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General Obligation Refunding Bonds - 5/28/1993* Preliminary, subject to change. PRELIMINARY OFFICIAL STATEMENT m o £ y Dated May 28, 1993 5 m °NEW ISSUE Ratings: Moody's: "" = '13 S &P: ' o 1 (See "Other Information - Ratings" herein) g ° c under statutes, regulations, Bonds b g publi hed rulings a d court dec s on ex s ng on the date subject subje to the matters described under "Tax iO —° ie Matters" herein, including the alternative minimum tax on corporations. $ , o 'fa 3 CITY OF ROUND ROCK, TEXAS (Williamson and Travis Counties) $21,520,000* $3,000,000 ▪ g GENERAL OBLIGATION REFUNDING BONDS, and COMBINATION TAX AND REVENUE SERIES 1993 CERTIFICATES OF OBLIGATION, SERIES 1993 EN£ � Dated: June 1, 1993 Due: August 15, as shown on inside cover p„,= Interest on the $21,520,000* City of Round Rock, Texas General Obligation Refunding Bonds, Series 1993 (the "Bonds "), and on the o $3,000,000 City of Round Rock, Texas Combination Tax and Revenue Certificates of Obligation, Series 1993 (the 'Certificates "), will accrue 5 from the dated date as shown above and will be payable August 15 and February 15 of each year commencing February 15, 1994, and will g 3 = be payable by check or draft mailed by the Paying Agent/Registrar on the interest payment date to the registered owners thereof as shown on 8 the records of the Paying Agent /Registrar at the close of business on the Record Date (herein defined) or by such other method acceptable E o to the Paying Agent /Registrar, requested by, and at the risk and expense of the registered owner. Interest on the Bonds and Certificates will e ° be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. The Bonds and Certificates are issued only as fully registered - m o obligations in the denomination of 55,000 or any integral multiple thereof within a maturity. X 5 The initial Paying Agent/Registrar shall be Ameritrust Texas National Association, Austin, Texas (the "Paying Agent/Registrar ")(see "Bond d„ g "3 E' Information - Paying Agent/ Registrar" and "Certificate Information - Paying Agent/Registrar ") Payment, transfers and exchanges of Bonds o and Certificates shall be handled at the offices of the Paying Agent/Registrar in Dallas, Texas (the "Designated Payment/Transfer Office "). _ E - The principal of the Bonds and Certificates shall be payable upon presentation at the Designated Payment/Transfer Office of the Paying c d Agent /Registrar. E The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Article 717k, Vernon's Annotated E E Texas Civil Statutes, as amended ( "VATCS "), and an ordinance (the "Bond Ordinance ") passed by the City Council of the City, and are 5 general obligations of the City payable, both as to principal and interest, from the proceeds of a continuing, direct annual ad valorem tax Z..5 levied, within the limits prescribed by law, on all taxable property located within the Ctty, as provided in the Bond Ordinance (sea "Bond • L. Information - Security for Bonds ") E n — y3 E � The Certificates are being issued pursuant to the provisions of Articles 1175 and 1111 -1118, VATCS, as amended, inclusive, Texas Local 8 a A Government Code, Section 271.041 through Section 271.065, as amended, inclusive (the "Certificate of Obligation Act of 1971"), the City's 2 L " Home Rule Charter, and an ordinance (the "Certificate Ordinance "), passed by the City Council of the City, and will constitute general _ ° obligations of the City, payable from ad valorem taxes levied against all taxable property located therein, within the limits prescribed by law ▪ 4 and further secured by a hen on and limited pledge of not to exceed $1,000 in amount of surplus revenues of the City's waterworks and sewer • system, after deduction of maintenance and operation expenses and all debt service, reserve and other requirements in connection with all of the City's revenue bonds or other obligations (now or hereafter outstanding) which are payable from all or part of the net revenues of the City's waterworks and sewer system (see "Certificate Information - Authority for Issuance "). 898 u o Proceeds from the sale of the Bonds will be used for the purpose of refunding a portion of the City's outstanding general obligation bonds - L and certificates of obligation, in order to lower the overall debt service requirements of the City (see "Schedule 1 - Schedule of Refunded • N Bonds Proceeds of the Bonds will also be used to pay the costs of issuance related to the Bonds. • 2 Proceeds from the sale of the Certificates will be used for the purpose of paying contractual obligations to be incurred by the Ctty for (I) c 3 construction of Improvements to the street, bridge and road system of the City, including Gattis School Road and (2) the payment of fiscal, E engineering and legal fees Incurred in connection therewith E o co o_� • t° The Bonds and Certificates are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving ▪ 1 opinions of the Attorney General of the State of Texas and of McCall, Parkhurst & Horton L L.P., Austin, Texas, Bond Counsel. The legal E ° v opinion of Bond Counsel will be printed on or attached to the Bonds and Certificates (see Appendix C - 'Form of Bond Counsel's Opinions"). 7 4 Certain matters will be passed upon for the Underwriters by Vinson & Elkins L.L P., Austin, Texas, Counsel for the Underwriters. It is E g expected that the Bonds and Certificates will be available for delivery on July 8, 1993. o N 5 MORGAN STANLEY & CO. Z73.15 INCORPORATED E o A BANC ONE CAPITAL CORPORATION LEGG MASON WOOD WALKER a INCORPORATED � E MASTERSON MORELAND SAUER WHISMAN, INC. See Maturity Schedules on Inside of Cover * Preliminary, subject to change. $21,520,000* General Obligation Refunding Bonds, Series 1993 Amount Maturi ty $ 470,000 8 -15 -1994 670,000 8 -15 -1995 715,000 8 -15 -1996 840,000 8 -15 -1997 890,000 8 -15 -1998 3,245,000 8 -15 -1999 2,655,000 8 -15 -2000 2,365,000 8 -15 -2001 2,290,000 8 -15 -2002 2,465,000 8 -15 -2003 2,090,000 8 -15 -2004 2,510,000 8 -15 -2005 75,000 8 -15 -2006 75,000 8 -15 -2007 80,000 8 -15 -2008 85,000 8 -15 -2009 (Accrued interest from June 1, 1993 to be added) $3,000,000 Combination Tax and Revenue Certificates of Obligation, Series 1993 Amount Maturi ty $ 75,000 8 -15 -1995 110,000 8 -15 -1996 75,000 8 -15 -1997 100,000 8 -15 -1998 100,000 8 -15 -1999 140,000 8 -15 -2000 155,000 8 -15 -2001 75,000 8 -15 -2002 75,000 8 -15 -2003 80,000 8 -15 -2004 80,000 8 -15 -2005 185,000 8 -15 -2006 640,000 8 -15 -2007 580,000 8 -15 -2008 360,000 8 -15 -2009 170,000 8 -15 -2010 Rate Rate (Accrued interest from June 1, 1993 to be added) Price or Yield Price or Yield The City reserves the right, at its option, to redeem Bonds or Certificates having stated maturities on and after August 15, 2003, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2002, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption (see "Bond Information - Redemption of Bonds" and "Certificate Information - Redemption of Certificates "). •Amarillo Fort Worth Dallas ■ Paso 3 ROUND ROCK * Austin 'San Antonio Houston • No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information, or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Underwriters. This Official Statement does not constitute an offer to sell Bonds and Certificates in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. Certain information set forth herein has been obtained from the City and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriters. Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described herein since the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS AND CERTIFICATES, THE UNDERWRITERS MAY OVER - ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AND CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. OFFICIAL STATEMENT Description of the Bonds OFFICIAL STATEMENT Description of the Certificates ..... .... 1 CITY ADMINISTRATION Elected Officials . .... .......... . 5 Appointed Officials 5 Consultants and Advisors 5 SELECTED DATA FROM THE . OFFICIAL STATEMENT - 6 INTRODUCTION ...... . ..... 8 PLAN OF FINANCING FOR THE BONDS Purpose 8 Refunded Bonds 8 Sources and Application of Funds 9 BOND INFORMATION Authority for Issuance . _ 9 Security for Bonds 9 Redemption of Bonds 9 Paying Agent /Registrar 10 Transfer, Exchange and Registration 2 ' 10 Limitation on Transfer of Bonds" Called for Redemption 10 Record Date for Interest Payment 10 CERTIFICATE INFORMATION Authority for Issuance 11 Security for Certificates 11 Redemption of Certificates - 1 Paying Agent/Registrar 1 Transfer, Exchange and Registration 12 Limitation on Transfer of Certificates Called for Redemption 12 Record Date for Interest Payment 12 HOLDERS' REMEDIES . 12 BOND INSURANCE 12 TAX INFORMATION Ad Valorem Tax Law 13 Valuation, Exemptions and Debt Obligations 14 Taxable Assessed Valuations by Category 15 Valuation and Funded Debt History 16 Tax Rate, Levy and Collection History 16 Ten Largest Taxpayers 17 Tax Rate Limitation 17 Assessed Valuations, Tax Rates, Outstanding Debt and Authorized But Unissued Bonds of Overlapping Taxing Jurisdictions 18 TABLE OF CONTENTS 4 DEBT INFORMATION Debt Service Requirements . ..... .... 19 Estimated Direct and Overlapping Funded Debt Payable From Ad Valorem Taxes (As of 5 -1 -93) 20 Interest and Sinking Fund Budget Projection 20 . Computation of Self- Supporting Debt . ... 20 Authorized but Unissued General Obligation -.Bonds ... ........... 20 Anticipated Issuance of General Obligation Debt . 21 Funded Debt Limitation 21 Other Obligations 21 Pension Fund ' 21 FINANCIAL INFORMATION General Fund Revenues and Expenditures 22 Municipal Sales Tax History . . , 22 Financial Policies 23 TAX MATTERS Opinion 24 Federal Income Tax Accounting Treatment of Original Issue Discount 24 Collateral Federal Income Tax Consequences 25 State, Local and Foreign Taxes .... . 25 OTHER INFORMATION Ratings 26 Litigation 26 Registration and Qualification of the Bonds and Certificates for Sale .... 26 Legal Investments and Eligibility to Secure Public Funds in Texas ... 26 Legal Opinions and No- Litigation Certificate .... 26 Underwriting .... 27 Financial Advisor 27 Verification of Arithmetical and Mathematical ' Computations 27 Miscellaneous 27 SCHEDULE I - SCHEDULE OF REFUNDED BONDS APPENDICES General Information Regarding the City A Excerpts From the Annual Financial Report B Form of Bond Counsel's Opinions C The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement. 1 { ( Elected Officials Appointed Officials Name Robert L. Bennett, Jr. Joanne Land David Kautz Stephan L. Sheets Forrest Child For additional information regarding the City, please contact: CITY ADMINISTRATION Length of Term City Council Service ' Expires Occupation Charles C. Culpepper of May 1996 Self - employed Mayor Jimmy Joseph 4 Years May 1995 Self- employed Mayor Pro Tem Place 6 Rober. Stluka 3 Years May 1996 President, Automotive Wholesalers of Councilman Place 1 Texas Rod Morgan 1 Year May 1995 Self - employed Councilman Place 2 Rick Stewart 2 Years May 1994 Retired Businessman Councilman Place 3 Earl Palmer 3 Years May 1996 Retired Businessman Councilman Place 4 Martha A. Chavez m May 1994 School Teacher Councilwoman Place 5 (I) Elected on May 1, 1993. Mayor Culpepper served on the City Council for 71/2 years before resigning on November 24, 1992 to run for Mayor. (2) Elected on January 16, 1993 to fill the vacancy in Place 5 created by a resignation. City Manager Assistant City Manager /City Secretary Director of Finance City Attorney Tax Collector -Round Rock Independent School District City full employees numbered 296 as of October 1, 1992, of which 65 were assigned to the Police Department. Consultants and Advisors Auditors Pena, Swayze & Company Round Rock, Texas Bond Counsel McCall, Parkhurst & Horton L.L.P. Austin, Texas Financial Advisor First Southwest Company Austin, Dallas and San Antonio, Texas David Kautz George D. Janning Charles J. Hall, Jr. Director of Finance First Southwest Company First Southwest Company City of Round Rock or 98 San Jacinto Boulevard or 1850 One Riverwalk Place 221 East Main Street Suite 370 700 N. St. Mary's Street Round Rock, Texas 78664 Austin, Texas 78701 San Antonio, Texas 78205 (512) 255 -3612 (512) 476 -4372 (210) 222 -8522 5 Position Length of Service 14 Years 22 Years 15 Years 14 Years 11 Years SELECTED DATA FROM THE OFFICIAL STATEMENT The selected data on this page is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement. The offering of the Bonds and Certificates to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this data page from this Official Statement or to otherwise use it without the entire Official Statement. - This data page was prepared to present the purchasers of the Bonds and Certificates information concerning the Bonds and Certificates, the security for the payment of the Bonds and Certificates, the description of the tax base and other pertinent data, all as more fully described herein. The Issuer The City of Round Rock, Texas (the "City") is a political subdivision of the State of Texas (the "State ") located in Williamson and Travis Counties, Texas, operating as a home -rule city under the laws of the State of Texas (the "State ") and a charter approved by the voters in August, 1977. The City operates under a Council/Manager form of government where the mayor and six councilmembers are elected for staggered three -year terms. The Council formulates operating policy for the City while the City Manager is the chief administrative officer. The City is located in Williamson and Travis Counties, Texas, 8 miles north of Austin and 85 miles south of Waco on Interstate Highway 35. The City is also situated on U.S. Highway 79, which runs east and west. Both U. S. Highway 79 and Interstate Highway 35 are main arteries of traffic in the State (see Appendix A - "General Information Regarding the City"). Payment Record The City has never defaulted. Ratings The presently outstanding tax supported debt of the City is rated "A" by Moody's Investors Service ( "Moody's ") and "A -" by Standard & Poor's Corporation ( "S &P "). Applications for contract ratings on the Bonds and Certificates have been made to Moody's and S &P (see "Other Information - Ratings "). THE BONDS The Bonds The Bonds are being issued in the principal amount of $21,520,000* pursuant to the general laws of the State, particularly Article 717k, VATCS, as amended, and an ordinance (the "Ordinance ") passed by the City Council of the City (see "Bond Information - Authonty for Issuance "). Security for the Bonds The Bonds constitute general obligations of the City, payable from a continuing direct annual ad valorem tax levied on all taxable property within the City in an amount sufficient to provide for payment of principal of and interest on all ad valorem tax debt, within the limits prescribed by law, as provided in the Ordinance (see "Bond Information - Security for Bonds "). ' Optional Redemption The City reserves the right, at its option, to redeem Bonds having stated maturities on and after August 15, 2003, in whole or in part in principal amounts of 55,000 or any integral multiple thereof, on August 15, 2002, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption (see "Bond Information - Redemption of Bonds "). Tax Exemption for the Bonds In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. Use of Bond Proceeds Proceeds from the sale of the Bonds, together with other available funds, will be used for the purpose of refunding a portion of the City's outstanding general obligation bonds and certificates of obligation, in order to lower the overall debt service requirements of the City. Proceeds will also be used to fund the costs related to the issuance of the Bonds (see "Plan of Financing for the Bonds - Purpose "). * Preliminary, subject to change. 6 THE CERTIFICATES The Certificates The Certificates are being issued in the principal amount of $3,000,000 pursuant to the provisions of Articles 1175 and 1111 -1118, VATCS, as amended, inclusive, Texas Local Government Code, Section 271.041 through Section 271.065, as amended, inclusive (the "Certificate of Obligation Act of 1971"), the City's Home Rule Charter, and an ordinance (the "Certificate Ordinance "), passed by the City Council of the City (see "Certificate Information - Authority for Issuance "). Security for the Certificates The Certificates constitute general obligations of the City, payable from ad valorem taxes levied against all taxable property located therein, within the limits prescribed by law and further secured by a limited pledge of not to exceed $1,000 in amount of certain surplus revenues derived from the operation of the City's waterworks and sewer system (see "Certificate Information - Authority for Issuance "). Optional Redemption The City reserves the right, at its option, to redeem Certificates having stated matunties on and after August 15, 2003, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2002, or any date thereafter, at the par value thereof plus accrued Interest to the date fixed for redemption (see "Certificate Information - Redemption of Certificates "). Tax Exemption for the Certificates In the opinion of Bond Counsel, the interest on the Certificates will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. Use of Certificate Proceeds . Proceeds from the sale of the Certificates will be used for the purpose of paying contractual obligations to be incurred by the City for (1) construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of fiscal, engineering and legal fees incurred in connection therewith. Selected Issuer Indices Ratio Funded Fiscal Per Capita Per Capita Debt to Year Estimated Taxable Taxable Funded Funded Taxable % of Ended City Assessed Assessed Tax Tax Assessed Total Tax 9 -30 Population Valuation Valuation Debt Debt Valuation Collections 1985 25,500 $ 461,785,785 $18,109 $24,394,000 $ 956.63 5.28% 99.69% 1986 26,821 1,045,495,041' 38,980 35,852,000 1,336.71 3.43% 93.33% 1987 29,179 1,170,066,819 40,100 44,020,000 1,508.62 3.76% 98.77% 1988 30,352 1,208,589,028 39,819 44,693,000 1,472.49 3.70% 100.10% 1989 30,639 1,164,006,659 37,991 43,251,000 1,411.63 3.72% 102.29% 1990 30,923 1,052,509,796 34,036 43,000,700 1,390.57 4.09% 100.15% 1991 32,213 934,207,091 29,001 41,038,200 1,273.96 4.39% 99.69% 1992 33,769 836,585,606 24,774 38,738,400 1,147.16 4.63% 99.80% 1993 36,139 914,420,539° 25,303 40,796,106n 1,128.87 4.46% 98.70 % ' (1) Revaluation. (2) Includes the Bonds and Certificates and excludes the Refunded Bonds. Preliminary, subject to change. (3) Collections for part year only, through March 31, 1993. 7 OFFICIAL STATEMENT Relating to $21,520,000* CITY OF ROUND ROCK, TEXAS (Williamson and Travis Counties) GENERAL OBLIGATION REFUNDING BONDS, SERIES 1993 and $3,000,000 CITY OF ROUND ROCK, TEXAS (Williamson and Travis Counties) COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1993 INTRODUCTION This Official Statement, which includes the cover page and the Appendices hereto, provides certain information regarding the issuance by the City of Round Rock, Texas of $21,520,000* General Obligation Refunding Bonds, Series 1993 (the "Bonds ") and 93,000,000 Combination Tax and Revenue Certificates of Obligation, Series 1993 (the "Certificates "). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the separate ordinances passed by the City Council authorizing the issuance of the Bonds and Certificates (respectively, the "Bond Ordinance" and the "Certificate Ordinance" and collectively the "Ordinances "), except as otherwise indicated herein. The City is a political subdivision and municipal corporation of the State of Texas (the "State "), duly organized and existing under the laws of the State and the City's Home Rule Charter. The Bonds are issued pursuant to the Constitution and general laws of the State, particularly Article 717k, Vemon's Annotated Texas Civil Statutes "VATCS ", as amended, and additionally pursuant to the City's Home Rule Charter and the Bond Ordinance. The Certificates are being issued pursuant to the provisions of Articles 1175 and 1111 -1118, VATCS, as amended, inclusive, Texas Local Government Code, Section 271.041 through Section 271.065, as amended, inclusive (the "Certificate of Obligation Act of 1071"), the City's Home Rule Charter, and the Certificate Ordinance. There follow in this Official Statement descriptions of the Plan of Financing for the Bonds and the Certificates along with certain information regarding the City and its finances. All descriptions of documents contained herein are summaries only and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company, Austin, Dallas or San Antonio, Texas. Refunded Bonds * Preliminary, subject to change. PLAN OF FINANCING FOR THE BONDS Purpose The Bonds are being issued to provide funds which will be sufficient to refund a portion of the City's outstanding general obligation bonds and certificates of obligation aggregating $20,055,000* in principal amount (the "Refunded Bonds "), in order to lower the overall annual debt service requirements of the City and to pay the costs of issuance related to the Bonds. See Schedule I for details concerning the Refunded Bonds. The Refunded Bonds, and interest due thereon, are to be paid on the scheduled interest payment dates and the maturity or redemption dates of such bonds from funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement ") between the City and Ameritrust Texas National Association (the "Escrow Agent "). The Bond Ordinance provides that from the proceeds of the sale of the Bonds to the Underwriters, the City will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds. Such funds will be held by the Escrow Agent in a special escrow account (the "Escrow Fund ") and used to purchase d obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by the United States of America, which may not be called for redemption prior to maturity (the "Federal Securities "). Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds. KPMG Peat Marwick, Houston, Texas, independent certified public accountants, will verify at the time of delivery of the Bonds to the initial purchaser thereof the mathematical accuracy of the schedules that demonstrate the Federal Securities will mature and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay, when due, the principal of and interest on the Refunded Bonds. Such maturing principal of and interest on the Federal Securities will not be available to pay the Bonds (see "Other Information - Verification of Arithmetical and Mathematical Computations "). 