CERTIFICATES OF OBLIGATION: Interest _B.alt 7.86% 7.65 7.35 7.46 7.63 7.11 6.84 6.83 6.64, 6.67 6.29 9.01 6.69 5.75 5.50 5 . .50 5.37 3.97 5.39 5.39. 5.20 5.14 4.30 Total • •• ··-· •••• •••••• Balancr Issue Final Amount Outstanding ___Date Maturity Date Issued 9-30-94 11-15-85 2·15-03 560.614.070 $5.324.070 •• 4-15-87 2·15-07 5,960,000 1,800.000 5-15-88 2-15-03 750,000 205.000 5-15-88 2-15-08 6,560,000 1,310.000 8-15-88 2-15-07 5.000.000 1,225.000 8-15-88 2-15-00. 2,774.682 1.239.88..1 ••• 8-15-89 2-15-09 3.800.000 2.850.000 8-15-89 2-15-09 7.445.000 5.595.000 5-15-91 . 2-15-11 16.120,000 13,705,000 5-15-91 2-15-11 4.030.000 3,430.000 5-15-91 2-15-01 1,145.000 800,000 5·15-91 2·15-11 1.085.000 920.000 5-15-91 2-15-11 2,000.000 1.700.000 4-11-92 2·15-03 24,035.000 22.670,000 •••• 1-14-92 2-15-12 1.655,000 1,495.000 5-15·92 2-15-14 34.520.000 34.520.000 8-15-92 2·15-12 7,565,000 2,695,000 5·1-93 2·15·15 14,425,000 14,425,000 10-1-93 2-15-14 3.625.000 3,625,000 10-1-93 2-15-14 2.550,000 2,550,000 10-1-93 2-15-14 1.470,000 1.470.000 10·1-93 2-15-14 19.215,000 19.215,000 12·1·93 2-15·08 9.865 000 9 865.000 ••••• s:m~.2aa.zs2 Sl S2 633 254* Includes S I 03,465,477 used to finance enterprise activities . Refunding Bonds issued to replace bonds issued 1966-1982 and 1984 . Refunding Bonds issued to replace Certificates of Obligation issued in 1986. Balance outstanding includes $59,798 discount on bonds sold. Refunding Bonds issued to replace bonds issued 1983 and 1985 . Refunding Bonds issued for a partial refunding of bonds isssued 1987 and 1988 . - ,.., CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS K. LONG-TERM DEBT (CONYINUEDl ELECTRIC REVENUE BONDS: Balance 'Final Amount Outstanding Interest Rate Issue Date Maturity Date lmwl ~ 4.SO to 7.00% 3-1S-7S 4·1.5·9.5 s 6,400,000 s 320,000 5.00 to 7 . .50 9·15·7S 4-lS-96 2,000,000 200,000 6.25 4-IS-76 4-15-97 4,400,000 674,833 • 7.00 to 10.00 4-1.5-87 4-1.5.07 7,000,000 4,SSO,OOO 7.00 to 10.00 .5-1.5-88 4-1.5-08 17,000,000 11,900,000 6.2.5 to 9.20 S-1 S-91 4-15-11 7,500,000 6,375,000 5.00 to 6.50 7-15·91 4·15·02 4,424,976 3,319,976 •• 5.00 to 6.60 7-15-91 4-15-04 ~.222.282 !1332.282 ••• Total S S3.124,26S 131.612.128 • These bonds were issued at a premium to yield an effective rate of 5.58%. Balance outstanding includes $14,833 premium on bonds sold. •• ••• Refunding bonds issued for a partial refunding of the bonds issued May 15, 1983 . Refunding bonds issued for a partial refunding of the bonds issued April15, 1984 . WATER REVENUE BONDS: Final Amount Interest Rate Issue Date Maturity Date Jwwl 6.9 to 9.0 % 10-15-89 8-IS-19 $16,970,000 6.8 to 8.8 01-15-91 8-15-21 32 ti8~.noo Total SS6.6SS.OOQ • Balance outstanding includes $211.064 discount on bonds sold. .. Balance outstanding includes $522.207 discount on bonds sold. AIRPORT REVENUE BONDS: Interest Rate 4 . .5 to 5.5 Total Total Bonds Issue Date 9-15-78 Final Maturity Date 9-IS-98 55 Amount ln!wt $ 1130000 $ 1 73QOOQ $348,318,111 Balance Outstanding 09-30-94 $15,803,936 • 37.167 723 •• $53 . .511.722 Balance Outstanding 9-30-94 $ 360.000 s 360000 $238,245.4!U CITY OF LUBBOCK, TEXAS N~tes to.Financial Statements September 30, 1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS K. LONG· TERM DEBT <CONTINUED) The annual requirements to amortize all outstanding debt of the City as ofSeptember 30, 1994, including interest payments of $153,515,702, are as follows: As of September 30 1995 1996 1997 1998 1~99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total General Obligation Bil.n.ll.5. $ 19,632.207 19.634,354 18,782,037 17,829,592 16,929,014 15,755,584 14,403,349 12,836,185 11,465,247 9,552,816 9,182,662 8,815,042 8,442,053 7,448,047 6.866,081 6,022,745 5,766,263 4,330.631 4,116,769 3.934,006 741,313 $222 485 997 Revenue Bil.n.ll.5. $ 10,513,403 9,885,987 9,491,693 9,000,367 8,664,220 8,415,396 8,185,400 7,937,005 7,351,718 7,186,342 6.569,042 6,439,985 6,337,463 5,891,930 . 4,961,842 4,942,200 4,932,808 4,537,265 4,552,240 4.574,915 4,593,920 4,608,575 4,633,190 4,646,060 4,671,840 3,228,480 3 236 040 $169.989 326 .. lS.lU.C1 $ 2.231 $ 461,810 $ 378,768 373,194 342.094 30.609,651 29,899.109 28.646.924 27,172.053 25,593.234 24,170,980 22,588,749 20.773,190 18.816.965 16.739,158 15.751.704 15,255.027 14,779.516 . 13.339,977 11.827,923 10,964,945 10.699,071 8.867.896 8,669,009 8,508,921 5,335.233 4.608,575 4,633,190 4,646,060 4,671.840 3,228.480 3.236.040 $ 2.231 $ 1.555.866 $394 033.420 • • This schedule does not include the effect of premiums or discounts. The City has complied in all material respects with the bond covenants as outlined in each issue's indenture. i6 CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30,.1994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS K. LONG-TERM DEBT fCONIINUED) Long-term debt transactions for governmental and proprietary funds for the year ended September 30, 1994 are as follows: Debt Payable Debt Payable Governmental: 10+93 Additions Deletions 9-30-94 Tax-Supported Obligation Bonds Notes Compensated Absences Total Governmental Proprietary: Self-Supported Obligation Bonds Revenue Bonds Notes Leases Compensated Absences Total Proprietary Total City-Wide: Obligation Bonds Revenue Bonds Notes Leases Compensated Absences Total City-Wide s 39,074,525 2,830,223 2 ~~2.330 5 ~M1.4.DZII s 98,284,227 90,023,611 74,184 2,7!0,064 2.~62.090 $193,654,126 $!37,358,752 90,023,611 2,904,407 2,710,064 IO.JJU2Q UUI2112S~ s 20,778,530 s 1111.1102 $ 20.112Z.ll2 s s 15,946,470 s 12~.383 $ 16.QZ0.853 s s 36,725,000 s 2~3.1 ~~~ . 5 36,968.18S s 10,624,780 s 49,228.275 2,828.081 2.142 22.123 1.fl6~ 232 u ~z~.o~~ s ~6.1126.3~!1 10,765,220 s 103.465,477 4,412,084 85,611.527 74,!84 1,292,389 1.417,675 21.1211 2 ~112 3~~ 16 566 821 $ 123 158.2011 21,390,000 s I 52,693.752 4,412,084 85,611.527 2,828,081 76.326 1,292,389 1,417.675 IJ2.J21 10.2~~.211~ lQ,Q4U2S · S 2SQ.QS~.~~ The total long-term debt is reconciled to the total annual requirements to amortize long-term debt as follows: Long-Term Debt Interest Total amount of debt Add: Discounts Less: Premiums Compensated Absences Total future debt requirements $250,054,564 )53,515,702 733,271 . (14,833) ()0.255.284) $403,570,266 (2 536.846) $394.033 420 Long-term debt obligations of Civic Lubbock, Inc. at September 30, J 994 are summarized as follows: Note Payable to The Plains National Bank of West Texas, dated March I. 1990 in the original amount of$130,000, payable on de- mand, or if no demand is made, in monthly installments of $2,662, including interest at 8%, maturing April I, 1995, collateralized by· Select-A·Seat equipment ' Less current maturities Long-term debt less current maturities 57 s 15,575 (IS SZ5) $ 0 CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE III..DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS L. ADVANCED DEEEASEMENT In prior years, the City deleased certain Electric Light and Power System Revenue Bonds. A pun ion of the proceeds of the Series 1991 A Bonds were used to purchase United States T reasur) Secunti~>-· State and Local Government Series (the "Series 1991A Restricted Acquired Obligations") which were placed in an irrevocable trust to be used solely to refund that portion of the City's Electric Light and Power System Refunding Re\·enue Bonds, Series 1983 for payments due April 1s: 1994 through April 15, 2002. Accordingly, the trust account assets and the liability for the def~ased bonds arc not included in the City's financial statements. On September 30, 1994, $3,320,000 of bonds outstandmg are considered defeased. A portion of the proceeds oi the Series 1991 B Bonds were used to purchase United States Treasury Securities--State and Local Government Series (the "Series 1991B Restricted Acquired Obligations"). which were placed in an irrevocable trust along with an initial cash deposit to be used solely to refund that portion of the City's Electric Light and Power System Revenue Bonds, Series 1984 for payments due April 15, 1995 through April 15, 2004. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. On September 30, !99-l. $4,340,000 of bonds outstanding are considered defeased. In fiscal year 1992, the City defeased certain General Obligation Bonds. A portion of the proceeds of the Series 1992 Refunding Bonds was used to purchase United States Treasury Securitic~·-Statc and Local Government Series which were placed in an irrevocable trust .to be used solely to refund that portion of the Series 1983 General Obligation Bonds payments due February 15, 1994 through February 15, 2003 and the portion of the Series 1985 General Obligation Refunding Bonds payments due February 15, 1996 through February 15, 1999. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. On September 30. 1994, $22,670,000 of bonds outstanding are considered defeased. On January 20, 1994, the City of Lubbock issued $9,865,000 General Obligation Refunding Bonds, dated December I, 1993. These Bonds were used to partially advance refund the following bond issues: I. $2,100,000 of Series 1987 General Obligation Bonds for the payments due February 15, 1998 through February 15, 2004. 2. $3,300,000 of Series 1988 General Obligation Bonds for the payments due February 15', 1999 through February 15, 2004. 3. $350,000 of Series 1988 Combination Tax and Golf Course Revenue Certification Obligation for the payments due February I 5, 1999 through February 15, 2003. 4. $3,025,000 of Series 1988 Combination Tax and Sewer System Subordinate Lein Revenue Certificates of Obligation for the payments due February I 5, 1999 through February 15. 2007. A portion of the proceeds the Series 1993 Refunding Bonds was used to purchase United States Treasury Securities--State and Local Government Series which were placed in an irrevocable trust to be used solely to partially refund the listed above bond issues. As a result, these bonds are considered defeased, and the liability of$8,775,000 has been removed from the books of the City of Lubbock. As a result of the refunding, an extraordinary loss of $689,160 was recorded in the Enterprise Funds. 58 ,... CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 NOTE III. D~T AIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS L. ADVANCED DEFEASEMENT lCONIINUED) COMBINED SOURCES AND USE OF FUNDS Par Amount of Bonds (Discount)!Premium Accrued Interest from December 1, 1993 to December 20, 1994 Cash Contribution Total Sources Total Underwriter's Discount (0.777%) Cost of Issuance Deposit to Debt Service Fund Deposit to Escrow Fund Contingency Total Uses CALCULATION OF ECONOMIC GAIN GROSS PRESENT VALUE DEBT SERVICE SAVINGS Deposit to Debt Service Fund Cash Contribution NET PRESENT VALUE BENEFIT Savings as a% of refunded bond principal amount CASH FLOW DIFFERENCE Prior Debt Service Cash Flow: Series 1987 General Obligation Series 1988 General Obligation Series 1988 Golf General Obligation Series 1988 Sewer Cenificates of Obligation Less: New Debt Service Cash Flows Reduced Debt Service Plus: Accrued Interest Less: Cash Contribution Total Reduced Debt Service 59 $3,313,875 5,763,038 537,250 5.257 787 59,254 (331.115) $ 9,865,000 (60.668) 59,254 33J.JI5 $10.194.701 $ 76,651 105,000 59.254 9,950,415 3381 $10.194.701 $1,002,277 59.254 (331.115) $ 730 416 8.32% $14,871,950 03574 375) 1,297,575 (271.86)) $I .025.714 CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, 1994 . NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS L. ADVANCED DEFEASEMENT <CONIINUEDl On August 25, 1994, the City defeased $3,600,000 of the 1992 Tax and Waterworjc.sCertificates of Obligation. Revenues generated by the half-cent sales tax increase approved by a vote of the citizens vote in January 1993, were used to defease these bonds, therefore no economic gain or loss exists. These proceeds were used to purchase United States Treasury Securities which were placed in an irrevocable trust to be used solely to defease the above indicated bond issue. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. COMBINED SOURCES AND USES Of FUNDS Available Funds Total Sources Purchase price of Sinking Fund Acquired Obligations Purchase price of Defeasance Acquired Obligations Fees Total Uses Prior Debt Service Cash Flow: Less: New Debt Service Cash Flows Reduced Debt Service CASH FLOW DIFFERENCE 60 $ 3.617,000 ~ 3 ~12.QQO $ 1.599.000 2.014.500 3,5QO $ l.bi2.QQQ $5,307.225 Q $5 3Q7.225 CITY OF LUBBOCK, TEXAS Notes to Financial Statements September 30, l 994 NOTE III. DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS M. ACCRUED INSURANCE CLAIMS As discussed in Note I.G., the Internal Service Fund establishes a liability·for self insurance for both reported and unreported insured events, .which includes estimates of both future payments of losses and related claim adjustment expenseS. The following represents changes in those aggregate liabilities for the Fund during the past two years ended September 30: Worker's Compensation and Liability Reserves at beginning of fiscal year Claims & Changes in estimates Claims Payments Worker's Compensation and Liability Reserves at end of fiscal year Medical and Dental Claims Liability at end of fi seal year • · Total Self-Insurance Liability at end of fiscal year Total Assets to pay claims at end of fiscal year Accrued insurance claims payable from restricted assets-current Accrued insurance claims-non-current ~ $4,493,086 3,263,335 (2.220 969) S,S3S,452 I 892.964 s M28.~l6 S B 21J.I!6S ~ $2,649,198 ~.222.218 SM2MJ!! •The information necessary to prepare the separate disclosure for medical and dental claims liabilities is currently unavailable. N. LANDFILL CLOSURE AND POSTCLOSURE CARE COST m.l $2.351,617 4,185,326 (2 043.8571 4,493,086 1915 180 s 6,408.266 S 1.1S2.12J m.l $2,410,865 l.222.~QI $6.4Q8.266 In fiscal year 1994, the City adopted GASB Statement No. 18, "Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs". State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the· City reports.