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R-95-07-13-10H - 7/13/1995RS /RESOLUTION RS50713H RESOLUTION NO. R- 95- 07- 13 -10H WHEREAS, the City Council of the City of Round Rock, Texas (the "City ") has advertised the City's financial advisor, First Southwest Company (the "Financial Advisor "), to prepare a Preliminary Official Statement, for the City's Waterworks and Sewer System Revenue Refunding Bonds, Series 1995 (the "Bonds "); and WHEREAS, the City Council has reviewed the Preliminary Official Statement; and WHEREAS, the City Council deems it appropriate to approve the Preliminary Official Statement and authorize the distribution of the Preliminary Official Statement as further set forth below; Now Therefore, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: APPROVAL AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT That the City Council hereby approves the Preliminary Official Statement substantially in the form attached hereto as Exhibit "A ", with such changes, additions or deletions as directed by the City Council and, the Financial Advisor is hereby authorized and directed to distribute the Preliminary Official Statement. II. OTHER MATTERS That the Mayor or Mayor Pro Tem and the Secretary or Assistant Secretary of the City are authorized to do all things proper and necessary to carry out the intent hereof, including the approval of appropriate changes to the Preliminary Official Statement. RESOLVED this 13th day of July, 1995. ATTEST: KS /RESOLUTION RS50713H LAND, City Secretary �l" S EPPER, CHARLES C L L EPPER, Mayor City of Round Rock, Texas 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 JULY, 1995, at the City Hall (the "Meeting "), and the roll was called of the duly constituted officers and members of the City, to wit: Cauue14." *Oa 6R Charles Culpepper, Mayor Jimmy Joseph,-Mayef- 140'Te• Robert Stluka, Councilmember . Martha A. Chavez, Councilmember Rod Morgan, Councilmember Robert Bennett, City Manager Rick Stewart, Councilmember Joanne Land, Asst. City Manager /City Secretary Earl Palmer, m uncJ r David Kautz, Director of Finance Co uuel sg and all of the persons were present, except the following absentees: �" � , taus constituting a quorum. Whereupon, among other business, the following was transaction at the meeting, a written: RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING DISTRIBUTION OF SUCH PRELIMINARY OFFICIAL STATEMENT RELATING TO THE CITY'S WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1995 was duly introduced for the consideration of the Board. 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: 6 NOES: 0 2. A true, full and correct copy of the aforesaid Resolution passed 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 passage 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 purpose of the aforesaid °. xrwum+.ar Meeting, and that the Resolution would be introduced and considered for passage 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 Chapter 551, Government Code, as amended. (SEAL) SIGNED AND SEALED this )3 199 - /nikLb ia/YOL Secretary RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING DISTRIBUTION OF SUCH PRELIMINARY OFFICIAL STATEMENT RELATING TO THE CITY'S WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1995 WHEREAS, the City Council of the City of Round Rock, Texas (the "City ") has authorized the City's financial advisor, First Southwest Company (the "Financial Advisor "), to prepare a Preliminary Official Statement, for the City's Waterworks and Sewer System Revenue Refunding Bonds, Series 1995 (the "Bonds "); and WHEREAS, the City Council has reviewed the Preliminary Official Statement; and WHEREAS, the City Council deems it appropriate to approve the Preliminary Official Statement and authorize the distribution of the Preliminary Official Statement as further set forth below. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF CITY OF ROUND ROCK, TEXAS THAT: Section 1. APPROVAL AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT. The City Council hereby approves the Preliminary Official Statement substantially in the form attached hereto as Exhibit "A" with such changes, additions or deletions as directed by the City Council and, the Financial Advisor is hereby authorized and directed to distribute the Preliminary Official Statement. Section 2. OTHER MATTERS. The Mayor or Mayor Pro Tem and the Secretary or Assistant Secretary of the City are authorized to do all things proper and necessary to carry out the intent hereof, including the approval of appropriate changes to the Preliminary Official Statement. ROUND ROCK/CIIY/ W WSS: POS.RUS 7 /19 / DATE: July 11, 1995 SUBJECT: City Council Meeting, July 13, 1995 ITEM: 10. H. Consider a Resolution Approving Preliminary Official Statement and Authorizing Distribution of such Preliminary Official Statement relating to the City's Waterworks and Sewer System Revenue Refunding Bonds, Series 1995. STAFF RESOURCE PERSON: David Kautz STAFF RECOMMENDATION: Because of the recent lowering of interest rates, it has become feasible to refinance (advance refund) a group of outstanding City revenue bonds at a substantial savings. At current rates (4.87% NIC, through 2005), it is estimated that the advance refunding would produce a $300,000 present value benefit to the City's utility system, or approximately $40,000 year. Approval of this resolution would authorize the City staff and its financial advisor to pursue this refinancing. "Preliminary, subject to change. PRELIMINARY OFFICIAL STATEMENT Dated July 13, 1995 NEW ISSUE - Book-Entry-Only Ratings: Moody's: " " S &P: " Insured.— (See "OTHER INFORMATION - Ratings" herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under existing statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "TAX MATTERS" herein, including the alternative minimum tax on corporations. S7,185,000" CITY OF ROUND ROCK, TEXAS (Williamson and Travis Counties) WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1995 Dated: July 15, 1995 Due: February 1, as shown below Interest on the $7,185,000" City of Round Rock, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1995 (the "Bonds ") will accrue from the dated date as shown above and will be payable February 1 and August 1 of each year, commencing Feb 1, 1996, and will be calculated on the basis of a 360-day year of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC ") pursuant to the Book- Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of 55,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the Bonds, (see "BOND INFORMATION - Book- Entry-Only System" herein). The Bonds are issued pursuant to the general laws of the State of Texas, particularly Article 717k and Articles 1111 through 1118, inclusive, Vemon's Annotated Texas Civil Statutes, as amended ( "VATCS "), and an ordinance (the "Ordinance ") passed by the City Council, and are special obligations of the City of Round Rock, Texas (the "City") payable, both as to principal and interest, solely from and secured by a fast lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System (the "System "). The bondholders shall never have the right to demand payment from monies raised or to be raised from taxation (see "BOND INFORMATION - Authority for Issuance and Security of Bonds "). The Bonds are not a charge upon any other income or revenue of the City and shall never constitute an indebtedness of the general credit or taxing power or either the City of the State of Texas. The Ordinance does not create a mortgage on the System. The initial Paying Agent/Registrar shall be Bank of New York, New York (see "BOND INFORMATION - Paying Agent/Registrar "). Proceeds from the sale of the Bonds will be used to refund a portion of the City's outstanding Waterworks and Sewer System Revenue Bonds and to pay the costs associated with the issuance of the Bonds. MATURITY SCHEDULE' Price Price or or Amount Maturity Rate Yield Amount Maturity Rate Yield $ 75,000 1996 S 770,000 2001 955,000 1997 825,000 2002 640,000 1998 870,000 2003 695,000 1999 925,000 2004 720,000 2000 710,000 2005 The Bonds are not subject to optional redemption prior to their stated maturities. The presently outstanding revenue debt of the City, which is on a parity with the Bonds, is rated "A" by Moodys Investors Service, Inc. ( "Moody's ") and "A" by Standard & Poor's Rating Group, a division of McGraw- Hill ( "S &P "). Three outstanding waterworks and sewer system issues are rated "Asa" by Moody's and "" "AAA" by S&P by virtue of municipal bond insurance relating to such issues provided by various commercial insurance companies. Requests for ratings for the Bonds have been made to both rating services (see "OTHER INFORMATION - Ratings "). The Bonds are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving opinion of the Attorney General of the State of Texas and of McCall, Parkhurst & Horton L.L.P., Bond Counsel, Austin, Texas. The legal opinion of Bond Counsel will be printed on or attached to the Bonds (see APPENDIX C, "Form of Bond Counsel's Opinion "). Certain legal matters will also be passed upon for the Underwriters by Vinson & Elkins L.L.P., Austin, Texas, Counsel for the Underwriters. R is expected that the Bonds will be tendered for delivery to the initial purchaser(s) through DTC. Delivery is anticipated on or about August 22, 1995. MASTERSON MORELAND SAUER WHISMAN, INC. ESTRADA HINOJOSA & COMPANY THIS PAGE LEFT INTENTIONALLY BLANK 2 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 Preliminary 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 Preliminary Official Statement does not constitute an offer to sell Bonds in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. 