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HomeMy WebLinkAboutResolution - 1088 - Authorize Notice Of Sale, Bid Forms, Etc. - FSWC - General Obligation Bonds - 04/22/1982RESOLUTION 1088 - 4/22/82 RESOLUTION WHEREAS, the City Council of the City of Lubbock, Texas desires to receive bids for the purchase of its $10,950,000 General Obligation Bonds, Series 1982; and WHEREAS, First Southwest Company, Dallas, Texas, has been authorized and requested to prepare a Notice of Sale and Bidding Instructions, Of- ficial Bid Form and Official Statement containing financial, economic and other data necessary and desirable to attract bids for said bonds; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS: That the attached Notice of Sale and Bidding Instructions, Official Bid Form and Official Statement relative to $10,950,000 City of Lubbock, Texas General Obligation Bonds, Series 1982, are hereby approved, both as to form and content, and said First Southwest Company is authorized to distribute said Notice of Sale and Bidding Instructions, Official Bid Form and Official Statement to prospective bidders for, and purchasers of, the bonds. PASSED AND APPROVED this the 22nd day of April, 1982, by the City Council of the City of Lubbock, Texas, convened in regular session with a lawful quorum present. ATTEST: t` `j NOTICE OF SALE AND BIDDING INSTRUCTIONS ON $10,950,000 CITY OF LUBBOCK, TEXAS (Lubbock County) GENERAL OBLIGATION BONDS, SERIES 1982 Selling Thursday, May 27, 1982, at 10:30 AM, CDT THE SALE Bonds Offered for Sale at Competitive Bidding .. The City of Lubbock, Texas (the "City"), is offering for sale its W,VW,UUU GeneralObligation Bonds, Series 1982 (the "Bonds"). Address of Bids... Sealed bids, plainly marked "Bid for Bonds", should be addressed and delivered ere to "Mrs. Evelyn E. Gaffga, City Secretary, City of Lubbock, Texas", prior to 10:30 AM, CDT, on the date of the bid opening. All bids must be submitted on the Official Bid Form, without alteration or interlineation. Place and Time of Bid Opening The City Council will open and publicly read the bids -for the purchase of the bonds at the City Hall, Lubbock, Texas, at 10:30 AM, CDT, Thursday, May 27, 1982. Award of the Bonds ... The City Council will take action to award the Bonds (or reject all bids) promptly after the opening of bids, and adopt an Ordinance authorizing the Bonds (the "Ordi- nance") and approving the Official Statement. THE BONDS Description, The Bonds will be dated June 1, 1982, and interest coupons will be due on February 1, 1983, and each August 1 and February 1 thereafter until the earlier of maturity or prior redemption. The Bonds and interest coupons attached thereto will be payable at Citibank, N.A., New York, New York, or, at the option of the holder, at Texas Commerce Bank, National Association, Lubbock, Texas. The Bonds will mature serially on February 1 in each year as follows: The City reserves the right, at its option, to redeem Bonds maturing February 1, 1993, through February 1, 2002, both inclusive, in whole or any part thereof, on February 1, 1992, or any interest payment date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. Source of Payment . The Bonds are direct and voted general obligations payable out of the rece ptsrf om an ad valorem tax levied, within the limits prescribed by law, on taxable property located within the City. CONDITIONS OF THE SALE Types of Bids and Interest Rates The Bonds will be sold in one block on an "All or None" abasis; 3 an a - t a price o not ess than their par value plus accrued interest to the date of delivery of the Bonds. Bidders are invited to name the rate(s) of interest to be borne by the Bonds, provided that each rate bid must be in a multiple of 1/8 of 1% or 1/20 of 1% and the effective interest rate must not exceed 15%. The highest coupon rate bid may not exceed the lowest coupon rate bid by more than 2% in coupon rate. No limitation is imposed upon bidders as to the number of rates or coupon changes which may be used. All Bonds of one maturity must bear one and the same rate. No bids involving supplemental coupons will be considered. Each bidder shall state in his bid the total interest cost in dollars and the net effective interest rate determined thereby, which shall be considered informative only and not as a part of the bid. -i- Principal Principal Principal Year Amount Am 66 Year Amount Am�55�b� Year AmountAmi 1984 525,000 1991 550,000 1997 550,000 1985 550,000 1992 550,000 1998 550,000 1986 1987 550,000 550,000 1993 1994 550,000 550,000 1999 2000 550,000 550,000 1988 550,000 1995 550,000 2001 550,000 1989 550,000 2002 550,000 The City reserves the right, at its option, to redeem Bonds maturing February 1, 1993, through February 1, 2002, both inclusive, in whole or any part thereof, on February 1, 1992, or any interest payment date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. Source of Payment . The Bonds are direct and voted general obligations payable out of the rece ptsrf om an ad valorem tax levied, within the limits prescribed by law, on taxable property located within the City. CONDITIONS OF THE SALE Types of Bids and Interest Rates The Bonds will be sold in one block on an "All or None" abasis; 3 an a - t a price o not ess than their par value plus accrued interest to the date of delivery of the Bonds. Bidders are invited to name the rate(s) of interest to be borne by the Bonds, provided that each rate bid must be in a multiple of 1/8 of 1% or 1/20 of 1% and the effective interest rate must not exceed 15%. The highest coupon rate bid may not exceed the lowest coupon rate bid by more than 2% in coupon rate. No limitation is imposed upon bidders as to the number of rates or coupon changes which may be used. All Bonds of one maturity must bear one and the same rate. No bids involving supplemental coupons will be considered. Each bidder shall state in his bid the total interest cost in dollars and the net effective interest rate determined thereby, which shall be considered informative only and not as a part of the bid. -i- r Basis for Award ... For the purpose of awarding the sale of the Bonds, the interest cost of each bid will be computed by determining, at the rate or rates specified therein, the total dollar cost of all interest on the Bonds from the date thereof to their respective maturities, using the table of Bond Years herein, and deducting therefrom the premium bid, if any. Subject to the City's right to reject any or all bids and to waive any irregularities except time of filing, the Bonds will be awarded to the bidder (the ."Purchaser") whose bid based on the above computation produces the lowest net effective interest cost to the City. Good Faith Deposit . A Good Faith Deposit, payable to the "City of Lubbock, Texas", in the amount of 9,006 00, is required. Such Good Faith Deposit shall be in the form of a Cashier's Check, or its equivalent, which is to be retained uncashed by the City pending the Purchaser's compliance with the terms of his bid and the Notice of Sale and Bidding Instructions. The Good Faith Deposit may accompany the Official Bid Form or it may be submitted separately. If submitted separately, it shall be made available to the City prior to the opening of the bids, and shall be accompanied by instructions from the bank on which drawn which authorize its use as a Good Faith Deposit by the Purchaser who shall be named in such instructions. The Good Faith Deposit of the Purchaser will be applied on the purchase price on the date of delivery of the Bonds. No interest will be allowed on the Good Faith -Deposit. In the event the Purchaser should fail or refuse to take up and pay for the Bonds in accordance with his bid, then said check shall be cashed and accepted by the City as full and complete liquidated damages. The checks accompanying bids other than the winning bid will be returned immediately after the bids are opened, and an award of the Bonds has been made. DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS Printed Bonds ... The City will furnish printed Bonds which will be executed by the facsimile signatures of the Mayor and Secretary of the City, and by the manual signature of the Comptroll- er of Public Accounts of the State of Texas. The Bonds will be in coupon form without privilege of registration as to principal or interest. CUSIP Numbers ... It is anticipated that CUSIP identification -numbers will be printed on the Bonds, but neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Purchaser to accept delivery of and pay for the Bonds in accordance with the terms of this Notice of Sale and the terms of the Official Bid Form. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of the numbers shall be the responsibility of and shall be paid for by the Purchaser. Deliver .. The Bonds will be tendered for delivery to the Purchaser at any bank in Austin, Texas, at the expense of the City. Payment for the Bonds must be made in immediately available funds for unconditional credit to the City, or as otherwise directed by the City. The Purchaser will be given six business days' notice of the time fixed for delivery of the Bonds. It is anticipated that delivery can be made on or about July 1, 1982, and it is understood and agreed that the Purchaser will accept delivery and make payment for the Bonds by 10:00 AM, CDT, on July 1, 1982, or thereafter on the date the Bonds are tendered for delivery, up to and including July 15, 1982. If for any reason the City is unable to make delivery on or before July 15, 1982, then the City shall immediately contact the Purchaser and offer to allow the Purchaser to extend his offer for an additional thirty days. If the Purchaser does not elect to extend his offer within six days thereafter, then his Good Faith Deposit will be'returned, and both the City and the Purchaser shall be relieved of any further obligation. In no event shall the City be liable for any damages by reason of its failure to deliver the Bonds, provided such failure is due to circumstances beyond the City's reasonable control. Conditions to Delivery ... The obligation of the Purchaser to take up and pay for the Bonds is su sect to the Purchaser's receipt of (a) the legal opinion of Messrs. Dumas, Huguenin, Boothman & Morrow, Dallas, Texas, Bond Counsel for the City ("Bond Counsel"), (b) the no - litigation certificate, and (c) the certification as to the Official Statement, all as further described in the Official Statement. Legal Opinions... The Bonds are offered when, as and if issued, subject to the unqualified legal opinion of the Attorney General of the State of Texas, and Messrs. Dumas, Huguenin, Boothman & Morrow (see Legal Opinions in Official Statement); the opinion of said firm will be printed on the Bonds. Certification of Official Statement ... At the time of payment for and delivery of the Bonds, the City will execute and deliver to the Purchaser a certificate in the form set forth in the Official Statement. Change in Tax Exempt Status .. At any time before the Bonds are tendered for delivery, the Purchaser may wit raw his bla if the interest received by private holders from bonds of the same type and character shall be declared to be taxable income under present Federal income tax laws, either by ruling of the Internal Revenue Service or by a decision of any Federal court, or shall be declared taxable or be required to be taken into account in computing any Federal income taxes, by the terms of any Federal income tax law enacted subsequent to the date of this Notice of Sale and Bidding Instructions. GENERAL Financial Advisor's Right to Bid .. First Southwest Company, the City's Financial Advisor, reserves the right to bid on the Bonds. Blue�Sk Laws ... By submission of his bid, the Purchaser represents that the sale of the Bonds In states ates other than Texas will be made only pursuant to exemptions from registration or, where necessary, the Purchaser will register the Bonds in accordance with the securities law of the states in which the Bonds are offered or sold. The City agrees to cooperate with the Purchaser, at the Purchaser's written request and expense, in registering the Bonds or obtaining an exemption from registration in any state where such action is necessary. Not an Offer to Sell . This Notice of Sale does not alone constitute an offer to sell the Bonds, but is merely notice of the sale of the Bonds. The offer to sell the Bonds is being made by means of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement. Prospective purchasers are urged to carefully examine the Official Statement to determine the investment quality of the Bonds. Issuance of Additional Bonds .. The City plans to sell additional General Obligation Bonds over the next several years (see "Estimated General Obligation Bond Program" in Official Statement). Ratings... The outstanding General Obligation Bonds of the City are rated "Aa" by Moody's nvI estorsService, Inc. and "AA" by Standard & Poor's Corporation. Applications for contract ratings on this issue have been made to both Moody's and Standard & Poor's. The results of their determinations will be provided as soon as possible. Municipal Bond Insurance .. In the event these Bonds are qualified for municipal bond insur- ance, and the urchaser desires to purchase such insurance, the cost therefor will be paid by the Purchaser. The Official Statement .. The City will furnish to the Purchaser, without cost, 100 copies of the Official tatement (and 100 copies of any addenda, supplement or amendment thereto, com- plete except as to interest rates and other terms relating to the reoffering of the Bonds. The Purchaser may arrange at his own expense to have the Official Statement reproduced and printed if he requires more than 100 copies, and may also arrange, at his total expense and responsibil- ity, for completion and perfection of the first or cover page of the Official Statement so as to reflect interest rates and other terms and information related to the reoffering of the Bonds. The City assumes no responsibility or obligation for the distribution or delivery of any of these copies to any one other than the Purchaser. Additional Copies of Notice Bid Form and Statement A limited number of additional copies of this Notice of Sale and Bidding ns ruct ons, the Official Bid Form and the Official Statement, as available over and above the normal mailing, may be obtained at the offices of First Southwest Company, Investment Bankers, 800 Mercantile Dallas Building, Dallas, Texas 75201, Financial Advisor to the City. The City reserves the right to reject any and all bids and to waive irregularities, except time of filing. The City Council, by resolution adopted this 22nd day of April, 1982, approved the form and content of the Notice of Sale and Bidding Instructions, the Official Bid Form and Official Statement, and has authorized the use thereof in its initial offering of the Bonds. On the date of the sale, the City Council will, in the ordinance authorizing the Bonds, reconfirm its approval of the form and content of the Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Purchaser. BILL McALISTER Mayor ATTEST: EVELYN E. GAFFGA City Secretary April 22, 1982 - iv - BOND YEARS Accumulated Year Amount Bond Years Bond Years Year 1983 S 525,000 350.000 350.000 1983 i 1984 525,000 875.000 1,225.000 1984 1985 550,000 1,466.666 2,691.666 1985 1986 550,000 2,016.666 4,708.332 1986 1987 550,000 2,566.666 7,274.998 1987 1988 550,000 3,116.666 10,391.664 1988 1989 550,000 3,666.666 14,058.330 1989 1990 550,000 4,216.666 18,274.996 1990 1991 550,000 4,766.666 23,041.662 1991 t 1992 550,000 5,316.666 28,358.328 1992 1993 550,000 5,866.666 34,224.994 1993 1994 550,000 6,416.666 40,641.660 1994 1995 550,000 6,966.666 47,608.326 1995 1996 550,000 7,516.666 55,124.992 1996 1997 550,000 8,066.666 63,191.658 1997 1998 550,000 8,616.666 71,808.324 1998 �ff` 1999 550,000 9,166.666 80,974.990 1999; 2000 550,000 9,716.666 90,691.656 2000 2001 550,000 10,266.666 100,958.322 2001 2002 550,000 10,816.666 111,774.988 2002 r Average Maturity-------------------------------- 10.208'Years - iv - OFFICIAL BID FORM Honorable Mayor and City Council May 27, 1982 City of Lubbock Lubbock, Texas Members of the Council: Reference is made to your Official Statement and Notice of Sale and Bidding Instructions, dated April 22, 1982, of $10,950,000 CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION BONDS, SERIES 1982, both of which constitute a part hereof. For your legally issued Bonds, as described in said Notice of Sale and Bidding Instructions 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 $ for Bonds maturing and bearing interest as follows: Maturity Interest Rate Maturity Interest Rate Interest Maturity Rate 2-1-1983 % 2-1-1990 % 2-1-1996 % 2-1-1984 % 2-1-1991 % 2-1-1997 % 2-1-1985 % 2-1-1992 % 2-1-1998 % 2-1-1986 % 2-1-1993. % 2-1-1999 % 2-1-1987 % 2-1-1994 % 2-1-2000 % 2-1-1988 % 2-1-1995 % 2-1-2001 % 2-1-1989 % 2-1-2002 % 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 % Check of theBank, n the amount of 2 9,000.00, which represents our Good Fa th (has been eposit (is attached ereto or 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 and make payment for the Bonds at Bank, Austin, Texas, not later than 10:00, CDT, on July 1, 1982, or thereafter on a ate t e Bonds are tendered for delivery, pursuant to the terms set forth to the Notice of Sale and Bidding Instructions. Respectfully submitted, By Authorized Representat ve ACCEPTANCE CLAUSE The above and foregoing bid is hereby in all things accepted by the City of Lubbock, Texas, this the 27th day of May, 1982. Mayor ATTEST: City Secretary Return of Good Faith Deposit is hereby acknowledged: This Official Statement does not constitute an offer to sell Bonds in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. No dealer, salesman, or any other person has been authorized to give any information or make any representation, other than those contained herein, in connection with the offering of these Bonds, and if given or made, such information or representation must not be relied upon. The information and expressions of opinion 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 since the date hereof. _. OFFICIAL STATEMENT ' Dated April 22, 1982 INTEREST EXEMPT, IN THE OPINION OF BOND COUNSEL, FROM PRESENT FEDERAL INCOME TAXES UNDER EXISTING STATUTES, REGULATIONS AND COURT DECISIONS $10,950,000 CITY OF LUBBOCK, TEXAS (Lubbock County) GENERAL OBLIGATION BONDS, SERIES 1982 Dated: June 1, 1982 Denomination: $5,000 t Principal and semi-annual interest (February l and August 1) payable at Citibank, N. A., New York, New York, or, at the option of the holder, at . Texas Commerce Bank, National Association, Lubbock, Texas. First interest coupon due February 1, 1983. Coupon bearer bonds, not registrable. These bonds (the "Bonds") were authorized at elections held on various dates, and constitute direct and voted general obligations of the City of Lubbock, payable from an ad valorem tax levied, within the limits prescribed by law, on taxable property located within the City. MATURITY SCHEDULE Amount Matte-uriity Rate Yield Amount Maturity Rate Yield 525,000 2-1-19884 550,000 2-1-1994* 550,000 2-1-1985 550,000 2-1-1995* 550,000 2-1-1986 550,000 2-1-1996* 550,000 2-1-1987 550,000 2-1-1997* 550,000 2-1-1988 - 550,000 2-1-1998* 550,000 2-1-1989 550,000 2-1-1999* 550,000 2-1-1990 550,000 2-1-2000* 550,000 2-1-1991 550,000 2-1-2001* 550,000 2-1-1992 550,000 2-1-2002* * The City reserves the right, at its option, to redeem Bonds maturing February 1, 1993, through February 1, 2002, both inclusive, in whole or any part thereof, on February 1, 1992, or any interest payment date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. Payment Record: The City has never defaulted Legality: Attornex General of the State of Texas and rs. umas, uauen n, oot man Morrow, ttorneys, a as Delivery: Anticipated on or about July 1, 1982 TABLE OF CONTENTS - 2 - Page ` Official Statement: i Description of the Bonds ---------------------- --------------------------------- 3 Elected Officials Appointed Officials ------------------------------------------------------------3 ---' ---- 3 Consultants and Advisors ------------------------------------- -------- 4/5 Introductory Statement ------------------------------------- - ------ 5/6::,.. Valuation and Debt'.Information--------------------------------------------- 7-- 6/8 Ad Valorem Taxation--------------------------------------------------------=-=- 8 Other Liabilities----------------------------------------------------------- 8 Funded Debt Limitation--------------------------------------------------------- - 9 Valuation and Funded Debt History ---------------------------------------------- 9 Taxable Assessed Valuations by Category --------------------- ----------------- 10 Estimated Taxable Assessed Valuations ------------------------------------------ 10 Authorized General Obligation Bonds -------------------------------------------- 10 Estimated General Obligation Bond Program -------------------------------------- Authorized But Unissued General Obligation Bonds of Overlapping Subdivisions --- 10 Estimated Overlapping Funded Debt Payable From Ad Valorem Taxes ---------------- 11 TaxData------------------------;------------------------------------- ---- - 11 12 Tax Rate Limitations---------------------------------------------------------- 12 1% Municipal Sales Tax --------------------------------------------- ---- - , 12 Estimated 1981-82 Tax Year Overlapping Taxes ----------------------------------- . -- Top Ten Taxpayers ----------------- ------------------------ ---- -- -- { .. 13 l Interest and Sinking Fund Management Index ------------------------------------- f" Computation of Self -Supporting Debt -------------------------------------------- 13 14., Debt Service Requirements - General Obligation Bonds --------------------------- TaxAdequacy------------------------------------------------------------------- 14 15 PensionFunds------------------------------------------------------------------ 16 General Fund Revenues and Expenditures ----------------------------------------- 17/18 Lubbock Power and Light -------------------------------------------------------- Condensed Statement of Operations - Electric Light and Power System ------------ 18 s' The Waterworks System ---------------------------------------------------- ---- 19/20 i 20 Condensed Statement of Operations - Waterworks System -------------------------- Increase in Water Rates -------------------------------------------------------- 20 20 The Sewer System -------------------------------------------- --------- --- 21 Condensed Statement of Operations - Sewer System ------------ ------- - AirportSystem-------------------------------------------------------- -- 21/22 �. 22 Condensed Statement of Operations - Airport System ----------------------------- General Information Regarding the City and Its Economy ----------------- -------- 22/28 rY Ratings------------------------------------------------------------------------ 29 29. TaxExemption------------------------------------------------------------------ Registration and Qualification of Bonds for Sale ----------- -------------------- 29 LegalInvestments in Texas ----------------------------------------------------- 29 { 29 j Legal Opinions and No -Litigation Certificate ----------------------------------- Authenticity of Financial Information ------------------------------------------ 30 30 Financial Advisor-------------------------------------------------------------- 30 Certification of the Official Statement ---------------------------------------- �:. Audited Financial Statements, September 30, 1981, examined by. Mason, Nickels & Warner, Certified Public Accountants ------------------------ Appendix The cover page hereof, this page, the appendix included herein -and any addenda, supplement or f amendment hereto, are part of the Official Statement. L i - 2 - ELECTED OFFICIALS Term CitCouncil Length of Service Expires Occupation t c isterecEl tie Mayor pr ;rp 84 President nd Co-Owner.