· a portion of these closure and postclosure costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The effects of the implementation have been renected as a restatement of the beginning retained earnings of the solid waste enterprise fund as discussed in Note VI. 61 CITY OF.LUBBOCK, TEXAS ·Notes to FinanciaiStatements September 30, 1994 NOTE III. DETAIL NOTESt>N ALL FUNDS AND ACCOUNT GROUPS N. LANDFILL CLOSURE AND POSTCLOSURE CARE COSTCCONTINUtm The $6,465,141 ·reported as landfill closure and postclosure care liability at September 30. 1994. represents the cumulative amoullt reported to date based on the use of 69.8 percent of the estimated capacity of the landfill. This amount includes $454,307 and $431,592 of expense applicable to fiscal 1994 and 1993, respectively. The City will recognize the remaining estimated cost of closure and postclosure care of $2,799,259 as the remaining estimated capacity is filled. These amounts ar.: based on what it would cost to perform all closure and postclosure care in 1994. The City expects to close the landfill in the year 1998. Actual cost may be higher due to inflation. changes in technolog~. or changes in regulations. The City is required by state and federal laws and regulations to provide assurance that fin:mcial resources will be available to provide for closure, postclosure care, and remediation or containment of environmental hazards at its landfill. The City is in compliance with these requirements and hns chosen the Local Government Financial Test and Government Guarantee mechanism for providing this assurance. The City expects to finance closure costs through normal operations. NOTE IV. CONTINGENT LIABILITIES A. FEDERAL GRANTS In the normal course of operations, the City receives grant funds from various Federal agencies. The grant programs are subject to audit by agents of the granting authority to insure compliance with conditions precedent to the granting of funds. Any liability for reimbursement which may arise as the result of audits of grants is not believed to be material. B. LITIGATION The City is involved in lawsuits arising in the normal course of business. including claims property damage, personal injury and personnel practices, disputes over contra.ct awards and property condemnation proceedings, and suits contesting the legality of certain taxes. In the opinion of management, the ultimate outcome of these lawsuits will not have a material adverse effect on the City's financial position as of September 30, 1994. NOTE V. FINANCIAL INSTRUMENTS The City is subject to off-balance sheet risk associated with assets that are not recorded in the financial statements, specifically with respect to United States Treasury Securities--State and Local Government Series, held in five irrevocable trusts. These include: • a trust to be used to refund a portion of the. City's Electric Light and Power System Refunding Revenue Bonds, Series 1983 • a trust to be used to refund a portion of the City's Electric Light and Power System Refunding Revenue Bonds, Series 1984 • a trust to be used to refund a portion of General Obligation Bonds, Series 1983 and 1985. • a trust to refund a portion of General Obligation Bonds, Series 1987, a portion of General Obligation Bonds, Series 1988, a portion of Combination Tax and Golf Course Revenue Certificates of Obligation, Series 1988 and a portion of Combination Tax and Sewer System Subordinate Lien Revenue Certificates of Obligation • a trust to refund a portion of Tax and Waterworks Certificates of Obligation, Series 1992. Management feels that due to the nature of these securities, there is a minimal amount of credit or market risk associated with these securities. Financial instruments which potentially subject the City to concentrations of credit risk consist primarily of non-insured Clr collateralized demand deposits and trade receivables. 62 CITY OF LUBBOCK, TEXAS ·Notes to Financial Statements September 30, 1994 NOTE V. FINANCIAL INSTRUMENTS (CONTINUED) Management believes that the City places its demand deposits in well capitalized financial institutions in amounts that are within the Federal Deposit Insurance Corporation limitations or are collateralized by pledged securities. Concentrations of credit risk arc primarily focused on trade receivables '~''hich are due from customers. No significant credit losses from individual receivables were experienced during the year. NOTE VI. RESTATEMENT OF BEGINNING BALANCES Beginning fund equity has been restated to reflect the adoption of GASB Statement No.l4 and GASB Statement No. 18. Pooled cash and cash equivalents have been restated to reflect the adoption of GASB Statement No. 14. The Total (Memorandum Only) columns for 1993 were not restated as they are not considered to be financial statements. A reconciliation of the adjustments made to fund equity and pooled cash and cash equivalents is as follows: Beginning fund balance/retained earnings. as previously reported Restatement for cumulative effect of a change in accounting prin· ciple as a result of adoption of GASB Statement No. 14 -entities included in current year reporting entity LCVB Civic Lubbock, Inc. Citibus URA-Rescrvc for Federal Housing Programs Restatement for cumulative effect of a change in accounting prin- ciple as a result of adoption of GASB Statement No. 18 Solid Waste Enterprise Total of restatements Beginning fund balance/retained earnings, as restated Special Revenue Funds s~.22~ 2~ (220,971) <220 971) $ s 074.933 63 Expendable Enterprise Trust Funds Funds 51~1!.61 I OJ!! $ 922 362 (2S9,0S8) 2,008,964 C6 0)0 834) C6 262 1!221 . 2,008,964 S 142 34U46 $ 2 938 326 Discretely Presented Component Units ~ 220,971 2S9,0S8 480.029 $ 480029 CITY OF ~l.!BBQCK, TEXAS Notes to FlnandaiStatements . . . . . . September 30, 1994 NOTE VI. RESTATEMEl'lT OF BEGINNING BALANCES (CONTINUED) · Contributed Capital, previously reported Restatement for cumulative effect of a change in accounting prin- ciple as a result of adoption of GASB Statement No~ 14 Citibus Total of restatements Beginning contributed capital as restated Beginning fund equity as restated Pooled cash and cash equivalents, as previously reported Restatement for cumulative effect · of a change in accounting prin· ciple as a result of adoption of GASB Statement No. 14 Civic Lubbock, Inc. Citibus Total of restatements Pooled cash and cash equivalents, as restated $ Special· Revenue Funds $ 5.074.933 $ $ NOTE VII. SUBSEQUENT EVENTS Enterprise · Funds $119,069,880 0.365.55 I l (3.365.551) $258.045.475 $1 (2,627,382 (79,939) (289.698) (369.637\ $!12.257.745 A. MANAGEMENT AGREEMENT FOR GOLF OPERATIONS "·Expendable Discretely $ Trust Presented Funds 'omponent Units $ 3 365.551 3.365 551 s 2.938.326 3.365.551 $ 3.84" 'i8Q $ $ $ 79.939 289.698 369.637 ! $ 369 637 On October 14, 1994, the City contracted with Fore Star Golf, Inc. for management services to be provided for the City's golf operations. The management agreement is effective from October 14, 1994 through December 31, 2014. Over the term of the contract, payments will be made according to a sliding scale. In return for payments, the golf course will receive certain capital and noncapital improv.ements. As a provision of this contract, Civic Lubbock, Inc. will provide concession services at the golf course through December 31, 1994, at which time Fore Star Golf, Inc, assumes responsibility. .- APPENDIXC FORM OF BOND COUNSEL'S OPINIONS TillS PAGE INTENTIONALLY LEFT BLANK TELEPHONE:: 214/855·8000 f'ACSIMILE: 214/855·8200 FULBRIGHT & .JAWORSKI l.L.P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 ROSS AVENUE. SUITE 2800 DALLAS, TEXAS 75201 HOUSTON WASHINGTON, D.C. AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES LONDON HONG KONG IN REGARD to the authorization· and issuance of the "City of Lubbock, Texas, General Obligation Bonds, Series 1995A" (the "Bonds"), dated December 15, 1995 (the "Bond Date"), in the princip8J. amount of $6,505,000, we have examined into the legality and validity of the issuance theroof by the City of Lubbock, Texas (the "City"), which Bonds are issuable in fully regist~red form only, in denominations of $5,000 or any integral multiple thereof (within a maturity), have stated maturities of February 15, 1997 through February 15, 2016, unless redeemed prior to maturity in accordance with the terms stated on the Bonds, and bear interest on the unpaid principal amount from the Bond Date at the rates per annum stated in the ordinance authorizing the issuance of the Bonds (the "Ordinance"), such interest being payable on February 15 and August 15 in each year, tommencing August 15, 1996, to the registered owners thereof shown on the registration books of the Paying Agent/Registrar on the Record Date (stated on the face of the Bonds). WE HAVE SERVED AS BOND COUNSEL for the City solely to pass upon the legality and validity of the issuance of the Bonds under the Constitution and laws of the State of Texas, and with respect to the exclusion of the interest· on the Bonds 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 Bonds 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 Bonds, including the Ordinance, customary certifications and opinions of officials of the City and other pertinent showings, and an examination of the Bond 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 the Bonds have been duly authorized by the City in compliance with the Constitution and laws of the State of Texas now in force, and the Bonds issued in compliance with the provisions of the Ordinance are valid, legally binding and enforceable obligations of the City, payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City, except to the extent that the enforceability thereof may be affected by bankruptcy, insolvency, reorganization, moratorium, or other Page 2'of Legal Opinion of Fulbright &,Jaworski L.L.P. Re: $6,505,000 "City of Lubbock, Texas, General Obligation Bonds, Series 1995A", . ·dated December 15, 1995 ·. similar laws affecting creditors' rights or the exercise of judicial discretion in accordance with general principles of equity. . IT IS FURTHER OUR OPINION THAT,. assuming continuing compliance after the dtite ,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 Bonds, interest ,on the Bonds 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 hereof, of the owners thereof pursuant to section 103 of such Code, existing regulations, published rulings, and court decisions thereunder, and (2) 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 Bonds, 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 corporations, 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 section 55 of the Code and the environmental tax imposed by section 59A of the Code is 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 Bonds. Ownership of tax-exempt obligations such as the Bonds 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. TELEPHONE:: 21-4/855·8000 F'ACSIMILE:: 214/855·8200 FULBRIGHT & JAWORSKI 22oo Ross AvENUE SUITE 2800 DALLAS, TEXAS 75201 HOUSTON WASHINGTON, D.C. AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES LONDON HONG KONG WE HAVE EXAMINED into the legality and validity of the issuance of the "City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1995" (the "Certificates"), dated December 15, 1995 (the "Certificate Date"), in the principal amount of $10,000,000, by the City of Lubbock, 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, 1997 through February 15, 2016, unless redeemed prior to maturity, in accordance with the terms stated on the face of the Certificates, and bear interest on the unpaid principal amount from the Certificate Date at the per annum rates 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 August 15, 1996, 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 Certificate 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 the Certificates have been duly authorized by the City in compliance with the Constitution and laws of the State of Texas now in force, and the Certificates issued in compliance with the provisions of the Ordinance are valid, legally binding and enforceable obligations of the City payable from the sources and secured in the manner 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 ofjudicial discretion in accordance with the general principles of equity. Page 2 of Legal Opinion of Fulbright.& Jaworski L.L.P. RE: · $10,000,000 "City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1995", dated December 15, .1995 . IT IS FURTHER OUR OPINION THAT, 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 (1) will be excludable from gross income, as defined in section 61 of the Internal Revenue Code of 1986, as amended to the date hereof, of the owners thereof pursuant to section 103 of· such Code, existing regulations, published rulings, and court decisions thereunder, and (2) 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 net book income, for the tax year 1989, or adjusted current earnings, for tax years beginning after 1989, for purposes of calculating the alternative minimum taxable income of such corporations, 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 and the environmental tax imposed by Sections 55 and 59A of the Code, respectively, 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. 95M25!D286207 . .-.. I' THIS PAGE INTENTIONALLY LEfi BLANK No Text No Text ·" CERTIFICATE AS TO TAX EXEMPTION The undersigned, being the duly chosen and qualified Assistant City Manager of the City of Lubbock, Texas (the "Issuer"), hereby certifies with respect to CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1995A11 , dated December 15, 1995, in the principal amount of $6,505,000 (the "Bonds"), as follows. A. General. 1. I, along with other officers of the Issuer, am charged with the responsibility for issuing the Bonds. 