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 Preliminary 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, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MABVTAIN THE MARKET PRICES OF THE BONDS A7' 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 1 CITY ADMINISTRATION Elected Officials 4 Appointed Officials 4 Consultants and Advisors 4 SELECTED DATA FROM THE OFFICIAL STATEMENT 5 PRELIMINARY OFFICIAL STATEMENT 6 PLAN OF FINANCING Purpose 6 Refunded Bonds 6 Sources and Application of Funds 7 BOND INFORMATION General 7 Security for Bonds 7 Pledged Revenues 7 Application of System Revenues 7 Redemption of Bonds 7 Rates 8 Additional Bonds 8 Book- Entry-Only System 8 Paying Agent/Registrar 9 Transfer, Exchange and Registration 9 Limitation on Transfer of Bonds Called for Redemption 9 Record Date for Interest Payment 10 Municipal Bond Insurance 10 THE SYSTEM Waterworks System 11 Water Usage 11 Ten Largest Water Customers 11 Monthly Water Rates 11 Wastewater System 11 Wastewater Treated 12 Ten Largest Wastewater Customers 12 Monthly Sewer Rates 12 TABLE OF CONTENTS 3 FINANCIAL INFORMATION Condensed Statement of Operations 13 Coverage and Fund Balances 13 Financial Policies 13 INVESTMENTS 14 DEBT INFORMATION Debt Service Schedule 15 Authorized Revenue Bonds 16 Anticipated Issuance of Revenue Bonds 16 Selected Provisions of the Bond Ordinance 16 TAX MATTERS Opinion 20 Federal Income Tax Accounting Treatment of Original Issue Discount 20 Collateral Federal Income Tax Consequences 20 State, Local and Foreign Taxes 21 Qualified Tax - Exempt Obligations for Financial Institutions 21 OTHER INFORMATION Ratings 22 Litigation 22 Registration and Qualification of Bonds for Sale 22 Legal Investments and Eligibility to Secure Public Funds in Texas 22 Legal Opinions and No-Litigation Certificate 22 Financial Advisor 22 Verification of Arithmetical and Mathematical Computations 23 Underwriting 23 Miscellaneous 23 APPENDICES General Information Regarding the City A Excerpts From the Annual Financial Report B Form of Bond Counsel's Opinion C The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Preliminary Official Statement. Elected Officials Appointed Officials Consultants and Advisors CITY ADMINISTRATION Length of Tenn City Council Service Expires Occupation Charles C. Culpepper 2 Years May 1996 Self-Employed Mayor Earl Palmer 5 Years May 1996 Retired Businessman Mayor Pro -Tem Place 6 Robert Stluka 5 Years May 1996 President, Automotive Wholesalers of Councilman, Place 1 Texas Rod Morgan 3 Years May 1998 Self - Employed Councilman, Place 2 Rick Stewart 4 Years May 1998 Retired Businessman Councilman, Place 3 Jimmy Joseph 6 Years May 1996 Self - Employed Councilman, Place 4 Martha A Chavez 2 1t2 Years May 1997 School Teacher Cowicilwoman, Place 5 Length of Name Position Service Robert L. Bennett, Jr. City Manager 16 Years Joanne Land Assistant City Manager /City Secretary 24 Years David Kautz Director of Finance 17 Years Stephan L. Sheets City Attorney 16 Years Auditor Pena, Swayze & Company Round Rock, Texas Bond Counsel McCall, Parkhurst & Horton L.L.P. Austin, Texas Financial Advisor First Southwest Company Austin and Dallas, Texas For Additional Information regarding the City, please contact David Kautz Garry Kimball Director of Finance First Southwest Company City of Round Rock, Texas or 98 San Jacinto Boulevard 221 East Main Street Suite 370 Round Rock, Texas 78664 Austin, Texas 78701 (512) 255 -3612 (512) 476-4372 4 SELECTED DATA FROM THE OFFICIAL STATEMENT This data page was prepared to present the purchasers of the Bonds information concerning the Bonds, the revenues pledged to payment of the Bonds, the description of the revenue base and other pertinent data, all as more fully described herein, and is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement The offering of the Bonds 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. The Issuer The City of Round Rock, Texas, is a political subdivision Located in Williamson and Travis Counties operating as a home -rule city under the laws of the State of Texas and a charter approved by the voters in August, 1977 (the `Home Rule Charter'). The City operates under the City Council/Manager form of government where the Mayor and six City Councilmembers are elected for staggered three -year terms. The City Council formulates operating policy for the City while the City Manager is the chief administrative officer. The City is located 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 I -35 are main traffic arteries within Texas (see APPENDIX A - "General Information Regarding the City"). The Bonds The Bonds are being issued in the principal amount of 57,185,000' pursuant to the general laws of the State of Texas, particularly Article 717k and Articles 1111 through 1118, inclusive, VATCS, as amended, the City's Home Rule Charter and an ordinance passed by the City Council (see Introduction to PLAN OF FINANCING "). Security for the Bonds The Bonds constitute special obligations of the City payable, both as to principal and interest, solely from and secured by a fast lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System on a parity with the City's outstanding Waterworks and Sewer System Revenue Bonds. The bondholders shall never have the right to demand payment from monies raised or to be raised from taxation (see "BOND INFORMATION - Security for Bonds "). Municipal Bond Insurance The City has applied to several bond insurance companies and will consider the purchase of insurance after an analysis of insurance bids has been made. Optional Redemption The Bonds are not subject to redemption prior to their stated maturities. Tax Exemptlon 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 will be used to advance refund and defense until the first available redemption data a portion of the City's outstanding Series 1985, 1986 and 1987 Waterworks and Sewer System Revenue Bonds and to pay the costs associated with the issuance of the Bonds. Payment Record The City has never defaulted. (1) Budget Fib Water Usage (Thousand Gallons) Net Average Year Estimated Average Total Available Annual Debt Coverage Ended City Day Usage for Debt Service of 9 -30 Population Usage (MOD) Service Requirements Debt 1990 30,923 4,450 1.624 54,609,453 51,857,987 2.48x 1991 32,213 4,327 1.579 4,673,591 1,837,014 2.54x 1992 33,769 4,247 1.550 5,037,359 1,533,454 3.28x 1993 36,139 5,184 1.892 5,724,294 1,510,159 3.79x 1994 39,460 6,598 2.408 6,909,660 1,447,101 4.77x 1995 41,650 5,995 2.188 N/A N/A N/A •Preliminaty, subject to change. Selected Issuer Indices 5 PRELIMINARY OFFICIAL STATEMENT Refunded Bonds Relating to 87,185,000" CITY OF ROUND ROCK, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1995 This Preliminary Official Statement, which includes the cover page, the schedule and the appendices hereto, provides certain information regarding the issuance by the City of Round Rock, Texas of 57,185,000• Waterworks and Sewer System Revenue Refunding Bonds, Series 1995. Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the ordinance authorizing the issuance of the Bonds (the 'Ordinance'), except as otherwise indicated herein. The City is a political subdivision of the State of Texas (the "State ") and a municipal corporation organized and existing under the laws of the State, including the City's Home Rule Charter (see APPENDIX A - "General Information Regarding the City"). The Bonds are being issued pursuant to the constitution and general laws of the State of Texas, particularly Article 717k, and Article 1111 through 1118, inclusive, VATCS, as amended, the City's Home Rule Charter and pursuant to the Ordinance adopted by the City Council oldie City of Round Rock on the date of the sale of the Bonds. There follows in this Official Statement descriptions of the Plan of Financing, the Bonds, the System and certain information about the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in the ent by reference to each such document Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company, Austin, Texas. 'Preliminary, subject to change. PLAN OF FINANCING Purpose The Bonds are being issued to provide funds sufficient to advance refund and defense until the first available redemption date a portion of the City's outstanding and callable Series 1985, 1986 and 1987 Waterworks and Sewer System Revenue Bonds, in the aggregate principal amount of $6,905,000• (the 'Refunded Bonds'), in order to lower the overall annual debt service requirements of the City and to pay the costs associated with the issuance of the Bonds. See SCHEDULE 1 The principal and interest due on the Refunded Bonds are to be paid on the scheduled interest payment dates and the redemption date of such bonds, from funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement ") between the City and Bank of New York, New York (the "Escrow Agent "). The Ordinance provides that from the proceed9 of the sale of the Bonds, 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 direct obligations of the United States of America (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, a nationally recognized accounting firm, will verify at the time of delivery of the Bonds to the Underwriter 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 w1B not be available to pay the Bonds (see "OTHER INFORMATION - Verification of Arithmetical and Mathematical Computations "). 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 all of the Refunded Bonds in accordance with the law. It is the opinion of Bond Counsel that as a result of such defeasance and in reliance upon the report of KPMG Peat Marwick, the Refunded Bonds will be outstanding only for the purpose of receiving payments from the Federal Securities and any cash held for such purpose by the Escrow Agent and such Refunded Bonds will not be deemed as being outstanding. The City has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund, from lawfully available funds, of any additional amounts required to pay the principal of and interest on the Refunded Bonds, if, for any reason, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund be insufficient to stake such payment 6 Sources and Application of Funds The proceeds from the sale of the Bonds will be applied approximately as follows: General Sources: Principal Amount of the Bonds $ Accrued Interest Total Sources of Funds S Uses: Deposit to Escrow Fund $ Deposit to Interest and Sinking Fund Underwriters' Discount Original Issue Discount Insurance and Other Costs of Issuance Total Uses of Funds S BOND INFORMATION Interest will accrue on the Bonds and the principal of and interest on the Bonds will initially be payable as provided on the cover page of this Official Statement. In the event that the Bonds are no longer subject to the Book - Entry-Only System described herein, the principal of the Bonds will be payable upon surrender of the Bonds at the designated office for payment of the Paying Agent/Registrar and interest on the Bonds will be payable to the registered