—K-AR served 4 years previously as APPOINTEE April 1986 Partner,'lbe Insurance Group Agency f April 1984 Homemakers' April 1 98 2 Retired Chairman of the Board, Snook & Aderton, Inc. April 1984 President, Brown McKee, Inc. OFFICIALS i City Councilman Alan Henry 8 Years Mayor Pro -Tem t Employment Joan Baker - 2 Years Councilwoman Name In This Position' of Lubbock M. J. Aderton 4 Years Councilman J. Robert Massengale Director E. Jack Brown 2 Years Councilman City Attorney Appointed 8- 3-78 APPOINTEE April 1986 Partner,'lbe Insurance Group Agency f April 1984 Homemakers' April 1 98 2 Retired Chairman of the Board, Snook & Aderton, Inc. April 1984 President, Brown McKee, Inc. OFFICIALS i - 3 - Length of t Employment -Position and Length of Time With city Name In This Position' of Lubbock Larry J. Cunningham City Manager Appointed -- "I5 -pears J. Robert Massengale Director of Finance Appointed 2-25-80 2 Years. John C. Ross, Jr.. City Attorney Appointed 8- 3-78 '3 Years ' Evelyn E. Gaffga Secretary -Treasurer Appointed 7- 3-78 3 Years Samuel W. Wahl Director of Water Utilities .for 12 Years 29 Years: Carroll McDonald Director of Electric Utilities Appointed 1- 8-79 3 Years James E. Bertram Director of Planning for 10 Years 13 Years Jimmy W. Weston Director of Community Facilities for 6 Years 15 Years Marvin W. Coffee '. Director of Aviation for 10 Years 11 Years Denzel W. Percifull Director of Public Services for 4 Years` 5 Years Rita P. Harmon Director -of Personnel, Appointed 5-16-81 6 Years CONSULTANTS AND ADVISORS Auditors ------------------------------- -------------------- Mason, Nickels & Warner, CPA's _ Lubbock, Texas Bond Counsel - Dumas, Huguenin, Boothman &Morrow Dallas, Texas Consultants and Engineers, Water Treatment Plant Expansion and Airport -------------------------------------------- Parkhill, Smith & Cooper Lubbock, Texas Engineers for Generator System ----------------------------------------------- Tippett & Gee Abilene, Texas Engineers for 50 Year Water Supply --------------------------------- Freese and Nichols, Inc. Fort Worth, Texas Engineers for Transmission Lines and Substations ------------------- Hicks & Ragland Company Lubbock, Texas Financial Advisor ----------------------------- First Southwest Company Dallas, Texas - 3 - INTRODUCTORY STATEMENT This Official Statement of the City of Lubbock, Texas, a political subdivision located in Lubbock County (the "City"), is provided to furnish information in connection with the sale of the City's $10,950,000 General Obligation Bonds, Series 1982 (the•"Bonds"). The Official Statement was prepared to present for the purchaser of the Bonds information concerning the Bonds, the revenues (ad valorem taxes) pledged to the Bonds, the description. of , the revenue base, factors that may affect.pledged revenues, and other pertinent data,.'all as more fully described herein.. See "Table of Contents". �. Source of Payment The Bonds are direct and voted general obligations payable from'an annual ad valorem taxTe-vied on all taxable property located in the City within. the limits prescribed by law. See "Tax Rate Limitations". Purpose ... Proceeds from the sale of the Bonds will be used fbr Waterworks System and street ainage improvements. See "Authorized General Obligation Bonds". Future Bond Issues The City plans to market substantially all of its remaining authorized but unissued , 07,000 General Obligation Bonds over the period 1983 through 1984. See "Estimated General Obligation Bond Program". Administration of the _Ci�t + The .City operates under a Home Rule Charter which was approved y tee ectorateecem r 27, 1917, and thereafter amended from time to time. The Charter provides for the Council -Manager form of government for the City. Policy-making and .super- visory functions are the responsibility of and vested in the Mayor and City Council. Lits ation Concerning and Validation of the Bonds On February 9, 1982, the City of Lubbock fileda validation suit under ArticVe 717m-1, s yled Ex Parte City of Lubbock, Texas, -(Cause. Number 105,924 in the 99th Judicial District Court, Lubbock County) in which the City sought to validate the authorization and issuance of these 310,950,000 Bonds ($235,000 bonds out of those approved at an election held on November 9, 1967, and $10,715,000 bonds out of those approved at an election held on November 21, 1981). No interventions were filed and the Court (on March 8, 1982) entered a judgment upholding the validity of the Bonds. No appeal has been taken... The ,judgment reads in part: "That this Judgment shall be forever binding and conclusive against the City .of Lubbock, Texas, and all other parties to this cause, including those before the Court and all other parties irrespective of whether such parties are within the description of parties in interest contained in the notices of this proceeding heretofore pub- lished, and this Judgment shall constitute a permanent.injunction against the insti- tution by,any person of any action or proceeding contesting the validity of said elections of November 9, 1967, and November 21, 1981; or the procedures relating thereto, and from contesting the validity of said $10,950,000 CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1982, or the validity of provisions made for their payment or the issuance, sale or delivery of said bonds or the restraint or hindrance of any contract lawfully entered into pursuant to the purposes for which said bonds were voted." Petitions Affectin the Tax Rate, Assessed Valuation and Tax Lev On July 12, 1979, three petitions calling for an election to amend the ty s Home Rue Charter in relation to ad valorem taxes were filed with the City Council. These petitions; separately, ask for the following amendments: (1) limitation of the City's maximum tax rate to $1.12 per $100 Assessed Valuation; (2) limitation of the ratio at which property can be assessed for; ad valorem taxes to 60% of fair market value; and (3) provide that, "The annual ad valorem taxes levied by the governing authority of the City government shall not be increased on the basis of an increase in the rate of evaluation of taxable property now on the assessed valuation of property subject to tax, from the preceding tax year, without first securing approval of said increase at an election submitting said proposed increase to the voters of the City of Lubbock. Said in- crease, if any, requiring a majority vote for its approval."* * Text of the 3rd petition quoted verbatim. On July 26, 1979, the City Attorney reported to the City Council that, in his opinion, the provisions of the petitions, if incorporated into the City Charter, would contravene provisions of the Texas Constitution (the Tax Relief Amendment) and general laws recently enacted by the Texas Legislature and recommended that no charter amendment election be called at this time. - 4 - The City Council authorized the City Attorney to,. file a declaratory judgment action in the District Court of Lubbock County to determine whether the Council, under such circumstances, would be required to call such an'electipniand,,to 4eter1n1ne the rights of the petitioners, other citizens and the City Council in the 'p'r'6 ises, YSuch' 9awsuit'was filed July 26, 1979, in the 140th Judicial district Court of Lubbock County, and upon rendition of a final judgment, the Council will proceed in the manner directed by the Court., On June 10, 1980, the Court entertained motions for summary judgment filed by both parties. On June 27, 1980, the Court, by -summary judgment, ruled in favor of the City in all respects, finding that the City was under no legal duty to call an election for the submission of the 3 proposed charter amendments and that all 3 proposed charter amendments have been withdrawn from the field in which the initiatory process is operative by the Constitution and the general law of this State and the property tax code (SB 621). The defendants appealed to the Court of Civil Appeals for the Seventh Supreme Judicial District of Texas (Amarillo, Texas), which reversed and remanded the District Court judgment. The City filed a motion for rehearing which was denied by the Court of Civil Appeals, Amarillo. The City has filed an application for writ of error with the Supreme Court of Texas. No representation can be made at this time as to the ultimate result of the case on appeal or when any judgment will become final. Other Considerations .. Nevertheless, in the opinion of the City Attorney and Bond Counsel, any charter amendment which would prevent the payment of outstanding bonds (and interest thereon) issued prior to the adoption of the amendment by reducing the maximum tax rate or limit or the assessed valuation of taxable property (by changing the basis or manner of assessing property) would be an impairment of the contractual obligation with holders of the outstanding bonds and therefore not applicable thereto. VALUATION AND DEBT INFORMATION 1981 Market (Appraised) Valuation $2,807,601,557. Less: Local Exemptions at Market (Appraised) Value (1) Over 65 $99,248,070 Disabled Veterans 2,072,270 Disabled 4,720,090 _ 106,040,430 1981 Taxable Assessed Valuation (100% of 1981 Net Appraised Valuation) (2) $2,701;561,127 City Funded Debt Payable From Ad Valorem Taxes (As of 3-15-82) (See Notes 3, 4 and 5): General Purpose Bonds $ 26,534.798 - Waterworks Bonds 27,817,858 Sewer System Bonds 3,011,344 The Series 1982 Bonds 10,950,000 Total Funded Debt .ay able from Ad -Valorem Taxes $ 68,320,000 Less Self-supporting Debt: Waterworks Bonds $27,817,858 Sewer System Bonds (including $4,107,344 of this issue) 4 357 015 Tota General Purpose General Obligation Debt __ S 36,344,798 Interest and Sinking Fund, All General Obligation Bonds, As of 3-15-82 . S . 1,556,470 Ratio Total Funded Debt to Taxable Assessed Valuation ----------- -____ 2,53% Ratio Total General Purpose General Obligation Debt to Taxable Assessed Valuation ---- 1.35% 1982 Estimated Population 178,282*Per — 30 Per Capita Capita tal General Purp se Valuationessed GeneralOb igation De t53. $204.14 Area 7_91-1q Suare Miles * Source - City of Lubbock, Texas. - 5 - Note 1: These exemptions apply to either real or personal property assessments to a maximum of: (1) $16,700 market value of a residence homestead for those 65 years of age or older; (2) $3,000 Assessed Valuation for disabled veterans; and (3) $10,000 market value of a residence homestead for the disabled. These exemptions may be declared when taxes are paid, and -the City's Tax Assessor -Collector estimates that some additional exemptions will be recorded. Note 2: Assessed values of the capital shares of 10 banks, which are under litigation, are not included in the 1981 Taxable Assessed Valuation. Note 3: The City of Lubbock transfers to the General Fund each -fiscal year: (1) ' from Water Revenue Fund surplus, an amount at least equivalent to debt service requirements on Waterworks System General Obligation Bonds, and (2)from Sewer Revenue Fund surplus, an amount at least equivalent to debt service requirements on Sewer System General Obligation Bonds. Since both Waterworks and Sewer General Obligation Bonds are self-supporting, due to these transfers, the City's General Purpose General Obligation Debt has been calculated as shown. Note 4: As of 3-15-82 the above statement of indebtedness does not include the following presently outstanding Revenue Bonds, as they are payable solely from the net revenues derived from the Systems: $140,000 Waterworks System Revenue Bonds and $23,225,000 Electric Light and Power System Revenue Bonds. The statement also does not include the.following: $2,350,000 Airport Revenue Bonds, presently outstanding, as these bonds are payable solely from the gross revenues derived from the City of Lubbock Airport. In addition, $1,195,000 General Obligation Bonds, due March 15, 1982, have been deducted from outstanding General Obligation Debt. Note 5: The City's last General Obligation Bond sale was April 23, 1981, when $16,750,000 General Obligation Bonds, Series 1981, were offered and sold. AD VALOREM TAXATION The Bonds are payable from ad valorem taxes levied upon all taxable property within the City. The "Property Tax Code" (V.T.C.A., Tax Code), adopted in 1979, is a. codification of Texas law as to ad valorem taxation and reference is hereby made thereto for identification of property subject to taxation; property exempt from taxation and other exemptions granted and allowed, if claimed; the appraisal of property for purposes of taxation and the procedures to be followed and limitations applicable to the levy and collection of ad valorem taxes. Among other features, the Property Tax Code provides for: 1. A single Appraisal District in each County of the State to appraise property for purposes of taxation for all taxing units located wholly or partly within the County beginning January 1, 1982. 2. All property to 'be assessed at 100% of its.appraised value and prohibits the assess- ment of property for taxation on the basis of a percentage of its appraised value. 3. An increase in the effective tax rate of a taxing unit to be'limited to not more than 5% except by a referendum vote. In calculating the effective tax rate, taxes for bonds or other contractual obligations are excluded. - Recent amendments (Chapter 13, Acts of the 67th Legislature, First Called Session, 1981) to'the Property Tax Code (designed to clarify and remedy technical flaws experienced in implementing various provisions thereof) provide for: 1. Postponement of full implementation of an Appraisal District's operations, on a local option basis, until 1983 or 1984. 2. Mandatory county participation in the Appraisal District. 3. Changes the provisions relating to an effective annual tax increase being subject to a referendum election by: a. Raising the amount of the annual tax increase necessary to trigger a referendum election to 8%; -6- .b. Reducing the number of qualified voters necessary to petition for a1referendum election to 10%; c. Extending the period available to collect signatures on a petition for a refer- endum election to 90 days; d. Eliminating the requirement that a minimum of 25%. of the qualified voters must vote in a referendum election to be valid. 4. The State Property Tax Board to conduct an annual ratio study in each' Appraisal District to determine the degree of uniformity of appraisals and the weighted average level of appraisals within each major kind of property (effective 1-1-84).t 5. An increase in penalties for delinquent taxes. The new penalties are: a. 6% - First month 1% - Additional penalty each month through June 12% - All delinquencies.on July 1 regardless of delinquency period; b. A taxing unit may add an additional penalty to a maximum of 15% of taxes, penalty and interest due in order to defray costs of tax attorneys. 