8 By the deposit of the Federal Securities and cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of the Refunded Bonds in accordance with the law. Bond Counsel shall render an opinion substantially to the effect that, as a result of such defeasance, the Refunded Bonds will be outstanding only for the purpose of receiving payments from the Federal Securities and cash held for such purpose by the Escrow Agent and such Refunded Bonds will not be deemed outstanding for the purpose of any limitation on debt or the assessment of taxes. Bond Counsel shall rely upon the verification of KPMG Peat Marwick in rendering said opinion. Sources and Application of Funds The proceeds of the Bonds and Certificates will be applied approximately as follows: Authority for Issuance The Bonds are issued pursuant to the general Laws of the State, particularly Article 717k, VATCS, as amended, and constitute general obligations of the City, payable from a continuing, direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property located within the City, as provided in the Bond Ordinance. Security for Bonds There is no direct debt limitation in the City's Home Rule Charter or under State Law. The City operates under a Home Rule Charter adopted pursuant to (Article XI, Section 5, Texas Constitution), approved by voters in August, 1977, 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. Redemption of Bonds Sources of Funds: Principal Amount of the Bonds $ Principal Amount of the Certificates Original Issue Discount (OID) City Contribution Accrued Interest Total Available Funds $ Application of Funds: Deposit to Escrow Fund $ Deposit to Interest and Sinking Fund Underwriters' Discount Costs of Issuance Construction Fund Total Application of Funds $ BOND INFORMATION The City reserves the right, at its option, to redeem Bonds having stated maturities on and after August 15, 2003, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2002, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. If Less than all of the Bonds of a matunty are to be redeemed, the Paying Agent/Registrar (as hereinafter defined) shall determine by lot the Bonds, or portions thereof, within such maturity to be redeemed. If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. At least 30 days prior to the date fixed for any redemption of Bonds, a written notice shall be sent by the Paying Agent/Registrar by United States mail, first-class, postage prepaid, to the registered owner of each Bond to be redeemed at its address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond. 9 Paying Agent/Registrar The initial Paying Agent/Registrar for the Bonds is Ameritrust Texas National Association, Austin, Texas (the "Paying AgentlRegistrar"). Payment, transfers and exchanges of Bonds shall be handled at the offices of the Paying AgentlRegistrar in Dallas, Texas (the "Designated Payment/Transfer Office "). In the Bond Ordinance, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times while the Bonds are outstanding and any successor Paying Agent/Registrar shall be a qualified bank, trust company or financial institution organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail, first - class, postage prepaid, which notice shall also give the address of the new Paying AgentlRegistrar. Transfer, Exchange and Registration The Bonds may be transferred and exchanged on the registration books of the Paying AgentlRegistrar only upon presentation and surrender thereof to the Paymg AgentlRegistrar at the Designated Payment/Transfer Office and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange or transfer. A Bond may be assigned by the execution of an assignment form on the Bond or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. A new Bond or Bonds will be delivered by the Paying Agent/Registrar in lieu of the Bond being transferred or exchanged, at the principal corporate trust office of the Paying AgentlRegistrar, or sent by United States mail, first- class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three (3) business days after the receipt of the Bonds to be cancelled, and the wntten instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying AgentlRegistrar. New Bonds registered and dehvered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and for a hke aggregate principal amount as the Bond or Bonds surrendered for exchange or transfer. Limitation on Transfer of Bonds Called for Redemption Neither the City nor the Paying Agent/Registrar shall be required (i) to make any transfer, conversion or exchange during the period beginning at the opening of business 30 days before the day of the first mailing of a notice of redemption and ending at the close of business on the day of such mailing, or (ii) to transfer or exchange to an assignee of the owner of the Bonds any Bond called for redemption, in whole or in part, within 30 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond called for redemption in part. Record Date for Interest Payment The record date ( "Record Date ") for the interest payable on any interest payment date means the close of business on the last business day of the month preceding such interest payment date. In the event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ( "Special Payment Date ", which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first- class, postage prepaid, to the address of each registered owner of a Bond appearing on the registration books of the Paying AgentlRegistrar at the close of business on the last business day next preceding the date of mailing of such notice. 10 Authority for Issuance CERTIFICATE INFORMATION The Certificates are being issued pursuant to the provisions of Articles 1175 and 1111 -1118, VATCS, as amended, inclusive, Texas Local Government Code, Section 271.041 through Section 271.065, as amended, inclusive (the "Certificate of Obligation Act of 1971"), the City's Home Rule Charter, and the Certificate Ordinance, and will constitute general obligations of the City, payable from ad valorem taxes levied against all taxable property located therein, within the limits prescribed by law, and further secured by a lien on and limited pledge of not to exceed $1,000 in amount of surplus revenues of the City's waterworks and sewer system, after deduction of maintenance and operation expenses and all debt service, reserve and other requirements in connection with all of the City's revenue bonds or other obligations (now or hereafter outstanding) which are payable from all or part of the net revenues of the City's waterworks and sewer system. Security for Certificates The Certificates will constitute general obligations of the City, payable from ad valorem taxes levied against all taxable property located therein, within the limits prescribed by law and are further secured by a lien on and limited pledge of not to exceed $1,000 in amount of surplus revenues of the City's waterworks and sewer system, after deduction of maintenance and operation expenses and all debt service, reserve and other requirements in connection with all of the City's revenue bonds or other obligations (now or hereafter outstanding) which are payable from all or part of the net revenues of the City's waterworks and sewer system. All taxable property within the City is subject to a continuing, direct annual ad valorem tax levied by the City sufficient to provide for the payment of principal of and interest on all obhgations payable in whole or in part from ad valorem taxes, which tax must be levied within limits prescribed by law. Article XI, Section 5, of the State Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 assessed valuation for all City purposes. Redemption of Certificates The City reserves the right, at its option, to redeem Certificates having stated maturities on and after August 15, 2003, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2002, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. If less than all of the Certificates of a maturity are to be redeemed, the Paying Agent/Registrar shall determine by lot the Certificates, or portions thereof, within such maturity to be redeemed. If a Certificate (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such certificate (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date; provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. At least 30 days prior to the date fixed for any redemption of Certificates, a written notice shall be sent by the Paying Agent/Registrar by United States mail, first-class, postage prepaid, to the registered owner of each Certificate to be redeemed at its address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Certificate. Paying Agent /Registrar The initial Paying Agent/Registrar for the Certificates is Ameritrust Texas National Association, Austin, Texas. Payment, transfers and exchanges of Bonds shall be handled at the offices of the Paying Agent/Registrar in Dallas, Texas (the "Designated Payment/Transfer Office "). In the Certificate Ordinance, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times while the Certificates are outstanding and any successor Paying Agent/Registrar shall be a commercial bank or trust company or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Certificates. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Certificates by United States mail, first-class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. II Transfer, Exchange and Registration The Certificates may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon, presentation and surrender thereof to the Paying Agent/Registrar at the Designated Payment/Transfer Office and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange or transfer. A Certificate may be assigned by the execution of an assignment form on the Certificate or by other Instrument of transfer and assignment acceptable to the Paying Agent/Registrar. A new Certificate or Certificates will be delivered by the Paying Agent/Registrar in lieu of the Certificate being transferred or exchanged, at the principal corporate trust office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Certificates issued in an exchange or transfer of Certificates will be delivered to the registered owner or assignee of the registered owner in not more than three (3) business days after the receipt of the Certificates to be cancelled and the wntten instrument of transfer or ' request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Certificates registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one matunty and for a like aggregate principal amount as the Certificate or Certificates surrendered for exchange or transfer. Limitation on Transfer of Certificates Called for Redemption Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange to an assignee of the registered owner of the Certificates any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such Irnutation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Certificate. Record Date for Interest Payment The record date ( "Record Date ") for the interest payable on any interest payment date means the close of business on the last business day of the preceding month. In the event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ( "Special Payment Date ", which shall be 15 days after the Special Record Date) shall be sent at Ieast five (5) business days prior to the Special Record Date by United States mad, fast- class, postage prepaid, to the address of each registered owner of a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. HOLDERS' REMEDIES Although a bondholder and certificateholder could presumably obtain a judgment against the City if a default occurred in the payment of principal of or interest on any such Bonds or Certificates, such judgment could not be satisfied by execution against any property of the City. The bondholder's or certificateholder's only practical remedy if a default occurs is a mandamus or mandatory injunction proceeding to compel the City Council to levy, assess and collect an annual ad valorem tax within the tax rate limitation sufficient to pay principal of and interest on the Bonds and Certificates as it becomes due. The bondholder or certificateholder could be required to enforce such remedy on a periodic basis. The enforcement or claim for payment of principal of or interest on the Bonds and Certificates, including the remedy of mandamus, and the validity of the pledge of taxes, would be subject to the applicable provisions of the federal bankruptcy laws and to other laws affecting the rights of creditors of political subdivisions generally. BOND INSURANCE The City has submitted applications for municipal bond insurance with commercial carriers. The City expects to receive a commitment from a provider of such insurance and reserves the right to insure the Bonds and Certificates if the City determines that such insurance is economically beneficial to the City. 12 1 A Ad Valorem Tax Law TAX INFORMATION The appraisal of property within the City is the responsibility of the Williamson County Appraisal District (the "Appraisal District "). Excluding agricultural and open -space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under the Property Tax Code to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of three members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review Board. Reference is made to the Vemon's Texas Code Annotated ( "VTCA ") Tax Code, for identification of property subject to taxation; property exempt or which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the levy and collection of ad valorem taxes. Article VIII of the State Constitution ( "Article VIII ") and State law provide for certain exemptions from property taxes, the valuation of agricultural and open -space lands at productivity value, and the exemption of certain personal property from ad valorem taxation. Under Section l -b Article VIII and State law, the governing body of a political subdivision, at its option, may grant: (1) An exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the disabled from all ad valorem taxes thereafter levied by the pohtical subdivision; (2) An exemption of up to 20% of the market value of residence homesteads with a minimum exemption of $5,000. State law and Section 2 of Article VIII mandate an additional property tax exemption for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces. The exemption applies to either real or personal property with the amount of assessed valuation exempted ranging from $1,500 to a maximum of $3,000. Section 1 - j of Article VIII authorizes an ad valorem tax exemption for " freeport property." Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabncation. The exemption will be effective for all future tax years unless the City takes action prior to April 1, 1990 but after January 1, 1990. Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal. The City has taken action to tax freeport property. The Williamson County Appraisal District estimated the 1992 value of freeport property at $32,328,620. The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $15,000 and the disabled are granted an exemption ranging from $1,500 to 53,000. The City has not granted an additional exemption of 20% of the market value of residence homesteads. Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt. The City does not tax nonbusiness vehicles and the Round Rock Independent School District collects taxes for the City. The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones, under which the tax values on property in the zone are "frozen" at the value of the property at the time of creation of the zone. The City has not created a tax increment financing zone. The City also may enter into tax abatements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on the owner's property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements until the expiration of the agreement. The City has adopted an ordinance establishing guidelines and criteria governing reinvestment zones and tax abatement agreements within the City limits or its extraterritorial jurisdiction. Under that ordinance, in order for the owner of property within a reinvestment zone to be eligible to receive a tax abatement, the owner must show that the planned project will substantially increase the appraisal value of property within the zone and contribute to the retention or expansion of primary and secondary employment within the City. Abatements may be granted on new real property in each year covered by an agreement only to the extent its value for that year exceeds its value for the year in which the agreement is executed. Abatements may be granted for tangible personal property located on the real property in each year covered by the agreement other than tangible personal property that was located on the real property at any time before the period covered by the agreement with the City 13 and other than inventory and supplies. Tax abatement agreements shall not exceed ten (10) years. The City currently has five abatement agreements in effect, all of which expire within ten (10) years. Valuation, Exemptions and Debt Obligations 1992 Total Appraised Value Established by Williamson County Appraisal District Less Totally Exempt Property 1992 Market Valuation Established by Williamson County Appraisal District Less Exemptions /Reductions at 100% of Market Value: Over 65 and Disabled Homestead Exemptions ni $ 8,61 1,757 Disabled Veterans Exemptions Ri 334,500 Open -Space Land Use Reductions (3) Freeport Exemptions Property Redevelopment and Tax Abatement Exemptions 13,086,967 32,328,620 2.778,451 $1,010,166,960 38,606,129 $ 971,560,831 t 57,140,295 1992 Taxable Assessed Valuation $ 914,420,536 City Funded Debt Payable from Ad Valorem Taxes: ( General Purpose Obligations (as of 5 -1 -93) $ 10,855,417 , The Bonds (preliminary, subject to change) 21,520,000 Certificates of Obligation 2,258,100 1 The Certificates 3,000,000 Waterworks and Sewer System General Obligation Bonds 3,754,583 ± Combination Tax and Revenue Certificates of Obligation 1,805,000 Capital Leases - 197 531 1 Funded Debt Payable from Ad Valorem Taxes $ 43,390,631 I t Less Self- Supporting Debt: Waterworks and Sewer System General Obligation Bonds $ 11,861,606 Combination Tax and Revenue Certificates of Obligation 880 000 12,741,606 Net Funded Debt Payable From Ad Valorem Taxes $ 30,649,025 Interest and Sinking Fund (as of 3 -31 -92 S ( 3-31-92) $ 2,832,300 Ratio of Funded Debt to 1992 Taxable Assessed Valuation 4.75% Ratio of Net Funded Debt to 1992 Taxable Assessed Valuation 3.35% 1993 Estimated Population - 36,139 Per Capita 1992 Taxable Assessed Valuation - $25,303 Per Capita Funded Debt - $1,201 Per Capita Net Funded Debt - $848 (1) Pursuant to authority permitted by Section 1 -b of Article VIII, the City, beginning in 1975, has granted a property tax exemption to the residence homestead of property owners over 65 years of age. (2) The Legislature, pursuant to a constitutional amendment and VTCA, Tax Code Section 11.22, mandated an additional property tax exemption, beginning in 1976, for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces. The exemption from taxation applies to either real or personal property with the amount of Assessed Valuation exempted ranging from $1,500 to $3,000, dependent upon the amount of disability or whether the exemption is applicable to a surviving spouse or children. (3) Reduction made to the Appraised Value of productive agricultural and open -space lands under the provisions of Sections 1 -d and 1 -d -1 of Article VIII. 14 Taxable Assessed Valuations by Category Category Real, Residential, Single -Family Real, Residential, Multi-Family Real, Vacant Lots /Tracts Real, Acreage (Land Only) Real, Farm and Ranch Improvements Real, Commercial /Industrial Real and Tangible Personal, Utilities Tangible Personal, Commercial/Industrial Tangible Personal, Other Real Property, Inventory iii Total Appraised Value Before Exemptions Less: Total Exemptions /Reductions Taxable Assessed Value Category Real, Residential, Single -Family Real, Residential, Multi- Family Real, Vacant Lots /Tracts Real, Acreage (Land Only) Real, Farm and Ranch Improvements Real, Commercial Real, Industrial Real, Oil, Gas and Other Mineral Reserves Tangible Personal, Nonbusiness Vehicles Real and Tangible Personal, Utilities Tangible Personal, Commercial Tangible Personal, Industrial Tangible Personal, Other Intangible Personal Real Property, Inventory of Total Appraised Value Before Exemptions Less: Total Exemptions /Reductions Taxable Assessed Value Taxable Appraised Value For Fiscal Year Ended September 30, 1993 1992 1991 % of % of % of Amount Total Amount Total Amount Total $475,255,003 48.92% $426,931,083 49.56% $443,598,117 48.51% 72,958,283 7.51 % 67,217,461 7.80% 63,491,560 6.94% 17,537,052 1.80% 20,607,390 2.39% 27,916,838 3.05% 27,486,354 2.83% 37,682,663 4.37% 70,725,795 7.73% 2,243,465 0.23% 2,330,637 0.27% 2,712,800 0.30% 139,661,990 14.37% 166,388,077 19.31% 175,119,785 19.15% 36,117,918 3.72% 27,482,205 3.19% 27,138,604 2.97% 191,877,802 19.75 % 103,106,059 11.97% 92,145,831 10.08% 38,964 0.01% 17,813 0.01% 25,062 0.01% 8,384,000 0.86% 9,712,727 1.13% 11.517,495 1.26% $971,560,831i 100.00% 5861,476,115 100.00% $914,391,887 100.00% 57,140,295 24.890.509 49.595.624 $ 914,420,536 $836,585,606 $ 864,796,263 Taxable Appraised Value For Fiscal Year Ended September 30, 1990 1989 Amount $ 473,725,197 78,521,351 44,017,162 111,801,235 2,432,597 186,713,325 29,327,077 -0- -0- 29,000,235 67,430,083 57,468,420 663,077 29,504,040 $ 1,110,603,799 58,094,003 $ 1,052,509,796 % of Total 42.65% 7.07% 3.96% 10.07% 0.22% 16.81 % 2.64% 0.00% 0.00% 2.62 % 6.07% 5.17% 0.06% 0.00% 2.66 % 100.00% Amount $ 527,657,815 95,810,182 84,567,949 138,478,251 2,844,030 205,137,443 30,557,378 - 0- -0- 26,626,517 66,131,849 44,184,245 557,973 - 0- 3,861,221 $ 1,226,414,853 62,408,196 $ 1,164,006,657 % of Total 43.02% 7.81% 6.90% 11.29% 0.23 % 16.73% 2.49% 0.00% 0.00% 2.17% 5.39% 3.60% 0.05% 0.00% 0.32% 100.00% (1) Residential inventory properties in the hands of developers or builders; each group of properties in this category is appraised on the basis of its value as a whole as a sale to another developer or builder. This category initiated in 1988. (2) Includes $32,328,620 of Freeport Property. (3) Includes $20,981,150 of Freeport Property. Valuation and Funded Debt History (1) Revaluation. (2) Includes the Bonds and Certificates but excludes the Refunded Bonds. Preliminary, subject to change. Funded Ratio Funded Fiscal Per Capita Debt Debt to Year Estimated Taxable Taxable Outstanding Per Capita Taxable Ended City Assessed Assessed at End of Funded Assessed 9 -30 Population Valuation Valuation Year Debt Valuation 1985 25,500 $ 461,785,785 $18,109 $24,394,000 $ 956.63 5.28% 1986 26,821 1,045,495,047" 38,980 35,852,000 1,336.71 3.43% 1987 29,179 1,170,066,819 40,100 44,020,000 1,508.62 3.76% 1988 30,352 1,208,589,028 39,819 44,693,000 1,472.49 3.70% 1989 30,639 1,164,006,659"' 37,991 43,251,000 1,411.63 3.72% 1990 30,923 1,052,509,796 34,036 43,000,700 1,390.57 4.09% 1991 32,213 934,207,091 29,001 41,038,200 1,273.96 4.39% 1992 33,769 836,585,606 24,774 38,738,400 1,147.16 4.63% 1993 36,139 914,420,536" 25,303 40,796,100' 1,128.87 4.46% Tax Rate, Levy and Collection History Fiscal Year Distr,buhon Ending Tax General Interest and % Current % Total 9 -30 Rate Fund Sinking Fund Tax Levy Collections Collections 1984 $0.57060 $0.3048 $0.26580 $ 2,229,122 97.19% 99.00% 1985 0.57060 0.3703 0.20030 2,660,975 97.55% 99.69% 1986 0.39850 0.2108 0.18770 4,166,298 92.06% 93.33% 1987 0.42690 0.2245 0.20240 4,995,015 94.99% 98.77% 1988 0.42500 0.1941 0.23090 5,136,516 94.54% 100.10% 1989 0.42000 0.1546 0.26540 4,888,828 96.88% 102.29% 1990 0.48360 0.1874 0.29620 4,961,926 94.00% 100.15% 1991 0.54910 0.2262 0.32290 5,135,656 97.62% 99.69% 1992 0.62480 0.2754 0.34940 5,399,266 98.35% 99.80% 1993 0.62459 0.2850 0.33959 5,709,316 97.06 %m 98.70 %"' (1) Collections for part year only, through March 31, 1993. Source: The City. Property within the City is assessed as of January 1 of each year (except for business inventory which may, at the option of the taxpayer, be assessed as of September 1); taxes become due October 1 of the same year, and become delinquent on February 1 of the following year. Split payments are not permitted. Discounts are not allowed. Taxpayers 65 years old or older are permitted by State law to pay taxes on homesteads in four installments with the first due on February 1 of each year and the final installment due on August 1. Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows: Month Penalty Interest Total February 6% I% 7% March 7% 2% 9% April 8% 3% 11% May 9% 4% 13% June 10% 5% 15% July 12% 6% 18% After July, penalty remains at 12 %, and interest increases at the rate of 1% each month. In addition, if an account is delinquent in July, a 15% attorney's collection fee is added to the total tax penalty and interest charge. 16 1 Ten Largest Taxpayers Tax Rate Limitation Under the Tax Code: Name of Taxpayer Cypress Semiconductor Westinghouse Electric Corporation McNeil Consumer Products Sysco Food Services, Inc. Texas Utilities Electric Tellabs Operations, Inc. DuPont Photo Mask, Inc. Farmers Insurance Group DMC Austin Apartment, Inc. Epic Properties, Inc. Nature of Property Electronic Manufacturer Industrial Motors Pharmaceutical Manufacturer Wholesale Foods Distributor Electric Utility Electronic Manufacturer Manufacturer Insurance Apartments Commercial Real Estate All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt within the limits prescribed by law. Article XI, Section 5 of the State Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 Assessed Valuation for all City purposes. By each September 1 or as soon thereafter as practicable, the City Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation expenditures, and (2) a rate for debt service. The City must annually calculate and publicize its "effective tax rate and "rollback tax rate. The City Council may not adopt a tax rate that exceeds the lower of the rollback tax rate or 103 % of the effective tax rate until It has held a public hearing on the proposed increase following notice to the taxpayers and otherwise comphed with the Tax Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate. "Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values (adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included in this year's taxable values. "Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted) divided by the anticipated tax collection rate. The Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an additional one -half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year. The City does not collect the additional half -cent sales tax. Reference is made to the Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation of the various defined tax rates. 17 1992/93 % of Total Taxable Taxable Assessed Assessed Valuation Valuation $ 19,142,900 2.09% 16,846,640 1.84% 14,564,536 1.59% 13,584,744 1.49% 13,408,144 1.47% 12,351,194 1.35% 10,716,388 1.17% 9,716,771 1.06% 9,378,567 1.03% 7,643,230 0.84% $ 127,353,114 13.93% Assessed Valuations, 'Fax Rates, Outstanding Debt and Authorized But Unissued Bonds of Overlapping Taxing Jurisdictions 1992 Outstanding Authorized Taxable 1992 Tax Supported But Unissued Assessed Tax Debt As of Debt As of Taxing Jurisdiction Valuation Rate 5 -1 -93 5 -1 -93 Round Rock Independent School District $ 3,187,783,943 $ 1.7981 $ 141,921,084 $ -0- Williamson County 4,183,877,577 0.3666 13,275,000 -0- Travis County 21,240,675,586 0.5762 238,649,011 87,012,00d Northeast Round Rock Road District #1 816,926 167.4500 10,000,000 1,700,000 Southeast Williamson County Road Distract #1 410,881 182.2500 5,650,000 7,150,000 Georgetown Independent School District 687,084,199 1.5400 20,814,947 -0- (1) All values include property under review. (2) Includes $0.90 levied by the County Education District. (3) Because of a constitutional limitation on the pro rata share of unlimited tax debt on certain parcels of land, in 1989 the County was forced to issue certificates of obligation in lieu of the voter authorized road bonds. Thus far, the County has such certificates of obligation in lieu of road bonds in the total amount of $54,190,000. In each of those issues the County agreed and covenanted that while any of those certificates of obligation remain outstanding it would not issue a like amount of the voter authorized road bonds. Of the $87,012,000 remaining balance of road bonds authorized at the September 1984 election, $22,482,000 are unencumbered by such covenants. (4) These Districts were recently reorganized under Chapter 9 of the Federal Bankruptcy Code. Outstanding debt will be paid through special assessments levied within the respective Districts. 18 Debt Service Requirements Fiscal Year Outstanding ('and %of Ending Debt The Bonds(1) TheCertifcates Total Principal 9/30 Requirernents(2) Principal Interest Total Principal Interest Total Requirements Retired 1993 54,470,929 54,470,929 1994 3,359,983 5470,000 51,265,984 51,735,984 5191,973 5191,973 5,287,940 1995 3,328,504 670,000 1,036,495 1,706,495 575,000 159,240 234,240 5,269,239 1996 3,277,278 715,000 1,013,045 1,728,045 110,000 156,615 266,615 5,271,938 1997 3,211,198 840,000 985,160 1,825,160 75,000 152,325 227,325 5,263,683 1998 3,183,708 890,000 949,880 1,839,880 100,000 149,175 249,175 5,272,763 43.88% 1999 796,048 3,245,000 909,830 4,154,830 100,000 144,675 244,675 5,195,553 2000 629,240 2,655,000 757,315 3,412,315 140,000 139,975 279,975 4,221,530 2001 641,758 2,365,000 627,220 2,992,220 155,000 133,115 288,115 3,922,093 2002 511,413 2,290,000 508,970 2,798,970 75,000 125,365 200,365 3,510,748 2003 413,388 2,465,000 392,180 2,857,180 75,000 121,540 196,540 3,467,108 80.23% 2004 794,388 2,090,000 264,000 2,354,000 80,000 117,640 197,640 3,346,028 2005 220,675 2,510,000 153,230 2,663,230 80,000 113,400 193,400 3,077305 2006 555,325 75,000 17,690 92,690 185,000 109,080 294,080 942,095 2007 12,575 75,000 13,565 88,565 640,000 98,905 738,905 840,045 2008 9,425 80,000 9,365 89,365 580,000 63,065 643,065 741,855 98.24% 2009 9,425 85,000 4,845 89,845 360,000 30,295 390,295 489,565 2010 154,425 170,000 9,775 179,775 334200 100.00% 525,579,680 521,520,000 58 ,908,774 530,428,774 53,000,000 52,016,158 55,016,158 561,024,612 (1) Prel¢nmary, subject to change. (2) Excludes the Refunded Bonds. Estimated Direct and Overlapping Funded Debt Payable From Ad Valorem Taxes (As of 5 -1 -93) Expenditures of the vanous taxing bodies within the territory of the City are paid out of ad valorem taxes levied by these taxing bodies on properties within the City. These pohtical taxing bodies are independent of the City and may incur borrowings to finance their expenditures. The following statement of direct and estimated overlapping ad valorem tax bonds was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed below may have issued additional bonds since the date stated in the table, and such entities may have programs requiring the Issuance of substantial amounts of additional bonds the amount of which cannot be determined. The following table reflects the estimated share of overlapping funded debt of these various taxing bodies. Estimated Total % Overlapping Taxme Jurisdiction Funded Deht Applicable Funded Deht Round Rock, City of (Net Funded Debt) $ 30,649,025 100.00% $ 30,649,025 Round Rock Independent School District 141,921,084 28.33 % 40,206,243 Williamson County 13,275,000 16.96% 2,251,440 Travis County 238,649,011 " / 0.33% 787,542 Northeast Round Rock Road District 81 10,000,000 63.48% 6,348,000 Southeast Williamson County Road District 61 5,650,000 68.03% 3,843,695 Georgetown Independent School District 20,814,947 0.01 % 2,081 Total Direct and Overlapping Funded Debt $ 84,088,026 Ratio of Direct and Overlapping Funded Debt to Taxable Assessed Valuation 9.20% Per Capita Overlapping Funded Debt $2,327 (1) Includes $193,739,014 of Limited Tax Debt and $44,909,997 of Unlimited Tax Debt. Interest and Sinking Fund Budget Projection Estimated Funded Debt Service Requirements for Fiscal Year Ending September 30, 1993 $5,137,293 Interest and Sinking Fund, September 30, 1992 $ 839,939 1992 Interest and Sinking Fund Tax Levy ® 97% Collection 3,012,122 Budgeted Transfers (Water and Sewer System Debt) 1,810,635 Estimated Investment Income 125.000 5. 787, Estimated Balance at September 30, 1993 $ 650,403 Computation of Self- Supporting Debt Net Revenue from Water and Sewer System, Fiscal Year Ended 1992 $5,037,359 Less: Revenue Bond Debt Service Requirements, 1992 Fiscal Year 1,639,747 Balance Available for Other Purposes $3,397,612 System General Obligation Debt Requirements, 1992 Fiscal Year 1, Balance $1,586,977 Percentage of System General Obligation Deht Self - Supporting 100.00% Authorized but Unissued General Obligation Bonds Purpose North Fork Project Amount Date Amount Heretofore Unissued Authorized Authorized Issued Balance 9 - 06 - 80 $ 10,000,000 $ 8,415,000 $ 1,585,000 20 Anticipated Issuance of General Obligation Debt Other than the Bonds and Certificates, the City currently has no plans for the issuance of additional debt for the next 12 months. Funded Debt Limitation No du funded debt limitation is imposed on the City under current State law or the City's Home Rule Charter. Article XI, Section 5 of the State Constitution is applicable to the City and limits its maximum ad valorem tax rate to $2.50 per $100 assessed valuation for all City purposes. Other Obligations The annual requirements to amortize the City's lease - purchase agreements to maturity are as follows: Pension Fund Year Ended September 30, Prin Interest Total 1993 $ 63,581 $ 9,104 $ 72,685 1994 83,398 7,141 90,539 1995 33,209 2,499 35,708 1996 17,343 511 17.854 $197 531 $19 255 $216,786 The City provides pension benefits for all of its full employees through a nontraditional, joint contributory, defined contribution plan, one of over 500 administered by Texas Municipal Retirement System ( "TMRS "), an agent multiple- employer pubhc employee retirement system. It is the opinion of the TMRS management that the plans in TMRS are substantially defined contnbution plans, but they have elected to provide additional voluntary disclosure to help foster a better understanding of some of the nontraditional characteristics of the plan. The program is fully described in Note 8 of Appendix B - "Excerpts from the City of Round Rock, Texas Financial Report". 21 General Fund Revenues and Expenditures Revenues Taxes Licenses and Permits Charges for Service Fines and Forfeitures Miscellaneous Total Revenues FINANCIAL INFORMATION Expenditures General Government $ 2,013,830 $ 1,886,910 $ 2,168,286 $ 2,171,757 $ 2,163,370 Public Safety 3,538,469 3,206,284 2,787,898 2,495,060 2,256,009 Public Works 1,587,165 1,532,079 1,437,816 1,317,435 1,240,441 Culture and Recreation 1352,009 1,319,716 1,096,273 962 438 950,413 Total Expenditures $ 8,491 473 $ 7,944,989 $ 7,490,273 $ 6,946,690 $ 6,610,233 Excess (Deficiency) of Revenues over Expenditures $ (382,809) $ 987,225 $ (636,555) $ (669,635) $ (383,920) Budgeted Transfers In $ 924,880 $ 845,988 $ 665,765 $ 746,905 $ 557,748 Budgeted Transfers Out (993,555) -0- -0- -0- (4,860) Total Transfers $ (68,675) $ 845,988 $ 665,765 $ 746,905 $ 552,888 Net Increase (Decrease) $ (451,484) $ 1,833,213 $ 29,210 $ 77,270 $ 168,968 Other Miscellaneous Adjustments -0- -0- -0- -0- - (85,317) Beginning Fund Balance 4,781,588 2,948,375 2,919,165 2,841,895 2,758,244 Ending Fund Balance $ 4 330 104 $ 4.781,588 $ 2,948,375 $ 2,919,165 $ 2,841,895 (1) Includes $1,933,333 in proceeds from a lawsuit settlement. Source: City of Round Rock Finance Department. Municipal Sales Tax History For Fiscal Year Ended September 30, 1992 1991 1990 1989 1988 $ 6,561,912 $ 5,720,473 $ 5,515,700 $ 5,021,304 $ 5,066,201 266,380 124,831 105,976 95,105 115,198 501,081 436,006 404,856 320,884 370,999 405,803 414,434 445,780 470,451 350,044 373,488 2,236,470m 381,406 369311 323,871 $ 8,108,664 $ 8,932,214 $ 6,853,718 $ 6,277,055 $ 6,226,313 The City has adopted the Municipal Sales and Use Tax Act, Chapter 321, Texas Tax Code which grants the City the power to impose and levy a 1% Local Sales and Use Tax within the City, the proceeds are credited to the General Fund and are not pledged to the payment of the Bonds. In 1987 voters authorized a 1 /2% increase in the sales tax rate to reduce the ad valorem tax rate. Effective in 1988 the total municipal sales tax levy was 1.5 %. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts of the State, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. Revenue from this source, for the years shown, has been: Fiscal Year % of Equivalent of Ended Total Ad Valorem Ad Valorem Per 9 -30 Collected Tax Levy Tax Rate Capita (0 1984 $ 1,425,938 54.99% $0.3066 $62.38 1985 1,681,940 40.52% 0.1609 65.96 1986 1,707,426 40.98% 0.1683 63.66 1987 1,555,403 51.14% 0.1329 53.31 1988 2,096,000 41.62% 0.1729 69.06 1989 2,495,177 51.04% 0.2144 81.44 1990 2,815,981 54.83% 0.3014 91.06 1991 2,851,861 55.59% 0.3024 88.53 1992 3,250,370 60.20% 0.3885 96.25 (1) Based on estimated or U.S. Census population for all years. 22 { Financial Policies Basis of Accounting ... The City's accounting records of the Governmental Fund revenues and expenditures are maintained on a modified accrual basis. Revenues are recognized in the accounting period in which they are available and measurable. Expenditures are recognized in the accounting period in which the fund Lability occurred, if measurable, except for unmatured Interest on general long -term debt. Propnetary Fund revenues and expenses are recognized on a full accrual basis. Revenues are recognized in the accounting penod in which they are earned and become measurable. Expenses are recognized in the accounting period in which they are incurred. Fund Balances ... It is the City's policy that working capital resources should be maintained at minimum of three months of the General Fund operating expenditure budget. Use of Bond Proceeds ... The City's policy is to use bond proceeds for capital expenditures only and not to fund normal City operations. Budgetary Procedures ... The City's Home Rule Charter establishes the fiscal year as the twelve -month period beginning each October 1. On or before August 1 of each year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted. The budget shall he adopted by the City Council no later than the twenty- seventh day of September. Adoption of the budget shall constitute a levy of the property tax proposed therein. During the fiscal year, budgetary control is maintained by the monthly review of departmental appropriation balances. Actual operations are compared to the amounts set forth in the budget. Departmental appropriations that have not been expended lapse at the end of the fiscal year if no disbursement from or encumbrance of the appropriation has been made. Fund Investments ... The City's investment policy parallels the state laws which govern the investment of public funds. Funds are invested in a diversified portfolio which utilizes a range of authorized investment vehicles, as provided by state law and governed directly by the investment policy of the City as adopted by the City Council. 23 Opinion TAX MATTERS On the date of imhal delivery of the Bonds and Certificates, McCall, Parkhurst & Horton L.L.P., Austin, Texas ( "Bond Counsel "), will render the opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof, (1) interest on the Bonds and Certificates will be excludable from the "gross Income" of the holders thereof and (2) the Bonds and Certificates will not be treated as "private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code "). Except as stated above, Bond Counsel will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds and Certificates. See Appendix C - "Form of Bond Counsel's Opinions ". In rendenng their opinion, Bond Counsel will rely upon (a) the Issuer's no- arbitrage certificate and with respect to the Bonds, the venfication report prepared by KPMG Peat Marwick, and (b) covenants of the Issuer with respect to arbitrage, the application of the proceeds to be received from the issuance and sale of the Bonds and Certificates and certain other matters. Failure of the Issuer to comply with these representations or covenants could cause the interest on the Bonds and Certificates to become Includable in gross income retroactively to the date of issuance of the Bonds and Certificates. The law upon which Bond Counsel has based Its opinion is subject to change by the Congress of the United States and to subsequent judicial and admimstrative Interpretation by the courts and the Department of the Treasury. There can be no assurance that such law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds and Certificates. Federal Income Tax Accounting Treatment of Original Issue Discount The Underwriters have represented that the Initial public offering price to be paid for certain of the Bonds and Certificates, as stated on the cover page of the Official Statement (the "Original Issue Discount Bonds and Certificates ") may be less than the principal amount thereof. The difference between (t) the amount payable at the maturity of each Original Issue Discount Bond and Certificate, and (ti) the initial offering price to the public of such Original Issue Discount Bond and Certificate constitutes original issue discount with respect to such Original Issue Discount Bond and Certificate in the hands of any owner who has purchased such Original Issue Discount Bond and Certificate in the initial public offering of the Bonds and Certificates. Under existing law, such initial owner is entitled to exclude from gross income (as defined in Section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond and Certificate equal to that portion of the amount of such onginal Issue discount allocable to the period that such Onginal Issue Discount Bond and Certificate continues to be owned by such owner. For a discussion of certain collateral federal tax consequences, see discussion set forth below. In the event of the redemption, sale or other taxable disposition of such Onginal Issue Discount Bond and Certificate prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond and Certificate in the hands of such owner (adjusted upward by the portion of the original Issue discount allocable to the period for which such Original Issue Discount Bond and Certificate was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond and Certificate is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six -month period ending on the date before the semiannual anniversary dates of the date of the Bonds and Certificates and ratably within each such six -month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond and Certificate for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the Issue price and the amount of onginal Issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Bond and Certificate. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Onginal Issue Discount Bonds and Certificates which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds and Certificates should consult the own tax advisors with respect to the determination for federal, state and local income tax purposes of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and Certificates and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds and Certificates. 24 Collateral Federal Income Tax Consequences The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Bonds and Certificates. This discussion is based on existing statutes, regulations, pubbshed rulings and court decisions, all of which are subject to change or modification, retroactively. The following discussion is apphcable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance compames, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with Subchapter C earnings and profits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax- exempt obligations. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX - EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS AND CERTIFICATES. Interest on the Bonds and Certificates will be includable as an adjustment for "adjusted earnings and profits" to calculate the alternative minimum tax imposed on corporations by section 55 of the Code. Section 55 of the Code imposes a tax equal to 20 percent of the taxpayer's "alternative minimum taxable income," if the amount of such alternative minimum tax is greater than the taxpayer's regular income tax for the taxable year. Interest on the Bonds and Certificates is includable in the "alternative minimum taxable income" of a corporation (other than a regulated investment company or a real estate investment trust) for purposes of determining the environmental tax imposed by section 59A of the Code. Section 59A of the Code imposes on a corporation an environmental tax, in addition to any other income tax imposed by the Code, equal to 0.12 percent of the excess of the modified alternative minimum taxable income of such corporation for the taxable year over $2,000,000. Interest on the Bonds and Certificates may be subject to the "branch profits tax" imposed on the effectively- connected earnings and profits of a foreign corporation doing business in the United States. Under the Code, holders of tax- exempt obhgations, such as the Bonds and Certificates, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. State, Local and Foreign Taxes Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Bonds and Certificates under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons. 25 OTHER INFORMATION Ratings The presently outstanding tax supported debt of the Ctty is rated "A" by Moody's Investors Service, Inc. (" Moody's) and "A -" by Standard & Poor's Corporation ( "S &P "). Applications for contract ratings on the Bonds and Certificates have been made to Moody's and S &P. An explanation of the significance of such ratings may be obtained from the rating agency furnishing the rating. The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revtsed downward or withdrawn entirely by either or all of such rating companies, if in the judgment of such companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Bonds and Certificates. Litigation It is the opinion of the City Attorney and City Staff that there is no pending litigation against the City that would have a material adverse financial impact upon the City or its operations. Registration and Qualification of the Bonds and Certificates for Sale The sale of the Bonds and Certificates has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds and Certificates have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds and Certificates been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds and Certificates ' under the securities laws of any junsdiction in which the Bonds and Certificates may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds and Certificates shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. Legal Investments and Eligibility to Secure Public Funds in Texas Section 9 of the Bond Procedures Act provides that the Bonds and Certificates "shall constitute negotiable instruments, and are investment securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of law or court decision to the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas ". State law further provides that, providing the Bonds and Certificates are rated not less than "A" or its equivalent as to investment quality by a nationally recognized rating agency, the Bonds and Certificates are ehgible to secure deposits of any public funds of the State, its agencies and political subdivisions, and are legal security for those deposits to the extent of their market value. No review by the City has been made of the laws in other states to determine whether the Bonds and Certificates are legal investments for various institutions in those states. To determine whether the Bonds and Certificates described herein are eligible to secure public deposits, reference should be made to current ratings shown herein under the caption "Ratings ". 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 and Certificates, including the unqualified approving legal opinions of the Attorney General of the State of Texas approving and th Bonds and Certificates and to the effect that the Bonds and Certificates are valid and legally binding obligations of the City, based upon examination of such transcript of proceedings, the approving legal opinions of Bond Counsel, to like effect and to the effect that the interest on the Bonds and Certificates will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "TAX MATTERS" herein, including the alternative minimum tax on corporations. In the opinion of the City Attorney, the City is not a party to any litigation or other proceeding pending or to its knowledge, threatened in any court, agency or other administrative body (either state or federal) which, if decided adversely to the City, would have a material adverse effect on the financial condition of the City. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Official Statement, and Bond Counsel 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. Bond Counsel has reviewed the information under the captions "INTRODUCTION ", "PLAN OF FINANCING OF THE BONDS ", "BOND INFORMATION ", "CERTIFICATE, INFORMATION ", "TAX MATTERS" and the headings "Legal Investments and Eligibility to Secure Public Funds in Texas" and "Legal Opinions" and "No- Litigation Certificate" under the caption "OTHER INFORMATION" and is of the opinion that the information relating to the Bonds, Certificates and Ordinances contained under such captions is a fair and accurate summary 26 of the information purported to be shown therein. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds and Certificates is contingent on the sale and delivery of the Bonds and Certificates. Certain legal matters will be passed upon for the Underwriters by Vinson & Elkins L.L.P, Austin, Texas, Counsel for the Underwriters. Underwriting The Underwnters have agreed, subject to certain conditions, to purchase the Bonds and Certificates from the City, at a discount of $ for the Bonds and $ for the Certificates from the initial offering pnce of the Bonds and Certificates. The Underwnters will be obligated to purchase all of the Bonds and Certificates if any Bonds or Certificates are purchased. The Bonds and Certificates to be offered to the public may be offered and sold to certain dealers (including the Underwriters and other dealers depositing Bonds and Certificates into investment trusts) at pnces lower than the public offering prices of such Bonds and Certificates, and such public offering prices may be changed, from time to time, by the Underwriters. Financial Advisor First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds and Certificates. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds and Certificates is contingent upon the issuance and delivery of the Bonds and Certificates. First Southwest Company, in its capacity as Financial Advisor, has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds and Certificates, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. Verification of Arithmetical and Mathematical Computations KPMG Peat Marwick will verify from the information provided to them the mathematical accuracy as of the date of the closing on the Bonds of (1) the computations contained in the provided schedules to determine that the anticipated receipts from the Federal Securities and cash deposits in the Escrow Fund, will be sufficient to pay, when due, the principal, interest and call premium payment requirements of the Refunded Bonds, and (2) the computations of yield on both the securities and the Bonds contained in the provided schedules used by Bond Counsel in its determination that the interest on the Bonds is exempt from tax. KPMG Peat Marwick will express no opimon on the assumptions provided to them, nor as to the exemption from taxation of the interest on the Bonds. Miscellaneous 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 summaries of the statutes, documents and resolutions contained in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. The Ordinances authorizing the issuance of the Bonds and Certificates will also approve the form and content of this Official Statement, and will authorize its further use in the reoffering of the Bonds and Certificates by the Underwriters. ATTEST: By: Joanne Land City Secretary 27 CITY OF ROUND ROCK, TEXAS By: Charles C. Culpepper Mayor THIS PAGE LEFT BLANK INTENTIONALLY Schedule of Refunded Bonds" General Obligation Bonds, Series 1979 Onginal Dated Maturity Date Date Amount 5 -1 -1979 7 -1 -1997 $ 100,000 7 -1 -1998 125,000 7 -1 -1999 125,000 7 -1 -2000 125,000 7 -1 -2001 150,000 7 -1 -2002 150,000 7 -1 -2003 150.000 $ 925.000 Maturities to be redeemed prior to scheduled maturity on July 1, 1994, at par. Certificates of Obligation, Series 1979 Original Dated Maturity Date Date Amount 12 -1 -1979 7 -1 -1994 $ 30,000 30 000 Maturity to be redeemed prior to scheduled maturity on July 1, 1993, at par. General Obligation Bonds, Series 1981 -A Original Dated Maturity Date Date Amount 4-1 -1981 8 -1 -1994 $ 425,000 8 -1 -1995 450,000 8 -1 -1996 500,000 8 -1 -1997 525,000 8 -1 -1998 550,000 8 -1 -1999 270 000 $ 2,720,000 Maturities to be redeemed prior to scheduled maturity on August 1, 1993, at par. General Obligation Bonds, Series 1981 - B Original Dated Maturity Date Date Amount 2 -1 -1981 8 -1 -2000 $ 275,000 8 -1 -2001 300 000 $ 575,000 Maturities to be redeemed prior to scheduled maturity on August 1, 1996, at par. . SCHEDULEI General Obligation Bonds, Series 1987 Original Dated Maturity Date Date Amount 2 -1 -1987 8 -1 -2005 $325,000 $325,000 Maturities to be redeemed prior to scheduled maturity on August 1, 1997, at par. Certificates of Obligation, Series 1987 Original Dated Matunty Date Date Amount 2 -1-1987 8 -1 -2002 $ 140,000 8 -1 -2003 145,000 $ 285,000 Maturities to be redeemed pnor to scheduled maturity on August 1, 1997, at par. General Obligation Refunding Bonds, Series 1987 Original Dated Maturity Date Date Amount 3 -15 -1987 8 -1 -1999 $ 2,630,000 8 -1 -2000 1,930,000 8 -1 -2001 1,600,000 8 -1 -2002 1,695,000 8 -1 -2003 1,810,000 8 -1 -2004 1,960,000 8 -1 -2005 2,080,000 $13,705,000 Maturities to be redeemed prior to scheduled maturity on August I, 1997, at par. Combination Tax & Revenue Certificates of Obligation, Series 1988 Original Dated Maturity Date Date Amount 1 -1 -1988 8 -1 -2000 $ 150,000 8 -1 -2001 175,000 8 -1 -2002 200,000 8 -1 -2003 200.000 $ 725,000 Maturities to be redeemed prior to scheduled maturity on August 1, 1998, at par. Certificates of Obligation, Series 1990 Original Dated Maturity Date Date Amount 7 -1 -1990 8 -1 -2003 $ 85,000 8 -1 -2004 95,000 8 -1 -2005 100,000 8 -1 -2006 110,000 8 -1 -2007 115,000 8 -1 -2008 125,000 8 -1 -2009 135 000 $ 765,000 Maturities to be redeemed prior to scheduled maturity on August 15, 2000, at par. Preliminary, subject to change. THIS PAGE LEFT BLANK INTENTIONALLY APPENDIX A GENERAL INFORMATION REGARDING THE CITY Location The City is located in Williamson and Travis Counties, Texas, 8 miles north of Austin and 85 miles south of Waco on Interstate Highway 35. The City is also situated on U.S. Highway 79 which runs east and west. Both U.S. Highway 79 and Interstate Highway 35 are main arteries of traffic m the State. Economy Due to its geographical setting and proximity to Austin, the City has an economy diversified by industry, business, professional services, farming and ranching. The City is one of the fastest growing cities in the State, increasing in population from 12,740 in 1980 to 36,139 today. In part, this growth was stimulated by the opening of a wide variety of stores in the City in 1981. These included the Factory Outlet Mall at IH 35 and Farm - Market Road 1325. This was the first "discount mall" in Texas. The Round Rock West Center which offered shoppers a large Safeway Store and a variety of other retail stores also opened in 1981. Wal -Mart built a large discount department store on IH 35 during this same period. More recently, a new shopping center was completed on Highway 620. These investments enabled the City to become the first in Williamson County to collect over a million dollars in city sales tax in a single year, and also to widen its lead as the county's largest trade center. During the past two years over 400,000 square feet of existing manufacturing /warehouse space has been occupied by companies like Textek Plastics, Enviroquip, Hart Labels, Mission Industries, Legacy Lamp, Pavex, Cyclean and Innovative Business Accelerator. These companies have combined to create over 1,000 new jobs in the community. More recently, Dell Computer, a Fortune 500 company, revealed plans to constructa 600,000 square foot facility and will employ 2,600 people once the facility is in operation. In April, 1993, Michael Angelo's Gourmet Foods. Inc., a maker of frozen Italian food products, announced plans to construct a new $10 million, 125,000 square foot food processing and distribution plant in the City. Initially the plant will employ 500 people with future projections nearing 1,700 jobs. This company will provide a desired employment diversity because most of the jobs require semi - skilled and unskilled labor, in contrast to the many high -tech expansions recently announced. Major Industry Industries located within the City's corporate limits and in the City's immediate surrounding area produce pharmaceuticals, office products, computer systems and communication equipment. Various other industries and major employers such as the school district are located in the Round Rock area. The following is a partial list of major employers and the number of people they employ as of April, 1993. Company Description Employees Round Rock Independent School District School District 2,817 Farmers Insurance - Insurance 650 Tellabs, Inc. Telephone Components 426 Wayne Dresser Pump Controls 315 Round Rock, City of City Government 300 Cypress Semiconductor Semiconductors 254 Westinghouse Motor Industrial Motors 250 TN Technologies, Inc. Electronic Measurements 219 Westinghouse Magnet Division Electronic Manufacturing 182 McNeil Consumer Products Tylenol Products 180 AMP Packaging Systems Computer Backplanes 175 DuPont Photo Mask, Inc. Manufacturing 137 Weed Instruments Electronics 117 Mission Industries Manufacturing 45 A -1 Labor Market Profile City Government and Community Services The City is governed by a Council/Manager form of government with a Mayor and six councilmembers. The City's fire department consists of 31 full -time and 33 volunteer part-time members with 14 fire fighang vehicles. The City's police department has a staff of 65 and it maintains 32 vehicles. The City also has 976 acres of parks, which include eleven tennis courts, 22 baseball fields, 5 soccer fields, 2 swimming pools and other facilities that are available to the community. A public golf course is under construction. The Round Rock Leader, a weekly newspaper, an Austin daily newspaper, and a public library with 48,000 volumes are just a few of the many community services offered to the citizens of the City. The Round Rock Community Hospital was completed in 1983 and is located on a 100 acre site near Brushy Creek between the City and U.S. Highway 183. This hospital has 120 doctors. The Creekside Minor Emergency Center, located in the City, has 5 doctors on call 24 hours a day. Other hospital services are easily accessible in nearby Austin and Georgetown. Financial Institutions The City has access to five banks and one major savings and loan associations. Utilities The City is served by Southwestern Bell Telephone Company, Texas Utilities Electric Company and Lone Star Gas Company. Water and sewer facilities are furnished by the City. Transportation The City is easily accessible from the Austin Municipal Airport and Executive Airpark, a private airport located near the City. Two major railroads, two motor freight lines and a bus line serve the City. Education Facilities The City is located entirely within one of the fastest growing school districts in the State, the Round Rock Independent School District. The District is comprised of 110 square miles with a current 1992 Net Taxable Assessed Valuation of $3,187,783,943. The City is within 90 miles of six of the major universities in the State, Including the University of Texas at Austin, just 15 miles away. Southwestern University is located eight miles north in the City of Georgetown. Recreation Austin Metropolitan Statistical Area September September September September 1992 1991 1990 1989 Total Civilian Labor Force 471,800 452,600 440,800 434,300 Total Employment 448,700 431,500 419,900 412,200 Total Unemployment 23,100 21,100 20,900 22,100 Percent Unemployment 4.9% 4.7% 4.7% 5.1% September September September September 1992 1991 1990 1989 Total Civilian Labor Force 8,728,100 8,524,800 8,490,700 8,438,400 Total Employment 8,076,800 7,978,200 7,965,100 7,906,500 Total Unemployment 651,300 546,600 525,600 531,900 Percent Unemployment 7.5% 6.4% 6.2% 6.3% Lake Travis, together with a number of other major lakes and parks, is in the vicinity to add recreational dimension to the area. The hunting of deer, quail and mourning doves can also be enjoyed throughout this area. Each year, the weekend after the Fourth of July, Round Rock holds Frontier Days, a 20 year tradition which attracts many people. The streets are lined with entertainment, arts, crafts, food booths; and many events are scheduled all over town. The event has become an annual affair and draws crowds of several thousand. Also, since 1980 the Chamber of Commerce has sponsored a Merchants Fair with over 60 booths, giving information about Round Rock businesses and services. Source: Round Rock Chamber of Commerce. State of Texas A -2 THIS PAGE LEFT BLANK INTENTIONALLY APPENDIX B EXCERPTS FROM THE CITY OF ROUND ROCK, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 1992 The information contained in this Appendix consists of excerpts from the City of Round Rock Annual Financial Report for the Year Ended September 30, 1992, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information. 0, PENA B LIC SWAYZE & CO. CERTIFIED PU ACCOUNTANTS INDEPENDENT AUDITORS' REPORT Honorable Mayor, Members of the City Council, and City Manager City of Round Rock, Texas - January 26, 1993 We have audited the accompanying purpose financial statements of the City of Raul Rock, Texas as of and for the year ended September 30, 1992, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to Obtain reasonable assurance abort whether the financial statements are free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and di t1 usurps in the financial statements An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Round Rock, Teams as of September 30, 1992, and the results of operations and the cash flows of its proprietary and similar trust field types for the year then ended in conformity with generally accept accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. Supplemental financial statements and statistical data listed in the table of contents are presenter) for purposes of additional analysis and are not a required part of the 4 eneral purpose financial statements of the City of Round Rock, Texas. Sudi information, except for that portion marked 'kinaudited ", an whidr we express no opinion, has been subjected to the auditing procedures applied in the audit of the general purpose financial statements, and, in our opinion, the information is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. MEMBER AMERICAN LNST1TUTE AND TEXAS SOCIFT1 OF CERTIFIED PUBLIC ACCOUNTANTS P O. BOX 250 ROUND ROCK, TEXAS 78680 512 25 2105 FAX 512 255 2466 19 GENERAL PURPOSE FINANCIAL STATEMENTS: COMBINED STATEMENTS - OVERVIEW 21 ASSETS Cash and temporary investments - Cash Temporary investments Receivables (net of allowances for uncollectibles) - Property taxes, including interest and penalties Accounts and other Loans Accrued interest Interfund Assessments Inventories Other current assets Property and rights held under de- ferred compensation plan Restricted assets - Cash Temporary investments Funds held by trustee Accrued interest Fixed assets, (net of accumulated depreciation of $10,639,215) Investment in joint ventures Amounts to be provided for retirement of general long -term debt Amount available in Debt Service Fund CITY OF ROUND ROCK. TEXAS COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT CROUPS SEPTEMBER 30. 1992 21,648 Governmental Fund Tvoes Special Debt Capital General Revenue Service Projects $ 684,877 $ 230,203 $ 6,962 $ 34,197 4,172,624 770,515 798,841 1,668,201 240,625 297,620 319,080 - 45,256 16,025 - 34,425 192,783 16,590 976,713 Total assets $5 489,304 $1..238,797 $1,120 $9,679 22 The accompanying notes are an integral part of this statement. Account Groups Proprietary Fiduciary General General Fund Type - Fund Types - Fixed Long -Term Total Enterprise Trust 6 Agency Assets Debt (Memo Only) $ 80,450 $ 3,164 $ $ $ 1,039,853 5,117,857 144,944 12,672,982, 538,245 1,147,528 1,466,608 45,256 16,025 32,050 1,027,728 192,783 31,124 31,124 8,033 29,681 125,262 125,262 93,433 93,433 11,364,946 11,364,946 1,378,122 1,378,122 29,748 29,748 43,691,936 17,663 129,273,132 172,982,731 1,699,042 1,699,042 38,843,807 38,843,807 - 839,939 839,939 $64 244 $991 033 $199 $39 6R3,746 $244 (continued) 23 OTHER CREDITS . LIABILITIES. EQUITY AND Governmental Fund Types Special Debt Capital CITY OF ROUND ROCK. TEXAS COMBINED BALANCE SHEET - CONTINUED ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30. 