owners shown on the records of the Paying Agent/Registrar on the fifteenth day of the month next preceding each interest payment date by check mailed on or before the interest payment date or by such other method as described in the Ordinance. The Bonds are issued as fully registered bonds in the denomination of $5,000 or any integral multiple thereof within a maturity. Security for Bonds The Bonds are special obligations of the City payable, both as to principal and interest, solely from and secured by a first lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System. Net Revenues means the gross revenues of the System after deducting the maintenance and operating expenses. Maintenance and operating expenses include contractual payments which under Texas laws and their provisions are established as operating expenses. The Bonds are not a charge upon any other income or revenues of the City and shall never constitute an indebtedness or pledge of the general credit or taxing powers of the City. The Ordinance does not create a lien or mortgage on the System and any judgment against the City may not be enforced by levy and execution against any property owned by the City, except the Net Revenues of the System. As additional security, there has been established a Reserve Fund which shall be funded in an amount equal to the average annual debt service requirements of the Bonds and any Additional Bonds. The required Reserve will be established at the time of closing in accordance with the provisions of the Ordinance (see "DEBT INFORMATION - Selected Provisions of the Bond Ordinance "). Redemption of Bonds The Bonds are not subject to redemption prior to their stated maturities. Book -Entry-Only System The Depository Trust Company ("DTC "), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully - registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully - registered certificate will be issued for each maturity of the Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited - purpose trust company organized under the New York Banking Law, a Thanking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Direct Participants') deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access 7 to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ( "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interest in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings an behalf of the customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments an the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book - Entry -Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book- Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinance will be given only to DTC. Information concerning DTC and the Book - Entry-Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City or the Underwriters. Paying Agent/Registrar The initial Paying Agent/Registrar is Bank of New York, New York. In the Ordinance, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times while the Bonds are outstanding and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly 8 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 Agent/Registrar. Transfer, Exchange and Registration In the event the Book - Entry-Only System should be discontinued, the Bonds may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender thereof to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. 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 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 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 business days after the receipt of the Bonds to be cancelled, and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in any integral multiple of 55,000 for any one maturity and for a like aggregate principal amount as the Bond or Bonds surrendered for exchange or transfer. See "Book- Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Bonds. 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 15th day of the preceding month. In the event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ( "Special Payment Date ", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of a Bond 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. Municipal Bond Insurance The City has applied to several bond insurance companies for consideration for municipal bond insurance. TILE SYSTEM Waterworks System The City's water system is divided into five (5) service levels. Level I A serves customers in the central portion of the City. Intermediate Level 1 -B was created to meet increasing residential and industrial demands in the northern portion of the City. Level 2 was established to provide for service extension to the west and southwest. Level 3 was developed to serve industrial facilities to the far north, primarily the Westinghouse plant. Level 4 is located to the southeast to serve current and future expansion in that direction. As of February, 1995, the system was billing 12,738 customers. Six City owned water wells pumping from the Edwards Aquifer and a 15 MGD surface water treatment plant from North Fork Lake (Lake Georgetown) provide the total water supply for the City. Gas chlorination prior to storage is the only required treatment Current capability of the City's wells is listed below. Existing Water Wells Pump Capacity Well Location GPM MGD Lake Creek 1,300 1.870 Lake Creek 1,200 1.728 Lake Creek 3,000 0.432 Westinghouse 300 0.432 Westinghouse 100 0.144 Spring Street 1,400 2.016 9 The six water wells have a combined safe water pumping capability of 7,300 GPM, or 10.50 MGD. The safe drought yield of these wells is 4.0 MGD. Water Supply Contracts The City has a 100 year contract, dated May 2, 1978, with the Brazos River Authority for a surface water supply of 6.0 MGD (18.42 acre-feet) average annual use. The surface water source is North Fork Lake (Jake Georgetown) located seven miles northwest of the City. Withdrawal, conveyance and the 6.0 MGD treatment facility were completed in 1982. Additions which increased capacity to 15.0 MGD were completed in April of 1987. In September 1991, the City entered into an additional 50 year surface water supply agreement with the Brazos River Authority of raw water from Lake Stillhouse Hollow, approximately 30 miles north of the City. The City has reserved 8,134 acre -feet of water per year under the agreement. Water Storage The City's Waterworks System presently has 19 storage tanks. The ground storage tanks have combined storage capacity of 7.85 million gallons; standpipe tanks have a storage capacity of 3.75 million gallons, and the elevated tanks have a storage capacity of 3.31 million gallons. Contracted Utility Services 1. Westinghouse - The City contracts with Westinghouse to fumish treated water and sanitary sewer services. Westinghouse's water rate is $1.76/M gallons. Sewer rates are the same as for customers inside the city limits. 2. Brushy Creek Municipal Utility District ('Brushy Creek MUD", the 'District') - In 1986, the City entered into a water supply contract to provide service to the District. This contract provides that the City will provide up to 3.0 MGD (average) and 9.0 MGD (peak) of water to the District at a cost of 1.25 times the City's rates, plus excess use penalties. The contract terminates in 2006. Under this contract, the base charge is $30,619/mo. Volume charge is 5.99/1000 gallons used subject to annual review. 3. The Meadows at Chandler Creek Municipal Utility District ("Chandler Creek MUD", the 'District') - The City has agreed to provide water service, wastewater service, fire protection and garbage service to the District through an agreement dated May 10, 1984, and a September 23, 1991, supplement to that agreement. The City will ultimately serve a total of 2,506 living unit equivalents in the District when it is fully developed. The water, wastewater and garbage collection rates charged by the City will equal those of comparable users located within the City as discussed below. 4. Fero Bluff Municipal Utility District ('Fem Bluff MUD') - The City has agreed to provide water to Fern Bluff MUD for 1.5 million gallons average use. The rates on this contract also provide for payment of capital recovery fees and oversize fees. 5. Tal -Tex, Inc. - The City is providing temporary wholesale water service to Tal -Tex, Inc. through December 31, 1995. The demand charge is $5,560/mo. The volume charge is 51.03 /1000 gallons used. 6. Vista Oaks Municipal Utility District ('Vista Oaks MUD') - The City has agreed to provide water service, wastewater service, fire protection and garbage service to Vista Oaks MUD under an agreement dated January 22, 1987. Rates under that agreement were amended April 22, 1993 to include a base charge of 510.52 and a volume charge of $1.76/1000 gallons used. 10 Ten Largest Water and Sewer Customers Gallons Sold Water Revenue Sewer Revenue 12 Mos. ending 12 Mos. Ending 12 Mos. Ending Customer 12 -31 -94 12 -31 -94 12 -31 -94 Brushy Creek MUD 427,591,000 S 813,087.63 S 0.00 Tal -Tex 51,555,200 119,821.87 0.00 Fern Bluff MUD 43,002,000 110,399.33 0.00 RoundRocklSD 36,320,300 89,165.12 50,948.39 Chandler Creek MUD 27,400,800 85,377.58 56,606.71 Vista Oaks MUD 24,842,000 65,193.23 32,126.74 Michealangelo's 22,878,900 44,181.10 4,394.42 Southgate Apartments 15,799,800 30,078.67 25,033.55 Stonehenge Apartments 15,133,800 28,906.49 23,746.75 Dupont Photo 13,927,000 26.639.71 21.813.25 S 141 ?115O 73 $ 21466981 Monthly Water Rates (Effective 10-1-91) Water rates for retail customers inside the city limits are as follows': Bak 51.76 per 1,000 gallons of water used by all customers Monthly Charge Meter Size Base Serving Customer 5/8 inch 3/4 inch 1 inch 1 1/2 inch 2 inch 3 inch 4 inch 6 inch 8 inch 10 inch 12 inch 'Rates outside the City limits are calculated under contract terms (see above) or on a case by case basis with customers repre.senting an insignificant amount of system revenues. Wastewater System Presently the City has a total wastewater treatment capability of 6.6 million gallons per day. Current average daily flow is about 6.0 MGD. Effluent quality is within acceptable limits of a 10-15 ppm (parts/million gallons of water) Texas Water Quality Board Discharge Permit. The City has plans to build wastewater interceptors along with treatment facilities to serve outlying areas. Collection mains in the City range from 6 to 42 inches in diameter. Most of the City's lift stations will be eliminated when the wastewater interceptors are constructed As of February, 1995, the system was billing 12,738 sewer customers. 