6. An increase in interest charged on delinquent taxes. The new interest charges are: a. 1% - First month; and b. An additional 1% increase each month thereafter. 7. Property within the Appraisal District to be reappraised at least once every 4 years (effective 1-1-84). 8. The establishment and application of uniform discovery and appraisal procedures on all types of business inventories without regard to the nature of the property comprising the inventory. 9. An increase for the first time in the appraised value of property above its 1981 assessed value in any year from 1982 through 1985, which may be, at the option of the local taxing unit, limited to 1 1/2 times the percentage of increase in the value of all other property on the unit's tax rolls. 10. Changes in the composition and selection of board members, the allocation of Appraisal District costs, the size of the Appraisal Review Board and the financial account- ability of Appraisal District. 11. Local taxing units to challenge the Appraisal Review Board's appraisals and judicial review of challenges, and authorizes local taxing units of an Appraisal District to overturn and veto actions of the Board of Directors of the Appraisal District. 12. Changes in the procedures and requirements pertaining to tax increases by local taxing units. The Property Tax Code as Applied to'the City of Lubbock 1. Beginning January 1, 1982, the Lubbock County Appraisal District assumed responsibility for appraising property in the City of Lubbock, as well as the other taxing units in the Appraisal District. The Lubbock County Appraisal District is governed by a board of five directors appointed by votes of the governing bodies of Lubbock County, the City of Lubbock, Lubbock Independent School District and the other cities, towns and school districts in the District with votes weighted by relative tax levy. 2. The Lubbock County Appraisal District has contracted with the City of Lubbock to collect city ad valorem taxes, beginning in 1982. 3. The City of Lubbock does not tax personal automobiles. -7- t 4. Since a program of on-going reappraisal of real property has been maintained by the City of Lubbock for many years, the City of Lubbock is of the opinion that major reappraisals of all property in the City will not be necessary. 5. The City Council of the City of Lubbock has not acted to grant the exemption of up to 40% of market value of a residence homestead from ad valorem taxation beginning in 1982 as per- mitted under a Constitutional Amendment authorized in November, 1981. OTHER LIABILITIES On September 1, 1976, the City purchased the land and buildings, owned by Auto Realty Company, Inc., located immediately north of City Hall. For many years previously, this property was the site of a Ford Motor Company dealership. Included in the purchase were 81,250 square feet of land and six buildings of various sizes totaling 52,614 square feet. A part of the property is being used as a City Hall Annex. and the balance is being converted to a Transit System maintenance and storage facility. Total purchase price was $389,820.00. Prior to purchase, the City obtained various appraisals of the property which varied from a high of $1,432,095 to a low of $362,860. Of the $389,820 purchase price, the City paid $40,000 in cash at the time of closing and executed its note for $349,820 for the balance. This note is classified as part of the City's General Long -Term Debt and is payable from the General Jund. The outstanding principal balance on 9-30-81 was $260,609.20 which matures in 9 annual installments, September 1, 1982, through September 1, 1990, with interest calculated at -7%. Note Amortization Schedule Fiscal Year Ending Outstanding 9-30Principal Interest Total • Balance T98� $260,609.20 1982 $ 21,757.20 $ 18,242.80 $ 40,000.00 238,852.00 1983 23,280.40 16,719.60 40,000.00 215,571.60 1984 24,910.00 15,090.00 40,000.00 190,661.60 1985 26,653.60 13,346.40- 40,000.00 164,008.00 1986 28,519.60 11,480.40 40,000.00 135,488.40 1987 30,515.60 9,484.40 40,000.00 104,972.80 1988 32,652.00 7,348.00 40,000.00 72,320.80 1989 34,937.60 5,062.40 40,000.00 37,383.20 1990 37,383.20 2,616.80 40,000.00 -0- $260,609.20 $ 99,390.80 $360,000.00 In order to provide for a majority of each annual installment on the note, the City Council directed the investment of $399,324.00 of General Fund surplus cash in $384,000.00 par value of U. S. Treasury Bonds, the interest earnings on these bonds to be applied to the annual $40,000.00 installment on the note. Annual interest earnings on the bonds total $30,990.00, leaving a balance of $9,010.00 to be budgeted from the General Fund each year. FUNDED DEBT LIMITATION There is no direct debt limitation in the City Charter or under State Law. The City operates under a Home Rule Charter that limits the maximum tax rate, for all City purposes, to $2.50 per $100 Assessed Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for general obligation debt service. See "Tax Adequacy". - 8 - Ratio Funded Debt to Taxable Assessed Valuation 7.06% 7.16% 7.46% 6.34% 5.17% 4.31% 3.81% 3.63% 3.51% 3.94% 2.51% (1) For all years Taxable Assessed Valuations are net of any exemptions. The City's Tax Assessor -Collector maintains an on-going reappraisal of Real Property in the City, reappraising approximately 1/4 of the City each. year. (2) Taxable Assessed Valuations for Fiscal Periods 1970-71 through 1980-81 have been adjusted for supplements and corrections to the tax rolls made subsequent to certification of the rolls. (3) Anticipated. TAXABLE ASSESSED VALUATIONS BY CATEGORY Property Assessment VALUATION AND FUNDED DEBT HISTORY Fiscal As % of Appraised Period Taxable Basis Year Ending 9 -30 Assessed Valuation(l) of Assessment Funded Debt Out - standin Year End T976=7f 1971-72 X317,204,665(2 630,]51,893(2 -- 60% 000 44,459,000 1972-73 659,742,523(2 60% 47,266,000 1973-74 716,225,294 2 60% 53,440,000 1974-75 797,387,868(2) 60% 50,546,000 1975-76 923,557,647(2 60% 47,763,000 1976-77 1,014,049,149(2 60% 43,682,000 1977-78 1,104,591,631(2 60% 42,107,000 1978-79 1,298,016,250(2) 6D% 47,086,000 1979-80 1,403,475,893(2) 60% 49,301,000 1980-81 1,565,733,545(2) 60% 61,710,000 1981-82 2,701,561,127 100% 67,900,000(3) Ratio Funded Debt to Taxable Assessed Valuation 7.06% 7.16% 7.46% 6.34% 5.17% 4.31% 3.81% 3.63% 3.51% 3.94% 2.51% (1) For all years Taxable Assessed Valuations are net of any exemptions. The City's Tax Assessor -Collector maintains an on-going reappraisal of Real Property in the City, reappraising approximately 1/4 of the City each. year. (2) Taxable Assessed Valuations for Fiscal Periods 1970-71 through 1980-81 have been adjusted for supplements and corrections to the tax rolls made subsequent to certification of the rolls. (3) Anticipated. TAXABLE ASSESSED VALUATIONS BY CATEGORY * As of 10-1 each year. (3) Personal automobiles became exempt from ad valorem taxes in 1979. - 9 - Property Assessment Adjustments As % of Appraised (lj Personal Real Personal Property: For Corrections And (2) Taxable Year Vaallu�e__ Estate Property Automobile D �d,971,0 Supplements . Assessed Valuation 1971 60% 7 ,501 6 480,135,900 134,524,140 16,722,500 1,230,647 $ 617,2 605 630,151,893 1972 1973 60% 60% 494,016,482 147,500,760 18,501,264 527,814,930 158,183,100 28,166,355 275,983 2,060,909 659,742,523 716,225,294 1974 1915 60% 60% 583,951,000 179,961,580 37,971,470 650,705,600 189,955,610 51,291,080 (4,496,182) 31,605,357 797,381,868 923,557,647 1976 1977 60% 60% 705,954,020 223,968,871 68,042,430 761,704,740 251,890,585 94,912,585 16,083,828 (3,916,279) 1,014,049,149 1,104,591,631 1978 1979 60% 60% 941,202,840 274,932,421 93,108,47211,227,483 1,105,749,615 299,111,144 10,609,830(3)12,000,696 1,298,016,250 1,403,475,893 1980 1981 60% 100% 1,195,978,655 323,734,323 9,981,770 2,106,697,370 576,327,753 18,536,004 36,038,797 1,565,733,545 N.A. 2,701,561,127 (1) The City's Tax Assessor -Collector maintains an on-going reappraisal program of real pro- perty, reappraising approximately 1/4 of (2) Taxable real property in the Assessed Valuations for 1974-1980 are net after City each year. the following exemptions (in terms of Assessed Valuation): Over 65 Disabled Homestead Veteran Disabled Year Exemptions Exemptions mo i' of Effective 'Exemptions Not 1975 13,323,150 Not Effective ect ie Not Effective 1976 11,888,760 $1,307,240 1977 14,159,830 1,646,220 Not Effective Not Effective 1978 34,991,600* 1,549,890* 1979 49,793,340* 1,928,450* Not Effective Not Effective 1980 52,926,900* 2,147,280* 1981 Not Effective 99,248,070* 2,072,270* $4,720,090* * As of 10-1 each year. (3) Personal automobiles became exempt from ad valorem taxes in 1979. - 9 - Fire Department - - ESTIMATED TAXABLE ASSESSED VALUATIONS (1) 33 d6 3Ib 95a,bM $43,907.000 ESTIMATED Estimated BOND PROGRAM Anticipated Issuance Taxable 1983 Fiscal Assessed Total Waterworks. System Sewer System M 1,423,000 Period Valuation a 8,075,000 .Street Improvements 3,164,000 1983-84 3,628,248,460 7,304,000 Storm Sewer and Drainage -0- 1984-85 4,188,557,620 373,000 Fire Station (for adjacent (1) All estimates are net after estimated exemptions at 100% of net appraised',value. Source: Lubbock County Appraisal District. 310,000 627,000 937,000 AUTHORIZED GENERAL OBLIGATION BONDS 1,689 000 3I6 933 -0- 12 042 000 ,90 , 0 AUTHORIZED BUT UNISSUED GENERAL OBLIGATION Amount Amount ; Date Amount Heretofore Being Unissued Purpose Authorized �5-'21-77— Authorized Issued Issued Balance aterworks System Waterworks System 8- 9-80 $16,775,000 3II�66 21,000,000 16,200,000 6- -0-. I5�6�6 4,800,000 Waterworks System 11-21-81 5,226,000 -0- -0- 5,226,000 Sewer System 5-21-77 3,303,000 2,030,000 -0-' 1,273,000 Sewer System 11-21-81 7,892,000 -0- 1,090,000; 6,802,000 Street Improvements 5-21-77 4,782,000 3,693,000 -0-1 1,089,000 Street Improvements 11-21-81 9,495,000 -0-. 3,280,000 6,215,000 Storm Sewer and Drainage 11- 9-67 1,950,000 1,715,000' 235,000 -0- Storm Sewer and Drainage 5-21-77 473,000 100,000 -0- 373,000 Fire Station (for adjacent areas, when annexed) 5-21-77 310,000 -0- -0- 310,000 Health Department 11-21-81 1,000,000 -0- 1,000,000 -0- , Airport 11-21-81 12,854,000. -0- 812,000 12,042,000 Traffic 11-21-81 4,283,000 -0- 4,263,000 -0- 11 21 81 877 000 -0- 250 000 627 000 Fire Department - - $96,220;gg 33 d6 3Ib 95a,bM $43,907.000 ESTIMATED GENERAL OBLIGATION BOND PROGRAM Anticipated Issuance 1983 1984 1985 Total Waterworks. System Sewer System M 1,423,000 $3.a,�—�- 5,352,000 . 1,300,000 a 8,075,000 .Street Improvements 3,164,000 4,065,000 75,000 7,304,000 Storm Sewer and Drainage -0- 373,000 -0- 373,000 Fire Station (for adjacent areas, when annexed) -0- 310,000 627,000 937,000 Airport 10 353 000 1,689 000 3I6 933 -0- 12 042 000 ,90 , 0 AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS OF OVERLAPPING SUBDIVISIONS The Lubbock Independent School District has $100,000 authorized but unissued School Building Unlimited Tax Bonds; these bonds were authorized in 1959 for stadium purposes. The District does not anticipate ever issuing these bonds. Lubbock County has $500,000 unissued Unlimited Tax Road Bonds, authorized in 1961, but has no plans to issue these bonds. - 10 - ESTIMATED OVERLAPPING FUNDED DEBT PAYABLE FROM AD VALOREM TAXES rk o - Estimated Taxing Jurisdiction Total City of Lubbock-- Funded Debt 3 % a licable Overlapping Funded Debt Lubbock Independent School District $(1 16,150,000(2 96.53% 36�3�798 15,589,595 Lubbock County Lubbock County Hospital District -0- -G- 93.16% 93.16% -0- Lubbock County water Control and -0- Improvement District No. 1 Lubbock-Cooper Independent School District -0- 1,268,000 93.16x 3.16 Frenship Independent -School District Roosevelt Independent School District 3,785,374 21.41% 44,887 810,449 Idalou-,Independent School District 491,000 1,228,000(3) 3.39% 0.01% 16,645. 123 TOTAL OVERLAPPING FUNDED _DEBT ^ $52,856,497 Ratio Overlapping Funded Debt to Taxable Assessed Valuation --------------------------1.96% _ ...Per Capita•Overlapping Funded Debt • $296.48 - (1j General Purpose General Obligation Debt, including the Bonds. (2j Includes $11.900,000 Bonds sold 1-21-82. ' (3 Includes $650,000 Bonds to be offered for sale 4'22-82. TAX DATA s ` (Year Ung 9-30) Distribution Tax Tax enera _.. oar -of City nterest an Yet Rate F3ind30� (1) % Current % Total Development SinkingFund g Ta Collections Collections 1971-72 1.14 0.3700 0.05 0.1200 11972-73 1.29 0.3600 0.05 7.183.732 x 94.06% 97.92% 0.8800 1973-74 1.36 0.4600 0.05_ 0.8500 8,510.678 _9,740,664 93.72% 93.18% 96:41% 96'.39% 1974-75 1.36 0.5400 0.05 0.7700 1975-76 1.36' 0.7000 0.05 0.6100 10,844,475 Y2,560.384 93.16% 93.43% ' '' 97.26% i 1976-77 '1.41 0.7500 0.05 0.6100 1977-78 1.'41 0.8600 14,298,093 93.09% 97.19% 95.76% 0.05 0.5000 1978-79 1.12 0.7500- 0.05 0.3200 15,574,742 14537782 93.84% 92.75% 96.41% 95.39%` 1979-80 1.12 0.6800 0.05 0.3900 1980-81 1.10 0.6800 0.05 0.3700 15,718,930 '.. 