2 • This certificate is made pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), and Treasury Regulations issued thereunder (the "Regulations"). 3. This certificate is based on the facts and estimates described herein in existence on this date, which is the date of delivery of the Bonds to and payment for the Bonds by the initial purchasers thereof, and, on the basis of such facts and estimates, the Issuer expects that the future events described herein will occur. B. pyrpose and size. 1. The Bonds are being issued pursuant to an Ordinance of the Issuer, finally adopted by the City Council of the Issuer on December 7, 1995, (hereinafter referred to as the "Ordinance") to finance the construction of street improvements, including signalization, lighting and rights-of-way and park improvements, including neighborhood parks, athletic fields and swimming pools (collectively, the "Projects"). Terms used and not defined herein have the same meaning given to them in the Ordinance. 2. The Projects will be owned, operated, and maintained by the Issuer. The Issuer has not contracted with any person or entity to operate and/or maintain the Projects or any part of them for and on behalf of the Issuer. The Issuer does not expect to enter into any contract for the operation, maintenance or management of the Projects or any part of them. 3. There is not, and as of the date hereof the Issuer does not anticipate entering into, any lease, contract or other understanding or arrangement, such as a take-or-pay contract or output contract, with any person other than a state or local governmental unit pursuant to which the Issuer expects that proceeds of the Bonds, or the facilities financed therewith, will No Text be used in the trade or business of such person (including all activities of such persons who are not individuals). 4. The amounts received from the sale of the Bonds, when added to the amounts expected to be received from the investment thereof, do not exceed the amounts required to pay the costs of the Projects and of issuing the Bonds. 5. No receipt from the sale of the Bonds or amounts received from the investment thereof will be used to pay the principal of or interest on any presently outstanding issue of bonds or other similar obligations of the Issuer other than the Bonds. c. Source and Disbursement of Funds. 1. The Bonds are being issued and delivered to the purchaser or purchasers thereof on the date hereof upon payment of the aggregate agreed purchase price of $6,505,000.00, plus a premium of $0.00 plus accrued interest thereon. 2. The amount received from the purchaser or purchasers of the Bonds representing accrued interest is being deposited on the date hereof in the Interest and Sinking Fund for the Bonds and will be used to pay the first payment of interest to become due on the Bonds on August 15, 1996. 3. costs of issuance relating to the Bonds are estimated to be $31,994.80 and will be paid by the Issuer from the proceeds of sale of the Bonds. The remainder of the proceeds of sale will be credited to the construction fund of the Issuer (the "Construction Fund") , will be accounted for separately from all other funds on the books of account of the Issuer, and will be used to pay costs of the Projects. The Issuer estimates investment earnings in the aggregate amount of $200,000.00 will be received from the investment of the amounts deposited to the Construction Fund pending the disbursement of such amounts for the governmental purposes the Bonds are being issued to pay. All of such investment earnings profit will be used to pay any cost overruns on the Projects or if there are none, deposited to the Interest and Sinking Fund and used to pay principal of and interest on the Bonds within one year of receipt. D. Temporary Periods and Time for Expenditures. 1. Within six months from the date hereof, the Issuer will have incurred binding obligations or commitments to third parties for the Projects in the amount of at least 5% of the net sales proceeds of the Bonds. 0294497 -2- No Text 2. After entering into said contracts, completion of the Projects and the allocation of net sales proceeds of the Bonds to expenditures will proceed with due diligence. 3. The Issuer expects that all of the net sales proceeds of the Bonds will be spent within three years from the date hereof, and that all investment proceeds of the Bonds will be spent within one year from the date of receipt. 4. Approximately $0. 00 of the proceeds of the Bonds will be used to reimburse the Issuer for Project expenditures made by it from its own funds prior to the date hereof. The Issuer adopted an official intent for the original expenditures (except possibly for expenditures meeting the preliminary expenditures exception set forth in section 1.150-2(f) (2) of the Regulations) not later than 60 days after payment of the original expenditures, and a copy of such official intent is attached to this Certificate As To Tax Exemption. Except for expenditures meeting the preliminary expenditures exception set forth in section 1.150-2(f)(2) of the Regulations, the Bonds are being issued and the reimbursement allocation is hereby being made not later than 18 months after the later of (i) the date the original expenditures were paid, or (ii) the date the Project is placed in service or abandoned, but in no event more than 3 years after the original expenditures were paid. The original expenditures were capital expenditures, and in connection with this allocation, the Issuer has not employed any abusive arbitrage device under section 1.148-10 of the Regulations to avoid the arbitrage restrictions or to avoid restrictions under section 142 through 147 of the Code. E. Interest and Sinking Fund. 1. Pursuant to the Ordinance, the Issuer has levied a tax on all taxable property in the Issuer to pay principal of and interest on the Bonds as such become due, and such tax has been pledged to the payment of the Bonds. Amounts collected from such tax for the payment of the principal of and interest on the Bonds are to be deposited to the credit of the Interest and Sinking Fund maintained on the books of the Issuer. 2. The Interest and Sinking Fund will be maintained by the Issuer primarily to achieve a proper matching of revenues and debt service payments within each bond year. The Issuer expects that the following will occur with respect to the money in the Interest and Sinking Fund: 0294497 a. Such fund will be depleted at least once each bond year, except possibly for a carryover amount not to exceed the greater of the previous bond year's earnings on the Interest and Sinking Fund or one-twelfth of the -3- No Text ,... previous bond year's debt service requirements on the Bonds; b. All amounts deposited to such fund to pay debt service on the Bonds will be spent within 13 months of deposit; and c. All amounts received from the investment of such fund will be deposited therein and will be expended within twelve months of receipt. 3. Except as described above, no funds of the Issuer have been or will be pledged to payment of the principal of or interest on the Bonds or otherwise restricted so as to give reasonable assurance of the availability of such funds for such purpose. F. Yield and Nonpurpose Investments. 1. No other obligations of the Issuer which are reasonably expected to be paid from substantially the same source of funds as the Bonds were sold within 15 days from the date the Bonds were sold, except for the "City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue certificates of Obligation, Series 1995", dated December 15, 1995 (the "Certificates"). 2. The discount factor required to reduce the principal and interest to be paid on the Certificates and the Bonds to a present value on the date hereof, compounding semiannually, equal to the initial offering prices at which a substantial amount of each maturity of the Certificates and the Bonds was sold to the public, is 4.98765%. In determining the initial offering price at which a substantial amount of each maturity of the certificates and the Bonds was sold to the public, the Issuer has relied on certificates from the managing underwriters that purchased such obligations. 3. Except as otherwise provided in Section 148 (f) of the Code, the Issuer will account for proceeds of the Bonds separately from other funds of the Issuer and will compute and pay to the United States Treasury the Rebate Amount due with respect to the Bonds no less frequently than every five years, in the installments, to the place, 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- - G. No Abusive Arbitrage Device. 1. In connection with the issuance of the Bonds, the Issuer has not employed any action which has the effect of overburdening the market for tax-exempt obligations by issuing more bonds, issuing bonds earlier, or allowing bonds to remain outstanding longer than is reasonably necessary to accomplish the governmental purposes of the Bonds. 2. In connection with the issuance of the Bonds, the Issuer has not employed any action which has the effect of enabling the Issuer to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage. EXECUTED AND DELIVERED :JAN 1 1. 1996 CITY OF LUBBOCK, TEXAS Debra B. Fort6 Assistant City Manager -5- No Text ' No Text 421 6-95 Form 8038-G (Rev. May 19951 lnfonnation Return for Tax-Exempt Governmental Obligations .. Undll........, ....... Code secllan 141(ef .. See ...,.... .. lnstruc:tions. !Not-= 1M Fam 8038-GC If tile Issue prfctl is 111'1t:111r 1100.0000 0 Education (attaCh schedule-see instructionS} • • • • 0 Health and hOspital (attaCh sChedule-see instructions). 0 TransportatiOn • • • . • • • • • 0 Public safety. • . . . • . • . • • • • 0 Environment Oncluding sewage bonds) • • • . 0 Housing •..•.••...•••• 0 Utilities • . . • • • • • • • • • • • • • • • • • . • . • • iJ Other. Describe (see instructions) • streets and park improvements If are tax or other revenue anticipation txlnds, ctleck box • are in the form or a tease or 21 Proceeds used ror accruec:t interest . . • . • • • • • • . • 22 Issue price of entire issue (enter amount from lne 20. CCIIumn (c)} • • Z3 Proceeds used fOt IXInd isSuance costs Oncluding uncler'wt1ters' CSisccu'lt) 24 Pf'Oceeds used for credit enhancement • • • • • • • • • · • 25 Proceeds allocated to reasonably required reserve cr replacement ft.rld Zl Pf'Oceeds used to currently refund prior issues 27 Proceeds used to ac:tvance refund prior issues • • • • • • .• 28 Total (add lines 23 27) • • ·• • • • • • • • • . • Enter the remaining weighted average maUity of the bonds to be currentty refunded Enter the remaining weighted average matl6lty of 1he bonds to be ec:tvance refunded Enter the last date crt which the refunded bOnds will be caHed • • • • • • • • .. !4 Enter the amount or the state volume cap altocated to the Issue under section 141(b)(5} ... ... ... 35 Enter tile lli'ICII..d rl tile IXlnds designated by ltle iSsuer Wider sectiC:1n 265(bK3)(B)(i)(IIQ (small Issuer excepdol'$ 3&. Enter llle amour1 of !1055 proceeds inVeSted ar to be inveSted in 1 parceed inYesa'nerl COI'IniCl (let ~ 3497 OMS No. 1StS..07ZO years years b Enter the final maturity data of the guaranteed Investment CCI"ltt'aCl • • ------ !7 Pooled financingS: I PrcceeciS rlltls issue lftat n to be used to make leans 1D CCIW pemneralll'litS b If this issue is a loan made from the proceeds c1 another tax-exempt lsSM. check tiDX .., 0 ancJ enter the name of the issuer • ancJ lh8 data d 1he 1ssta • 38 If the issuer has elected to pay a penalty in lieu of arbiU'age rebate. chec:k tiDX • • • • Cl 31 tf the issuer has identified a • Cheek tiDX • . • • • • • • • • • • • • .., Fc:w Pap8IWOC1c Reduction Act Notice, see page 1 of the InstructiOns. ca. No. llm5 Form 8038-G (Rill. 5·95l In. aa:t pap il J4t7.J.I * BLENDED YIELD No Text No Text .- .. SIGNATURE AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS COUNTY OF LUBBOCK § § § WE, the undersigned, officials of the City of Lubbock, Texas (the "Issuer"), do hereby certify with respect to the "CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1995A", dated December 15, 1995 (the "Bond Date"), in the aggregate principal amount of $6,505,000 (the "Bonds") as follows: (1) The Bonds have been duly and officially executed by the undersigned with their manual or facsimile signature in the same manner appearing hereon, and the undersigned hereby adopt and ratify their respective signatures in the manner appearing on each of the Bonds whether in manual or facsimile form, as the case may be, as their true, genuine and official signatures. (2) On the Bond Date and on the date hereof, we were and are the duly qualified and acting officials of the Issuer indicated below. (3) The legally adopted proper and official corporate seal of the Issuer is impressed, imprinted or lithographed on all of the Bonds and impressed on this Certificate. (4) No litigation of any nature is now pending before any federal or state court, or administrative body, or to our knowledge threatened, seeking to restrain or enjoin the issuance or delivery of the Bonds or questioning the issuance or sale of the Bonds, the authority or action of the governing body of the Issuer relating to the issuance or sale of the Bonds, the levy of taxes to pay the principal of and interest on the Bonds or materially affecting the assessment or collection of taxes to pay the principal of and interest on the Bonds; and that neither the corporate existence or boundaries of the Issuer nor the right to hold office of any member of the governing body of the Issuer or any other elected or appointed official of the Issuer is being contested or otherwise questioned. (5) No authority or proceeding for the issuance, sale or delivery of the Bonds, passed and adopted by the governing body of the Issuer, has been amended, repealed, revoked, rescinded or otherwise modified since the date of passage thereof, and all such proceedings and authority relating to the issuance and sale of the Bonds remain in full force and effect as of the date of this certificate. No Text J~N. 1 1 l00iJ DELIVERED this -------------------------- (Issuer's Seal) THE STATE OF TEXAS COUNTY OF LUBBOCK OFFICIAL TITLE Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas s s The undersigned, a Notary Public, hereby represents and certifies each of the signatures of David R. Langston and Betty M. Johnsori, Mayor and City secretary, respectively, of the City of Lubbock, Texas, appearing above is genuine. ~VEN UNDER MY HAND AND SEAL OF OFFICE, this the '1\-h day of CeM be_Q. , 1995. -2- ,,./·-. . \ : \ ~~~~. ,1'J'J:I:l"t':f1".r~w::.rr.:r .. ·-·,-;: _,':'T.:rnn:o . . .. ri !31JOIRGJR .M Slflit.::;·: . . t' ~~ ~::~·-:; ,_ ·-~-,., ,~;·:·---~ r··~<· , \ ~ ~ ( 2 ~ -~ -; t f 1"?