11 Monthly Water Service Charge S 10.45 S 14.18 S 21.63 S 40.25 S 62.60 5 114.75 S 189.25 S 599.00 51,046.00 81,642.00 82,014.50 Average system flows are depicted below Average Daily Wastewater Flow Meter Size Base Rate -No Consumption 5/8 inch 3/4 inch 1 inch 1 1/2 inch 2 inch 3 inch 4 inch 6 inch 8 inch 10 inch 12 inch Fiscal Year Ended Gallons 1987 3,700,000 1988 3,800,000 1989 3,900,000 1990 4,000,000 1991 4,100,000 1992 5,300,000 1993 5,500,000 1994 5,300,000 1995a 6,300,000 (1) Year -to -date, through 5- 31 -95. Monthly Sewer Rates (Effective 10 -1 -91) Sewer rates for retail customers inside the city limits are as follows': Rate 51.73 per 1,000 gallons of water used for all users Monthly Charge 12 Monthly Sewer Service Charge S 7.85 S 10.28 S 15.13 S 27.25 S 41.80 S 75.75 S 124.25 S 391.00 S 682.00 91,070.00 51,312.50 'Rates outside the City limits are calculated under contract terms (see above) or on a case by case basis with customers representing an insignificant amount of system revenues. Billing Procedure and Rate Structure All bills for water, sewer and garbage collection are dated and mailed at such time as may be directed by the City Manager, and payment for such bills is due on or before the 16th day from the bill date. Any bill not paid by the due date is considered past due and a penalty of 52.50 or 10% the total amount due, whichever is more, is assessed. If a bill continues to be past due for a period of 10 days, all services are turned off and the meter removed All monthly sewer use fees are based upon the lessor of actual or average monthly water consumption for the months of December, January and February. Current Connection and Development Fees Water and Sewer Reconnect Charge $25.00 per connection for water or sewer Water and Sewer Tap Plumbing Permit (Effective 9- 22-83) The water inspection and meter setting fee is S100.00 per connection for 5/8" or 3/4" meter. For meters over 3/4 "the fee is the difference in cost for an oversized meter. An additional 5200.00 is imposed if the City is asked to make the tap connection. The sewer tap plumbing permit fee is the same as previously stated for the water tap plumbing permit. Water and Sewer Caoital Recovery (Capital Recovery Fee Revised 6- 14-90) Water service base fee - S1,345.00 per L.U.E. Sewer service base fee - 51,250.00 per L.U.E. Type of Residential Unit Number of Living Unit Equivalents Single - family 1.0 per unit Multi- family 0.5 per unit Duplex 0.9 per unit Triplex, four -plex 0.7 per unit Commercial and Industrial Fee waived �gecial Municipal Utility District Review F (Effective 11 22 MUD Review Fee - 55,000 per District 13 Condensed Statement of Operationsti Financial Administration Financial Policies FINANCIAL INFORMATION For Fiscal Year Ended September 30. venues 1994 1993 1992 1991 Charges for Services 510 ,264,712 S 8,902,424 S 7,644,356 $ 7,069,301 Interest Income and Other 1.087.004 597.299 774 183 1.399.856 Total 311,351316 S 9.499.723 S 8.418.539 S 8.469.157 EEx erases Utility Expense S 1,079,807 S 772,093 $ 665,639 $ 697,378 Personnel Services 1,898,399 1,629,303 1,564,885 1,516,082 Contracted Services 680,550 715,327 616,435 1,098,841 Materials and Supplies 758,369 630 .283 503,425 438,356 Other Charges 24.931 28.423 30.796 44.909 Total S 4.442.056 S 3.775.429 S 3.381.180 S 3.795.566 Net Available for Debt Service $ 6 909 660 $ 5 724 994 $ 5.017 359 $ 4 673 591 Metered Water Customers 12,459 11,564 10,899 10,050 Metered Sewer Customers 12,088 11,475 10,810 9,961 (1) Excludes depreciation expenses and debt service costs. Coverage and Fund Balances (I) Average Annual Principal and Interest Requirements, 1996 - 2009 $ 1,447,101 Coverage of Average Requirements by 1994 Net Income 4.77 Times Maximum Principal and Interest Requirements, 2005 S 1,779,067 Coverage of Maximum Requirements by 1994 Net Income 3.88 Times Water and Sewer System Revenue Bonds Outstanding after the Issuance of the Bonds $12,745,000 Interest and Sinking Fund, 5 -31 -95 S 694,789 Reserve Fund, 5 -31 -95 $ 2,576,889 (1) Estimated, includes the Bonds. Preliminary, subject to change. The financial administration of the City is vested in the Department of Finance. The Department of Finance operates under the Director of Finance, who is appointed by the City Manager. Required activities of the Department of Finance are control, custody, investment and disbursement of City funds, data processing, utility billing and collections, city wide purchasing, annual budget preparation and interim and annual financial reports. Basis of Accounting . . .The Citys accounting records of the governmental fund revenues and expenditures are recognized on the 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 liability is incurred, if measurable, except for unmatured interest on general long -term debt. The accrual basis of accounting is utilized by proprietary funds. Under the accrual basis of accounting, revenues are recognized in the accounting period in which they are earned and become measurable. Expenses are recorded in the accounting period incurred, if measurable. General Fund Balance . . .The City policy is to maintain working capital resources at a minimum of three (3) months of the General Fund operating expenditure budget This allows the City to avoid interim borrowing pending tax receipts and provides flexibility should actual revenues fall short of budget estimates. Use of Bond Proceeds, Grants, etc ...The City's policy is to use bond proceeds, grants, revenue sharing or other non- recurring revenues for capital expenditures only. Such revenues are never to be used to fund City operations. 14 Budgetary Procedures . . The City Charter establishes the fiscal years as the twelve -month period beginning October 1. The departments submit to the City Manager a budget of estimated expenditures for the ensuing fiscal year by the first of August. The City Manager subsequently submits a budget of estimated expenditures and revenues to the City Council by August 31. The City Council then holds public hearings on the budget after giving at least seven days notice of the hearing in the official newspaper of the City. The City Council shall then make any changes in the budget as it deems advisable and adopts a budget not later than the 27th day of the last month of the fiscal year. During the fiscal year, budgetary control is maintained by the review of departmental appropriation balances with purchase orders prior to their release to vendors. Departmental appropriation that have not been encumbered lapse at the end of the fiscal year. Therefore, funds that were budgeted and not used by the departments during the fiscal year are not available for their use unless appropriated by the City Council in the ensuing fiscal year's budget. INVESTMENT AUTHORITY AND INVESTMENT PRACTICES OF THE CITY The City invests its investable funds in securities and investments prescribed by the Texas Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended (the "Investment Act "). The Investment Act requires that the City establish an investment policy to ensure that City funds are invested only in accordance with State law. The City has established a written investment policy. The City's investments are managed by its Director of Finance, who reports to the City Manager. The Investment Act requires that investments be made with the judgment and care, under prevailing circumstances, that a person of prudence, discretion and intelligence would exercise in the management of his or her own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived The Investment Act requires that investment policies be written, primarily emphasize safety of principal and liquidity, and address investment diversification, yield and maturity and the quality and capability of investment management. The City's investment policies meet these criteria The Investment Act and other State laws provide that political subdivisions in the State may invest in, (i) direct obligations of the United States or its agencies and instrumentalities, (ii) direct obligations of the State or its agencies, (iii) other obligations unconditionally guaranteed or insured by or backed by the full faith and credit of the State, the United States or its agencies and instrumentalities, (iv) obligations of states and political subdivisions of any state which are rated as to investment quality at least "A" or its equivalent by a nationally recognized investment rating firm, (v) certificates of deposit issued by state and national banks or savings and loan associations domiciled in the State, (vi) prime domestic banker's acceptances, (vii) commercial paper with a stated maturity of 270 days or less that meets certain rating criteria, generally A -1, P -1, (viii) fully collateralized repurchase agreements having a defined termination date which are secured by obligations described in clause (i) that are pledged to the City and deposited with a third party, (ix) no load money market mutual funds which are regulated by the Federal Securities and Exchange Commission with a dollar weighted average stated portfolio maturity of 90 days or less and whose objectives include seeking to maintain a stable asset value of 51.00 per share, (x) an eligible public funds investment pool, (xi) bonds issued, assumed, or guaranteed by the State of Israel, and (xii) a qualified common trust fund or comparable investment device that is owned or administered by a Texas - domiciled bank and consists exclusively of obligations described above. The City may invest in such obligations directly or through govemment investment pools that invest solely in such obligations. The City is currently invested in a portfolio of U.S. Treasury securities, Federal Home Loan Bank Discount Notes, Federal Farm Credit Bank Discount Notes, Federal Home Loan Mortgage Corporation Discount Notes, Federal National Mortgage Assn. Discount Notes and a government investment pool (Texpool) which complies with the above -noted legal investment criteria. Under City investment criteria, other securities or investment instruments may be added to the City's investment portfolio which are approved under state law as authorized investments for municipal governments and which are further approved by the City Attorney and the D of Finance. Furthermore, the assets of the City shall be invested in instruments whose maturities do not exceed two years from the time of purchase. The Citys investment portfolio is generally representative of the City's investment practices although the City has in the past or may in the future also invest in other investments approved by the City Council which meet the above -noted legal criteria State law does not require the City to periodically mark its investments to market price, but it is the Citys practice to value its investments at least quarterly. Based upon the most recent valuation of its investments which occurred April 30, 1995, the City reports its investments totaling $21,373,265 in purchase cost had a market value of 521,450,209 or 100.36% of book value. 