94.50% 98.68% 1981-82 0.66 0.3225 0.05 0.2875 17,223,069 ,17,830,3D3 94.00% 90.74X* 98.51%' 92,220 Part year only, through 2-28-82. (I) "Tax Levy" and "Percent Current Collections• for Tax Years 1970-71 through been adjusted to reflect final corrections and supplements to the 1980-81 have ` end of each fiscal year. tax rolls as audited at the Property within the -City is assessed as of January 1 of the each year; taxes become due October l of r same year, and become delinquent on January 31 of not permitted. Discounts are not allowed. the following year. Split payments are Penalty and interest charges for late payment are: Month Paid Penalty Interest Total e�ruary bid March 7% 2% 9% April 8% 3% 11% . ` May 9% 4% 13% June 10% 5% 15% July 12% 6% 18% After July penalty remains at 12%; interest increases 1% each month. r { i TAX RATE LIMITATIONS 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 types of tax obligations of the City within the limits x prescribed by law. Article XI, Section 5, of the.Texas Constitution is applicable to the City of Lubbock, and limits its maximum ad valorem tax rate to $2.50 per $100 assessed valuation (for all city purposes). The City operates, under a Home Rule Charter which adopts the Constitu- tional provisions. 1% MUNICIPAL SALES TAX (Effective 4-1-68) The City has adopted the provisions of Article 1066e, V.A.T.C.'S., and levies a 1% Sales and Use Tax within the City. This tax is collected and enforced by the State of Texas Comptroller of Public Accounts, who remits the proceeds, less a service fee, to the City monthly. -Revenues from this source for the periods shown have been: `Fiscal Net Estimated r; Year Collections % of Equivalent Net Ended Remitted Ad Valorem Ad Valorem Collections 9-30 to Cit Tax Lev Tax Rate Per Capita !: -1971- -$-,s - —-- _- ; 1972 3,086,164 42.96% . 0.490 �. 1973 3,780,338 44.42% 0.573 ' 1974 4,537,048 "­_: 46.58% 0.634 1975 4,763,912 `43.93% 0.597 1976 5,690,591 45.31% 0.616 -- .1917 6,806,680 47.61% 0.671 -- 1978 7,421,615 47.65% 0.672 -- 1979 8,160,916 56.14% 0.629 1980 8,722,450 55.49% 0.621 '~ ;50.14* 1981 9,791,566 56.85% 0.625 -- * Based on U.S. Census, 1980, of 173,979. ESTIMATED 1981-82 TAX YEAR OVERLAPPING TAXES Set forth below'.is an estimate of all 1981-82 Tax Year .taxes levied on an average $50,000 single-family residence by the shown taxing jurisdictions, assuming appraisals are as shown Basis of assessment in all cases is 100% of appraisal value. Actual tax billings will vary according to each jurisdiction's assessing procedures and the following does not purport to be 'an exact computation of such tax levies: w Estimated ~ Appraised 1981 Estimated i and Assessed Tax 1981 Taxes Taxing Jurisdiction Value Rate Levied j. y o Lu oc 0* 3FUM .bis i Lubbock Independent School District 45,000** 0.99000 445.50 Lubbock County 30,000 0.31000 93.00 Lubbock County Hospital District f 30,000 0.28314 84.94 High Plains Underground Water Con- servation District No. 1 .30,000 0.0100 3.00 Estimated Total 1981-82 Ad Valorem Taxes $956.44 Market value. ** After $5,000 market value residence homestead exemption. - 13 - TOP TEN TAXPAYERS 1981 % of 1981 Taxable Taxable Name of Taxpayer —Incorporated Nature of Property Assessed Assessed Valuation Texas Instruments Southwestern Bell Telephone Company ectron cs Manu acturer Telephone Utility r7r,r� 65,551,390 2.42% Southwestern Public Service Company Furr's, Inc. Electric Utility 30,603,540 1.13% South Plains Mall Retail Groceries Regional Shopping Center 22427812 20,145,810 0.83% 0.74% Energas Company (a division of Pioneer Corporation) Plains Co-op Oil Mill Gas Utility Oil Mill 14,281,180 0.52% Farmers Co -Op Compress Cotton Compress 13,200,710 12,809,540 0.49% 0.47% _ International Business Machines Waples-Platter West Computers, Business Machines 9,777,260 0.36% Wholesale Groceries TVT.T 8 I�0% INTEREST AND SINKING FUND MANAGEMENT INDEX General Obligation Debt Service Requirements for Fiscal.Year Ending 9-30-82 ----- $8,955,282 Interest and Sinking Fund, All General 1981 Interest and Sinking Fund Tax Levy Obligation Issues, 9-30-81 -- $ @ 95% 904,102 Collection --------------------------------------- Estimated Delinquent Tax Collections, ---------------- as budgeted ------------------; 7,378,639 261,258 Estimated Income from Other Sources, as budgeted ------------------- 978.125 9,522,124 EstimatedSurplus ---------------------------------------------------- ----------- $ 666,842 COMPUTATION OF -SELF-SUPPORTING DEBT Waterworks Sewer Net System Revenue Available for Fiscal Year System System Ending 9-30-81 $6,964,101 Less: Revenue Bond Requirements, 1981-82 $1,047,306 Fiscal Year 144,760 _O_' Balance Available for Other Purposes $6,819,341 $1,047,306 System General Obligation Bond Requirements, 1981-82 Fiscal Year 4,458,926 489,031 Balance $2,360,415 $ 558,275 Percentage of System General Obligation Bonds Self -Supporting 100.00%' 100.00% - 13 - i.0 � M Krxo 4 -CL N Ln to ^ N9 p u : Lff Ln M 4D J M to O L d d 1 LAtnwwtnr OwgmNd00e-1dLnCUMO N A L.p�Nl�tO Me -i O1e-•1 to Mpll�t�l�tn Mt0 e -t l0 NQ1M M 4JO C CN M01M t01�OtDO d.•� COw OONd Ode!'e-IM ISN M . d w w w w w w OD rrm N00101 w 01 toff NM O dr.. e-1 d%0 O N1���O.1N t� � AN �OtOM 00O tffMOt�tnOMOIMN.-4000 t�lO tt+ C1 A N C O d Ln Ln tndd d d M M M N 1-•1 ewe -1e-1 r4 C 0)CCD � H E N 1-4 -1 M N f- 1/ d Ln r.- 0 1, 0O e4 to Ln to to r - N 4-1 N.101 Lf1M t:O 1�tO CONOO.�CO MCOd d 44 a r -N C NO CON Ln 1_0001M M1001. -I M MNet 1_NM_4 M ' !1 0 E 01 e -I I� M 0 0O t0 to L=") �"� M O OD tO N9 cDl rl^ d CO d N cncc NCO Ln Oto N Oto d'Ole-I r- UD dM w-4 OI L[1 rl tO to e-4 L d to tO Ln Ln LO -or d M M N N N N N Ne -L1--1 e4 O J N A-7 d ~ tU H N C N to O M O co 0 Ln M to to 0l O O M d ISN N N to O N.1.+N01toe4totoMN.4dNOO1\NddMNLnd 01 Y•0 COId CONN NtONdMMOtn M1�010 e•-1001 Ln w 1n O O E0Od 0p f�lD Oltb MOD t0Nt0 e-1 O t0 e-1 fb LAMd til N 3c cc N to 0l Ln f� O el M Cl to d N M co Ln M N O t� n d M . 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System ... All permanent, full-time City employees who are not firemen and who were ess t an years of age when employed by the City are covered by the Texas Municipal Retirement System. The System is a contributory, annuity -purchase type plan 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. Options offered' under the System, and adopted by the City, include current, prior and antecedent service credits, 20 year vesting, updated service credit, and regular and supplemental disability benefits. An employee who retires receives an annuity based on the amount of the employee's contributions over -matched two for one by the City. Employee contribution rate is 5% of gross salary. The City's contribution rate is calculated each year using actuarial techniques applied to experience; the 1981 contribution rate was 7.51% of gross payroll and the 1982 contribution rate is 6.73%. Enabling statutes prohibit any member city from adopting options which impose liabilities that cannot be amortized over 25 years within a specified statutory rate. The actuarially computed unfunded prior service liability as of December 31, 1980, was $9,348,364; this liability is being actuarially amortized annually through 2005. City of Lubbock assets held by the System on December 31, 1980, were $1,633,429 for prior service liabilities and $15,321,579 for accrued current service liabilities. Unfunded accrued current service liabilities totaled $528,348 on December 31, 1980, and are being liquidated by a five year amortization adjustment included in normal contribution rates. s Fireman's Relief and Retirement Fund ... City of Lubbock firemen are members of the locally 1 administered Lubbock firemen's Re Tef and Retirement Fund, operating under an act passed in ! 1937 by the State Legislature and adopted by City firemen, by vote of the department, in 1941. i Firemen are not covered by Social Security. j. The fund is governed by seven trustees, three firemen, two outside trustees (one appointed by the firemen trustee's and one appointed by the Mayor), the Mayor or his representative and the �. Director of Finance of the City. Execution of the act is monitored by the Firemen's Pension i Commissioner, who is appointed by the Governor. } Benefits of retired firemen are determined on a "formula" or a "final salary" plan. Actuarial + reviews are performed every three years, and the fund is audited annually. Firemen contribute 9% of full salary into the fund and the City must contribute alike amount;.however,.the City i. contributes on a basis of the percentage of salary which is a ratio adjusted annually that bears the same relationship to the firemen's contribution rate that the City's rate paid into the 1 Texas Municipal Retirement System and FICA bears to the rate other employees pay into the Texas Municipal Retirement System and FICA. The City's present contribution rate is 10.99%.' An actuarial evaluation as of 3-31-80 was conducted by the firm of Rudd and Wisdom, Inc., Austin, Texas. The valuation balance sheet estimated unfunded liabilities of $5,336,161. The study found that the plan would be actuarially sound if a funding program is maintained which would completely amortize this unfunded liability in approximately 25 years, and concludes 'Since your present funding period is approximately 19 years, we consider your plan, based on present levels of benefits and contributions, to be actuarially sound - 16 - Ot OW -411 to= Q'1 Otm %0 "A OMLI'IM M to-4NM OQ Nh Ln •-4 �tV Q %O M 40 A g 1Gwmr-01A.-IN000 Ch NN N to O Ln Q Q C1••�I N OI. 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L t0 h 40 in > C t0 L 0) L {{,,,, 4J W 41 W -•- 4T 4i V) M V) J L W W L 0. 4- X 41 C 40 C t0 N W 41 W U Cr: LL N W 00 t0 r_ W .L t� 4A OL W 4- > - W W 7 4d UI r W E C I/4 C r t0 C U W- C t0 r C U U U-4/ 4- X W O W C W L r 40 L r f0 = 10 C C t0 't W t0 N U W C L ITN W to 4- L4 r •C7 L C CA C O .0 C 0 r r r 0f 0 u W LA E b W CO >- t0 4) 00 >- � CL > j a W C U W W L W U C r W N U 40 C N t0 t- C A C W E R Io r Ln U C - •'- t--' C C E C X C E L L tp 2i L A r- C t0 0 L N W 47 N •• N #� Q # # s d 4-t t0 L 42 •-' C L -r 4 L A L W W O 'r 40 fa -O W 0 r O 7 D T a.4 L t0 L W-> O � q.. t7 V- N W > N4.�J4-+4�4.�F- 4-t C.I tL-I'->=Q 4491.0 44NF- 4.r UO •n C O C O %n W H - 16 - LUBBOCK ROWER AND LIGHT Lubbock Power and Light was established in 1916, and, is presently the largest municipal system in the West Texas region and the thirdflarg�est fin th6-State of Texas. The municipal system competes directly with a privately owned utility company within the corporate limits of the City of Lubbock. Electric rates in the City are Aet by City Council Ordinance and are the same for both power systems. The private system, Southwestern Public Service Company, was granted a new 20 -year franchise in 1964, which is subject to certain minor amendments each five year period thereafter. The company pays the City a franchise tax of 2% of its gross receipts. At present, Southwestern Public Service supplies power to approximately 50% of the customers in Lubbock. Lubbock Power and Light generates part of its power requirements and has two generating sta- tions located within the City. These plants are geographically separated from one to seven miles and deliver bulk power to substations through a 69 KV transmission loop system. In December, 1981 the City commenced buying 10 MW of power through an interconnection with Southwestern Public Service Company. Generating Stations ... Total generating capacity is 216,500 KW. Gas turbines and I.C. gene- rators provide e system with 55,500 KW of ready reserve and emergency and peaking service. Generating units consist of the following tart generation for , Since the completion of the interconnection with Southwestern Public Service Company, Station #2 has been kept on standby and will be used in the future for peak power -purposes only. Transmission and Distribution ... A 69,000 volt (69 KV) transmission loop system, 36 mires length, provides u in power to six 20 MVA -69,000/12470 volt -substations. A second transmission loop system insulated for operation at 115 KV is under constr69 KV in uction. The distribution system includes approximately 680 miles of overhead distribution lines and approximately 110 miles of underground distribution lines. There are twelve 12,470/4160 volt substations in the distribution system. Net system load for Fiscal Year Ending September 30, 1981 was 681,584,750 KWH with a peak demand of 149,500 KW. Construction Program ... A major transmission system and distribution system construction and improvement program is under way utilizing proceeds of $9,000,000 Electric Light and Power System Revenue Bonds sold in August, 1981: Transmission System ... The transmission system program includes upgrading of 3 major substations, extension of a 69 KV transmission line, extension of a second circuit of an existing 115 KV