~' -. ;,!''"• J -_, 1, --I I --I 1 __ I ,-I I --1 I ,- I 1 I rl No Text No Text ,... ... ~ ®ffice of tbt §ttornep ~eneral gs,tate of tEexas DAN MORALES A TIORNEY GENERAl January 5, 1996 THIS IS TO CERTIFY that the City of Lubbock, Texas (the "Issuer") has submitted to me City of Lubbock, Texas, General Obligation Bond, Series 1995A (the "Bond"), in the principal amount of $6,505,000 for approval. The Bond is dated December 15, 1995, numbered T-1 and was authorized by Ordinance No. 9863 of the Issuer passed on December 7, 1995. I have examined the law and such certified proceedings and other papers as I deem necessary to render this opinion. As to questions of fact material to my op1mon, I have relied upon representations of the Issuer contained in the certified proceedings and other certifications of public officials furnished to me without undertaking to verify the same by independent investigation. I express no opinion relating to the Official Statement or any other offering material relating to the Bond. Based on my examination, I am of the opinion, as of the date hereof and under existing law, as follows: ( 1) The Bond has been issued in accordance with law and is a valid and binding obligation of the Issuer. (2) The Bond is payable from the proceeds of an annual ad valorem tax levied, within the limits prescribed by law, upon all taxable property within the Issuer. Therefore, the Bond is approved. Attorney General of the State of Texas · No.29916 )3ook No. 96-A ltd . 512/463,2100 PRINTED ON RECYCLED PAPER P.O. BOX 12548 AUSTIN, TEXAS 78711·2548 AN EQUAl I!MPLDYMENT OPPORTUNITY EMPLDYER - OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I, John Sharp, Comptroller of Public Accounts of the State of Texas, do hereby certify that the attachment is a true and correct copy of the opinion of the Attorney General approving the: City of Lubbock. Texas. General Obligation Bond. Series 1995A numbered I:l, of the denomination of$ 6.505.000, dated December 15. 1995, as authorized by issuer, interest various percent, under and by authority of which said bonds/certificates were registered electronically in the office of the Comptroller, on the 5th day of January. 1996, under Registration Number 578V. Given under my hand and seal of office, at Austin, Texas, the 5th day of January. 1996. 1,£s,{.- JOHNSHARP Comptroller of Public Accounts of the State of Texas 1 ,-1 1 ~1 '1 1 ~1 1 ~1 1 1 '"'1 1 ~1 1 1 '"'1 1 ,..1 1 1 -1 1 -1 1 1 1 OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I, Melissa Guzman, Oeond Clerk ~Assistant Bond Clerk in the office of the Comptroller of the State of Texas, do hereby certify that, acting under the direction and authority of the Comptroller on the 5th day of January. 1996, I signed the name of the Comptroller to the certificate of registration endorsed upon the: City of Lubbock. Texas. General Obligation Bond, Series 1995A, numbered I:1. dated December 15. 1995. and that in signing the certificate of registration I used the following signature: ~-~ IN WITNESS WHEREOF I ave executed this certificate this the 5th day of January. 1996. ~~ ~. I, John Sharp, Comptroller of Public Accounts of the State of Texas, certify that the person who has signed the above certificate was duly designated and appointed by me under authority vested In me by TEX. REV. CIV. STAT. ANN. art. 4362 (1969), with authority to sign my name to all certificates of registration, and/or cancellation of bonds required by law to be registered and/or cancelled by me, and was acting as such on the date first mentioned in this certificate, and that the bonds/certificates described In this certificate have been duly registered In the office of the Comptroller, under Registration Number filifll.. GIVEN under my hand and seal of office at Austin, Texas, this the 5th day of January. 1996. 1,4s4 JOHN SHARP Comptroller of Public Accounts of the State of Texas - ,....., No Text • THE STATE OF TEXAS COUNTY OF DALLAS RECEIPT FOR PAYMENT s s s On the date hereof the following described bonds: "CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES l995A", dated December 15, 1995, in the aggregate principal amount of $6,505,000 (the "Bonds") were delivered to the purchaser(s) thereof, namely: RAUSCHER PIERCE REFSNES,INC. following the receipt of immediately available funds from the purchaser(s) in settlement of the agreed purchase price for the Bonds as follows: PRINCIPAL AMOUNT ACCRUED INTEREST TOTAL AMOUNT RECEIVED ON DELIVERY OF THE BONDS $6,505,000.00 24.862.50 $6,529,862.50 Furthermore, the undersigned has on the date of this receipt transmitted to American State Bank, Texas, Lubbock, Texas (the depository bank of the issuer) the above amount of funds for credit to the issuer's account in accordance with the instructions received. DELIVERED, this January 11, 1996. NORWEST BANK, NATIONAL ASSOCIATION, Dallas, Texas I No Text No Text I CERTIFicATE AS TO OFFICIAL STATEMENT THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK § § § § § Re: $6,505,000 "City of Lubbock, Texas, General Obligation Bonds, series 1995A11 , dated December 15, 1995 WE, THE UNDERSIGNED, officials of the City of Lubbock, Texas, acting in our official capacities, DO HEREBY CERTIFY that to the best of our knowledge and belief: (a) The descriptions and statements of or pertaining to the City contained in its Official statement, and any addenda, supplement or amendment thereto, prepared in connection with the issuance and sale of the above referenced Bonds, on the date of such Official statement, on the date of sale of the Bonds and the acceptance of the best bid therefor, and on the date of delivery, were and are true and correct in all material respects; (b) Insofar as the City and its affairs, including its financial affairs, are concerned, such Official statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) Insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and that the City has no reason to believe that they are untrue in any material respect; and (d) There has been no material adverse change in the financial condition of the City since the date of the last audited financial statements of the City. / ·"" ' ..: ' TO CERTIFY WHICH, witness our hands and the seal of said City, this ' ·· YJ (City Seal) Bob cass City Manaqer -2- TEXAS No Text ORDINANCE NO. 9863 AN ORDINANCE authorizing the issuance of 11CITY OF LUBBOCK 1 TEXAS 1 GENERAL OBLIGATION BONDS, SERIES 1995A"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and the approval and distribution of an Official statement pertaining thereto; and providing an effective date. WHEREAS, the City Council of the City of Lubbock, Texas, hereby finds and determines that $6,505,000 in principal amount of general obligation bonds approved and authorized to be issued at an election held on May 1, 1993 (as shown belqw), should be issued and sold at this time; a summary of the general obligation bonds authorized at elections previously held, the principal amount authorized, amounts heretofore issued and being issued pursuant to this ordinance and amounts remaining to be issued subsequent hereto being as follows: Principal Amounts Date Amount Heretofore Amounts Unissued purpose Authorized Authorized l~ued aelng Issued aarance Waterworks System 10-17-87 2,810,000 200,000 -0-2,610,000 Sewer System 5-21-77 3,303,000 2,175,000 -0-1,128,000 Street Improvements 5-1-93 10,170,000 5,156,000 5,010,000 4,000 Parks 5-1-93 §,~85,QQO ~.~90,000 l.~i5,000 -0- $i1,668,000 $11 !421 !000 $6,505,000 $ ~.742,000 AND WHEREAS, the City Council hereby reserves and retains the right to issue the balance of unissued bonds approved at said elections in one or more installments when, in the judgment of the Counc'il, funds are needed to accomplish the purposes for which such bonds were voted; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: Authorization -Designation-Principal Amount- Purpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $6,505,000, to be designated and bear the title "CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1995A" (hereinafter referred to as the "Bonds"), for the purpose of making permanent public improvements and public purposes, to wit: $5,010,000 for the construction of street improvements, including signalization, 028898:1 No Text e.. , lighting and rights-of-way, and $1,495,000 for park improvements, including neighborhood parks, athletic fields and swimming pools, all in accordance with authority conferred at the aforesaid election and under and in strict conformity with the Constitution and laws of the State of Texas, including Article 1175, v.A.T.c.s. and Article VIII section 1 of the City Charter of the City of Lubbock, Texas. SECTION 2: fully Registered Obligations -Bond Date -Authorized Qenominations-Stated Maturities-Interest Rates, The Bonds shall be issued as fully registered obligations only, shall be dated December 15, 1995 (the "Bond Date") , shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") in accordance with the following schedule: Year of Principal Interest Stated Maturity AmOUnt Rate 1997 $325,000 5.75% 1998 325,000 5.75% ·1999 325,000 5.75% 2000 325,QOO 5.75% 2001 325,000 5.75% 2002 325,000 5.75% 2003 325,000 5.75% 2004 325,000 5,75% 2005 325,000 5.75% 2006 325,000 5.75% 2007 325,000 4.90% 2008 325,000 4.90% 2009 325,000 5.oot 2010 325,000 5.oot 2011 325,000 4.80% 2012 325,000 4.75% 2013 325,000 4.75% 2014 325,000 4.75% 2015 325,000 4.75% 2016 330,000 4.75% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the per annum rates shown above (computed on the basis of a 360-day year of twelve 30-day months); such interest shall be payable on February 15 and August 15 in each year, commencinq August 15, 1996. SECTION 3: Terms of Payment-Payina Agent/Registrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall -2- No Text be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Norwest Bank Texas, National Association, Dallas, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent/ Registrar Agreement", substantially in the form attached hereto as EXhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the city may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The city covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the city agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Minneapolis, Minnesota (the "Designated Payment/Transfer Office''). Interest on the Bonds shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or ( ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next -3- No Text succeeding day which is not such a Saturday, sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (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 (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated Maturities on and after February 15, 2007, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2006 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. If less than all outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the -4- No Text Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Bond {or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration -Transfer/Exchange of Bonds- Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. -5- No Text At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchang_e. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Book-Entrv Only Transfers and Transactions. Notwithstanding the provisions contained in Sections J, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the City hereby approves and authorizes the use of -6- No Text 11Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the requirements and procedures identified in the Letter of Representation, by and between the City, the Paying Agent/Registrar and DTC (the "Depository Agreement") relating to the Bonds. Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bonds to be issued and delivered to DTC Participants and Beneficial owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9C, manually -7- No Text executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized aqent, or a certificate of reqistration substantially in the form provided in Section 90, manually executed by an authorized officer, employee or representative of the Payinq Aqent/Reqistrar, and either such certificate duly siqned upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, reqistered and delivered. SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a sinqle fully reqistered bond in the total principal amount of $6,505,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as twenty (20) fully reqistered bonds, beinq one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s) ") and, in either case, the Initial Bond(s) shall be reqistered in the name of the initial purchaser (s) or the desiqnee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and reqistered by the Office of the Comptroller of Public Accounts of the state of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Payinq Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchanqe therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearinq applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the desiqnee thereof, and such other information and documentation as the Payinq Aqent/Reqistrar may reasonably require. SECTION 9: Forms. A. Forms Generally. The Bonds, the Reqistration Certificate of the Comptroller of Public Accounts of the State of Texas, the Reqistration Certificate of Payinq Aqent/Reqistrar, and the form of Assiqnment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (includinq identifyinq numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such leqends and endorsements (includinq insurance leqends in the event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by -8- No Text the officers executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. B. Form of Definitive Bond. REGISTERED REGISTERED NO. $. ____ _ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1995A Bond Date: Interest Rate: Stated Maturity: CUSIP NO: December 15, 1995 Registered Owner: Principal Amount: DOLLARS The city of Lubbock (hereinafter referred to as the ncity"), a body corporate and political subdivision in the county of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Bond Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 in each year, commencing August 15, 1996. Principal of this Bond is payable at its stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the -9- No Text "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $6,505,000 (herein referred to as the "Bonds") for the purpose of making permanent public improvements and public purposes, to wit: $5,010,000 for the construction of street improvements, including signalization, lighting and rights-of-way, and $1,495,000 for park improvements, including neighborhood parks, athletic fields and swimming pools, all in accordance with authority conferred at an election and under and in strict conformity with the Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the city Council of the City (herein referred to as the "Ordinance••). The Bonds maturing on and after February 15, 2007, may be redeemed prior to their Stated Maturities, at the option of the city, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2006, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption and upon 30 days prior written notice being sent by United States Mail, first class postage prepaid, to the registered owners of the Bonds to be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon -10- No Text presentation and surrender of this Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar and there shall be issued to·the registered owner hereof, without charge, a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum hereof. If this Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance hereof in the event of its redemption in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. capitalized terms used herein have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the security Register occurs, one or more new fully registered Bonds of the same stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this No Text Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the city nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (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 (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United states Mail, first class postage prepaid, to the address of each Holder appearing on the security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the city is a body corporate and political subdivlsion duly organized and legally existing under and by virtue of the constitution and laws of the state of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the city h~ve been properly done, have happened and have been performed in reqular and due time, ·form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. · -12- No Text IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. CITY OF LUBBOCK, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) c. *Form of Registration Certificate of Comptroller of pyblic Accounts to appear on Initial BondCs> only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS ( ( ( ( REGISTER NO. I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my (SEAL) *NOTE TO PRINTER: signature and seal of office Comptroller of Public Accounts of the State of Texas Do Not Print on Definitive Bonds -lS. this No Text o. Form of Certificate of Paving Agent/Registrar to appear on Bonds (other than a single fully registered Initial Bond) • REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the state of Texas and registered by the comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar in Minneapolis, Minnesota is the "Designated Payment/Transfer Office" for this Bond. Registration date: E. Form of Assignment. NORWEST BANK TEXAS NATIONAL ASSOCIATION, Dallas, Texas, as Paying Agent/Registrar By Authorized Signature ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) •.•.••..•..•••.•.••.• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Social Security or other identifying number: •.•••••••.••• •••••••••••••••• ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ••.••••••.• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: . . . . . . . . . . . . . . . . . . Signature guaranteed: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. -14- No Text F. The Initial Bond<s> shall be in the form set forth in paragraph B of this Section, except that the form of the single fully registered Initial Bond shall be modified as follows: (i) immediately under the name of the bond the headinqs "Interest Rate " and "Stated Maturity ----'' shall both be omitted. (ii) Paraqraph one shall read as follows: Reqistered owner: Principal Amount: Dollars The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received, acknowledqes itself indebted to and hereby promises to pay to the Reqistered owner named above, or the reqistered assiqns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the followinq schedule: YEAR OF MATURITY PRINCIPAL INSTALLMENTS (Information to be inserted from schedule in Section 2 hereof). INTEREST BATE (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest beinq payable on February 15 and Auqust 15 in each year, commencinq Auqust 15, 1996. Principal installments of this Bond are payable in the year of maturity or on a prepayment date to the reqistered owner hereof by Norwest Bank Texas, National Association, Dallas, Texas (the "Payinq Aqent/Reqistrar"), upon presentation and surrender, at its desiqnated offices in Minneapolis, Minnesota (the "Desiqnated Payment/Transfer Office") • Interest is payable to the reqistered owner of this Bond whose name appears on the "Security Reqister" maintained by the Payinq Aqent/Reqistrar at the close of business on the "Record Date", which is the last business day of the month next precedinq each interest payment date, and interest shall be paid by the Payinq Aqent/Reqistrar by check sent United states Mail, first class postaqe prepaid, to the address of the reqistered owner recorded in the Security Reqister or by such -15- No Text other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United states of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 1995A Bond Account" (the "Interest and sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. Provided, however, in regard to the interest payment to become due on the Bonds on August 15, 1996, sufficient current funds will be available and are hereby appropriated to make such payments; and proper officials of the City are hereby authorized and directed to transfer and deposit to the credit of the Interest and Sinking Fund, a sufficient amount of current funds in process -16- No Text of collection which, together with the accrued interest received from the purchaser, will be adequate to pay the interest due on the Bonds on August 15, 1996. SECTION 11: Hutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar, subject to City approval and in its discretion, may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. The provisions of this Section are exclusive and shall preclUde (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 12: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof, together -17- No Text with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue code of 1986, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of four (4) years after the Stated Maturity, or applicable redemption date, of the Bonds for which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, after a period of four (4) years after Stated Maturity, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. The term "Government Securities", as used herein, means direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United states of America, which are non-callable prior to the respective stated Maturities of the Bonds and may be United States Treasury Obligations such as the State and Local Government Series and may be in book-entry form. SECTION 13: Ordinance a Contract -Amendments-outstanding Bonds. This Ordinance shall constitute a contract with the -18- No Text Holders from time to time, be bindinq on the City, and shall not be amended or repealed by the City so lonq as any Bond remains Outstandinq except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, includinq the curinq of any ambiquity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holdinq a majority in aqqreqate principal amount of the Bonds then Outstandinq affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of outstandinq Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) qive any preference to any Bond over any other Bond, or (3) reduce the aqqreqate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstandinq" when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds canceled by the Aqent/Reqistrar or delivered to the Aqent/Reqistrar for cancellation; Payinq Payinq (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds reqistered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14: Covenants to Maintain Tax-Exempt Status. A. Definitions. When used in this Section, the followinq terms have the followinq meaninqs: "Closing Date•• means the date on which the Bonds are first authenticated and delivered to the initial purchasers aqainst payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all leqislation, if any, effective on or before the Closinq Date. -19- No Text "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. 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 -20- No Text 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 rulinqs thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (includinq all contractual arranqements with terms different than those applicable to the qeneral 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 aqency, department and instrumentality thereof) other than a state or local qovernment, unless such use is solely as a member of the qeneral public; and (2) not directly or indirectly impose or accept any charqe or other payment by any person or entity who is treated as usinq Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of qeneral application within the City or interest earned on investments acquired with such Gross Proceeds pendinq application for their intended purposes. D. No Private Loan. Except to the extent perm! tted by section 141 of the Code and the Regulations and rulinqs 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 qovernment. For purposes of the foreqoinq 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 arranqement; 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. -21- No Text E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Requlations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Requlations and rulings thereunder. G. Information Report. The City shall timely file the information required by section 149(e) of the Code with the secretary of the Treasury on Form 8038-G or such other form and in such place as the secretary may prescribe. H. Rebate of Arbitrage Profits. 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 Requlations 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 -22- No Text 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 pay to the United States out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e) (2) of the Regulations, one hundred percent ( 100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and 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 paragraphs (2) and (3), 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 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. I. Not to Divert Arbitrage Profits. 