15 Debt Service Schedule DEBT INFORMATION 16 Authorized But Unissued Revenue Bonds - None Anticipated Issuance of Revenue Bonds The City does not anticipate the issuance of additional revenue bonds within the next twelve months. Selected Provisions of the Bond Ordinance The City of Round Rock will adopt an ordinance (the "Ordinance ") authorizing the Bonds, which will be in substantially the same form as the ordinance(s) authorizing the outstanding bonds, selected provisions of which are shown below: Section 8. Definitions. That as used in this Ordinance the following terms shall have the meanings set forth below, unless the text hereof specifically indicates otherwise: (a) The term "Additional Bonds" shall mean the additional parity revenue bonds which the Issuer reserves the right to issue in the future in accordance with Section 22 and Section 23 of this Ordinance. (b) The term "Bonds" shall mean the City of Round Rock, Texas Waterworks and Sewer System Refunding Revenue Bonds, Series 1995 authorized by this Ordinance. (c) The term "City Council" or " Council" shall mean the governing body of the Issuer. (d) The term "Government Obligations" shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, which may be United States Treasury obligations such as its State and Local Government Series, and which may be in book -entry form. (e) The tens 'Grose Revenues of the System" and "Grose Revenues" shall mean all revenues and income of every nature derived or received by the Issuer from the operation and ownership of the System, including the interest income from the investment or deposit of money in any Fund created by this Ordnance. (t) The term "Issuer" shall mean the City of Round Rock, in Williamson County, Texas. (g) The terns "Net Revenues of the System" and "Net Revenues" shall mean all Gross Revenues after deducting therefrom an amount equal to the current expenses of operation and maintenance of the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service, provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonable and fairly exercised by the adoption of appropriate resolutions, are nxrsaary to keep the System in operation and render adequate service to said Issuer and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair the Bonds or Additional Bonds, shall be deducted in determining "Net Revenues.' Payments required to be made by the Issuer for water supply or water facilities, sewer services or sewer facilities, fuel supply, which payments under law constitute operation and maintenance expenses of any part of the System, shall constitute and be regarded as expenses of operation and maintenance of the System under this Ordinance. Depreciation and amortization shall not constitute or be regarded as expenses of operation and maintenance of the System. (h) The term "Outstanding Bonds" shall mean collectively the presently outstanding Waterworks and Sewer System and Utility System Revenue Bonds of the Issuer described in the preamble of this Ordinance. (i) The term "Pledged Revenues" shall mean (1) the Net Revenues, plus (2) resources which are expected to be available to the Issuer on a regular periodic basis, including, without limitation, any grants, donations, or income received or o be received from the United States Goverment, or any other public or private source, whether pursuant to an agreement or otherwise, which in the future may, at the option of the Issuer, be pledged to the payment of the Bonds or Additional Bonds. 0) The term 'System" shall mean (1) the Issuer's entire existing waterworks and sewer system, together with all future extensions, improvements, enlargements and additions thereto, and all replacements thereof, and (2) any other related facilities, all or any part of the revenues or income from which do, in the future, at the option of the Issuer, and in accordance with law, become "Pledged Revenues" as hereinafter defined; provided that, notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law, the term System shall not mean any water, sewer, or other facilities of any kind which are declared not to be a part of the System, and which are acquired or constructed by the Issuer with the proceeds from the issuance of "Special Facilities Bonds," which are hereby defined as being special revenue obligation of the Issuer which are not payable from or secured by any Pledged Revenues, but which are secured by and payable from liens on and pledges of any other revenues, sources, or payments, including, but not limited o, special contract revenues or payment received from any other legal entity in connection with such 17 facilities; and such revenues, sources, or payments shall not be considered as or constitute Gross Revenues of the System, unless and to the extent otherwise provided in the ordinance or ordinances authorizing the issuance of such 'Special Facilities Bonds." System. (k) The teen "yea" or "fiscal year" shall mean the fiscal year used by the Issuer in connection with the operation o the n 9. Cumulative Effect of Bond Ordinance. That the Bonds are Additional Bonds issued pursuant to the terms and conditions as stated in the ordinances authorizing the issuance of the Outstanding Bonds and that the following sections of this Bond Ordinance substantially restate and are supplemental to and cumulative of the Ike sections in the ordinances that authorized the Outstanding Bonds so that Sections 9 through 25 of the Bond Ordinance will be applicable to all of the Bonds, the Outstanding Bonds and any Additional Bonds and that the payment of the interest thereon, together with other revenue bonds of the Issuer, are secured by and payable from an irrevocable first lien on and pledge of the Pledged Revenues all as more specifically descried in the Bond Ordinance. Section 10. Pledge. The Bonds and any Additional Bonds, and the interest thennn, are and shall be secured by and payable from a fast lien on and pledge of the Pledged Revenues, and the Pledged Revenues are further pledged to the establishment and maintenance of the Funds created by this Ordinance, and any Funds created by any ordinance authorizing the issuance of any Additional Bonds. The Bonds and any Additional Bonds are not and will not be secured by or payable from a mortgage or deed of trust on any red, personal, or mixed properties constituting the System. Section 11. Rates. The Issuer covenants and agrees with the holders of the Bonds and Additional Bonds as follows: (a) That it will at all times fix, maintain, charge and collect for services rendered by the System, rates and charges which will produce Gross Revenues, together with any other Pledged Revenues, at least sufficient to pay all expenses of operation and maintenance of the System and to provide an additional amount of Net Revenues to pay promptly all of the principal of and interest on the Bonds and Additional Bonds and to make all deposits now or hereafter required to be made into the Funds created by this Ordinance in connection with the Bonds and Additional Bonds with such Net Revenues being at least equal to 1.25 times the principal and interest requirements an the Bonds and Additional Bonds. (b) If the System should become legally liable for any other obligations or indebtedness, the Issuer shall fix, maintain, charge and collect additional rates and charges for services rendered by the System sufficient to establish and maintain funds for the payment thereof. Sectinu 12. System Fund That there is hereby created and there shall be established and maintained on the books of the Issuer, and accounted for separate and apart from all other funds of the Issuer, a special fund to be entitled the "City of Round Rock Waterworks and Sewer System Fund" (the "System Fund "). All Gross Revenues shall be credited to the System Fund immediately upon receipt, unless otherwise provided in this Ordinance. All current expenses of operation and maintenance of the System shall be paid from such Gross Revenues credited to the System Fund as a first charge against same. Before making any deposits hereinafter required to be made from the System Fund, the Issuer shall retain in the System Fund at all times an amount at least equal to one -girth of the amount budgeted for the then current fiscal year for the current operation and maintenance expenses of the System. Section 13. Interest and Sinking Fund That for the sole purpose of paying the principal of and interest on all Bonds and Additional Bonds, there is hereby created and there shall be established and maintained on the books of the Issuer, and accounted for separate and apart from all other funds of the Issuer, a separate fund to be entitled the "City of Round Rock Waterworks and Sewer System Revenue Bonds Interest and Sinking Fund' (the "interest and Sinking Fund "). Section 14. Reserve Fund That there is hereby created and there shall be established and maintained at the Issuer's depository bank a separate fund to be entitled the "City of Round Rock Waterworks and Sewer System Bonds and Additional Bonds Reserve Fund" (the "Reserve Fund"). The Reserve Fund shall be used to pay the principal of and interest on any Bonds or Additional Bonds when and to the extent the amounts in the Interest and Sinking Fund available for such payment are insufficient for such purpose, and may be used for the purpose of finally retiring the last of any Bonds or Additional Bonds. Section 15. Deposits of Pledged Revenues. That Pledged Revenues shall be credited