transmission line, construction of a major substation in Northeast Lubbock, upgrading of computer capabilities, and installation of remotes in all major substations to fully coordinate relay and line switching capabilities. Distribution System ... The program includes extension of and improvements to the ex s ing 5MFI ution system including additional distribution circuits for substa- tions, extensions to new service areas, transformers, meter pedestals, poles and crossarms, regulators, capacitors, meters, service lines and other appurtenances. - 17 - Year Generator Manufacturer Installed Station Prime Mover Fuel Capacity i�� or berg— Nordberg 1947 �'—" 2 Dieselua Fuel Westinghouse 1952 2 Diesel Steam Turbine Dual Gas Fuel or Oil 2,500 11,500 Westinghouse Westinghouse 1953 1957 2 2 Steam Turbine Gas or Oil 11,500 Westinghouse 1958 2 Steam Turbine Steam Turbine Gas Gas or Oil or Oil 22,000 22,000 Westinghouse General Electric 1964 1965 Holly Holly Gas Turbine Steam Turbine Gas Gas or Oil 12,500 Worthington General Electric 1971 1974 Holly Holly Gas Turbine Gas Gas or Oil or Oil 44,000 18,000 General Electric 1978 Holly Turbine Steam Turbine. Gas Gas or Oil or Oil 20,000 50 000 6!500 , , Since the completion of the interconnection with Southwestern Public Service Company, Station #2 has been kept on standby and will be used in the future for peak power -purposes only. Transmission and Distribution ... A 69,000 volt (69 KV) transmission loop system, 36 mires length, provides u in power to six 20 MVA -69,000/12470 volt -substations. A second transmission loop system insulated for operation at 115 KV is under constr69 KV in uction. The distribution system includes approximately 680 miles of overhead distribution lines and approximately 110 miles of underground distribution lines. There are twelve 12,470/4160 volt substations in the distribution system. Net system load for Fiscal Year Ending September 30, 1981 was 681,584,750 KWH with a peak demand of 149,500 KW. Construction Program ... A major transmission system and distribution system construction and improvement program is under way utilizing proceeds of $9,000,000 Electric Light and Power System Revenue Bonds sold in August, 1981: Transmission System ... The transmission system program includes upgrading of 3 major substations, extension of a 69 KV transmission line, extension of a second circuit of an existing 115 KV transmission line, construction of a major substation in Northeast Lubbock, upgrading of computer capabilities, and installation of remotes in all major substations to fully coordinate relay and line switching capabilities. Distribution System ... The program includes extension of and improvements to the ex s ing 5MFI ution system including additional distribution circuits for substa- tions, extensions to new service areas, transformers, meter pedestals, poles and crossarms, regulators, capacitors, meters, service lines and other appurtenances. - 17 - Interconnection ... An interconnection with Southwestern Public Service Company has been comp- leted and the City commenced buying power on December 1, 1981. Lubbock Power and Light has contracted with Southwestern Public Service Company for the purchase of 10 MW of power and, in addition, the contract calls for a total capacity of 100 MW upon proper notice. Southwestern operates in Lubbock under a franchise and serves an area covering the Panhandle and South Plains of Texas and parts of Eastern New Mexico with an integrated electric generating and distribution system. Fuel Suepl .. Primary fuel supply for Lubbock's generating system is natural gas which is supplied -by Westar Transmission Company, a division of Pioneer Corporation, Amarillo, Texas, under a long term contract. Secondary fuel in the form of fuel oil is maintained. in storage in the City. Due to transmission system limitations, some brief curtailments of natural gas supplies have been experienced in the past few years, and Westar indicates that some 50% to 70% short duration (48 hours or less) curtailments, during peak gas usage periods, may be experienced in the future. No curtailments in excess of 70% are projected by Westar nor will total annual curtailment exceed 5% of annual volume. The City's present storage capacity of fuel oil, for standby, secondary fuel, is over 1,500,000 gallons and an adequate supply of fuel oil for 10 days' operation at 50% natural gas curtailment is maintained in inventory at all times; with expected resupply, this period would be substant- ially extended. The newest Holly steam generator has a tri -fuel capability as it is designed to burn natural gas, fuel oil and crude oil. In the City's opinion, its fuel supply is favorably positioned due to the long term natural gas reserves presently owned, contracted for and under development by Westar and other divisions of Pioneer Corporation. Carbon Dioxide Recover ... The Carbon -Dioxide Technology Corporation, Houston, Texas, is con- structing on- s ruct ng a carbon oxide (CO2) recovery plant on a.three acre site adjacent to the Holly Plant. CO2 will be recovered from the Holly Plant stack gasses for use in a tertiary -level oil recovery program in nearby Garza County fields. Estimated cost of the plant is $30,000,000; estimated annual revenues to Lubbock Power and Light include $360,000 from sale of CO2, and $150,000 from the sale of electric power. Completion is projected for September, 1982. Fiscal Year Ended Operating Revenues Non -Operating Income Gross Income Operating Expense (excluding depreciation) Net Revenue Electric Connections CONDENSED STATEMENT OF OPERATIONS ELECTRIC LIGHT AND OWER SYSTEM 9-30-81 9-30-80 9-30-79 34,002,728 SZ9 9,_8 � $23,619,71b 690,388 731,676 826,106 $34,693,116 $29,891,540 $24,445,824 9-30-78 9-30-77 624,791 945,564 $23,072;509 $20,119,844 30,393,827 24,870,851 20,077,479 17,355,243 14,292,538 $ 4,299,289 $ 5,020,689 $ 4,368,345 $.5,117,266 $ 5,827,306 33,370 32,051 30,390 29,204 28,352 Maximum Principal and Interest Requirements, Electric System Revenue Bonds, Fiscal Year Ending 9-30-83 -----------=------------------- $ 3,734,017 Coverage by Net Income, Fiscal Year Ended 9-30-81 ------------------------------ 1.15 Times Electric Light and Power System Revenue Bonds Outstanding, 9-30-B1 ------------- $23,450,000 Interest and Sinking Fund and Reserve Fund, Cash and Investments, 9-30-81---------------------------------------------------------------------- $ 3,044,158 - 18 - THE WATERWORKS SYSTEM Water Su 1 .. Primary source of water for Lubbock is the Canadian River Municipal Water Author ty which delivers water from its Lake Meredith reservoir, located on the Canadian River about 30 miles north of Amarillo, to member cities through an underground aqueduct system. Lubbock is one of eleven member cities of the Authority; other members are Amarillo, Pampa, Borger, Plainview, Slaton, Levelland, Brownfield', Tahoka, O'Donnell and Lamesa. Lubbock re- ceived 30,536 acre feet of water from the Authority in Calendar Year 1981, approximately 84% of the City's total consumption'. Financed through the Federal Bureau of Reclamation at a cost of $83,358,280, the Canadian River Project will eventually yield 103,000 acre feet of water annually. Lubbock is entitled to receive 37.058% of the available annual supply - 38,200 acre feet when yield reaches 103,000 acre feet. Cost of the Project is being repaid to the Bureau of Reclamation by the Authority through a reimbursable loan maturing annually through 2018; debt requirements are paid from revenues received by the Authority from sale of water to member cities. Member cities make payments for water received from water revenues. Other Water SuRply Sources . Part of the City's water supply is obtained from 230 water wells, all producing trom the Ogallala Formation, which underlies the High Plains of Texas. Combined capacity of these wells is over 40,000,000 gallons per day. Primary underground supply wells are located in the "Sand Hills" tract area about 60 miles northwest of Lubbock in Lamb and Bailey Counties, in which the City owns approximately 75,000 acres of water rights. 19,500 acres have been developed with 120 producing wells. The City has recently contracted for the annual purchase of a minimum of 1,350 acre feet of water from a private source adjacent to the Sand Hills tract. This water source is now used primarily for peaking purposes. 50 Year Water Supply Stud ... The City of Lubbock has conducted an investigation of additional long term water supply sources. Freese and Nichols, Inc., Consulting Engineers, Fort Worth, Texas, who conducted this investigation for the City, have recommended consideration of a site on the North Fork of the Double Mountain Fork of the Brazos River (the "Post Site") and a site on the South Fork of the Double Mountain Fork of the Brazos River (the "Justiceburg Site"), about 35 and 50 miles southeast of Lubbock respectively, for the development of additional surface supplies. Freese and Nichols reported to the City that the quantity and quality of water available, particularly at the "Justiceburg Site", are suitable for development. Devel- opment of these supplies would provide the City with a dependable supply of approximately 29 million gallons per day. The City has submitted an application to the Texas Department of Water Resources for rights to the Justiceburg Reservoir site. equ�The System .. Lubbock's Waterworks System is modern and efficient and property, plant and valued at $44,355,362, after depreciation and including cost of construction work in progress, at September 30, 1981. Equipment includes remote control and communication facili- ties with centralized operation and direction of the water supply system. The distribution system extends throughout the City and is designed for expansion. Present pumping capacity is 165,000,000 gallons per day. Average daily water consumption was 36.0 million gallons in 1981. Storage capacity consists of 14 ground storage reservoirs and 3 elevated steel storage tanks, providing a total storage capacity of 59,350,000 gallons. Storage capacity is entirely ade- quate for peak hour and fire protection requirements. Water Treatment Facilities . A water treatment plant for the treatment of water received from the Canadian River Municipal Water Authority ("CRMWA") was completed in 1967. Maximum daily input of "CRMWA" water is 42MGD under Lubbock's contract. Present capacity of the plant is 56MGD. The plant also treats "CRMWA" water for several other members of the Authority; the City of Lubbock is fully reimbursed for.these costs. Water System Improvement Program ... A'program of water treatment and supply expansion and UTstri ut on system improvements are in progress, including: construction of a 1,200 acre foot open storage reservoir near the City's present water treatment plant to permit the storage of surplus water received from the Canadian River Municipal Water Authority in off-peak periods. "CRMWA" deliveries are limited by contract to 42 MGD; the reservoir will permit storage of water when demand does not require full utilization of contract allocation ... Water treatment plant expansion designed to increase the plant's treatment capability from 56 MGD to 75 MGD, permitting treatment of stored surplus water as well as delivered water during peak demand - 19 - periods Construction of an additional high service pump station at the treatment plant with associated transmission distribution mains into the distribution system to permit expanded delivery of treated water ... Development of 25 wells and collection system expansion at the Bailey County Well Field ... Distribution System Improvements include construction of a pump station and main lines. Waterworks Revenue Bonds ... There are no authorized but unissued Waterworks Revenue Bonds. CONDENSED STATEMENT OF OPERATIONS .WATERWORKS SYSTEM Fiscal Year Ended i 9-30-81 9-30-80 9-30-79 9-30-78 9-30-77 Operating Revenues ►-1�4$ 8,828,597 j3;$18_,M T7—,OU 3 Non -Operating Income 3,058,647 1,213,711 841,414 480,397 277,718 Gross Income $14,247,801 $10,042,308 $7,660,112 $7,481,750 $5,293,162 Operating Expense (excluding depreciation)* 7,283,700 6,927,147 5,957,631 5,130,938 4,260,222 Net Revenue $ 6,964,101 $ 3,115,161 $1,702,481 $2,350,812 $1,032,940 Water Meters 55,511 54,589 53,458 52,408 50,442 * Operating expense includes construction repayment costs and operating and maintenance charges paid to the Canadian River Municipal Water Authority. Maximum Principal and Interest Requirements, Waterworks Revenue Bonds, Fiscal Year Ending 9-30-82 (final principal maturity 6-1-82) ------------------ $ 144,760 Coverage Based on Net Income, Fiscal Year Ended 9-30-81 ------------------------- 48.1 Times Waterworks System Revenue Bonds Outstanding, 9-30-81 ----------=----------------- $ 140,000 Interest and Sinking Fund and Reserve Fund, 9-30-81 ----------------------------- $1,338,541 INCREASE IN WATER RATES Effective OctoFer 1 Old Rates (Effective 10-1-80) New Rates (Effective 10-1-81) First 1,OZi�gaf ons Minimum First 1,000 gallons $4.9b (Minimum) Next 49,000 gallons 0.93/M gallons Next 49,000 gallons 1.03/M gallons Next . 