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 earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, city Secretary, City Manager, and Assistant City Manager, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the -23- No Text certificate as to Tax Exemption or similar or other appropriate certificate, form or document. SECTION 15: Sale of the Bonds. Pursuant to a public sale for the Bonds, the bid submitted by Rauscher Pierce Refsnes, Inc. (herein referred to as the "Purchasers") is declared to be the best bid received producing the lowest net effective interest cost to the City, and the sale of the Bonds to said Purchasers at the price of par and accrued interest to the date of delivery, plus a premium of $0.00, is hereby approved and confirmed. Delivery of the Bonds to the PUrchasers shall occur as soon as possible upon payment being made therefor in accordance with the terms of sale. SECTION 16: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond ( s) pending the approval thereof by the Attorney General, the registration thereof by the comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, City Secretary, City Manager, and Assistant City Manager, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents relating to the City and its financial affairs as may be necessary for the issuance of the Bonds, the approval of the Attorney General and the registration by the Comptroller of Public Accounts and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 17: Official Statement. The Official Statement prepared in the initial offering and sale of the Bonds by the City, together with all addendas, supplements and amendments thereto issued on behalf of the City, is hereby approved as to form and content, and the City Council hereby finds that the information and data contained in said Official Statement pertaining to the City and its financial affairs is true and correct in all material respects and no material facts have been omitted therefrom which are necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The use of such Official Statement in the reoffering of the Bonds by the Purchasers is hereby approved and authorized. SECTION 18: Proceeds of Sale. The proceeds of sale of the Bonds, excluding the accrued interest and premium, if any, -24- No Text received from the purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund as shall be determined by the city council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sale of the Bonds, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. SECTION 19: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 20: cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 21: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, -25- No Text Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart thereof shall accompany the global Bonds deposited with the Depository Trust Company. SECTION 22: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 23: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the city, the Paying Agent/Registrar and the Holders, any right; remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 24: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 25: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United states of America. SECTION 2 6: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 27: Construction of Terms. If appropriate in the context of this Ordinance, words of the sinqular number shall be considered to include the plural, words of the plural number shall be considered to include the sinqular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 28: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be -26- No Text valid, and the City council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 29: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1996) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 17 of this Ordinance, being the information described in Exhibit B hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit B hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. -27- No Text The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 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 Bonds; 7. Modifications to rights of holders of the Bonds; s. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give the notice No Text required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR. MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting 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, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds 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 (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or -29- No Text (b) a Person that is unaffiliated with the city (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 30: PUblic Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by Chapter 551, Texas Government Code, as amended. SECTION 31: Effective Date. This Ordinance shall be in force and effect from and after its passage on second and final reading and IT IS SO ORDAINED. PASSED AND ADOPTED ON FIRST READING, this November 16, 1995. PASSED AND ADOP'T~~~ day of December, 199 . ATTEST: ~ti~ c~retai'Y (City Seal) ECOND AND FINAL READING 1 this the 7th -80- No Text EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of December 7, 1995 (this "Agreement") , by and between the City of Lubbock, Texas (the "Issuer"), and Norwest Bank Texas, National Association, Dallas, Texas, a banking association duly organized and existing under the laws of the United States of America (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of Lubbock, Texas, General Obligation Bonds, Series 1995A" (the "Securities") in the aggregate principal amount of $6,505,000, such Securities to be delivered to the initial purchasers on or about January 11, 1996; and WHEREAS, the Issuer has selected the Bank to serve as paying agent, registrar and transfer agent with respect to such Securities; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and is duly qualified and otherwise capable of performing the duties and services contemplated by this Agreement with respect to the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. 0289180 No Text Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the remainder of the Fiscal Year during which the Agreement is executed and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. This agreement assumes retention by the Paying Agent of the float on uninvested funds held in accounts by the Paying Agent. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2. 01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: 0289180 "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the security. "Bank Office" means the principal office of the Bank as indicated on page 11 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the governing body of the Issuer pursuant to which the securities are issued, certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, ending September 30th. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor, City Manager, Assistant City Manager, or City -2- EXHIBIT A No Text Secretary, any one or more of said officials, and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to section 4.06 hereof and the Resolution). "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. 11Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02. other Definitions. The terms "Bank," "Issuer," and 11Securities (Security)" have the meanings assiqned to them in the recital paragraphs of this Agreement. 0289110 -3- EXHIBIT A No Text The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. outies of Paying Agent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following address: Norwest Bank National Association Corporate Trust Services sixth and Marquette Minneapolis, Minnesota 55479-0113 As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date. All payments of principal and/or interest on the Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the fiduciary account provided in Section 5. 05 hereof, sent by United States mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. section 3. 02. Payment Oates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR section 4.01. Security Register -Transfers and Exchanges. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and Bank 0289110 -4- EXH\B\T A No Text may prescribe. All transfers, exchanqes and replacement of Securities shall be noted in the Security Reqister. The Bank represents and warrants its office in Dallas, Texas will at all times have immediate access to the Security Reqister by electronic or other means and will be capable at all times of producinq a hard copy of the Security Reqister at its Dallas office for use by the Issuer. All transfers, exchanqes and replacement of Securities shall be noted in the security Reqister. · Every Security surrendered for transfer or exchanqe shall be duly endorsed or be accompanied by a written instrument of transfer, the siqnature on which has been quaranteed by an officer of a federal or state bank or a member of the National Association of securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his aqent duly authorized in writinq. The Bank may request any supportinq documentation it feels necessary to effect a re-reqistration, transfer or exchanqe of the Securities. To the extent possible and under reasonable circumstances, the Bank aqrees that, in relation to an exchanqe or transfer of Securities, the exchanqe or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assiqnee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchanqe or transfer and the written instrument of transfer or request for exchanqe duly executed by the Holder, or his duly authorized aqent, in form and manner satisfactory to the Payinq Aqent/Reqistrar. section 4. 02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanqes thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeepinq pendinq their use and reasonable care will be exercised by the Bank in maintaininq such Securities in safekeepinq, which shall be not less than the care maintained by the Bank for debt securities of other qovernments or corporations for which it serves as reqistrar, or that is maintained for its own securities. Section 4.03. Form of Security Register. The Bank, as Reqistrar, will maintain the Security Reqister relatinq to the reqistration, payment, transfer and exchanqe of the Securities in accordance with the Bank's qeneral practices and procedures in effect from time to time. The Bank shall not be obliqated to maintain such Security Reqister in any form other than those which the Bank has currently available and currently utilizes at the time. 0289180 -5- EXHIBIT A No Text The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the · Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of cancelled Certificates. The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Mutilated. Destroyed. Lost or Stolen Securi- ~. The Issuer hereby instructs the Bank, subject to the provisions of Section 11 of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. 0289110 -6- EXHIBIT A No Text Section 4. 07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to section 4.06. ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents. Etc. conclusively rely, as to the truth of the correctness of the opinions expressed therein, on opinions furnished to the Bank. (a) 'Dle Bank may statements and certificates or (b) The Bank shall not be liable for any error of judqment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. 0289180 -7- EXHIBIT A No Text (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, ·and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5. 04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Moneys Held by Bank -Fiduciary Account/ Collateralization. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the State of Texas and the laws of the United states of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or int~rest on any Security and remaining unclaimed for four years after final maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only 0289180 -8- EXHIBIT A No Text to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the state and county where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5. OS. OT Services. It is h.ereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements", effective December 12, 1994, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. j\mendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank 02891110 -9- EXHIBIT A No Text shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on paqe 11. Section 6.04. Effect of Headings. The Article and Section headinqs herein are for convenience only and shall not affect the construction hereof. Section 6. 05. Successors and Assigns. All covenants and aqreements herein by the Issuer shall bind its successors and assiqns, whether so expressed or not. Section 6.06. severability. In case any provision herein shall be invalid, illeqal, or unenforceable, the validity, leqality, and enforceability of the remaininq provisions shall not in any way be affected or impaired thereby. section 6.07. Benefits of Agreement. Nothinq herein, express or implied, shall qive to any Person, other than the parties hereto and their successors hereunder, any benefit or any leqal or equitable riqht, remedy, or claim hereunder. Section 6. 08. Entire Agreement. This Aqreement and the Bond Resolution constitute the entire aqreement between the parties hereto relative to the Bank actinq as Payinq Aqent/Reqistrar and if any conflict exists between this Aqreement and the Bond Resolution, the Bond Resolution shall qovern. Section 6.09. counterparts. This Aqreement may be executed in any number of counterparts, each of which shall be deemed an oriqinal and all of which shall constitute one and the same Aqreement. Section 6.10. Termination. This Aqreement will terminate (i) on the date of final payment of the principal of and interest on the securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Aqreement by either party shall not be effective until (a) a successor Payinq Aqent/Reqistrar has been appointed by the Issuer and such appointment accepted and (b) notice qiven to the Holders of the Securities of the appointment of a successor Payinq Aqent/Reqistrar. Furthermore, the Bank and Issuer mutually aqree that the effective date of an early termination of this Aqreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Aqreement, the Bank aqrees to promptly transfer and deliver the Security Reqister (or a copy thereof), toqether with other pertinent books and records relatinq 0289180 -10- EXH\B\T A No Text to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1. 02 and of Article _ Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing LaW. This Agreement shall be construed in accordance with and governed by the laws of the state of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. [SEAL] Attest: Title: (CITY SEAL) ATTEST: City Secretary 02891110 NORWEST BANK TEXAS, NATIONAL ASSOCIATION, Dallas, Texas BY Title: Address: 935 Thanksgiving Tower 1601 Elm Street Dallas, Texas 75201 CITY OF LUBBOCK, TEXAS BY ---------------------------Mayor Address: P. o. Box 2000 Lubbock, Texas 79457 -11- EXHIBIT A No Text DESCRIPTION OF ANNUAL FINANCIAL INFORMATION Exhibit B to Ordinance The following information is referred to in Section 29 of this Ordinance. Annual Financial statements and operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information under Tables 1 through 15. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. No Text TELEPHONE: 214/855·8000 I'"ACSIMILE: 214/855·8200 WRITER"S DIRECT DIAL NUMBER: 214/855-8024 Ms. Betty Johnson City Secretary City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 FULBRIGHT & JAWORSKI L. L. P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE SUITE 2600 DALLAS, TEXAS 7S201 HOUSTON WASHINGTON, D.C. AUSTIN SAN ANTONIO CALLAS NEW YORK LOS ANGELES LONDON HONG KONG r---------· January 10, 1996 RECEIVED JAN 12 1996 CllY SECR£:1Ai<Y LUBBOCK. TEXAS Re: $10,000,000 11City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 199511, dated December 15, 1995 Dear Ms. Johnson: Pursuant to your request, enclosed herewith is an executed Paying Agent/Registrar Agreement relating to the above-described certificates for the City's records. Should you have any questions, please advise DC:ll Enclosure o1oam Sincerely, ~cw__~~ Diane Callahan Senior Legal Assistant No Text PAXING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of December 7, 1995 (this 11 Agreement 11 ) , by and between the City of Lubbock, Texas (the "Issuer"), and Norwest Bank Texas, National Association, Dallas, Texas, a banking association duly organized and existing under the laws of the United States of America (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of Lubbock, Texas, Tax and Waterworks system (Limited Pledge) Revenue Certificates of Obligation, Series 199511 (the "Securities") in the aggregate principal amount of $10,000,000, such securities to be delivered to the initial purchasers on or about January 11, 1996; and WHEREAS, the Issuer has selected the Bank to serve as paying agent, registrar and transfer agent with respect to such securities; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and is duly qualified and otherwise capable of performing the duties and services contemplated by this Agreement with respect to the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. 0289177 .• Section 1.02. Compensation. As compensation for the Bank's services as Payinq Aqent/Reqistrar, the Issuer hereby aqrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the remainder of the Fiscal Year durinq which the Aqreement is executed and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Payinq Aqent/Reqistrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the followinq Fiscal Year. This aqreement assumes retention by the Payinq Aqent of the float on uninvested funds held in accounts by the Payinq Aqent. In addition, the Issuer aqrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (includinq the reasonable compensation and the expenses and disbursements of its aqents and counsel). ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Aqreement, except as otherwise expressly provided or unless the context otherwise requires: 0289177 "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the principal office of the Bank as indicated on paqe 11 hereof. The Bank will notify the Issuer in writinq of any chanqe in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the qoverninq body of the Issuer pursuant to which the Securities are issued, certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, endinq September 30th. "Holder" and "Security Holder" each means the Person in whose name a Security is reqistered in the Security Reqister. "Issuer Request" and "Issuer Order" means a written request or order siqned in the name of the Issuer by the Mayor, city Manaqer, Assistant City Manaqer, or City -2- . - .. Secret~ry, any one or more of said officials, and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Resolution). "Redemption Date11 when used with respect to any security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2. 02. Other Definitions. The terms "Bank, " "Issuer," and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. 02891'7'1' -3- •' The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paying Agent. As Payinq Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following address: Norwest Bank National Association corporate Trust Services Sixth and Marquette Minneapolis, Minnesota 55479-0113 As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date. All payments of principal and/or interest on the Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the fiduciary account provided in Section 5. 05 hereof, sent by United states mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3. 02 • Pavment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01. Security Register -Transfers and Exchanges. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register11 ) for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and Bank Oll891'1'7 -4- No Text may prescribe. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. The Bank represents and warrants its office in Dallas, Texas will at all times have immediate access to the Security Register by electronic or other means and will be capable at all times of producing a hard copy of the Security Register at its Dallas office for use by the Issuer. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank aqrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4. 02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. 0289171 -5- .. No Text The Se~urity Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issu~r so that the Issuer may contest the court order or such release or disclosure of the contents of the security Register. Section 4.05. Return of cancelled Certificates. The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Mutilated. Destroyed. Lost or Stolen securi- lln· The Issuer hereby instructs the Bank, subject to the provisions of Section 25 of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. 02891'1'7 -6- No Text Section 4 • 07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to section 4.06. ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents. Etc. conclusively rely, as to the truth of the correctness of the opinions expressed therein, on opinions furnished to the Bank. (a) '!be Bank may statements and certificates or (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. 0289171 -7- No Text '\: r (e) T.he Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in qood faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or throuqh aqents or attorneys of the Bank. Section 5. 03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5. 04 • May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledqee of Securities and may otherwise deal with the Issuer with the same riqhts it would have if it were not the Payinq Aqent/Reqistrar, or any other aqent. Section 5.05. Moneys Held by Bank·-Fiduciary Account[ Collateralization. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeepinq and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obliqations which qualify and are eliqible under both the laws of the State of Texas and the laws of the United States of America to secure and be pledqed as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaininq unclaimed for four years after final maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only 0289117 -8- No Text to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Indemnification. To the extent permitted by law, the Issuer aqrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Aqreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5. 08. DT services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements", effect! ve December 12, 1994, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6. 01. Amendment. This Agreement may be amended only by an agreement in writing siqned by both of the parties hereto. Section 6. 02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank 028917'l -9- No Text shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on page 11. Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. severability. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6. 07. Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Payinq Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Payinq Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating 0289117 -10- No Text to the Securities, to the successor Payinq Aqent/Reqistrar desiqnated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect followinq the termination of this Aqreement. Section 6.11. Governing Law. This Aqreement shall be construed in accordance with and qoverned by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Aqreement as of the day and year first above written. (SEAL] Attest: ·~ ~c[ (CITY SEAL) ATTEST: "&~ 02891'71 BY Tit BANK TEXAS, NATIONAL N, Dallas, Texas Address: Norwest Bank Texas, NA 1601 Elm Street, #4300 Dallas, Texas 75201 Address: P. o. Box 2000 Lubbock, Texas 79457 -11- ... ,. \ '. I. n. CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION BONDS SERIES 1995A $6,505,000 CITY OF LUBBOCK, TEXAS TAX AND WATERWORKS SYSTEM (LTD PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995 Fee Proposal for Paying Agent and Registrar Services Acceptance Fee $200 per issue Our acceptance fee covers the review, acceptance and assumption of all responsibilities and duties as Paying Agent under the agreement, participation in document conferences, establishing records and accounts, authentication and delivery of bonds, receipt of funds, consultation with counsel and attendance at closings. This one time charge is payable at closing of the financing. Administration Fee $125 per issue This annual fee includes the normal day-to-day administration of the issue performed in accordance with the governing documents, maintenance of all administrative records, and the duties and functions associated with the Paying Agent agreement. Our annual administration fee is billed annually in advance. m. Out-of-Pocket Expenses At cost as incurred All out-of-pocket expenses incurred in connection with the acceptance of the paying agent appointment and annual administration will be billed at actual cost as incurred. Expenses for which we are normally reimbursed include, but are not limited to postage, express mail, mail insurance, long distance calls, fax charges, travel expenses, and wire charges. IV. Extraordinary Services Fees indicated in this schedule are based upon services rendered in accordance with established procedures and during normal business hours. Unusual or extraordinary services such as those provided upon an Event of Default are subject to additional charges based on the duties, responsibilities, and other factors involved. Our proposal is subject in all respects to our review and acceptance of the governing documents which set forth our duties and responsibilities. No Text GH P.O. Bo• 11T7, Au1tin. TX 117t7 -fOIC Pey To The Order Of GOOD FAITH Cashie(s Check No. 58028 12/07/95 130,100.00 $ ____ _ No Text JAN-03-96 17•44 FROMrFSWC LUBBOCK 1Dr8067493793 PAGE 2/5 . . ... loe W. Smttb &CCfi/M Dlrrt:lar Ianuary3, 1996 lf\.s . \C c-rLv--f\ re.r Ms. Joyce Holder Rauscher Pierce Refsnes, Inc. 2400 RPR Tower Plaza of the Americas 700N.Pearl Suite2400 u~:_Rftt~ 'b-109 t ~"in ..!. Dallas, Texas 75201 ~ k ?'10Z> $6,505,000 CITY OF LUBBOCK, TEXAS GENERAL OBUGATION BONDS, SERIES 1995 RE: Dear Joyce: D t..(to.s (!;"J-ot.( ~' 4 ) 4 ~, -115.5 This will confirm our telephone conversation when I advised that subject General Obligation Bonds wiD be ready fur delivel}' to your account on January 11, 1996. Payment, as set forth in the Notice, is to be made by 10:00 AM, CST, in immediately available funds, wired to Norwest Bank. Minneapolis, N.A., ABA #091000019, Account ##1038377, Corporate Trust Clearing, reference City of Lubbock, 1996, Attention: Susan Danner(414) 224-7472. Our calculation of payment figures is shown on the attached. Would you please indicate on the enclosed duplicate of this letter. returning it to us, if our figures are in agreement By eopy of this letter we are advising the City that, upon receipt of funds, the Good Faith Deposit should be properly endorsed to your firm and returned {Federal Express) to your attention. Thanks very much for your ~peration in effecting timely delivery ofth ee viafilx: Ms. Debra Forte Ms. Betsy Woad Ms. Betty M. Jobnson Mr. Jimmy Rodriguez City ofLubboct, Texas Ms. Pam Jones Norwcst Bank, Texas, N.A. DaJias, Texas Mr. Ed R Esquivel Fulbright&. Jaworski, LL.P. Dallas. TCXliS RAUSCHER PIERCE REFSNES,INC. BY: ..... ______________ ...._ __ __......._ __ _.... lNvEsiMF.Nr BANKERS 401 Cypre81 Strut, Suite 707 • Abilene, T&r.a3' 7~601 • 915-672-8432 • FA.X9JS.67S-6:ZIB No Text JAN-B3-S6 17•45 FROH1FSWC LUBBOCK PRINCIPAL AMOUNT PLUS ACCRUED INTEREST (TO 1-11-96) NET AMOUNT IDtB1216?493?93 $ 6,505,000.00 24.862.50 $ 6,529,862.50 1liE GOOD FAITII CHECK WILL BE RETURNED TO ISSUER ON SETILEMENT DATE PAGE 3/5 ---- " Frost National Bank Member: Cullen/Frost Bankers. A Family of Texas Banks 12/07/95 FINANCIAL ADVISOR: First Southwest 1001 Main Street, Suite 802 TO: Lubbock, TX 79401 CITY OF LUBBOCK Enclosed is our cashier's check in the amount of $130,100. 