to or deposited in the Interest and Sinking Fund, the Reserve Fund and other funds when and as required by this Ordinance and any ordinance authorizing the issuance of Additional Bonds. Section 16. Invesanents. That money in any Fund established pursuant to this Ordinance or any ordinance authorizing the issuance of Additional Bonds, may, at the option of the Issuer, be placed in time deposits or certificates of deposit secured by obligations of the type hereinafter described, or be invested in Government Obligations (as defined in section 6 hereof) or obligations guaranteed or insured by the United States of America, which, in the opinion of the Attorney General of the United States, are backed by its full faith and credit or represent its general obligations, or invested in obligations of instrumentalities of the United States of 18 America, including, but not limited to, evidences of indebtedness issued, insured, or guaranteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks, Government National Mortgage Association, United States Postal Service, Farmers Home Administration, Federal Home Loan Mortgage Association, Small Business Administration, Federal Housing Association, or Participation Certificates in the Federal Assets Financing Trust; provided that all such deposits and investments shall be made in such manner as will, in the opinion of the Issuer, permit the money required to be expended from any Fund to be available at the proper time or times as expected to be needed. Such investments (except United States Treasury Obligations - State and Local Government Series investments held in book entry torn, which shall at all times be valued at cost) shall be valued in terns of current market value as of the last day of each fiscal year. Unless otherwise set forth herein, all interest and income derived from such deposits and investments im,nediarely shall be credited to, and any losses debited m, the Fund from which the deposit or investment was made, and surpluses in any Fund shall or may be disposed of as hereinafter provided. Such investments shall be sold promptly when necessary to prevent any default in connection with the Bonds or Additional Bonds consistent with the ordinances, respectively, authorizing their issuance. Section 17. Finds Secured That money in all Funds crested by this Ordinance, to the extent not invested, shall be secured in the manna paencdeed by law. Section 18. Priority of Deposits and Payments From System Fend That the Issuer shall make the deposits and payments from Pledged Revenues in the System Fund when and as required by this Ordinance and any ordinance authorizing any Additional Bonds, and such deposits shall be made in the following manner and with the following irrevocable priorities, respectively. Fist, to the Interest and Sinking Fund, when and in the amounts required by this Ordinance and any ordinance authorizing any Additional Bonds; and Second, to the Reserve Fund, when and in the amounts required by this Ordinance and any ordinance authorizing any Additional Bonds. Secti 19 interest and Sinking Fund Requirements. (a) That promptly after the delivery of the Bonds the City shall cause to be deposited to the credit of the Interest and Sinking Fund any accrued interest received from the sale and delivery of the Bonds, and any such deposit shall be used to pay part of the interest next coming due on the Bonds. (b) That the City shall transfer from the Pledged Revenues and deposit to the credit of the Interest and Sinking Fund the amounts, at the times, as follows: (1) such amounts, deposited in approximately equal monthly installments on or before the 25th day of each month hereafter, commencing with the month during which the Bonds are delivered, or the month thereafter if delivery is made after the 25th day thereof, as will be sufficient, together with other amounts, if any, then on hand in the Interest and Sinking Fund and available for such purpose, to pay interest scheduled to accrue and come due on the Bonds and Additional Honda on the next succeeding interest payment date; (2) such amounts, deposited in approximately equal monthly installments on or before the 25th day of each month hereafter, commencing with the month during which the Bonds are delivered, or the month thereafter if delivery is made after the 25th day thereof, as will be sufficient, together with other amounts, if any, then on hand in the interest and Sinking Fund and available for such purpose, to pay principal scheduled to mature and come due on the Bonds and any Additional Bonds on the next succeeding principal payment date; and Section 20. Reserve Fund Requirements. That promptly upon the delivery of ale Bonds the Issuer shall cause to be deposited $ in the Reserve Fund from funds on hand and lawfully available for such purpose, and $ shaft be deposited on the 25th day of each month hereafter, commencing until the Fund shall contain $ The Issuer shall maintain in the Reserve Fund an amount of money and investments equal to the average annual principal and interest requirements of the Bonds (the "Required Reserve Amount"). Following the issuance of Additional Bonds, the Required Reserve Amount shall be equal to the average annual principal and interest requirements of all Bonds and Additional Bonds then outstanding. After the delivery of any Additional Bonds the Issuer shall cause the Reserve Fund to be increased, if and to the extent necessary, no that such fund will contain an amount of money and investments equal to the Required Reserve Amount. Any increase in the Required Reserve Amount may be funded from Pledged Revenues or from proceeds form the sale of any Additional Bonds, or any other available source or combination of sources. All or any par of the Required Reserve Amount not funded initially and immediately alter the delivery of any installment or issue of Additional Bonds shall be funded, within not more than five years from the data of such delivery, by deposits of Pledged Revenues in approximately equal monthly installments on or before the 25th day of each month. Principal amounts of the Bonds and any Additional Bonds which must be redeemed pursuant tu any applicable mandatory redemption requirements shall be deemed to be maturing amounts of principal for the purpose of calculating principal and interest requirements on such bonds. When and so long as the amount in the Reserve Fund is not less than the Requires Reserve Amount no deposits shall be made to the credit of the Reserve Fund; but when and if the Reserve Fund at any time contains leas than 19 the Required Reserve Amount, then the Issuer shall transfer from Pledged Revenues in the System Fund, and deposit to the credit of the Reserve Fund, monthly on or before the 25th day of each month, a sum equal to 1 /60th of the Required Reserve Amount, initial the Reserve Fund is restored to the Required Reserve Amount. The Issuer specifically covenants that when and so long as the Reserve Fund contains the Required Reserve Amount, the Issuer shall cause all interest and income derived from the deposit or investment of the Reserve Fund to b deposited to the credit of the System Fund. Section 21. Deficiencies; Excess Pledged Revenues. (a) That if on any occasion there shall not bc sufficient Pledged Revenues to make the required deposits into the Interest and Sinking Fund or the Reserve Fund, such deficiency shall be made up as soon as possible from the next available Pledged Revenues. (b) 'Brat, subject to making the required deposits to the credit of the various Funds when and as required be this Ordinance or any ordinance authorizing the issuance of Additional Bonds, any surplus Pledged Revenues may be used by the Issuer for any lawful purpose. Section 22. Payment of Bonds and Additional Bonds. On or before , and semiannually on or before each August 25 and February 25 thereafter while any of the Bonds or Additional Bonds are outstanding and unpaid the Issuer shall make available to the Paying Agent/Registrar therefor, out of the Intent and Sinking Fund, or if necessary, out of the Reserve Fund, money suf &cierd to pay, on each of such dates, the principal of and interest on the Bonds and Additional Bonds as the same matures and comes due, or to redeem the Bonds or Additional Bonds prior to maturity, either upon mandatory redemption or at the option of the Issuer. At the direction of the Issuer the Paying Agent/Regislxar shall either deliver paid Bonds and Additional Bonds to the Issuer or destroy all paid Bonds and Additional Bonds, and famish the Issuer with an appropriate certificate of cancellation or destruction. Section 23. Additional Bonds. (a) That the Issuer shall have the right and power at any time and from time to time, and in one or more series or issues, to authorize, issue and deliver additional parity revenue bonds (herein called "Additional Bonds "), in accordance with law, in any amounts, for any lawful purpose, including the refunding of any Bonds or Additional Bonds, or other obligations. Such Additional Bonds, if and when authorized, issued and delivered in accordance with this Ordinance, shall be payable for and secured by an irrevocable first lien on and pledge of the Pledged Revenues, equally and ratably on a parity in all respects with the Bonds and any other outstanding Additional Bonds. (b) That the principal of all Additional Bonds must be scheduled to be paid or mature on February 1 or August 1 (or both) of the years in which such principal is scheduled to be paid or mature. Section 24. Further Requirements for Additional Bonds. That Additional Bonds shall be issued only in accordance with this Ordinance, and no installment, Series, or issue of Additional Bonds shall be issued or delivered unless: (a) The Mayor of the issuer and the City Secretary sign a written certificate to the effect that the Issuer is not in default as to any covenant, condition, or obligation in connection with all than outstanding Bonds and Additional Bonds, and the ordinances authorizing same, and that the Interest and Sinking Fund and the Reserve Fund each contains the amount then required to be therein. (b) An independent certified public accounant, or independent firm of certified public accountants, acting by and through a certified public accountant, signs a written certificate to the effect that, in his or is