200,000 gallons 0.80/M gallons Next 200,000 gallons 0.88/M gallons All over 250,000 gallons 0.75/M -gallons All over 250,000 gallons 0.83/M gallons THE SEWER SYSTEM The City owns and operates a modern sewage system, with sanitary sewage collection and treat- ment handled separately from storm water drainage. Treatment facilities consist of the South- east Plant, with an average daily flow capacity of 25 million gallons, and the Northwest Plant, with an average daily flow capacity of 0.75 million gallons. Treated effluent is used to irrigate approximately 3,000 acres of farm land, and Southwestern Public Service Company has a contract with the City to use part of the sewage effluent for cooling purposes in Southwestern Public Service Company's 512,000 KW Clifford B. Jones electric generating plant near Lubbock. No effluent is discharged into streams. The sanitary sewage collection system includes approximately 695 miles of trunk mains and collector lines with trunk mains installed for future expansion of the collection system. Average daily sewage flow in 1981 was 18.9 million gallons. There are no outstanding or authorized sewer revenue bonds. - 20 CONDENSED STATEMENT OF OPERATIONS SEWER 5YSTEM Fiscal Year Ended 9-3041 9-30-80 '$2, 9-30-79 9-30-78 9-30-77 Income $2,758, 635,SOr $',368,�W Expense 1,710,934 1,597,031 1,395,924 2,644 1,082,772 $1,617 874,305 Net Income S1, 047, 306 $1,038,770 S 972,942 $1,179,872 S 743,193 Sewer Customers* 55,511 54,589 53,45852,408 50,442 * Estimated. i } AIRPORT SYSTEM The City has owned and operated its airport since 1929, with scheduled airline service begin- ning in 1946. Lubbock International Airport is located six miles north of the central business district and has an area of over 2,632 acres, of which approximately 1,500 acres is used for farming and clear zones. Scheduled Airline Service .. Scheduled airline transportation is furnished by American Air . ones,ran nternational, Continental Airlines, Texas .International Airlines, ,and Southwest Airlines; all flights are by jet aircraft. Air Midwest, a Wichita, Kansas, based regional certificated air carrier, also serves the City. Non-stop service is provided to Dallas -Fort Worth Regional Airport, Dallas Love Field, Houston, El Paso, Austin,, Amarillo and Midland -Odessa. 1981 passenger enplanements totaled 474,600, compared to 455,925 in 1980. Lubbock International Airport Terminal The terminal building, completed in April, 197conta ns approximately y square feet; the terminal houses airport administrative of-fices, airline offices and ticket counters, the baggage claim area, car rental offices, a restaurant and infIight meal preparation kitchen, air freight tenants, meeting and press rooms, and provides 6 gates for airline use; 5 gates are jetway equipped. Parking space at the terminal has been expanded through construction of a new 2 -level 740 -space parking building, which gives the Airport a total parking capacity of 1,820, including 140 employees. A new FAA control tower became operational in March, 1977. The old terminal building has been converted to government and commercial office space and houses a FAA General Aviation District Office and Airway Facilities Sector. A FAA -operated Flight Service Station is located adjacent to the old terminal. Federal Express services are available. The FAA -operated control tower provides 24 hour service. Runway System ... The runway system consists of: I - 11,500' x 1501, north/south, primary runway with high intensity lighting and a FAA -operated instrument landing system and other navigational aids; 1 - 8,000' x 1501, east/west, cross -wind runway, with high intensity lighting and a FAA operated instrument landing system; 1 - 2,800' x 150' general aviation runway; and a taxiway system connecting the runways with aprons, the terminal and other facilities. General Aviation Facilities ... A building designed for the use of private aviation is. located on the east s e a t e airport. This 8,779 square foot building still houses some general aviation services, a National Weather Service office and a U. S. Customs office. General aviation services are mainly available from -two west -side located major fixed base operators who provide hangars, aprons, fuel sales and other services for private aviation. 100 T -Hangars house most of the approximately 200 private aircraft that are based at the airport. Terminal and Apron Improvement Program ... $12,854,000 General Obligation Bonds for airport Improvement purposes were approved at the election on November 21, 1 981; $812,000 of these are included in the Bonds, the proceeds to be used for architectural/engineering services and purchase of a jetway for Gate 5 at the terminal. -21- An estimated $10,220,000 will be used to expand the present terminal with a 60,000 square foot addition which will include two additional gates equipped with jetways, baggage handling + system, additional rent car areas and expanded airline lease apace. $2,634,000 will be used . for the City's share of the cost of terminal apron expansion; total estimated cost of terminal ! expansion is $11,246,040 of which the FAA's share is $8,612,040; included in the apron expan- sion is provision for the two new gates at the terminal and four additional, second phase, future gates. Warehouses and Land RentalsJ... The airport has five 16,000 square.foot warehouses and. six of er warehouses for storage space rental. `1 CONDENSED STATEMENT OF OPERATIONSAIRPORT SYSTEM i Fiscal Year Ended 9-30-81 -9-30-80 9-30-79 9-30-78 ` 9-30-77 - Operating Revenues < $2,210,270 $1,950,7163�,$b` 6s� 31 5,3I0 _$1,467,716 Mon -Operating Revenue 396,976 279,961 413,953 257,945 I67,716Non-Operating 185,865 ' s Gross Income $2,607,246 $2,230,677 '•52:277,015 $2,124,655 $1,653,581 ! Operating Expensexf .,... i (excluding depreciation) 1,972,780 4,732,584 1,467,720 1,191,964 1,183,939 l Net Revenue S 634,466 S 498,093 $ 809,295: S 932,691 S 469,642 <. .. Maximum Principal and Interest'Requirements, Airport Revenue Bonds, �. y - - -- Fiscal Year Ending9-30-82 (secured b Gross Income from System) - - $ 345,146 Coverage Based on Gross Income, Fiscal Year Ended 9-30-81 ------- - ----- 7.55 Times Airport Revenue Bond-s-butstanding, 9-30-81 ----------------- m ----------- ------ $2,475,000 j Interest and Sinking Fund, 9-30.81 -------------------------------- --------- $ 760,886 1 Reserve Fund, Cash and Investments, 9-30-81 ------------------------------------- $ 300,000 !!�, GENERAL INFORMATION REGARDING THE CITY AND ITS ECONOMY LOCATION AND AREA ... The City of Lubbock,:i~aunty .Seat of Lubbock County, Texas, is located on the South Plains of f. West Texas. Lubbock is'the economic, educational, cultural and medical center of the area. POPULATION .... Lubbock is the eighth largest City in Texas: r- „ ,City of Lubbock Cor orate Limits ,1910 Census 1920 Census 4,051 1930 Census 20,520- ! 1940 Census 31,853 1950 Census 71,390 1960 Census 128,691 �. _1970 Census < 149,101 1980 Census. 113 979 Estimated, 1982 17,282* r Standard Metropolitan Area (Lubbock County) 1970 Census 179,295 ' ! 1980 Census 211,651 " V • *Source: City of Lubbock, Texas j f - 22 - AGRICULTURE ... Lubbock is the center of a highly mechanized agricultural area with a majority of the crops irrigated with water from underground sources. Principal crops are cotton, grain sorghums and corn with livestock, sunflowers and soybeans as additional sources of agricultural income. The Texas Department of Agriculture and the Statistical Reporting Service, U.S. Department of Agriculture report as follows: Lubbock County's 1980 cotton production was 213,200 bales; grain sorghum production was 31,110,000 pounds; and corn production was 227,400 bushels. On January 1, 1981, there were an estimated 56,000 head of cattle and calves located on farms or in feed lots in Lubbock County. An estimated 108,000 cattle were marketed from feed lots during 1980. Lubbock County Cash Receipts from farm marketings, 1978/80, were: All Crops 1� 17 1980* Livestock and Products 27,053,000 39,255,000 33,771,OW 000 U.S. Government Payments 6,498,000 _ 5,971,000 6,434,000 Total Cash Receipts $105,608,000 $119,927,000 $130,050,000 * Preliminary - subject to revision. (Source: 1980 cotton production in a 23 county (including Lubbock County) 2,001,700 bales; 1960 grain sorghum production in this same area surrounding Lubbock was grain corn production was 66,237,400 bushels. area was 844,150,000 pounds; and Three major vegetable oil plants located in Lubbock have a combined weekly capacity of over 2,400 tons of cottonseed and soybean oil. Several major seed companies are headquartered in Lubbock. BUSINESS AND INDUSTRY ... Lubbock SMSA labor Force Estimates (Source: Texas mp oyment omm ss on) February January December February January December Civilian Labor Force 1982* 107�66 1982 1981 1981 1981 1980 Total Employment 101,900 100,600 102,950 96,540 �6 96,110 �� 96,970 Unemployment Percent Unemployed 5,300 4.9% 4,650 4.4% 3,800 3.7X 3,800 4,690 3,860 3.8% 4.7% 3.8% * Subject to revision. The Texas Employment Commission reported in March, 1982, that February, 1982, nonagricultural employment in the Lubbock area totaled 90,800, up from 89,260 in February, 1981; of this total an estimated 11,550 were employed in manufacturing compared to 12,060 in February, 1981. Over 240 manufacturing plants in Lubbock produce such products as consumer products utilizing semi -conductor elements, vegetable oils, heavy earth -moving machinery, irrigation equipment and pipe, farm equipment, electronic instruments, 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. - 23 - Some larger industries in Lubbock (with more than 100 employees) are: Estimated Employees December, Company Product 1981* Texas Instruments, Inc. Consumer Procucts with emi- on uctor Elements Johnson Manufacturing Company (Division of Heavy Earth -Moving Machinery and 250+ Eagle-Picher Industries) Farm Equipment Lubbock Avalanche -Journal Southwestern Newspaper 350+ Newspaper Corporation Litton Data Systems, Guidance and Control Navigational Equipment; Electronic 325+ Systems Division, Litton Industries, Inca Computer Systems Plains Co-op Oil Mill Vegetable Oil Products, Cottonseed 325+ Products Evans Transportation Company (Division of Evans Products Company) Pressure Vessels for Rail Cars 300+ Frito-Lay, Inc. (Subsidiary of Potato and Corn Chips 300+ Pepsico, Inc.) Goulds Pumps, Inc. Vertical Turbine Pumps 250+ Mrs. Baird's Bakeries Bread Products 175+ Coca-Cola Bottling Company Soft Drinks 175+ Bush Hog -Husky Company (Subsidiary.of Structural Steel Fabrication, Irriga- 150+ Allied Products, Inc.) tion Equipment, Pollution Equipment Grinnell Fire Protection Systems Company Automatic Sprinkler Heads 150+ (Subsidiary of Tyco Laboratories) Rainbo Baking Company, subdivision of Bread Products 130+ Cambell -Taggart Associated Bakeries, Inc. Bell Dairy Products, Inc. Dairy Products 100+ Hall Foundries & Manufacturing, Inc. Aluminum and Brass Castings, Wooden 100+ Foundry Patterns Lubbock Cotton Oil Company Cottonseed Oil and Other Cottonseed 100+ Products, Soyean Oil Dr. Pepper -Seven Up Bottling Company Soft Drinks 100+ Nubro Corporation Reground Ball Bearings, Formed Wire 100+ Coils, Starter Armatures * Source: Lubbock Chamber of Commerce. Texas Instruments; Inc., world leading developer and producer of semi -conductors and other electronic products, commenced manufacturing operations in Lubbock in April, 1973. The company employs over 3,000 in the manufacture of consumer products utilizing semi -conductor elements, 'and the servicing of these products. The Company's Consumer Products Division headquarters is located in Lubbock. Wholesale distribution represents a major sector of the Lubbock eonomy, with hundreds of outlets serving a 54 county area in West Texas and New Mexico. The U.S. Bureau of the Census. Census of Business, 1977, estimated Lubbock County (Lubbock Standard Metropolitan Area) retail trade at $866 million in 1977. Sales & Marketin Manag- ement, Sury X of Buying Power, estimates Lubbock County 1980 retail sa es a . There are ten banks in the City ... American State Bank, established 1948; Texas Commerce Bank (formerly Citizens National Bank), established 1906; First National Bank, established 1901; Lubbock National Bank, established -1917; The Plains National Bank, established 1955; Security National Bank, established 1963; Bank of the West, established 1973; Texas Bank & Trust Co., established 1973; Southwest Lubbock National Bank, established 1978; and Liberty State Bank, established 1979. There are six savings and loan associations in the City. Combined Bank Statistics Year End Deposits -1970 Year End De osits -19/b $47/,Z47,i84 1971 527,314,293 , 1977 1,104,602,663 1972 596,697,439 1978 1,104,896,188 1973 723,327,701 1979 1,219,990,000 1974 793,915,466 1980 1,369,037,000 1975 878,164,171 1981 1,500,177,000 - 24 - EDUCATION ... TEXAS TECH UNIVERSITY ... Established in Lubbock in 1925, Texas Tech University is the third largest State-owned Univer- sity in Texas and had a Spring, 1982 enrollment of 20,621. Accredited by the Southern Association of Colleges and Schools, the University. is' a co-educational, State -supported insti- tution offering the bachelor's degree in 87 major fields, the master's degree in 69 major fields, the doctorate degree in 32 major fields, 'and the 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 90 permanent buildings with additional construction in progress. 