1992 LIABILITIES General Revenue Service Projects Accounts payable $ 404,573 $ 6,760 $ $ 171,337 Accrued payroll 245,924. - - Interfund payables 289,496 703,808 9,635 - Due to participants - - Other accrued liabilities 15,514 Payable from restricted assets Accounts Accrued interest Customer deposits Contract Revenue bonds - - - Deferred revenues 219,207 192,783 270,439 Leases payable - - - General obligation debt Revenue bonds payable - Golf course trust certificates payable Accrued compensated absences Contract payable Total liabilities 1.159.200 903.351 280.074 186.851 EOUITY AND OTHER CREDITS Contributed capital - Developers Other governments Municipality , Investment in general fixed assets Retained earnings - Reserved for revenue bond retirement Reserved for construction Unreserved Fund balance - Reserved for non - current loans receivable 37,798 - Reserved for debt service - 839,939 Reserved for endowments - Reserved for authorized construction 2,492,260 Unreserved - Designated for future capital improvements 1,499,167 - Undesignated 2.830.937 297.608 Total equity & other credits 4.330.104 335.406 839.939 2.492.260 Commitments & contingent liabilities Total liabilities, equity and other credits $5,489,304 $1,938,757 $1,190,011 $2,679,111 24 The accompanying notes are an integral part of this statement. Account Grouts Proprietary Fiduciary General General Fund Type - Fund Types - Fixed Long -Term Enterprise Trust & Agency Assets Debt $ 299,974 $ 482 73,389 24,789 - 135,820 92,700 384,363 379,033 63,770 860,000 14,175,000 6,361,682 191.310 22.906.010 12,808,575 181,934 9,161,418 2,498,510 2,238,701 14,863,096 41.752.234 $64,65R,244 136.302 100,000 129,273,132 Total (Memo Only) $ 883,126 319,313 1,027,728 135,820 15,514 92,700 384,363 379,033 63,770 860,000 682,429 197,531 197,531 38,738,400 38,738,400 14,175,000 6,361,682 747,815 747,815 191.310 39.683.746 65.255.534 12,808,575 181,934 9,161,418 129,273,132 2,498,510 2,238,701 14,863,096 37,798 839,939 100,000 2,492,260 1,499,167 54.731 3.183.276 154.731 129.273.132 179.177.806 $791 013 $179 773 112 $39 746 $244413,3411 25 Governmental Fund Types Special General Revenue Revenues - 6,561,912 Taxes, including interest and penalties , $ 266,380 Licenses, permits and fees Charges for services 501,081 Fines and forfeitures 405,803 Assessments Intergovernmental - Hotel occupancy tax 373.48 - Interest and other Total revenues 8,108.664 CITY OF ROUND ROCK. TEXAS COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 30, 1992 Expenditures - Current - General government 2,013,830 38,162 Public safety - 3,538,469 Public works 1,587,165 Culture and recreation 1,352,009 127,540 Debt service - Principal retirement - - Interest and fiscal charges Capital projects Total expenditures 8.491,473 165.702, Excess (deficiency) of revenues over expenditures (382,809) 44.352 Other financing sources (uses) - Lease purchase proceeds 96,880 Operating transfers in 828,000 -- Operating transfers out (993.555) Total other financing sources (uses) (68.675) Excess (deficiency) of revenues and other financing sources over expenditures and other uses (451,484) 44,352 Fund balances, October 1, 1991 4.781.588 291.054 Fund balances, September 30, 1992 $4,330,104 $335,406 26 The accompanying notes are an integral part of this statement. $ 14,795 3,604 122,537 6918 210 054 Governmental Fund Types Debt Capital Service Proiects $ 3,037,683 90,229 3,127,912 116,640 116,640 Total (Memo Only) $ 9,599,595 266,380 501,081 405,803 14,795 3,604 122,537 649.475 11.563.270 2,051,992 3,538,469 1,587,165 1,479,549 2,406,823 2,406,823 2,888,215 2,888,215 1.752,630 1.752.630 5.295.038 1.752.630 15.704,843 (2.167,126) (1.635.990) (4.141,573) 96,880 1,854,520 993,555 3,676,075 (993.555) 1.854.520 993,555 2.779.400 (312,606) (642,435) (1,362,173) 1.152.545 . 3.134.695 9.359.882 $ 839,939 $ 2,492,260 $ 7,997,709 27 Expenditures - Current - General government Public safety - Public works Culture and recreation Debt service - Principal retirement Interest and fiscal charges Total expenditures Fund balances, October 1, 1991 Fund balances, September 30, 1992 28 CITY OF ROUND ROCK. TEXAS COMBI ED S ATEMENT OF REVENU S END TURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL. SPECIAL REVENUE AND DEBT SERVICE FUND TYPES YEAR ENDED SEPTEMBER 30. 1992 2,013,830 3,538,469 1,587,165 1,352,009 Excess (deficiency) of revenues over expenditures (382.809) Excess (deficiency) of revenues and other financing sources over ex- penditures and other uses General Fund Variance - Favorable Actual Budget (Unfavorable) Revenues - Taxes, including interest and penalties $6,561,912 $6,412,670 $ 149,242 Licenses, permits and fees 266,380 224,502 41,878 Charges for services 501,081 489,585 11,496 Fines and forfeitures 405,803 443,218 (37,415) Assessments - - - Intergovernmental Hotel occupancy tax - - Interest and other 373.488 329.861 43.627 Total revenues 8.108.664 7.899.836 208.828 2,123,547 3,574,259 1,634,040 1,387,117 The accompanying notes are an integral part of this statement. 109,717 35,790 46,875 35,108 8.491.473 8.718.963 227.490 (819.127) 436.318 Other financing sources (uses) - Lease purchase proceeds 96,880 103,390 (6,510) Operating transfers in 828,000 828,000 - Operating transfers out (993.555) (993.555) Total other financing sources (uses) (68.675) (62.165) (6.51(2) (451,484) $ (RR1 792) $ 499 4.781.588 $4 310 104 Special Revenue Funds Variance - Favorable Actual Budget (Unfavorable) $ $ 14,795 14,795 3,604 3,604 - 122,537 107,000 15,537 - - - 69.118 49.971 19.147 90.229 130.000 (39.771) 210.054 175.370 34.684 3.127.912 3.104.159 23.753 38,162 49,795 11,633 127,540 141,155 13,615 2,406,823 2,406,823 - 2.888.215 2.889.056 841 165.702 190.950 25.248 5.295.038 5.295.879 841 44.352 (15.580) 59.932 (2.167.126) (2.191.720) 24.594 44,352 $(15,58Q) $ 59 932 291.054 $335,406 Actual $3,037,683 Debt Service Fund Variance - Favorable Budget (Unfavorable) $2,974,159 $ 63,524 1,854,520 1,854,117 403 1.854.520 1.854.117 403 (312,606) $ (337 .1 ) $ 94,997 1.152.545 $ 839,939 29 CITY OF ROUND ROCK. TEXAS COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS / FUND BALANCES - PROPRIETARY FUND TYPE AND SIMILAR TRUST FUND YEAR ENDED SEPTEMBER 30, 1992 Fiduciary Proprietary Fund Type - Fund Type - Nonexpendable Total Enterprise Trust (Memo Only) Operating revenues - Charges for services $ 7.991.772 $ 7.991.772 Total operating revenues 7.991.772 - 7.991.772 Operating expenses - Personal services 1,564,885 1,564,885 Contractual services 627,720 - 627,720 Supplies 270,998 562 271,560 Materials 232,427 232,427 Heat, light and power 665,639 665,639 Bad debts 30,796 - 30,796 Depreciation 1.624.285 832 1.625.117 Total operating expenses 5.016.750 1.394 5.018.144 Non - operating revenues (expenses) - Interest and other 867,734 6,344 874,078 Interest and fiscal charges (1,806,725) - (1,806,725) Loss on investment in joint ventures (25.462) (25.462) Total non - operating revenues (expenses) (964.453) 6.344 (958.109) Income before operating transfers 2.010.569 4.950 2.015.519 Operating transfers - Operating transfers (out) (2.682.520) (2.682.520) Total operating transfers (2.682.520) (2.682,520) Net income (loss) before extraordinary loss (671,951) 4,950 (667,001) Extraordinary loss - revenue bond refunding (589.556) (589.556) Net income (loss) (1,261,507) 4,950 . (1,256,557) Retained earnings /fund balance, 10 -1 -91 20.861.814 149 :781 21.011.595 Retained earnings /fund balance, 9 -30 -92 $19,600,307 $154,731 ,919,755 30 Operating income (loss) 2.975.022 (1.394) 2.973.628 The accompanying notes are an integral part of this statement. Cash flows from operating activities: Operating income (loss) Adjustments to reconcile net operating income to net cash provided by operating activities: Depreciation Decrease (increase) in receivables Decrease (therms) in other assets Decrease in restricted asset. Increase (decrease) in accounts payable Increase in accrued payroll Decrease in interfund payable. Decrease in other current liabilities - Increase in payables from restricted assets Total adjustments Net cash provided by operations Cash flows from noncapital financing activities: Operating transfers to other funds CITY OF ROUND ROCK. TEXAS COMBINED STATEMENT OF CASH FLAWS PROPRIETARY FUND TYPE AND SIMILAR TRUST FUND YEAR ENDED SEPTEMBER 30. 1992 Supplemental disclosure of noncash capital and related financing activities: Enterprise Fund The City recognized a 325,462 loss for its pro rate share investment in Joint ventures. Fiduciary Proprietary Fund Type - Fund Type - Nonerpendable Total Enterprise Trust (Nemo Only) §-1.M.0 P—riliq $ 2,975.629 1,624,285 832 1,825,117 (58,076) - (58,076) (6,291) 10 (8,281) 3,602 - 3,602 73,588 (5,643) 67,845 15,035 - 15,035 (94,483) - (94.483) (81,395) (61,395) 1 8.991 18.991 1.515.256 (4.801) 1.510.455 4,490.278 (6.195) 4.484.083 (2.682.520) Het cash used for noncepital financing activities (2.682.520) (2.682,520) Cash flows from capital and related financing activities: Receipt of capital contributions 1,573,044 1.573,044 Funds released by trustee 253,270 253,270 Acquisition and eonetruction of capital assets (712,227) - - (712,227) Payments on contract payable (63,770) (63,770) Proceed. from revenue bond. 4,035,000 4,035,000 Amounts deposited in an irrevocable trust with an ..crow agent to provide future debt service payments on refunded boode (3,984,556) (3.984.556) Principal paid on revenue bond. (715,000) (715,000) Principal paid on 1 payable (3,622) (3,622) Interest and fiscal charges paid (1.806.725) (1.808.725) Net cash need for capital and related financing activities (1.824,586) (1.424.586) Cash flows from investing activities: Payments for investments (466,921) - (488,921) Interest and other income 867.734 6.344 _ 674.076 Net mesh provided by investing activities 400.813 8.344 407.157 Net increase in cash and cosh equivalents 783,985 149 784,134 Cosh and cash equivalents at beginning of year 15 405 780 6 15.542,609 Cash and cash equivalents at end of year 016 189 785 6137.068 4 916 178 All The accompanying notes are an integral part of this statement. (2.682.520) 31 Note 1 - Summary of Principal Acoomtina Policies The accounting and reporting policies of the City relating to the Hurls and account gr ups included in the aocospanying financial statements conform to generally accepted accounting principles (GAAP) as applied to governmental entities. Generally accepted accounting principles for local governments include those principles prescribed by the Government Accenting Standards Board (GASB), which constitutes the primary source of GAAP for governmental units. The following represents the more significant accounting and reporting policies and practices used by the City. (A) Reporting Entity The City of Round ck, . Terms is a municipal corporation incorporated under Article XI, Section 5 of the Constitution of the State of Tarns (Home Rule Amemirent). The City operates under a Council - Manager form of government and provides such services as are authorized by its charter to advance the welfare, health, morals, comfort, safety and convenience of the City and its inhabitants. This report includes the financial statements of the funds and account groups required to account for those activities, organizations and functicros which are related to the City and are controlled by or dependent upon the City's governing body, the City Council. The criteria for including activities used by the City in preparing its financial statements are in conformity with Section 2100 of the Gwanmrntal Accounting Starmrds Board Codification of Governmental Accounting and Financial Reporting Sts Jsrds. The basic criterion for inclusion in the City's reporting entity for general purpose financial statement reporting is the ability to exercise oversight responsibility by the City's elected officials. Oversight responsibility is determined by the City's per over activities. This per includes, but is not limited to, financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations and accountability for fiec1 matters. The City's major activities or functions include police and fire protection, emergency medical services, parks and library, public health and social services, planning and zoning and general administrative services. In addition, the City owns and operates a waterworks and sewer utility system. These activities are included in the accompanying financial statements Based an the above criteria, the following activity is included in the City's 1992 financial statements City of Road Rock Deferred Compensation Plan for the City Bi 1oyees CITY OF ROUND ROCK, TOMS NOTES TO COMBINED FINANCIAL SrATE2gNIS SEPTEMBER 30, 1992 The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salaries 33 CITY OF ROUND POCK. TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 Note 1 - Stmri ry of Principal Accountina Policies - continued (A) Reporting Entity - continued until future years. The City does not make any contributions to the plan. The deferred compensation is not available to employees until termination, retirement, or unforeseeable emergency. Deferred Compensation is available to employees' beneficiaries in case of death. All amounts of compensation deferred under the plan, all property and rights purchased with the amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. In management's opinion, the City has no liability for losses under the plan. However, the City does have the duty of due care that would be required of an ordinary prudent investor. The City believes the possibility that it will use the assets to satisfy the claims of general creditors in the future is remote. All assets of the plan are held by an independent administrator. It is appropriate to include this entity in the City's 1992 financial statements since the City has title to these assets. The Deferred Conpensation FYurd is reported as an Agency Ftimd. The following significant organizations are not part of the City and thus are excluded from the accompanying financial statements. Rand Rock Independent School District (RRISD) RRISD is a separate governmental unit from the City.. RRISD is governed by a distinct Board of Trustees that levies taxes, approves budgets, maintains accounting records and directs the operations of RRISD. The Board of Trustees is elected by citizens living within RRISD bomdaries, Which are not identical to those of the City. Under a contractual agreement, taxes levied by the City are collected by RRISD. Collections are transferred to the City daily Special Purpose Districts Various municipal utility aryl ' road districts lie within the City's extraterritorial jurisdiction. All of these districts are separate governmental units from the City. Each district is governed by a Board of Directors, whidi is elected by the citizens within its boundaries. 34 Note 1 - Summary of Principal Accounting Policies - continued (B) Basis of Presentation CITY OF ROUND ROCK, TEXAS VOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1992 The accounts of the City are organized and operated on the basis of funds or account groups, each of which is considered to be a separate accrcmtina entity. The operations of each fund are accounted for with a self - balancing set of accounts that comprise its amPts, liabilities, fund balances or retained earnings, revenues and expenditures or expenses. The various funds are grouped by category and type in the financial statements The City maintains the following fund types within three broad fund categories and account groups. (C) Governmental Fund Types Governs ental funds are those through which most goverrs ental functions of the City are financed. The acquisition, use and balances of the City's expendable financial resources and the related current liabilities (except those, if any, whidr should be accamted for in proprietary funds) are aocourtd for through governmental funds. The measurement focus is upon determination of financial position and cianges in financial position, rather than upon net inure determination. The following goverrtmantal fund types are maintained by the City: General Fund - The General Fund accounts for financial resources in use for general types of operations which are not encompassed within other funds. Special Revenue Fiords - Special Revenue Ftmds are used to account for the proceeds of sperafic revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. There are eight major groups of funds within the Special Revenue Fund whidn account for the activities related to grant programs and hotel motel roam taxes. They are as follows: - National Parks Service Grant. - Community Development Block Grant Fund. - Library Literacy Program Giant Fund. - Street and Bridge Fund. Texas Parks and Wildlife Grant Fund. - Hotel -Motel Occupancy Tax F1md. Brown Foundation Grant Fund. Police Special Revenue Fund. Debt Service Frmd - The Debt Service Fund is used to account for the accumulation of resouroes for, and the payment of, general long-term debt principal, interest and related costs. 35 (C) Governmental '.bald Tvpes - continued CITY OF ROUND ROCK, TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1992 Note 1 - Summary of Principal Acoamtirxr Policies - continued (D) Pmprietary Furl Tvpe The Proprietary Fund is used to account for the City's ongoing organizations and activities which are similar to those feud in the private The measurement focus is upon capital maintenance and upon determination of net income, financial position and cash flows. The following Proprietary Fund type is maintained by the City. Enterprise pond - The Enterprise F1md is used to account for operations that are financed and operated in a manner simi 1 ar to private business enterprises -where the intent of the governing body is that the costs (expenses including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The City's Enterprise Fund consists of the Water and Wastewater System Rind and a Golf Course Furd. These funds are primarily supported by user charges. 36 Capital Proiects Furls - The Capital Projects Mods are used to account for financial re curses to be used for the acquisition or constriction of major capital facilities (other than those financed by Proprietary and Trust Funds). There are ten major groups of funds within the Capital Projects Funds which account for the activities related to various capital improvements projects as follows: - Parkland Acquisition. Streets. Utility System, Series 1985. - Street and Park improvements. - Streets and Drainage. - Park Development. Streets, Parks and General Development, Series 1985. - Streets, Parks and General Development, Series 1987. - City Hall Complex. - Self Financed CO ruction. (F) Account Groups • CITY OF ROUND ROCK, TEXAS NOTES TO C ?BIND FINANCIAL STATEMENTS - CONTINUED SEFPFS4BER 30, 1992 Note 1 - Summary of Principal Accounting Policies - continued (E) Fiduciary Ftmd Types Fiduciary Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or other funds. Eath trust fund is classified for accounting measurement purposes as either a governmental find or a proprietary fund. The City maintains the following Fiduciary Fund types: Nomexpendable' Trust Fiord - This fund is accounted for in the same manner as proprietary funds with the measurement focus on determina- tion of net income and capital maintenance. The nonexpendable trust fund is the Sproull Memorial Endowment Fend. It is used to fund park improvements. Agency Funds - The Agency Funds are purely custodial (assets equal - liabilities) and thus do not involve measurement of results of operations. The Agency Funds consist of the Library Custodial and Deferred Compensation Founds. Account grasps are used to establish accounting control and accountability for the City's general fixed assets and general long -term liabilities. The following are the account groups maintained by the City: General Fixed Assets Account Gra>a - This group of accounts is established to account for all fixed assets of the City other than those accounted for in the proprietary and nonexpendable trust funds. General Long-Term Debt Account Group - This group of accounts is established to account for all general long -term liabilities other than those accounted for in the proprietary fund and to provide control over unmatured general obligation bonds and other long -term liabilities. The two account groups are not funds. They only measure financial position and are not involved with measurement of results of operations. (G) Basis of Accomtina Basis of accounting refers to the time at which revenues and expenditures or expenses are recognized in the accounts and reported in the financial states. Governmental funds and agency finds are accented for on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are 37 CITY OF ROUND ROCK, TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS •- CONTINUED SEPTEMBER 30, 1992 Note 1 - Summary of Principal Accounting Policies - continued (G) Basis of Accounting- continued recorded when susceptible: to accrual (i.e., both measurable annd available). Available neans collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures, if measurable, are generally recognized on the accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include the unnoatured principal and interest on general obligation long term debt which is recognized when due. This exception is in conformity with generally accepted accounting principles. Property tax revenues are recognized when they become available. in this case, available means when due, or past due and receivable within the current period and collected within the current period or soon enough thereafter to be used to pay liabilities of the current period. Such time thereafter shall not exceed 60 days. Tax collections expected to be received subsequent to the 60 day availability period are reported as deferred revenue. Sales, franchise and motel taxes and special assessments are recorded when susceptible to accrual, both measurable and available. Licenses and permits, charges for services, fines and forfeitures and other revenues (except earnings of investments) are recorded as revenues when received in cash because they are generally not measurable until actually received. Earnings on investments are recorded on the accrual basis in all funds. In applying the ale to accrual concept to intergovernmental revenues, the legal and contractual requirements of the individual grant pLu Ldus are used for guidance. Ninnies received are generally unrestricted as to purpose of expenditure and are revocable only for failure to comply with prescribed compliance requirements. ents. These resources are recognized zed as revenues at the time of receipt, or sooner, if the susceptible to accrual criteria are met. The accrual basis of accounting is utilized by proprietary funds and ixnexpendable trust funds. Under the accrual basis of accounting, revenues are recognized in the accounting period in which they are earned and become measurable. Expennses are recorded in the accounting period incurred, if measurable. Assets of the Agency Flmd - Deferred Caopensation FU d are presented at fair market value as required by GASB Statement No. 2. 