opinion, during either the next preceding fiscal year, or any twelve consecutive calendar month period out of the 18 -month period immediately preceding the month in which the ordinance authorizing the issuance of the then proposed Additional Bonds is passed, the Pledged Revenues were at leant 1.25 times an anwunt equal to the average annual principal and interest requirements and 1.10 times the maximum annual principal and inte rest requirements of all Bonds and Additional Bonds which are scheduled to be outstanding after the delivery of the amount of Pledged Revenues for the purposes of this subsection (b), if there has been any increase in rates or charges for services of the System which is then in effect, but which was not in effect during all or any part of the entire period for which the Pledged Revenues are being calculated (hereinafter referred to as the "entire period ") then the certified public accountant, or in lieu of the certified public accountant a firm of consulting engineers, shall determine and certify the amount of Pledged Revenues as being the total of (i) the actual Pledged Revenues for the entire period, plus (ii) a sum equal to the aggregate amount by which the actual billings to customers of the System during the entire period would have been increased if such increased uses or charges had been in effect during the entire period. (c) Provision shall be made in the ordinance authorizing their issuance for increasing the Reserve Fund to the Required Reserve Amount as required by Section 17 hercof with proceeds of the Additional Bonds, or other available source or combination of sources including Pledged Revenues, or both. (d) That all calculations of average annual principal and interest requirements of any bonds made in connection with the issuance of any then proposed Additional Bonds shall be made as of the date of such additional Bonds; and also in making calculations for such purpose, and for any other purpose under this Ordinance, principal amounts of any bonds which must be 20 redeemed prior to maturity pursuant to any applicable mandatory redemption requirements shall be deemed to be maturing amounts of principal of such bonds. et a' n 2 General Covenants. The Issuer further covenants and agrees that in accordance with and to the extent required or pemtitted by law: (a) Performwlce. It will faithfully perform at all times any and all covenants, undeialcings, stipulations and provisions contained in this Ordinance, and each ordinance authorizing the issuance of Additional Bonds, and in each and every Bond and Additional Bond; that it will promptly pay or cause to be paid the principal of and interest on every Bond and Additional Bond, on the dates and in the places and manner prescribed in such ordinances and Bonds or Additional Bonds; and that it will, at the times and in the manner prescribed, deposit or cause to be deposited the amounts required to be deposited into the Interest and Sinking Fund and the Reserve Fund; and any holder of the Bonds or Additional Bonds may require the Issuer, its officials and employees, to carry out, respect, or enforce the covenants and obligations of this Ordinance, or any ordinance authorizing the issuance of Additional Bonds, by all legal and equitable means, including specifically, but without limitation, the use and filing of mandamus proceedings, in any court of competent jurisdiction, against the Issuer, its officials and employees. (b) Issuer's Legal Authority. The Issuer is a duly created and existing home rule city of the State of Texas, and is duly authorized under the laws of the State of Texas to create and issue the Bonds and Additional Bonds; that all action on its part for the creation and issuance of the said obligation has been or will be duly and effectively taken, and that said obligations in the hands of the holders and owners thereof are and will be valid and enforceable special obligations of the Issuer in accordance with their terms. (c) Tnle. The Issuer has or will obtain lawful title to the lands, buildings, structures and facilities constituting the System, that it warrants that it will defend the title to all the aforesaid lands, buildings, structures and facilities, and every part thereof, for the benefit of the holders and owners of the Bonds and Additional Bonds, against the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the Pledged Revenues to the payment of the Bonds and Additional Bonds in the manner prescribed herein, and has lawfully exercised such rights. (d) Lrenr. The Issuer will from time to time and before the same become delinquent pay and discharge all taxes, assessments and govermental charges, if any, which shall be lawfully imposed upon it, or the System, that it will pay all lawful claims for rents, royalties, labor, materials and supplies which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof, so that the priority of the lien granted hereunder shall be fully preserved in the manner provided herein, and that it will not create or suffer to be created any mechanic's, laborer's, materialmari s, or other lien or charge which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the lien hereof might or could be impaired; provided, however, that no such tax, assessment, or charge, and that no such claims which might be used as the basis of a mechanic's, laborers, materialman'a, or other lien or charge, shall be required to be paid so long as the validity of the same shall be contested in good faith by the Issuer. (e) Operation of System; No Free Service. While the Bonds or any Additional Bonds are outstanding and unpaid the Issuer shall continuously and efficiently operate the System, and shall maintain the System, or cause the System to be operated and maintained in good condition, repair and working order, all at reasonable cost. No free service of the System shall be allowed, and should the Issuer or any of its agencies, instrumentalities, lessors, or concessionaires make use of the services and facilities of the System, payment monthly of the standard retail price of the services provided shall be made by the Issuer or any of its agencies, inatrmentalities, lessors, or concessionaires out of funds fror sources other than the revenues of the System, unless made from surplus Pledged Revenues as permitted by Section 18(b) hereof. (1) Further Encwnbra ce. While the Benda or any Additional Bonds are outstanding and unpaid, the Issuer shall not additionally encumber the Pledged Revenues in any manner, except as permitted in this Ordinance in connection with Additional Bonds, unless said encumbrance is made junior and subordinate in all respects m the lien, pledges, covenants and agreements of this Ordinance and any ordinance authorizing the issuance of Additional Bonds; but the right of the Issuer to issue revenue bonds payable from a subordinate lien on surplus Pledged Revenues is specifically recognized and retained. (g) Sale or Disposal of Property. While the Bonds or any Additional Bonds are outstanding and unpaid, the issuer shall not sell, convey, mortgage, encumber, lease, or in any manner transfer title to, or dedicate to other use, or otherwise dispose of, the System, (except as permitted in paragraph (n) hereof) or any significant or substantial part thereof; provided that whenever the Issuer dean it necessary to dispose of any property, machinery, fixtures, or equipment, or dedicate such property to other use, it may do so either when it has made arrangements to replace the same or provide substitutes therefor, or it is determined by resolution of the City Council that no such replacement or substitute is necessary. (h) Insurance. (1) The Issuer shall cause to be insured such pans of the System as would usually be insured by corporations operating tike properties, with a reaponble insurance company or companies, against risks, accidents, or casualties against which and to the extent insurance is usually carried by corporation operating like properties, including, to the extent 21 reasonable obtainable, fire and emended coverage insurance, insurance against damage by floods, and use and occupancy insurance. Public liability and property damage insurance also shall be carried unleas the City Attorney gives a written opinion to the effect that the Issuer is not liable for claims which would be protected by such insurance. All insurance premiums shall be paid as an expense of operation of the system. At any time while any contractor engaged in construction work shall be fully responsible therefor, the Issuer shall not be required to carry insurance on the work being constructed if the contractor is required to carry appropriate insurance. All such policies shall be open to the inspection of the Bondholders and their representatives at all reasonable times. Upon the happening of any loss or damage covered by insurance from one or more of said causes, the Issuer shall make due proof of loss and shall do all things necessary or desirable to cause the insuring companies to make payment in full directly to the Issuer. The proceeds of insurance covering such property, together with any other funds necessary and available for such purpose, shall be used forthwith by the Issuer for repairing the property damaged or replacing the property destroyed; provided, however, that if said insurance proceeds and other funds are insufficient for such purpose, then said insurance proceeds pertaining to the System shall be deposited in a special and separate trust fund, at an official depository of the Issuer, to be designated the Insurance Account. The Insurance Account shall be held until such time as other funds become available which, together with the Insurance Account, will be sufficient to make the repairs or replacements originally required. (2) The annual audit hereinafter requited may contain a section commenting on whether or not the Issuer has complied with the requirements of this Section with respect to the maintenance of insurance, and shall state whether or not all insurance premiums upon the insurance policies to which ref:tame is made have been paid. (>l Annual Budge: and Rare Covent The Issuer shall prepare, prior to the beginning of each fiscal year, an annual budget, in accordance with law, reflecting an estimate of cash receipts and disbursements for the ensuing fiscal year in sufficient