1981-82 faculty membership is over 1,500, and there are over 4,500 other full and part-time employees including professional and administrative staff. Including the Medical School, the University's operating budget for 1981-82 is over $153.7 million of which $110.3 million is from State appropriations; book value of physical plant assets, including the Medical School, is $305.7 million. In 1969, the State Legislature authorized the establishment of a medical school at the Univer- sity. Construction of Pod A of the school is complete, and construction on Pods B and C is near completion. The medical school opened in 1972, and had an enrollment of 334 for the Spring Semester, 1982, not including residents. There are 42 graduate students. The School of Nursing admitted its first class in Fall, 1981 and had a Spring Semester, 1982 enrollment of 65. The Allied Health School will admit its first class in Fall, 1982. OTHER EDUCATION INFORMATION The Lubbock Independent School District, with an area of 87.5 square miles, includes over 95% of the City of Lubbock. Spring, 1982, enrollment was 28,942; there were 1,996 faculty and professional personnel and 1,190 other employees. The District operates 5 senior high schools, 8 junior high schools, 35 elementary schools and other educational programs. The District is planning the construction of 3 new elementary schools. SCHOLASTIC MEMBERSHIP HISTORY* Refined Average School Student Daily YearMembership Attendance 32063 30716 1973-74 32,499 30,477 1974-75 32,209 30,255 1975-76 31,733 29,888 1976-77 31,502 29,683 1977-78 31,163 29,554 1978-79 29,877 28,284 1979-80 29,377 27,257 1980-81 28,828 27,044 1981-82 28,942** 26,991*** * Source: Superintendent's Office, Lubbock Independent School District. ** As of 2-26-82. *** As of the end of third six weeks period. Lubbock Christian College, a privately owned, co-educational senior college located in Lubbock, had an enrollment of 1,021 for the Spring Semester, 1982, and offers 23 bachelor degree programs. 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. Course offerings cover technical/vocational subjects, and Spring, 1982, enrollment was 828. The College also operates a major off -campus learning center at Reese Air Force Base; course offerings are in primarily academic subjects and Spring, 1982 enrollment was 394. -25- The State of Texas School for the Mentally Retarded, located on a 220 acre site in Lubbock, now consists of 37 buildings with accommodations for 556 students. The School's operating budget for 1981/82 is in excess of $11.5 million. The School is operating at 100% capacity, and has over 700 professional and other employees. TRANSPORTATION ... Scheduled airline transportation at Lubbock International Airport is furnished by American Airlines, Braniff International, Continental Airlines, Texas International, Southwest Airlines and Air Midwest. Non-stop service is provided to Dallas -Fort Worth Regional Airport, Dallas Love Field, Houston, Amarillo, Austin, El Paso and Midland -Odessa. 1981 passenger boardings totaled 474,600. Extensive private aviation services are located at the airport. Federal Express services are available. Rail transportation is furnished by the Atchison, Topeka and Santa Fe Railway Company and the Burlington -Northern, Inc., with through service to Dallas, Houston, Kansas City, Chicago, Los Angeles, and San Francisco. Texas, New Mexico and Oklahoma Bus Lines, a subsidiary of Grey- hound Corporation, provides bus service. Headquarters for T.I.M.E.-DC, Inc., a transcon- tinental motor carrier, are located in Lubbock, and 14 motor freight common carriers provide service. Lubbock has a well developed highway network including 4 U. S. Highways, 1 State Highway, a controlled -access outer loop and a county -wide system of paved farm -to -market roads. The U. S. Department of Transportation is extending the Interstate Highway System to Lubbock through construction of a 125 mile interstate highway (Interstate Highway 27) linking Lubbock to Interstate 40 at Amarillo; construction is in progress. GOVERNMENT AND MILITARY ... Reese Air Force Base, located 5 miles west of Lubbock, is an undergraduate Jet Pilot Training Base of the Air Training Command. The Base covers over 3,000 acres and has approximately 2,800 military and 650 civilian personnel. 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 agen- cies have offices in Lubbock; a Federal District Court is located in the City. HOSPITALS AND MEDICAL CARE ... There are seven hospitals with a March, 1982 total of 1,508 licensed beds. Methodist Hospital, the largest, employs 533 of its licensed 549 beds, and also operates an accredited nursing school; St. Mary's of the Plains Hospital utilizes 202 beds of its licensed 222 beds. Others include West Texas Hospital with 166 beds, Highland Hospital. with 123 beds, University Hospital, Inc. with 99 beds and Community Hospital of Lubbock with 76 beds. Lubbock County Hospital District, with boundaries contiguous with Lubbock County, owns the Lubbock General Hospital which it operates as a teaching hospital for the Texas Tech University Medical School, utilizing 210 of its licensed 273 beds. Lubbock has over 200 practicing physicians and surgeons (M.D.) plus the Texas Tech University Medical School Staff, and over 80 dentists. A radiology center for the treatment of malignant diseases is located in the City. RECREATION AND ENTERTAINMENT ... Lubbock's Mackenzie State Park and 60 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 2 country clubs, each with a golf course, swimming pool and tennis courts. -26- 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. The west and south periphery, about 50 acres, is being redeveloped privately with office buildings, hotels and motels, a hospital and other facilities. Available to residents are Texas Tech University programs and events, Texas Museum, Planetarium and Ranch Heritage Center exhibits and programs, Lubbock TMemorial ech eCivic Center and its events, Lubbock Symphony Orchestra programs, Lubbock Theatre Center, Lubbock Civic Ballet, Municipal Auditorium and Coliseum programs and events, the library and its branches, the annual Panhandle -South Plains Fair, college and high school football, basketball and other sporting events; modern movie theatres. CHURCHES ... Lubbock has approximately 200 churches representing more than 25 denominations. UTILITY SERVICES ... Water and Sewer - City of Lubbock. Gas - Energas Company (a division of Pioneer Corporation). Electric - City of Lubbock (Lubbock Power & Light) and Southwestern Public Service Company. Telephone - Southwestern Bell Telephone Company. MEDIA ... Newspapers - 1 daily (morning and evening); others semi -weekly -and weekly. Television and Radio - 3 network TV channels and 1 educational public service TV channel; cable TV services; AM and FM radio stations. ECONOMIC INDICES (1) Bank Building Utility Connections Year De.osits Po stal�Permits Water ­ s Electric e one -Receipts , 41S76iFW 3 Vi�r 1970 477,247,184 40,035,768 42,460 43,456 48,966 115,047 4,043,407 1971 527,314,293 69,209,358 43,012 44,039 49,970 1210545 4,323,582 1972 596,697,439 64,278,038 44,331 45,168 50,717 128,288 5,241,799 1973 723,3279701 78,844,779 45,565 45,650 50,994 135,344 5,317,985 1974 793,915,466 118,718,253. 46,745 45,971 51,739 141,942 5,737,352 1975 878,164,171 114,823,400 47,817 47,671 52,451 149,906 6,662,348 1976 1,013,973,289 91,904,380 49,933 48,809 56,008(2) 158,497 8,027,363 1977 1,104,602,863 131,951,646 50,825 50,062 60,077 161,860 10,778,787 1978 1,104,896,188 132,600,657 52,629 51,266 63,123 168,273 11,006,891 1979 1,219,990,000 104,883,750 53,705 54,878 65,294 171,609 11,758,260 1980 1,369;037,000 88,829,331 54,788 55,768 66,885 ' 174,110 12,882,061 1981 1,500,177,000 106,757,064 55,527 56,541 749224 174,263 13,867,490 Notes: (1) All data 1969-1981 as of 12-31, except Postal Receipts which are as of 6-30 for 1967-76 and as of 12-31 for 1977/81. (2) Electric connections include those of a privately owned utility company. 12-31-76 electric connections reflect institution of metering of individual apartment units. - 27 - N m Q m MM OO tD n0.-Id 40 t0 Ln M t.. 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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 of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. TAX EXEMPTION The delivery of the Bonds is subject to an opinion of Messrs. Dumas, Huguenin, Boothman & Morrow, Bond Counsel to the City ("Bond Counsel"), to the effect that interest on the Bonds is exempt from all present Federal income taxes under existing statutes, rulings, regulations and court decisions. The laws, regulations, court decisions and administrative regulations and rulings upon which the conclusion stated in Bond Counsel's opinion will be based are subject to change by the Congress, the Treasury Department and later judicial and administrative decisions. REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds 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 Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any juris- diction. The City assumes no responsibility for qualification of the Bonds under the securi- ties laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with. regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS IN TEXAS The Bonds are legal investments for sinking funds of Texas counties, cities and towns. They are eligible to secure Texas state, county, city and school district funds and constitute legal investments for insurance companies in the State of Texas. No review has been made of the laws of states other than Texas to determine whether the Bonds 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 Bonds, including the unqualified approving legal opinion of the Attorney General of the State of Texas, to the effect that the Bonds are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the unqualified approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds is exempt from Federal income taxation under existing statutes, regula- tions, rulings and court decisions. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Bonds, or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Bonds or the coupons appertain- ing thereto, 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 such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Bonds in the Official Statement to verify that such description conforms to the provisions of the bond resolution. The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds are contingent on the sale and delivery of the Bonds. The legal opinion will be printed on the Bonds. - 29 - AUTHENTICITY OF FINANCIAL INFORMATION The financial data and other information contained herein have been obtained from the City's records, audited financial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the surrmar.ies 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. FINANCIAL ADVISOR First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company may submit a bid for the Bonds, either independently or as a member of a syndicate organized to submit a bid for the Bonds. CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds, the Purchaser will be furnished 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 pertain- ing 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 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 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, includ- ing 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. The District will furnish the Purchaser, as a part of the transcript of proceedings, a certi- fied copy of a resolution of the City Council as of the date of the sale of the Bonds which will approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Pur- chaser. ATTEST: EVELYN E. GAFFGA City Secretary - 30 BILL McALISTER Mayor APPENDIX The information contained in this Appendix has been reproduced from the City of Lubbock, Texas Annual Audit Report for the Fiscal Year Ended September 30, 1981. The information pre- sented represents only a part of the Annual Audit Report and does not purport to be a complete statement of the City's financial condition. Reference is made to the complete Annual Audit Report for further information.