00 to be used as good faith on the sale of $6,505,000.00 GENERAL OBLIGATION BONDS, SERIES 1995A to be sold on 12/07/95. This check may be used by any of the following: ABN AMRO Securities (LaSalle) B. T. Securities, Corp. Bear, Stearns & Company Citicorp Securities Markets, Inc. Craigie, Inc. Dillon, Read & Co., Inc. A. G. Edwards & Sons, Inc. Fidelity capital Markets Goldman, Sachs & Co. William R. Hough & Co. Raymond James Financial, Inc. Juran & Moody, Inc. Legg Mason Wood Walker, Inc. Lehman Brothers Merrill Lynch & Company Morgan Stanley & Co. , Inc. Nike Securities Oppenheimer & Company, Inc. Rauscher Pierce Refsnes, Inc. Southwest Securities Tucker Anthony Inc. A. H. Williams & CO. Zions Bank Robert W. Baird & Co, Inc. Bank of America NT&SA Chemical Securities Inc. Coastal Securities Dain Bosworth, Inc. Estrada Hinojosa & Company The GMS Group, Inc. Griffin, Kubik, Stephens & Thompson, Inc. HUtchinson, Shockey, Erley & Co. Edward D. Jones & Co. Everen Securities, Inc. Lazard Freres & Co. Masterson Moreland Sauer Whisman, Inc. J. P. Morgan Securities, Inc. NationsBanc capital Markets, Inc. Norwest Investment Services, Inc. Principal Financial Securities, Inc. Service Asset Management Smith Barney Texas Commerce Bank, N. A. Victoria Bank & Trust If the bid of any of the above dealers is high, keep the check as good faith. However, if none of the above are the winning bidder, please return the check immediately by overnight delivery. Sincerely, ~~~ .\0( Gayle Gagnon Vice President GG/pc/ 10/ck#58028 /time:11:00AM Frost National Bank Post Office Box 1727 Austin, Texas 78767·1727 , _, TO THE FINANCIAL ADVISOR: tirCia\~~1!~~ ' A0$1XN• ~XA:S 787Qt TO THE ISSUER AND PURCHASER: (I) IF mE ATIACHED CHECK IS PRESENTED AT CLOSING AND THE ISSUER IS PAID TilE FULL AMOUNT OF mE ISSUE, the check should be endorsed by the Issuer and deposited to the Purchaser's depository bank account after the closing. THE CHECK SHOULD NOT BE RETURNED TO FROST BANK. IT SHOULD BE DEPOSITED TO TilE PURCHASER'S CHECKING ACCOUNT AS A REGULAR DEPOSIT. SAMPLE ENDORSEMENT FOR BACK OF CHECK (l) IF mE ATIACHED CHECK IS PRESENTED AT CLOSING AND TilE ISSUER IS PAID "LESS" mE GOOD FAml CHECK AMOUNT, the Issuer should endorse the check and deposit it into bls own depository bank account after the closing. THE CHECK SHOULD NOT BE RETURNED TO FROST BANK. IT SHOULD BE DEPOSITED TO THE ISSUER'S CHECKING ACCOUNT AS A REGULAR DEPOSIT. SAMrLE ENQORSEMENT FOR BACK OF CHECK FOR QUESTIONS, PLEASE CALL FROST BANK, GAYLE HAWKINS (Sll) 473-4805. j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j I Joe W. Smith Executive Director City of Lubbock Debra Forte P. 0. Box 2000 Lubbock, Texas 79457 Phone: (806) 767-2015 Fax: (806) 767-2051 City of Lubbock Betty M Johnson P. 0. Box2000 Lubbock, Texas 79457 Phone: (806) 767-2025 Fax: (806) 762-1946 City of Lubbock Jimmy Rodriguez P. 0. Box2000 Lubbock, Texas 79457 Phone: (806) 767-2160 Fax:(806) 749-7211 1 FIRST SOU1HWEST COMPANY January 3, 1996 City of Lubbock Betsy Wood P. 0. Box 2000 Lubbock, Texas 79457 Phone: (806) 767-2161 Fax: (806) 749-7211 Norwest Bank Texas, N.A. Pam Jones 1601 Elm Street 4300 Thanksgiving Tower Dallas, Texas 75201-2936 Phone: (214) 922-8900 Fax: (214) 922-8904 American State Bank Selma Sedgwick P. 0. Box 1401 Lubbock, Texas 79408-1401 Phone: (806) 767-7182 Fax: (806) 763-8269 RECEIVED 'JAN 041996 CllY SECRETARY lUBBOCK, TEXAs RE: Closing Instructions for the $6,505,000 City of Lubbock, Texas, General Obligation Bonds, Series 1995 (collectively the "Bonds") Payment for the above referenced Bonds is scheduled to occur at 10:00 A.M., CST, on Thursday, January 11, 1996 (the "Closing Date"), and payment therefore is to occur at the offices of Norwest Bank, Texas, N.A. (''Norwest Bank"). ·. SOURCES OF FUNDS Par Amount of Bonds Accrued Interest (12/15/95 to 1/11/96) TOTAL FUNDS ~~~ ~h, ifl/., .. ~ q~~J INvESTMENT BANKERS $ 6,505,000.00 24,862.50 $ 6,529,862.50 402 Cypress Street, Suite 707 • Abilene, Texas 79601 • 915-672-8432 • F AX91 5-675-6218 No Text ... (A) On January 11, 1996 the Underwriter, Rauscher Pierce Refsnes, Inc., shall wire $6,529,862.50 in immediately available funds to the paying agent bank, Norwest Bank, prior to 10:00 A.M. CST for the account of the City of Lubbock, in payment for the purchase price of the Bonds. (B) On January 11, 1996, Norwest Bank shall wire or transfer immediately available funds prior to 11 :00 A.M. CST as follows: Transmit by wire to American State Bank, Texas, Lubbock, Texas ABA #111322583, Attn: Selma Sedgwick Phone (806) 767-7182, depository bank for City of Lubbock for credit to the following account: City of Lubbock Consolidated Account, Account #87793 $ 6,529,862.50 The cooperation of the addressees with the above instructions is greatly appreciated. If you have any questions or cannot comply with any portion of the instructions, please contact us immediately at (915) 672-8432 . No Text TELEPHONE: 21<11/85!5-8000 ,-ACSIMILE: 21<11/85!5-8200 WRITER'S DIFIECT DIAL NUMElEA: 214.1855-&024 Ms. Debra Forte Assistant City Manager City of Lubbock P. 0. Box 2000 Lubbock, Texas 79457 FULBRIGHT & .JAWORSKI L.LP. A REGISTEAEO I..IMITEO LIABILITY PARTNEASHIP 2200 ROSS AVENUE SUITE 2800 DALLAS, TEXAS 75201 December 19, 1995 HOUSTON WASHINGTON, D.C. AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES LONDON HONG KONG j ·Rec~~;. ~;~~ -:· f .... ;: l1 DEC 211995 CITY SEcRt:i,...t<v LU~K.wcA5 Re: $6,505,000 "City of Lubbock, Texas, General Obligation Bonds, Series 1995A", dated December 15, 1995 Dear Ms. Forte: In reference to the above-described general obligation bonds, enclosed herewith is a substitute page 2 of Ordinance No. 9863 . This substitute page correctly reflects the principal amount of each maturity of the bonds. DC:ll Enclosure 0108772 Should you have any questions, please advise 'ncerely, Dian~ Callahan~ Senior Legal Assistant No Text THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK GENERAL CERTIFICATE s s s s s WE, the undersigned, Assistant City Manager and City Secretary, respectively, of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. The total principal amount of indebtedness of the City, including the proposed $6,505,000 "City of Lubbock, Texas, General Obligation Bonds, Series 1995A", dated December 15, 1995 (the "Bonds .. ) and $10,000,000 "City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 199511 , dated December 15, 1995 (the 11Certificates"), payable from ad valorem taxes levied and collected by the City is as follows: OUTSTANDING INDEBTEDNESS ------------------$148,178,752 THE CERTIFICATES ---------------------------10,000,000 THE BONDS ~--~---~--------------------------6,505,000 TOTAL INDEBTEDNESS ------------------------$164,683,752 2. A debt service requirement schedule for all outstanding tax debt of the City, including the Certificates and the Bonds, is attached hereto as Exhibit A and made a part of this certificate for all purposes. 3. Certain duly qualified and acting officers of said City are as follows: DAVID R. LANGSTON RANDY NEUGEBAUER BOB CASS QUENTIN THOMAS DEBRA B. FORTE BETTY M. JOHNSON ANITA BURGESS MAYOR MAYOR PRO TEM CITY MANAGER ASSISTANT CITY MANAGER ASSISTANT CITY MANAGER CITY SECRETARY CITY ATTORNEY 4. That the assessed value of all taxable property (net of exemptions) in the City, as shown by the tax rolls for the year 1995, and which have been duly approved and are the latest official assessment of taxable property in the City is as follows: TOTAL ASSESSED TAXABLE VALUES OF REAL AND PERSONAL PROPERTY ------------$5,399,872,909 No Text 5. The City is incorporated under the General Laws of the State of Texas, and is operatinq under the Home Rule Amendment to the Texas constitution, Section 5, Article XI, as amended in 1912. The City Charter was oriqinally adopted at an election held on December 27, 1917, and said Charter has not been amended or revised in any respect since May 7, 1988, the date of the last Charter Amendment Election. 6. The City has sufficient current funds available to pay the interest to become due on the Bonds on Auqust 15, 1996 and there will be deposited in the special fund created for the payment of the Bonds such amount of current funds which, toqether with the accrued interest received from the purchasers of the Bonds, will be sufficient to pay the amounts to become due on the Bonds on August 15, 1996. WITNESS OUR HANDS AND THE SEAL OF THE CITY OF LUBBOCK, TEXAS, this the 7th day of December, 1995. (City Seal) -2- CITY OF LUBBOCK, TEXAS DebraB:FOr'fi Assistant City Manaqer No Text CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS S s COUNTY OF LUBBOCK § s CITY OF LUBBOCK S I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. on the 16th day of November, 1995, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the city Hall of said city; the duly constituted members of the council being as follows: DAVID R. LANGSTON RANDY NEUGEBAUER VICTOR HERNANDEZ T. J. PATTERSON WINDY SITTON MAX INCE ALEX "TY" COOKE ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: None. Among other business considered at said meeting, the attached ordinance {the 110rdinance11 ) entitled: ORDINANCE NO. 9863 "AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES l995A'; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date." was introduced and submitted to the council for first reading. After presentation and due consideration of the Ordinance, and upon a motion being made by Victor Hernandez and seconded by Max Ince, the Ordinance was approved on first reading by the council by the following vote: No Text all voted "For" none voted "Against" none abstained all as shown in the official Minutes of the council for the meeting held on the aforesaid date. 2. On the 7th day of December, 1995, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the council being as follows: DAVID R. LANGSTON RANDY NEUGEBAUER VICTOR HERNANDEZ T. J. PATTERSON WINDY SITTON MAX INCE ALEX "TY" COOKE ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: T. J. Patterson. Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by Alex 11Ty11 Cooke and seconded by Victor Hernandez, the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: all voted "For" none voted "Against" none abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3 • The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written notice of said meetings, including the subject of the above entitled Ordinance, was posted and given in advance thereof in compliance with the provisions of V. T. C. A. , Government Code, Chapter 551, as amended. -2- No Text J IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 7th day of December, 1995. City of Lubbock, Texas (City Seal) -3- No Text Honorable Mayor and City Council City of Lubbock, Texas Members of the City Council: OFFICIAL BID FORM December7, 1995 Reference is made to your Official Statement and Notice of Sale and Bidding Instructions, dated November 16, 1995 of $6,505,000 CITY OF LUBBOCK. TEXAS GENERAL OBUGATION BONDS, SERIES 1995A, both of which constitute a part hereof. For your legally issued Bonds, as described in said Notice of Sale and Bidding ~ctions and Official Statement, we will pay you par and accrued ·interest from date of issue to date of delivery to us, plus a cash premium of S for Bonds maturing and bearing interest as fOllows: Maturity Principal Interest February 15 Amount Rate 1997 $ 325,000 5.15"% 1998 325,000 5:]?-% 1999 325,000 0·7~-% 2000 325,000 5:']2-% 2001 325,000 -~-5.7 % 2002 325,000 S:"J5% 2003 325,000 5:]5% 2004 325,000 5.-o-,., 2005 325,000 5.]4)-% 2006 325,000 b--.75"" Our calculation (which is not a part of this bid) of the interest cost from the above is: Total Interest Cost Less Premium NET INTEREST COST EFFECTIVE INTEREST RATE Maturity February 15 2007 $ 2008 2009 2010 20ll 2012 2013 2014 2015 2016 Principal Interest Amount Rate 325,000 fl-· ~0 % 325,000 g_. q_o % 325,000 G:...ou % 325,000 s-.oc::> % 325,000 fL. ilQ. % 325,000 l./ ./5 "" 325,000 ?}_. '15-% 325,000 ~.7<"""'% ~.,.;-% 325,000 330,000 t./.75;" s ~ s tif,!l~J . ~-~ er $ 315"/8::331'"-..,) S':OG:>') IS<Q% % We arc having the Bonds of the following maturities tJ 0 AI C:: insured by"':""":,..-:--..-:-:----:---:---:----.-:-___ at a premium of S , said premium to be paid by the Pan:haur. Any fees to be paid to the rating agencies as a result of said insurance will be pajd by the City. The Initial Bonds shall be registered in the name of Rauscher Pierce Refsnes, Inc. , which will, upon payment for the Bonds, be cancelled by the Paying Agent/Registrar. The BOndS will then be registered in the name of cede & Co. (DTC's partnership nominee), under the Book-Entry-Dnly System. A bank cashier's check or certified check of the Frost Bank, Austin, TX:in the amount of$130,100.00, which represents our Good Faith Deposit ~lSr (has been made available to you prior to the opening of this bid), and is submitted in accordance with the terms as set forth in the Official Statement and Notice of Sale and Bidding Instructions. We agree to accept delivery of the Bonds utilizing the Book-Entry-Only System through DTC and make payment for the Initial Bond in immediately available funds in the Corporate Trust Division, Norwest Bank Texas, National Association, Dallas, Texas, not later than 10:00 AM, CST, on January II, 1996, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Notice of Sale and Bidding Instructions. It will be the obligation of the purchaser of the Bonds to complete the DTC Eligibility Questionnaire. The undersigned agrees to complete, execute, and deliver to the City, at least six business days prior to delivery of the Bonds, a certificate relating to the "issue price" of the Bonds in the form and to the effect accompanying the Notice of Sale and Bidding Instructions, with such changes thereto as may be acceptable to the City. We agree to provide in writing tbe initial reoffering prices and otber terms, if any. to the Fluanelal Advisor by tbe close of tbe next business day after the award. Respectfully submitted, RAUSCHER PIERCE REFSNES, INC. & ASSOCIATES The above and foregoing bid is hereby in all things accepted by the City of Lubbock, Bidding Instructions, this the 7th day of December, 1995. No Text 79~·~ LUBBOCK AVALANCHE·JOURNAL Morris Communication Corporation NOT A PUBLIC In and for the State of Texas My Commission Expires .................. ___ _ Subscribed and sworn to before me this __ }L.fool!2'\---'day of ~h1 her 19 1s: ~"""!"':oc"/"..co:l"..o""~....oor'~~ l'!' (, PAITI TATE ~ · , Notary Pullhc. State of Texas . ~ ,.:;,~...__., ... ~ My Comm1s..•·'Jn Exptres 6-30-96 ] FORMSS-10 / No Text