38 CITY OF ROUND ROCK. TES NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1992 Note 1 - Summary of Principal Accounting Policies - continued (H) Budgets and Budgetary getaxy Accoumtinn The City follows these procedures in establishing the appropriated budget as reflected in the acocmpanying financial statements' (1) At least sixty days prior to the beginning of each fiscal year, the City Manager submits to the City Council a proposed budget for the fi year beginning on the following October 1. The operating budget, which represents the financial plan for the ensuing fiscal year, includes proposed expenditures and the means of financing them. (2) Public hearings are conducted at which all interested persons' anments concerning the budget may be heard. (3) The budget is legally enacted by the City Council through passage of an appropriation ordinance and tax levying ordinance not later than the twenty - seventh day of the last mouth of the figra1 year. (4) Formal budgetary integration is employed as a management control device during the year for the Genaral Fund, Special Revere Funds, Debt Service Fund and Proprietary Funds. Management control for the operating budget is maintained at the individual office, department, or agency level. (5) Annual budgets are legally adopted for the General Fund, Special Revenue Funds, Debt Service Feud and the Proprietary Funds. Capital Projects Funds have no binding annual budget. Rather, budgets are long range and are used primarily for planning purposes Accordingly, no amparison of budget to actual is presented in the financial statements (6) Amendments that alter total expenditures of any fund must be approved by the City Council. Although costs are monitored on a departmental basis, the level of control at whidi expenditures may not exceed the budget is at the fund level. The reported budgetary data has been revised for amendments authorized. (7) Any appropriation balances in the General Fund and Special Revenue Furls lapse or revert to the urdesignated fund balances at the close of each fiscal year. The budgets of the various funds are prepared an a basis consistent with gernerally accepted accounting principles as described above. Budgeted amounts are as originally adopted, or as amended by the City Council on November 24, 1992. Individual amendments were not material in relation to the original appropriations which were amended. 39 CITY OF ROUND ROCK, TEXAS 1 I• M • 71V• YDvID4.1 - eliAW ll129 (I) Encumbrances CCIMECINED SEPTEMBER 30, 1992 Note 1 - Summary of Principal Accounting Policies - continued Enc nbranoes represent gym,; tments related to unperformed (executory) contracts for goods or services. For budgetary purposes, encumbrances lapse at ftgr year- end. (J) Cash and Investments It is the City's policy to invest all temporary cash surplus. Mese investments are reported on the combined balance sheet as cash and temporary investments. Included in cash and cash equivalents are currency an hand, demand deposits with banks or other financial institutions and investments with the Texas local Government Investment Pool. Interest is allocated to each fund on the basis of investments owned. All investments are stated at cost which approximates market value except for assets in a deferred compensationpaan which are stated at market value in accordance with GASB Statement 2. (K) Inventories Inventories are valued at the lower of cost or market. Cost is determined for inventories of supplies in the Fnterprise Fund on the first -in, first-cut method. (L) Fixed Assets Fixed assets owned by the Enterprise Fled and Nonagendable Trust Flail are stated at historical cost. Maintenance and repairs are charged to operations as incurred, and innampennnts and betterments which extezxi the useful lives of fixed assets are capitalized. Depreciation of plant and equipment classified by functional omparents is provided by the straight method over their estimated useful lives. Estimated useful lives are as follows: Buildings Improvements or than buildings Madhiney and eq 25 years 25 - 30 years 5 years When fixed assets of the Este' pr se F rkl or Non expendable Tryst Fled are retired r ed or otherwise disposed of, a gain or loss on disposal of assets is recognized. For the Enterprise Fund's fixed assets, interest is capitalized on construction costs. The amount of interest cost capitalized for assets ooustructed with tax exeapt borrowings is equal to the cost of borrowing, less interest earned on related interest - bearing investments acquired with proceeds of the related tax - exempt borrowings. 40 Note 1 - Summary of Principal Accounting Policies - continued (L) Fixed Assets - continued CITY OF ROUND ROCK, TEXAS NCTES TO OWED FINANCIAL, STATEMENTS - CoNITNUED SEPTEMBER 30. 1992 General fixed assets have been acquired for general goverrmentai purposes. Assets purchased or constructed are recorded as expenditures in the goverrmprntai fund type and capitalized at historical cost in the General Fixed Asset Account Gnxrp contributed fixed assets are recorded as general fixed assets at estimated fair market value at the time received. Public daoain general fixed assets (infrastructure) have been capitalized. Infrastructure consists of certain i rovements other than buildings, including roads, curbing, gutters, streets and sidewalks and drainage systems. No depreciation has been provided on general fixed assets. No interact has been capitalized on general fixed assets (M) lam -Term Debt General obligation bonds which have been issued to fund capital projects of both the general government and certain proprietary funds are to be repaid from tax revenues of the City. General obligation debt is recorded exclusively in the General Long -Term Debt Account Group. Any proceeds from issuance of general obligation bonds . whidi are utilized for construction of proprietary fund fixed assets are reported as irxreases In equity contributions in the applicable proprietary ford. Revenue bards which have been issued to ford capital projects of the Enterprise Fund are to be repaid from net revenues of the utility systems. Such debt is recorded in the Enterprise Fl nd. (N) Vacation and Sick Pay A total of two years vacation eligibility may be accumulated by each employee. EMployees are paid for the accumulated vacation upon termination. Beginning October 1, 1990, employees became eligible to receive a portion of their sick leave upon termination depending on their years of service subsequent to October 1, 1987. After three years the employee receives 25% of their accumulated sick leave up to 60 days; after five years they receive 50% up to 90 days, and after ten years they receive 70% up to 90 days. The City accrues a liability for accumulated vacation and sick leave benefits which meet the following criteria: - The City's obligation to ford accumulated vacation and sick leave benefits is attributable to employees' services already rendered. - The Obligation relates to rights that vest or - Payment of the canpensation is probable. - The amount can be reasonably estimated. aocu aulate. 41 Note 1 - Summary of Principal Accounting Policies - continued CITY OF MONO ROCK. TEXAS Nom TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 (N) Vacation and Sick Pav - continued In accordance with the above criteria, the City has accrued a liability for vacation and vested sick leave pay which has been earned but not taken by City employees. For governmental funds, the liability for accumulated vacation and sick leave benefits is recorded in the General Long -Term Debt Account Group since it is anticipated that none of the liability will be liquidated with expendable available financial resources. The liability for aacumilated vacation and sick pay is recorded in the Proprietary FZurd as accrued payroll in accordance with FASB Stat®eit 43 (0) Transactions Between Fonds . During the course of normal operations, the City has numerous transactions between funds. Non - recurring or non - routine transfers of equity between finds are treated as resir>n l unity transfers and are reported as additions to or deductions from the fund balance of governmental funds. Residual equity transfers to proprietary funds are reported as reductions of retained earnings or contributed capital as is appropriate in the circumstances. All other 1ega11y authorized transfers are treated as operating transfers and are included in the results of operations of both governmental and proprietary funds. (P) Total (Memo Only) Columns The aearttanying general purpose financial statements are a combined overview of the financial position and results of operations of the City and cash flows for proprietary fund types. The ''Total (Memo Carly) " colts are presented for general information purposes and are not meant to fairly present financial position or results of operations for the City as a whole in conformity with generally accepted accounting principles. Such data is not comparable to a consolidation as interfu d eliminations have not been made in the aggregation of data. Note 2 - Property Taxes Property taxes attach as an enforceable lien on January 1. Taxes are levied at or about October 1, are due on November 1, and are past due the following February 1. The Williamson Cavity Appraisal District establishers appraisal values in accordance with requirements of the Texas Legislature. The City Council levies taxes based upon the appraised values. The Round Rock Independent ent School District bills and collects the City's property taxes. The property tax rates, established in accordance with state law, were based of 1001 of the net assessed valuation of real and pexrscrial property within the City on the 1991 tax roll. The tax rate, based on total taxable assessed valuation of $864,172,995 was $.62479 on eadi $100 valuation and was allocated to the General Rind and Debt Service Fund at $.27535 and $.34944 respectively. 42 CITY OF ROUND ROCK, TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPIER 30. 1992 Note 2 - Property Taxes - continued Property taxes receivable at ST ether 30, 1992, consisted of the following: Debt General Fund Service Fund Total Current year levy $178,493 $228,497 $406,990 Prior years' levies 94.851 110.513 205.364 273,344 339,010 612,354 Less - allowance for uloollectible taxes Note 3 - TnterfUnd Acopumts (32.719) A summary of intern d accounts follows: General Fund Special Revenue F1n<ds - Texas Parks and Wildlife Grant Fund Total Special Revenue Funds Debt Service Fuel Capital Projects Funds - Parklani Acquisition Fund 177,044 Utility System, Series 1985 9,536 Streets, Parks and General Development, Series 1985 517,228 Self Financed Construction 272.905 Total Capital Projects Funds 976,713 F3nterprise Furl - Water and Wastewater (41.390) (74.109) $940,62 $297,620 $518,945 Allowances for un collectible taxes are based upon historical experience in collecting property taxes. The City is prohibited from writing off real property taxes without specific statutory authority from the Texas Legislature. Interfinri Interf nld Receivables Pavables S 34,425 $ 289,496 - 703.808 - 703.808 16.590 9.635 24.789 $1,027,778 $7,027,778 43 Land Buildings and improvements Construction in progress Equipment Land Buildings and improvements MaC3lineLy and equipment Less: Allowance for depreciation Construction in progress 44 CITY OF ROUND ROCK. TEXAS NOTES TO COMBINED FINANCIAL STATEIENIS - CONTINUED SEPTEMBER 30, 1992 Note 4 - Fixed Assets The following is a summary of changes to fixed assets in the General Fixed Asset Account Group: • October 1, 1991 Additions Deductions $ 10,354,971 $ 88,765 $ 112,945,991 835,150 649,225 291,320 1,756,677 1,218,302 4.621.294 519.800 273.309 $128,211,976 $1,200,192 $2,140,816 The following is a smeary of fixed assets in the Enterprise Furl and Nonexpendable Trust Fluid: Enterprise Flrrrl $ 2,383,584 46,218,343 5,658.270 54,260,197 (10,634.400) 43,625,797 66,139 $41, September 30, 1992 $ 10,443,736 113,131,916 829,695 4.867.785 $179,773,117 Ncr expereable Trust Fund $10,001 12,477 22,478 (4.815) 17,663 $17,663 CITY OF ROUND ROCK, TEXAS NOTES O COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 Note 4 - Fixed Assets - Continued Major construction contracts in progress from inception to Sep °"'ber 30, 1992, consisted of the following: Expended , Required Project to Future Authorization 9 -30-92 Committed Financing Projects funded principally by general Obligation debt - Streets, parks and general development $22,426,265 $21,263,342 $1,162,923 None Utility system improvements 8,806,031 8,702,712 103,319 None Streets and other improvements 1.590.290 1.582.731 7.559 None 02,822,986 $31,548,7R9 $1,273,801 Projects funded by revenue bonds and developer contribu- tions - Waterworks and sewer system improvements $ 7,164,672 $ 7,164,515 $ 157 None Utility system projects 2,819,921 2,078,531 741,390 None Utility line improvements 10,611,995 10,438,263 173,732 None Water lines, plant and other 2,287,122 2,129.099 158,023 None $22,,:: $21,810,408 $1,071,407 Note 5 - Bonded Debt The following is a summary of bond transactions of the City for the September 30, 1992, (in thousands of dollars): year ended reneral Long Term t ht Bonds Certificates Revenue Total Payable, 10 -01-91 $34,560 $6,478 $15,110 $56,148 Issuances - - 4,035 4,035 Retirements 1.750 550 4.110 6.410 Balance, 9 -30-92 $37,810 $5,928 09,035 $51,773 45 CITY OF ROUND HOCK, TEXAS NOTES TO COMBINED FOAL STATES - CONTINUED D SEPTEMBER 30. 1992 Note 5 - Bonded Debt - continued le at Sept er 30, 1992, were Bongo a f in of Obligation in thousands of dollars): comprised of the following individual (• Date of Issue General obligation Bonds Series 1975 / 8 -1 -75 5.0 % $ 330 $ 210 5.4 - 7.9 % 1,950 1,325 Series 1979 / 5 -1 -79 . Series 1980A / 9 -1 -80 8.0 - 8.9 % 2,000 450 Series 1981B / 2 -1 -81 7.5 - 10.0 % 2,870 1,260 Series 1981A / 4 -1 -81 5.62 % 5,545 3,095 Series 1983 / 10 -1 -83 9.0 - 11.5 % 2,800 150 Series 1984 / 8 -1 -84 8.5 - 10.8 % 200 60 Series 1985 / 5-1 -85 8.0 - 11.0 % 745 200 Series 1985A / 11 -1 -85 9.125 - 11.5 % 12,150 1,425 5.0 - 8.0 % 3,730 ` 3,255 Series 1987 / 2 -1 -87 • Series 1987 / 3 - 15 - 87 21.380 Be f 4.0 - 7.0 % 22.550 46 Amount of Amt Interest Original outstanding Rates Issue 9 -30-92 Note 5 - Bonded Debt - continued Amount of Amount Interest Original Date of Issue Rates Issu 9 -- 30 Outstanding 9-30-92 Certificates of Obligation Series 1975 / 8 -1 -75 5.0 % $ 69 $ 35 Series 1979 / 12 -1 -79 6.75 - 8.0 % 270 55 Series 1985 / 5-1 -85 10.5 - 12.04 7,580 850 Series 1987 / 2 - 1 - 87 6.0 - 9.0 % 1,940 83 Series 1988 / 1 -1 -88 6.25 - 9.0 % 1,850 1,690 Series 1989 / 3 -15-89 6.4 % 190 1,700 Series 1990 / 7 -1-90 6.50 - 9.5 % - 1.595 1,515 $11,494 $ 5,929 Revenue Bonds Series 1978 / 9 - 78 Series 1985 / 11 - 1 - 85 Reflnding Series 1986 / 4 -1 -86 Series 1987 / 2 -1-87 Series 1992 / 1 - 1 - 92 RefUn ling CTPY OF ROUND ROCK. TEXAS NOTES TO COMBINED FINANCIAL STATF24N15 - CONTINUED SEPTEMBER 30, 1992 - 5.65% 6.25 - 9.3 % 6.25 - 9.25% 5.30 - 8.30% 3.50 - 5.80% $ 300 $ 60 7,180 7,450 2,910 2,080 6,325 2,535 4,035 4,035 $71,87c $19,0 15 47 48 CITY OF ROUND ROCK. TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 Note 5 - Bonded Debt - continued The annual requirements to amortize all boarded and certificate of obligation debt ' at September 30, 1992, including interest, are as follows (in thousands of dollars): General Year Ended Obligation September 30, Debt Revenue ota 1993 $ 5,105 $ 1,556 $ 6,661 1994 5,117 1,529 6,646 1995 5,085 1,488 6,573 1996 5,059 1,534 6,593 1997 5,090 1,501 6,591 1998 - 2002 21,222 5,096 26,318 2003 - 2007 10,309 3,441 13,750 2008 - 2011 - 612 $57,599 $16,14'5 $73,744 On January 1, 1992, the City issued $4.035 million in Revenue Bonds with an average interest rate of 5.49% to advance refund $3 4 million of outstanding Series 1985 bonds with an average interest rate of 5.18 %. The net proceeds of $3.965 million• (after payment in underwriting fees, insurance and other issuance costs) were used to purchase U.S.. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments of the Series 1985 bonds. As a result, the Series 1985 bonds are considered to be defeased and the liability for those bards has been removed from the Enterprise FUnI - Water and Wastewater. The advance reftnrding resulted in the recognition of an extraordinary loss of $589,556 for the year ended September 30, 1992. The City, however, reduced its aggregate debt service payments by a1mxt $2.2 million over the next 14 years aryl will realize an economic gain (difference between the present values of the old and new debt service payments) of approximately $222,000. - In prior years, the City defeased certain certificates of obligation and revenue and general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide all future debt service payments on the old bowls. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At September 30, 1992, $28,104,000 of bonds outstanding are considered defeased The City is required by bond ordinances to pledge the net revenues of the waterworks and sewer system for the retirement of its outstanding revenue bards, including interest thereon, and is required for suds purposes to maintain debt service funds and bond reserve funds for all outstanding revenue bads. Note 5 - Bonded Debt - continued CITY OF ROUND ROCK, 173S NOTES '10 COMBINED FINANCIAL STATEMENTS - CONTINUED SEPPFSER 30, 1992 The debt service funds, aggregating $675,471 at September 30, 1992, are restricted within the Enterprise Fund and require that net revenues of the City's waterworks and sewer system, after operating and maintenance expenses are deducted, be irrevocably pledged by providing equal monthly installments which will pmmo to the semiannual principal and interest requirements as they became due. The bond reserve funds for revenue bond retirement, aggregating $2,303,710 at September 30, 1992, are also restricted within the Enterprise Furd. The City is in compliance with the requirement to maintain a ocmbined reserve fund containing cash and investments in an amount equal to the average annual principal and interest requirements of all bonds then outstanding: At September 30, 1992, the required reserve totalled $1, 153, 268. The City also covenants under the bowl indentures that reserve funds shall be invested in time deposits, certificates of deposit and direct or guaranteed obligations of the United States of America. The revenue bond ordinances also provide for other limitations and rc�tclotions. The City is in compliance with all significant limitations and restrictions contained in the various revenue bond ordinance,. Bonds and certificates of obligation authorized and unissued at September 30, 1992, amounted to $1,585,000. Note 6 - lhterfcmd Transfers Interfurd transfers for the year ended September 30, 1992, were as follows: General Fund - Capital Projects Fund - Self Financed Construction Enterprise Fmrl - Water and Wastewater Fund 828.000 Total General Furl Operating Operating Transfers In Transfers Out $ - $ 993,555 828,000 993.555 49 Note 6 - Interfund Transfers - continued 50 CITY OF ROUND ROCK, TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1992 Debt Service Fund - Enterprise Furl - Water and Wastewater Fund Capital Projects Fund- - Self Firms Construction 993,555 Enterprise Fund - Water and Wastewater Fund - General Fund Debt Service FU d Total Enterprise Fund Operating Operating Transfers In , - Transfers Out 1,854,520 $1,676,075 828,000 1,854,520 2,682,520 $3,676,075 Note 7 - Restricted Assets CITY OF ROUND ROCK. TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUE'? SEPTEMBER 30. 1992 The following summarizes restricted assets by purpcme at September 30, 1992: Enterprise Fund: Revenue bond debt service - Cash $ 5,570 Temporary investments 2.973.611 2.979.181 Construction - Cash 30,254 Temporary investments 5.968.508 5.998.762 Impact Fees - cash 53,809 Temporary invents 2.047.594 2.101.403 Custmer deposits - Cash 3,800 Temporary investments 375.233 379.033 Golf course acquisition and onion - FUnds held by trustee 189,520 Accrued interest 519 190.039 Golf course lease payment reserve - FUnds held by trustee 483,919 Accred interest - 5.405 489.324 Golf course reserve fund - FUnds held by trustee 704,683 Accrued interest 23.824 728.507 $12,866,20 51 Note 8 - Employee Retirement Plan The City provides pension benefits for all of its full -time employees through a nontraditional, joint contributory, defined contribution plan in the state -wide Texas Mir cipal Retirment System (TA1RS), one of over 590 administered by MRS, an agent multiple - employer public employee retirement system. It is the opinion of the T71RS management that the plans in TNRS are substantially defined contribution plans, but they have elected to provide additional voluntary disrlosure to help foster a better understanding of some of the nontraditional characteristics of the plan. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City - financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions. In addition, the City can grant as often as annually another type of monetary credit referred to as an updated service credit whidi is a theoretical amount whidi, when added to the employee's aammculated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions arcuuti ated with interest if the current employee contribution rate and city matching percent had always been in existence and if the employee's salary had always been the average of his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer- financed monetary credits with interest were used to purse an annuity. Members can retire at ages 60 and above with 10 or more years of service or with 25 or more years of service regardless of age. The plan also provides death and disability benefits. A member is vested after 10 years, but he niist leave his accumulated contributions in the plan. If a member withdraws his awn money, he is not entitled to the employer- financed monetary credits, even if he was vested. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TRS and within the actuarial constraints also in the statutes. The contribution rate for the employees is 5%, and the City matdiing percent is currently 150%, both as adopted by the governing body of the City. Under the state law governing MRS, the City contribution rate is annually determined by the actuary. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of whidi are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to City matdiing percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each 52 CITY OF ROUND ROCK TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 CITY OF ROUND ROCK. TEXAS NOTES TO oomBINED FINANCIAL STAT FIS - CONTINUED SEPTEMBER 30. 1992 Note 8 - Employee Retirement Plan - continued employee at the time his retireenenthecones effective. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25- year amortization period. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfUndeed actuarial liability is to be amortized over a new 25 -year period. Currently, the unfunded actuarial liability is being amortized over the 25 -year period which began January, 1990. The unit credit actuarial cost method is used for deternini g the City contribution rate. Contributions are made monthly by both the employees and the City. Since the City needs to know its contribution rate in advance to budget for it, there is a one -year lag between the actuarial valuation that is.the basis for the rate and the calendar year when the rate goes into effect. The City's total payroll for the year ended September 30, 1992, was $6,031,788 and the City's contributions were based on a payroll of $5,819,466. Both the City and the covered employees made the required contributions, amount; to $246,532 (4.17% of covered payroll for the months in calendar year 1991, 3.70% normal cost plus 0.47% to amortize the unfurled actuarial liability, and 4.26% for the nlw hs in calendar year 1992, 3.77% normal cost plus 0.49% to amortize the nmfUnded actuarial liability) for the City and $290,956 (5%) for the employees. There were no related - party transactions. Even though the substance of the City's plan is not to provide a defined benefit in some form, some additional voluntary disclosure is appropriate due to the nontraditional nature of the defined contribution plan whidr had an initial iarfiarled pension benefit obligator due to the monetary credits granted by the City for services rendered before the plan began and which can have additions to the unfunded pension benefit obligation through the periodic adoption of increases in benefit credits and benefits. Statement No. 5 of the Governmental Accounting Standards Board (GASB 5) defines pension benefit obligation as a standardized tic- losuie measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of public employee pension plans, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons an public employee pension plans. The pension benefit obligation shown below is similar in nature to the standardized disclosure measure required by GASS 5 for defined benefit plans except that there is no need to project salary increases since the benefit credits earned for service to date are not dependent upon future salaries. The calculations were made as part of the annual actuarial valuation as of December 31, 1991 Because of the money nature of the plan, the interest rate asstmptian, currently 8.5% per year, does not have as muds impact on the results as it does for a defined benefit plan. Market value of assets is not determined for each City's plan, but the market value of assets for MRS as a whole was 114.1% book value as of December 31, 1991. 53 CITY OF ROUND ROCK, TEXAS NC TES TO COMBINED FINANCIAL STATEMENTS — CONTINUED SEPTEMBER 30, 1992 Note 8 - Employee Retirement Plan - continued Pension Benefit Obligation - Annuitants currently receiving benefits $ 7,621 Terminated employees 256,877 Current employees Accumulated employee contributions including allocated invested earnings 1,824,637 Eagilayer-financed vested 928,111 Employer- financed nonvested 729.452 Total $3,746,698 Net assets available for benefits, at book value $3,536,843 Unfunded pension benefit obligation $ 209,855 The book value of assets is amortized cost for bonds and original cost for short - term securities and stocks. The actuarial assumptions used to compute the actuarially determined City contribution rate are the same as those used to comute the pension benefit obligation. The following represents historical trend information for the employee retirement plan: • Net assets available for benefits, at book value Pension benefit obligation Net assets available for benefits as a percentage of the pension benefit obligation 'unfunded pension benefit obligation Annual covered payroll Unfunded pension benefit obligation as a percentage of axonal covered payroll Employer contributions ELployer contributions as a percentage of annual covered payroll 1992 1991 1990 $3,536,843 $2,842,264 $2,247,624 . $3,746,698 $3,163,115 $2,526,462 94.48 $ 209,855 $5,819,466 3.6% $ 246,532 $ 214,320 $ 179,397 4.2% 89.9% $ 320,851 $5,217,540 89.0% $ 278,838 $4,681,340 6.1% 6.0% 4.1% 3.8% Applicable 10 -year historical trend information reflecting progress made in aommn sufficient assets to pay benefits when due is reported in the City's comprehensive annual financial report at page 114. 54 CITY OF ROUND ROCK. T'EYAS NOTES TO COMBINED FINANCIAL SITE flS - CONTINUED SEPTEMBER 30, 1992 Note 9 - Deferred Cessation Plan • The City offers its employees a deferred o spensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred causation is not available to employees until termination, retirement, death or unforeseeable emergencies. The plan is administered by the Public fliployees Benefit Services Corporation, an unrelated third party. Under the terms of an Internal Revenue Code Section 457 deferred carpensation plan, all deferred compensation and income attributable to the investment of the deferred compensation amounts held by the third party, until paid or made available to the employees or beneficiaries, are the property of the City subject only to the claims of the City's general creditors. In addition, the participants in the plan have rights equal to those of the general creditors of the City, and each participant's rights are equal to his or her share of the fair market value of the plan assets. The City believes it is unlikely that plan assets will be needed to satisfy claims of general creditors that might arise. As part of its fiduciary role, the City has an obligation of due care in selecting the third party administrator. Management believes the City has acted in a prudent manner and is not liable for losses that may arise from the administration of the plan. Note 10 - Cash and Temporary its At September 30, 1992, the carrying amount of the City's deposits including tamporary investments, was $26,549,336 and the bank balance was $26,472,050. The bank balance can be classified in Category 1. Of the bank balance, $400,000 was covered by federal depository insurance, $25, 578,336 was covered by collateral held in the pledging bank's trust depsrtient in the City's name and $493,714 was uninsured and uucollateralized. The uninsured and uncollateralized deposits are held by the General Fund, Special Revenue Find - Terms Parks and Wildlife. Grant Fund and the Enterprise se Fund - Water and Sewer FOni. The City also had $125,262 in assets in the Deferred sensation Plan Agency Fund administered by the Public Ebployee Benefit Services Corporationn. The Plan s mots had a carrying amount and market value of $125,262 at September 30, 1992. The City's temporary investments at September 30, 1992, were as follows: Carrying Market Amour[t Value U.S. Treasuries $ 933,842 $ 933,842 Terms local Government Investment Pool 23.104.086 23.104.086 $74,017,978 $74,017,97R. 55 CITY OF ROUND ROCK. TEXAS NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 Note 10 - Cash and Temporary Investments - continued State law authorizes the City to invest in obligations of the United States government and its agencies and certificates of deposit of any state or federally chartered bannk. Note 11 - Lease-Purchases Payable In addition to general Obligation bonds and certificates of obligation, the • General Lo ng -Term Debt Account Gawp includes the City's obligations under capital leases which are not due in the current period. Following is a suntiar; zatian of capital lease transactions for the year ended September 30, 1992: ' Balance, September 30, 1991 $207,674 Increase (decrease) in long -term portion (10.143) Balance, September 30, 1992 $197,531 Lease obligations in the neneral Long -Term Debt Account Group are funded with general revenue sources The annual requirements to amortize the lease-purchase to maturity in the General LongTerm Debt Account Group are as follows: In the Enterprise Fund, the City has the following obligations under capital leases for the year ended September 30, 1992: 56 Year Ended September 30. Principal Interest 1993 $ 63,581 $ 9,104 $ 72,685 1994 83,398 7,141 90,539 1995 33,209 2,499 35,708 1996 17.343 511 17.854 $197,511 $19,25 $716,7R6 Balance, September 30, 1991 Increase (decrease) in current portion Balance, September 30, 1992 $ 3,622 (3.622) Note 12 - Accrued Oonpensated Absences CITY OF ROOND ROCK, TEXAS NCTES TO COMBINED FINANCIAL STATII.ENIS - CONTINUED SEPTEMBER 30, 1992 Changes to accrued compensated absences within the General Long-Term Debt Account Group for the year ending Seer 30, 1992, were as follows: Note 13 - Joint Ventures Balance, Sz either 30, 1991 Increase in accrual Balance, September 30, 1992 Williamson Canty Regional Rsr Water Line $507,903 239,912 • $747,R15 The City is a party in an agreement that authorizes the Brazos River Authority (" BRA ") to design, construct and operate a regional water line. Participants and their respective percentage shares are as follows: City of Georgetown City of Rand Rock Jonah Water Supply Corporation 22.794% 72.023 5.183 100.000% Urder terms of the agreement, the BRA was appointed as project manager and is responsible for the operation of the project. The BRA, which is governed by a Board of 21 directors appointed by the Governor of the State of Texas, is solely responsible for budgeting aryl financing arrangements for the project. The City, in accordance with GAO criteria, reports its investur„L in the project using the equity method of accounting. The following is a summary of financial information taken from the project's audited financial statements at August 31, 1992: Jonah City of City of Water Supply Round Rock Georgetown Corporation bta1 Assets 849,151 268,741 61,108 1,179,000 Liabilities . 982,394 310,910 70,696 1,364,000 Equity (deficit) (133,243) (42,169) (9,588) (185,000) Revenues - - - - EXpenses 25,462 8,058 1,832 35,352 Net expenses 25,462 8,058 1,832 35,352 57 CITY OF ROUND ROCK, TES NOTES '10 COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30. 1992 Note 13 - Joint Ventures - continued Regional Sewer Project The City entered into a Wastewater Disposal contract with Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Ccunties ("District"), the City of Austin, Williamson ComatyMUnicipal Utility District No. 2 and Williamson County Municipal Utility District No. 3. The agreement provides for the District, as project manager, to construct a pipeline for collection of wastewater and a treatment plant for the treatment of such wastewater. According to the agreement, the participants are Obligated to pay all costs incurred by the District for all construction, operation and maintenance of the project. Each participant's share in the project is determined by the respective participant's reserve capacity in the project as a ratio to the total capacity of the project. Final cost allocations will be made upon project completion. At this time, each participant's share of assets and liabilities is not determinable. Under the terms of the Wastewater Disposal Contract, the participants make contributions, as necessary, to fund the project. Accordingly, there was no joint venture debt at SepteMber 30, 1992. In August, 1987, Williamson County Municipal Utility District No. 2 notified the otherneeticiparts of its intention towitharaw from participation in the project. In 1988, Williamson County Municipal Utility District No. 3 notified the remaining participants of its intention to withdraw also. The City of Austin and the City of Pound Polak have decided to continue with the project. • In January, 1989, the City sold line facilities to the District which were constructed, owned and operated by the City for approximately $3,300,000. The District, whidh is governed by a five member board elected by the citizens of Williamson and Milani Counties, is solely responsible for management of the project. Accordingly, the District controls budgeting and financing for the project. The following is a summary of funding and expenditures taken from the project's audited financial statements at September 30, 1991: City of City of Austin 130201._ Totais 58 Funded $6,923,898 $1,196,574 $8,120,472 Interest earnings 129.553 23,472 153,025 Total sources $7,093,451 g1.2291A10 $8,771 Expenditures for project $6,948,020 $1,143,361 $8,091,381 Refunds - - - Total uses 86,948,020 $1,141,161 $11,0011,1R1 CITY OF ROUND ROCK, TEXAS - Norms TO COMBINED FINANCIAL STATEMENTS - CONTINUED SEPTEMBER 30, 1992 Note 14 - Sept Information Enterprise Fps The City : int a in two enterprise funds which are .intended to be self - supporting through user fees charged for services to the public. Financial segment information as of and for the year ended September 30, 1992, is as follows: Water and Golf Sewer Course Total Ope revenues 7,644,356 347,416 7,991,772 Depreciation expense 1,536,103 88,182 1,624,285 Operating income 2,727,073 247,949 2,975,022 Interest and other income 774,183 93,551 867,734 Interest expense 1,134,236 672,489 1,806,725 Operating transfers out 2,682,520 - 2,682 r 520 c Net income (loss) (930,518) (330,989) capital ) (1,261,507) contributions 1,573,044 - 1,573,044 Fixed asset additions 685,978 26,249 712,227 Dotal assets cepital 7,019,173 - 7,019,173 57,108,368 7,549,876 64,658,244 Revenue bps payable 15,035,000 - 15,035,000 Trust certificates payable from golf course operations - 6,361,682 6,361,682 Total equity 40,788,748 963,486 41,752,234 Note 15 - Mlmicirxl Golf Course By December 31, 1989, the City had entered into a series of agreements identified below as Land Use Agreement Lease po ern, Ground Lease, Management Agreement and Trust Agreement to construct and operate a public golf course. The following describes the funding source for construction costs and significant ficant elements of those agreements City of Round Rock Coif Course Trust Certificates, Series 1989 -$6,740,000 The Trust Certificates were sold to provide funds for the acquisition of real property, for the constriction of a public golf course and for a reserve and capitalized interest fund. The certificates are to be repaid solely from lease payments generated from the operations of the golf course facility. Payment terns are based on the following maturity schedule: 59 CITY OF ROUND ROCK, TES NOTES TO COMBINED FINANCIAL SIM:ME IS - CONTINUED SEFTEMBER 30, 1992 Note 15 - lLmicimal Golf Ca rse - continued 60 Year Ended Principal December 31, Serial Term Interest 1992 $ - $ - $ 657,927 1993 - - 657,927 1994 - - 657,927 1995 - - 657,927 1996 140,000 - 657,927 1997 155,000 - 646,027 1998 165,000 - 632,466 1999 180,000 - 617,616 2000 200,000 - 601,236 2001 215,000 - 582,836 2002 235,000 - 562,840 2003 260,000 - 540,750 2004 280,000 - 516,050 2005 310,000 - 489,450 2006 - 340,000 460,000 2007 - 375,000 426,000 2008 - 410,000 388,500 2009 - 450,000 347,500 2010 - 495,000 302,500 2011 - 545,000 253,000 2012 - 600,000 198,500 2013 - 660,000 138,500 2014 - 725.000 72.500 $y,140, 000 54.600,000 $11,065,906 4 The Certificates sold at a discount fran face value of $404,400. Excess construction funds, $1.7 million (capitalized interest and a fully funded reserve fund) out of the sale of the Certificates and lease payments from golf course operations were held to meet annual payments by the Trustee under terms of a Trust Agreement Constriction of Golf Course The City Obtained title on December 28, 1989, to a portion of the golf course site pursuant to the Lard Use Agreement dated SeeptaTter 28, 1989, by and between the City and Franklin Capital Corporation whicth provides among other things that the property must be used as a public golf course. The City has acquired the mining portion of the pr4erty for the golf course project. In the event annual project revenues are insufficient to pay principal of and interest on the Certificates, the project cannot be put to use as anything other than a golf course by the Trustee. Failure to comply with certain of the provisions of the Land Use Agreement may result in the City's loss of ownership of the project. CITY OF ROUND ROCK, TES NOTES TO COMBINED FINANCIAL SI TEM NIS - CONTINUED SEPTEMBER 30, 1992 Note 15 - Municipal Golf Course - continued Funds from the sale of the Certificates were deposited with a Trustee who advanced funds to the City for construction of the golf course facilities. Any amounts remaining from advanced funds and interest thereon after construction was completed were transferred to the Lease Payment Fluid by the Trustee. Operations Through a Ground TAa Agreement, the City leased the golf course property to a City controlled non -profit public purpose corporation. The corporation and the City entered into a Lease/Purchase Agreement whereby the City leases the oaIpleted golf course from the corporation and makes periodic lease payments to the corporation. The corporation uses the lease payments to repay the holders of the Trust Certificates. The obligation of the City to pay lease payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. Neither the Certificates nor the obligation of the City to pay lease payments raider the TAnce/R rthase Agreement constitutes a debt of the City or a pledge of the faith and credit of the City. The City executed the Management Agreement as amended with CCA Silban//GolfCorp/Rowxl Rock, Inc. (Operator) for a term of five years commencing on the date the golf course opened, with a City option to terminate after three years. Under conditions set forth in the Agrees ent, the Operator is to make monthly payments, subject to certain stated limits, equal to the debt service requirements of the Trust Certificates. In addition, the Operator has issued to the City a limited guaranty agreement which guarantees required monthly debt service payments as set forth in the agreement The emulative payments under the guaranty agreement shall not exceed $300,000. Note 16 - Fatuity Acctmtnlated Deficit At Sept ±er 30, 1992, retained earnings included the following accumulated deficit: Enterprise FUnd - Golf Fund $736,914 61 62 '• P.. 1 ➢11 y 7 IDAt — ••' 1 WI '10 O Note 16 E au i tY ' aontinuea C«et_ibuted CaDira� The following is a summary of Changes in contributed capital in the Enterprise - Water and Sewer' Balance, October 1, 1991 Changes - Impact fees Reclassification Municipality Balance, September 30, mnm IIMK. TF�}' {A.S 411 vc ice+ UNCIAL �� 3p 1992 Other ;cinalit�C Developers_ ___VMmpnt� $ 9,943,539 $ 46,360 $8,888,983 1,300,61 (135,574) 135,574 1992 ¢11.10 .57 S sl 272.43 Cq•�61. Note 17 Ck�it ments and i MP11Cies The City has a contract with the Round Rock 7rdePendent Sd col District to collect City taxes and deposit movies to the of $25 685. For this service, the Sd col District was paid a contract amount Reform Act of 1986, the city annually contra � Due to requirements of the rebate requi far' the City s various issues. the At September of 30, arbitrage 92, t of approximately $ 1 27,0 At 5� ,....~ n accrued 30, 1992, the rebate requirements financial statements. $ 127,00 have been aecr in the accompanying THIS PAGE LEFT BLANK INTENTIONALLY APPENDIX C FORM OF BOND COUNSEL'S OPINION 717 NORTH HARWOOD NINTH FLOOR DALLAS, TEXAS 75201.6587 TELEPHONE 214 2202800 TELECO!, 214 9530738 LAW OFFICES MCCALL, PARKHURST X HORTON L.L.P. 3100 ONE AMERICAN CENTER AUSTIN, TEXAS 78701.3234 TELEPHONE 5124783805 TELECOPt 312 4720871 CITY OF ROUND ROCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 1993 IN THE AGGREGATE PRINCIPAL AMOUNT OF $ 402 ONE RIVERWALK PLACE SAN ANTONIO, TEXAS 782053503 TELEPHONE 210 2252800 TEL EEOPV 2102232984 AS BOND COUNSEL FOR THE ISSUER (the "Issuer ") of the bonds described above (the "Bonds "), we have examined into the legality and validity of the Bonds, which bear interest from the dates specified in the text of the Bonds, until maturity or redemption, at the rates and payable on the dates specified in the text of the Bonds and with the ordinance of the Issuer adopted on , 1993, authorizing the issuance of the Bonds (the "Ordinance "). WE HAVE EXAMINED the Constitution and laws of the State of Texas, certified copies of the proceedings of the Issuer, and other documents authorizing and relating to the issuance of said Bonds, including one of the executed Bonds (Bond Numbered R -1) and printer's specimens of Bonds to be authenticated and delivered in exchange for the Bonds. BASED ON SAID EXAMINATION, IT IS OUR OPINION that said Certificates have been authorized, issued and delivered in accordance with law; and that except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization and other similar matters affecting creditors' rights generally, the Bonds constitute valid and legally binding obligations of the Issuer; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of said Bonds have been levied and pledged for such purpose, within the limit prescribed by law, all or all as provided in the Ordinance of the Issuer authorizing the issuance of the Bonds. IT IS FURTHER OUR OPINION, except as discussed below, that the interest on the Bonds is excludable from the gross income of the owners thereof for federal income tax purposes under the statutes, regulations, published rulings, and court decisions existing on the date of this opinion. We are further of the opinion that the Bonds are not "private activity bonds" and that accordingly, interest on the Bonds will not be included as an individual or corporate alternative minimum tax preference item under Section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code "). In expressing the aforementioned opinions, we have relied on the Verification Report of KPMG Peat Marwick, and assume compliance by the Issuer with, certain representations and covenants regarding the use and investment of the proceeds of the Bonds. We call your attention to the fact that failure by the Issuer to comply with such representations and covenants may cause the interest on the Bonds to become includable in gross income retroactively to the date of issuance of the Bonds. WE CALL YOUR ATTENTION TO THE FACT that the interest on tax - exempt obligations, such as the Bonds, is (a) included in a corporation's alternative minimum taxable income for purposes of determining the alternative minimum tax and the environmental tax imposed on corporations by Sections 55 and 59A of the Code, (b) subject to the branch profits tax imposed on foreign corporations by Section 884 of the Code and (c) included in the passive investment income of the subchapter S corporation and subject to the tax imposed by Section 1375 of the Code. EXCEPT AS STATED ABOVE, we express no opinion as to any other federal, state, or local tax consequences of acquiring, carrying, owning or disposing of the Bonds. In particular, but not by way of limitation, we express no opinion with respect to the federal, state or local tax consequences arising from the enactment of any pending or future legislation. WE IIAVE ACTED AS BOND COUNSEL for the Issuer for the sole purpose of rendering an opinion with respect to the legality and validity of the Bonds described above under the Constitution and laws of the State of Texas, and with respect to the "exclusion from gross income of the interest on such Bonds for federal income tax purposes, and for no other reason or purpose. We have not been requested to investigate or verify, and have not investigated or verified, any records, data, or other material relating to the financial condition or capabilities of the Issuer, and have not assumed any responsibility with respect thereto. We have relied solely on certificates executed by officials of the Issuer as to the current outstanding indebtedness of and the assessed valuation of taxable property within the Issuer. Respectfully, McCall, Parkhurst & Horton L.L.P. 3100 ONE AMERICAN CENTER AUSTIN. TEXAS 78701.3234 TELEPHONE 5124783805 TELECOPV 512 472 -0871 LAW OFFICES MCCALL, PARKHURST & HORTON L.L.P. 717 NORTH HARWOOD NINTH FLOOR DALLAS, TEXAS 7520/6587 TELEPHONE 210220-2800 TELECOPV 210 953 -0736 CITY OF ROUND ROCK, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1993 IN THE AGGREGATE PRINCIPAL AMOUNT OF $3,000,000 402 ONE RIVERWALK PLACE SAN ANTONIO. TEXAS 78205.3503 TELEPHONE 210 225 -2800 TELECOPY 210 225 2984 AS BOND COUNSEL FOR THE CITY OF ROUND ROCK, TEXAS (the "Issuer ") in connection with the issuance of the Certificates of Obligation described above (the "Certificates "), we have examined into the legality and validity of the Certificates, which bear interest from the dates specified in the text of the Certificates, until maturity or redemption, at the rates and payable on the date specified in the text of the Certificates and in the Ordinance of the Issuer adopted on , 1993 authorizing the issuance of the Certificates (the "Ordinance "). WE HAVE EXAMINED the applicable and pertinent provisions of the Constitution and laws of the State of Texas, and a transcript of certified proceedings of the Issuer, and other pertinent instrumentsauthorizing and relating to the issuance of the Certificates, including one of the executed Certificates (Certificate Number R -1). BASED ON SAID EXAMINATION, IT IS OUR OPINION that said Certificates have been authorized, issued and delivered in accordance with law; and that except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization and other similarmatters affecting creditors' rights generally, the Certificates constitute valid and legally binding obligations of the Issuer, and that ad valorem taxes sufficient to provide for the payment of the interest on and principalof said Certificates have been levied and pledged for such purpose, within the limit prescribed by law, and that the Certificates are additionallysecured by and payable from a pledge of the revenues of the Issuer's Waterworks and Sewer System, with such amount not exceeding $1,000, after payment of all operation and maintenance expenses thereof, and all debt service, reserve and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding),wbich are payable from all or part of said revenues, all as provided in the Ordinance of the Issuer authorizing the issuance of the Certificates. IN OUR OPINION, except as discussed below, the interest on the Certificates is excludable from the gross income of the owners for federal income tax purposes under the statutes, regulations, published rulings and court decisions existing on the date of this opinion. We are further of the opinion that the Certificates are not "private activity bonds" and that, accordingly, interest on the Certificates will not be included as an individual or corporate alternative minimumtax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code "). In expressing the aforementioned opinions, we have relied on, and assume compliance by the Issuer with, certain representations and covenants regarding the use and investment of the proceeds of the Certificates. We sal! your attention to the fact :hat faflutc by the Issuer to comply with such renrtsentaticr and covenants may cause the interest on the Certificates to become iuclur :abl: in gross income retroactively to the date of issuance of the Certificates. WE CALL YOUR ATTENTION T3 THE FACT that the interest on tax- exempt oblitmtions, such asthe Certificates. is (a) includc:t in a catporattcn's alternative minimum taxable income for purposes of determir. ' g the alternative m itimmp Lis and the environmental tax imposed on corporatio..s by sections 55 and 59A of the Code, (u) subject to the branch profits lax imposed on foreign corpor;tioaa i.fy section &14 of the Code a.'d (c) included in the passive investment income of an S corporatioa and subject to the tax imposed by section 1375 of the Code. EXCEPT AS STATE) ABOVE, we express no opinion as to any other federal, state or local tax consequences of acquibin., carrying, owning or disposing of the Certificates. WE HAVE AC " =.:D AS BOND COUfiSEL for the issuer for the sole purpose of rendering an opinion with respect to the legality and validity of the Certificates under the Constitution and laws cf the State of Texas, and with respect to the exclusion from gross income for federal income tax purposes of the interest on the Certificates, and for no other reason or purpose. We have not been requested to investigate or verify, and have not independently investigated or verified any records, data or other material relating to the financial condition or capt<bilities of the Issuer, and have not assumed any responsibility wish respect thereto.', We have relied solely ca certificates executed by officials of the Issuer as to the current outstanding indebtedness of, assessed vai::ation of taxable property within., and the sufficiency of the pledged revenues of, the Issuer. Respectfully, McCall, Parkhurst & Horton L.L.P. THIS PAGE LEFT BLANK INTENTIONALLY Financial Advisory Services Provided By �IRST SO COMPANY INVESTMENT BANKERS - 93- 05 - /3 -// ... RESOLUTION DIRECTING THE PUBLICATION OF NOTICE OF INTENTION TO ISSUE CITY OF ROUND ROCK, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1993 AND OTHER MATTERS RELATED THERETO THE STATE OF TEXAS § CITY OF ROUND ROCK § WHEREAS, the City Council (the "Council") of the City of Round Rock, Texas (the "City") finds that the payment in whole or in part of contractual obligations to be incurred for: (1) the construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of professional services for legal, fiscal and engineering fees in connection therewith (the "Contractual Obligations) would be beneficial to the inhabitants of the City and are needed to perform essential City functions; and WHEREAS, the Council has deemed it advisable to give notice of intention to issue certificates of obligation in a maximum principal amount not to exceed $3,000,000 (the "Certificates ") pursuant to the provisions of the Certificate of Obligation Act of 1971, Section 271.041 et seq., Local Government Code (the "Act ") for the purpose of financing the Contractual Obligations; and WHEREAS, prior to the issuance of the Certificates, the City is required under the Act to publish notice of its intention to issue the Certificates in a newspaper of general circulation in the City, the notice stating: (i) the time and place tentatively set for the passage of the ordinance authorizing the issuance of the Certificates, (ii) the maximum amount and purpose of the Certificates to be authorized, and (iii) the manner in which the Certificates will be paid; and WHEREAS, the meeting at which this Resolution is adopted was open to the public and public notice of the time, place and purpose of the meeting was given, all as required by Article 6252 -17, Vernon's Texas Civil Statutes, as amended. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: 1. Attached hereto is a form of the Notice of Intention to issue the Certificates, the form and substance of which is hereby adopted and approved. 2. The City Secretary or other authorized representatives of the City, shall cause the notice to be published in substantially the form attached hereto, in a newspaper of general circulation in the City, on the same day in each of two consecutive weeks, the date of the first publication to be at least 14 days prior to the time set for the ordinance authorizing issuance of the Certificates as shown in the notice. ROUND ROLL• NODCflRES 517193 3. This Resolution shall become effective immediately upon adoption. The Mayor and City Secretary are hereby authorized and directed to execute the certificate to which this Resolution is attached on behalf of the City and to do any and all things proper and necessary to carry out the intent of this Resolution. ROUND ROC NORORRES ROM 2 r THE STATE OF TEXAS CITY OF ROUND ROCK CERTIFICATE FOR RESOLUTION § § We, the undersigned officers of the City of Round Rock, Texas (the "City "), hereby certify as follows: 1. The City Council of the City (the "Council ") convened in REGULAR MEETING ON THE 13TH DAY OF MAY, 1993, at the City Hall (the 'Meeting "), and the roll was called of the duly constituted officers and members of the City, to wit: Mike Robinson, Mayor Robert Bennett, City Manager Jimmy Joseph, Mayor Pro -Tem Joanne Land, Asst. City Manager /City Secretary Rod Morgan, Councilmember David Kautz, Director of Finance Rick Stewart, Councilmember Earl Palmer, Councilmember Robert Stulka, Councilmember Martha A. Chavez, Councilmember and all of the persons were present, except the following absentees: `4 , thus constituting a quorum. Whereupon, among other business, the following was transacted at the Meeting: a written was duly introduced for the consideration of the Council. It was then duly moved and seconded that the Resolution be adopted; and, after due discussion, the motion carrying with it the adoption of the Resolution, prevailed and carried by the following vote: AYES: a NOES: YLO'Yi 2. A true, full and correct copy of the Resolution adopted at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that the Resolution has been duly recorded in the Council's minutes of the Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the Council's minutes of the Meeting pertaining to the adoption of the Resolution; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the Council as indicated therein; that each of the officers and members of the Council was duly and sufficiently notified officially and personally, in advance, of the time, place and ROUND ROCK: R6OLUIN.CRT RESOLUTION DIRECTING THE PUBLICATION OF NOTICE OF INTENTION TO ISSUE CITY OF ROUND ROCK, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1993 AND OTHER MATTERS RELATED THERETO purpose of the aforesaid Meeting, and that the Resolution would be introduced and considered for adoption at the Meeting, and each of the officers and members consented, in advance, to the holding of the Meeting for such purpose; that the Meeting was open to the public and public notice of the time, place and purpose of the Meeting was given, all as required by Vernon's Annotated Texas Civil Statutes Article 6252 -17. 3. The Mayor has approved and hereby approves the aforesaid Resolution; and the Mayor and the City Secretary of the City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of the Resolution for all purposes. (SEAL) SIGNED AND SEALED the 4 1i AA 44 ! is/ /It CA Secretary CI of Round Rock Mayor City of Round Rock ROUND ROLL: NOIICRCRr!AM NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that it is the intention of the City Council of the City of Round Rock, Texas, to issue interest bearing certificates of obligation of the City entitled "City of Round Rock, Texas Combination Tax and Revenue Certificates of Obligation, Series 1993," for the purpose of paying contractual obligations to be incurred by the City for (1) construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of fiscal, engineering and legal fees incurred in connection therewith. The City Council tentatively proposes to authorize the issuance of such Certificates of Obligation at its regular meeting place in the City Hall at a meeting to commence at 7 o'clock, p.m., on the 10th day of June, 1993. The maximum amount of Certificates of Obligation that may be authorized for such purpose is $3,000,000. The City Council presently proposes to provide for the payment of such Certificates of Obligation from the levy of taxes and from a limited pledge of net revenues derived from the operation of the City's Waterworks and Sewer System. CITY 17/ DOCK, TEXAS Mayor DATE: May 11, 1993 SUBJECT: City Council Meeting - May 13, 1993 ITEM: 11.B. Consider an ordinance giving notice of intent to issue C.O.'s Series 1993 for Gattis School Road Improvements. (First Reading) STAFF RESOURCE PERSON: Bob Bennett /David Kautz STAFF RECOMMENDATION: The issuance of $3 million of Certificates of Obligation will allow the City to construct Gattis School Road to urban standards. Because the City is in the process of refinancing $24,460,000 of G.O. debt, this issuance can be attached to the refinancing issue and save $25,000 while quickly providing capital construction funds. More importantly, issuance of C.O.'s will allow the City to construct Gattis School Road to a standard that can safely accommodate a rapidly growing area. It is anticipated that the growth in the area will offset this debt. In fact, construction of this road can be viewed as a public investment that will direct growth to an area where the water and sewer utility was built with private development dollars. RESOLUTION DIRECTING THE PUBLICATION OF NOTICE OF INTENTION TO ISSUE CITY OF ROUND ROCK, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1993 AND OTHER MATTERS RELATED THERETO THE STATE OF TEXAS § CITY OF ROUND ROCK § WHEREAS, the City Council (the "Council") of the City of Round Rock, Texas (the "City ") finds that the payment in whole or in part of contractual obligations to be incurred for: (1) the construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of professional services for legal, fiscal and engineering fees in connection therewith (the "Contractual Obligations) would be beneficial to the inhabitants of the City and are needed to perform essential City functions; and WHEREAS, the Council has deemed it advisable to give notice of intention to issue certificates of obligation in a maximum principal amount not to exceed $3,000,000 (the "Certificates ") pursuant to the provisions of the Certificate of Obligation Act of 1971, Section 271.041 et seq., Local Government Code (the "Act ") for the purpose of financing the Contractual Obligations; and WHEREAS, prior to the issuance of the Certificates, the City is required under the Act to publish notice of its intention to issue the Certificates in a newspaper of general circulation in the City, the notice stating: (i) the time and place tentatively set for the passage of the ordinance authorizing the issuance of the Certificates, (ii) the maximum amount and purpose of the Certificates to be authorized, and (iii) the manner in which the Certificates will be paid; and WHEREAS, the meeting at which this Resolution is adopted was open to the public and public notice of the time, place and purpose of the meeting was given, all as required by Article 6252 -17, Vernon's Texas Civil Statutes, as amended. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: 1. Attached hereto is a form of the Notice of Intention to issue the Certificates, the form and substance of which is hereby adopted and approved. 2. The City Secretary or other authorized representatives of the City, shall cause the notice to be published in substantially the form attached hereto, in a newspaper of general circulation in the City, on the same day in each of two consecutive weeks, the date of the first publication to be at least 14 days prior to the time set for the ordinance authorizing issuance of the Certificates as shown in the notice. ROUND ROOD ROT,cRRS SAN) 3. This Resolution shall become effective immediately upon adoption. The Mayor and City Secretary are hereby authorized and directed to execute the certificate to which this Resolution is attached on behalf of the City and to do any and all things proper and necessary to carry out the intent of this Resolution. AMINO ROM: NO112J+6S YlM 2 ROUND ROOK: NOKhOT 1/7N1 NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that it is the intention of the City Council of the City of Round Rock, Texas, to issue interest bearing certificates of obligation of the City entitled "City of Round Rock, Texas Combination Tax and Revenue Certificates of Obligation, Series 1993," for the purpose of paying contractual obligations to be incurred by the City for (1) construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of fiscal, engineering and legal fees incurred in connection therewith. The City Council tentatively proposes to authorize the issuance of such Certificates of Obligation at its regular meeting place in the City Hall at a meeting to commence at 7 o'clock, p.m., on the 10th day of June, 1993. The maximum amount of Certificates of Obligation that may be authorized for such purpose is $3,000,000. The City Council presently proposes to provide for the payment of such Certificates of Obligation from the levy of taxes and from a limited pledge of net revenues derived from the operation of the City's Waterworks and Sewer System. CITY OF ROUND ° " K, TEXAS Mayor // 1 RESOLUTION DIRECTING THE PUBLICATION OF NOTICE OF INTENTION TO ISSUE CITY OF ROUND ROCK, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1993 AND OTHER MATTERS RELATED THERETO THE STATE OF TEXAS § CITY OF ROUND ROCK § WHEREAS, the City Council (the "Council") of the City of Round Rock, Texas (the "City ") finds that the payment in whole or in part of contractual obligations to be incurred for: (1) the construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of professional services for legal, fiscal and engineering fees in connection therewith (the "Contractual Obligations) would be beneficial to the inhabitants of the City and are needed to perform essential City functions; and WHEREAS, the Council has deemed it advisable to give notice of intention to issue certificates of obligation in a maximum principal amount not to exceed $3,000,000 (the "Certificates ") pursuant to the provisions of the Certificate of Obligation Act of 1971, Section 271.041 et seq., Local Government Code (the "Act") for the purpose of financing the Contractual Obligations; and WHEREAS, prior to the issuance of the Certificates, the City is required under the Act to publish notice of its intention to issue the Certificates in a newspaper of general circulation in the City, the notice stating: (i) the time and place tentatively set for the passage of the ordinance authorizing the issuance of the Certificates, (ii) the maximum amount and purpose of the Certificates to be authorized, and (iii) the manner in which the Certificates will be paid; and WHEREAS, the meeting at which this Resolution is adopted was open to the public and public notice of the time, place and purpose of the meeting was given, all as required by Article 6252 -17, Vernon's Texas Civil Statutes, as amended. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: 1. Attached hereto is a form of the Notice of Intention to issue the Certificates, the form and substance of which is hereby adopted and approved. 2. The City Secretary or other authorized representatives of the City, shall cause the notice to be published in substantially the form attached hereto, in a newspaper of general circulation in the City, on the same day in each of two consecutive weeks, the date of the first publication to be at least 14 days prior to the time set for the ordinance authorizing issuance of the Certificates as shown in the notice. ROUND ROOD ROVERS YPM 3. This Resolution shall become effective immediately upon adoption. The Mayor and City Secretary are hereby authorized and directed to execute the certificate to which this Resolution is attached on behalf of the City and to do any and all things proper and necessary to carry out the intent of this Resolution. ROUND ROM. NOTIC.AES R7 2 NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that it is the intention of the City Council of the City of Round Rock, Texas, to issue interest bearing certificates of obligation of the City entitled "City of Round Rock, Texas Combination Tax and Revenue Certificates of Obligation, Series 1993," for the purpose of paying contractual obligations to be incurred by the City for (1) construction of improvements to the street, bridge and road system of the City including Gattis School Road and (2) the payment of fiscal, engineering and legal fees incurred in connection therewith. The City Council tentatively proposes to authorize the issuance of such Certificates of Obligation at its regular meeting place in the City Hall at a meeting to commence at 7 o'clock, p.m., on the 10th day of June, 1993. The maximum amount of Certificates of Obligation that may be authorized for such purpose is $3,000,000. The City Council presently proposes to provide for the payment of such Certificates of Obligation from the levy of taxes and from a limited pledge of net revenues derived from the operation of the City's Waterworks and Sewer System. ROUND ROOM NOTICRCRT 3,7193 CITY �� t�K, TEXAS Mayor