detail to indicate the probable Gross Revenues and Pledged Revenues for such fiscal year. The Issuer shall fix, establish, maintain and collect, such rates, charges and fees for the use and availability of the System at all times as are necessary (1) to produce Gross Revenues sufficient, together with any other Pledged Revenues, to pay all cure„ t operation and maintenance expenses of the System, and (2) to produce an amount of Pledged Revenues during each fiscal year at least 1.25 times the annual principal and interest requirements of all then outstanding Bonds and Additional Bonds. (1) Records. The Issuer shall keep proper books of record and account in which full, true, proper and correct entries will be made on an dealings, activities and transactions relating to the System, the Pledged Revenues and the Funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any Bondholder or citizen of the Issuer. To the extent consistent with the provisions of this Ordinance, the Issuer shall keep its boob and records in a manner conforming to standard accounting practices as usually would be followed by private corporations owning and operating a similar System, with appropriate recognition being given to essential differences between municipal and corporate accounting practices. (k) Audits. After the close of each fiscal year while an of the Bonds or any Additional Bonds are outstanding, an audit will be made of the books and accounts relating to the System and the Pledged Revenues by an independent certified public accountant or an independent firm of certified public accountants. As soon as practicable after the close of each such year, and when said audit has been completed and made available to the issuer, a copy of such audit for the preceding year shall be mailed to the Municipal Advisory Council of Texas, to each paying agent for any bonds payable from Pledged Revenues, to any Bondholders who shall so request in writing, and to First Southwest Company. The annual audit reports shall be open to the inspection of the Bondholders and their agents and representatives at all reasonable times. (1) Governmental Agencies. It will comply with all of the terns and conditions of any and all franchisee, permits and authorizations applicable to or necessary with napes to the System, and which have been obtained from any governmental agency; and the Issuer has or will obtain and keep in full force and effect all franchises, permits, authorization and other requirements applicable to or necessary with respect to the acquisit ion, construction, equipment, operation and maintenance of the System. (m) No Competition. It will not operate, or grant any franchise or, to the erttent it legally may, permit the acquisition, construction, or operation of, any facilities which would be in competition with the System, and to the extent that it legally may, the Issuer will prohibit any such competing facilities. (n) District or River Authority Contract. Nothing herein shall be construed to prevent the Issuer from making contracts with a district or river authority operating pursuant to Article 16, Section 59 of the Texas Constitution, as authorized by Chapter 30, Texas Water Code, or Article 4413 (32c), V.A.T.C.S., wider which a district or river authority will make a sewer system or water systern or portions thereof available to the Issuer, and will furnish waste water collect ion, transportation, treatment, disposal services or water treatment or water transportation facilities to the Issuer, through the district'a or river authority's sewer system or water system or in such other manner as deemed appropriate by the Issuer. Such contracts may provide for the operation, or the acquisition by purchase or lease, or the Issuer's waste water treatment and disposal facilities or water treatment or water transportation facilities, in whole or in part, by the district or river authority. 22 Annual Reports Material Event Notices CONTINUING DISCLOSURE OF INFORMATION In the Ordinance, the City has made the folowing agreement for the benefit of the holders and beneficial owners of the Bonds. The City is required to observe the agreanaa for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the City will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified material events, to certain information vendors. This information will be available to securities brokers and others who subscribe to receive the infuriation from the vendors. The City will provide certain updated financial information and operating data to certain information vendors annually. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in this Official Statement under the headings 'THE SYSTEM" under the subheadings only "Ten Largest Water and Sewer Customers," "Monthly Water Rates" and "Monthly Sewer Rates" and "FINANCIAL INFORMATION" under the following subheadings only "Condensed Statement of Operations" and "Coverage and Fund Balances ", and "FINANCIAL INFORMATION," and in Appendix B. The City will update and provide this information within six months after the end of each fiscal year ending in or after 1996. The City will provide the updated information to each nationally recognized municipal securities information repository ( "NRMSIR ") and to any state information depository ("SID") that is designated by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the 'SEC"). The City may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule 15c2 -12. The updated information will include audited financial statements, if the City commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the City will provide audited financial statements when and if the audit report becomes available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B or such other accounting principles as the City may be required to employ from tune to time pursuing to state law or regulation. The City's current fiscal year end is September 30, 1995. Accordingly, it must provide updated information by March 31 in each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change. The City will also provide timely noticed of certain events to certain information vendors. The City will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holden of the Bonds; (8) Bond calls; (9) defeasancca; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes. In addition, the City will provide timely notice of any failure by the City to provide information, data, or financial statements in accordance with its agreement described above under "Annual Reports." The City will provide each notice described in this paragraph to any SID and to either each NRMSIR or the Municipal Securities Rulernaking Board ( "MSRB "). Avalabl'dy of Information from NRMSIRs and SID The City has agreed to provide the foregoing information only to NRMSIRs and any SID. The information will be available to holders of Bonds only if the holders comply with the procedures and pay the charges established by such information vendors or obtain the information through securities brokers who do so. The Municipal Advisory Council of Texas has been designated by the State of Texas as a SID, but the SEC staff has not yd determined that it is a qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street, P.O. Box 2177, Austin, Texas 78768 -2177, and its telephone number is 512/476-6947. Limitations and Amendments The City has agreed to update information and to provide notices of material events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The City makea no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure 23 ageeanent or from any statement made pursuant to its agreement, although holden of Bonds may seek a writ of mandamus to compel the City to comply with its agreement This continuing disclosure agreement may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions, as amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the bonds in compliance with the Rule, taking into account any amendments or interpretation of the Rule since such offering as well as such changed circumstances and (2) either (a) the Holden of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determined that such amendment will not materially impair the interest of the holders and beneficial owner, of the Bonds. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. Compliance with Prior Undertakings The City has not previously made a continuing disclosure agreement in accordance with SEC Rule 15c2 -12 nor has it been required to make any continuing disclosure agreement 24 TAX MATTERS Opinion On the date of initial delivery of the Bonds, McCall, Parkhurst Sc Horton L.L.P., Austin, Texas, Bond Counsel, will render their opinion that in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof, (1) interest on the Bonds for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Bonds 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(aX5) 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. See APPENDIX C - Form of Opinion of Bond Counsel. In rendering their opinion, Bond Counsel will rely upon (a) the City's no-arbitrage certificate and the verification report prepared by KPMG Peat Marwick, and (b) covenants of the City with respect to arbitrage, the application of the proceeds to be received from the issuance and sale of the Bonds and certain other matters. Failure of the City to comply with these representations or covenants could cause the interest on the Bonds to become includable in gross income retroactively to the date of issuance of the Bonds. The law upon which Bond Counsel have based their opinion is subject to change by the Congress and to subsequent judicial and administrative 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. Federal Income Tax Accounting Treatment of Original Issue Discount The initial public offering price to be paid for one or more maturities of the Bonds (the "Original Issue Discount Bonds ") may be less than the principal amount thereof. In such event, the difference between (i) the amount payable at the maturity of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount with respect to such Original Issue Discount Bond in the hands of any owner who has purchased such Original Issue Discormt Bond in the initial public offering of the Bonds. 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 equal to that portion of the amount of such original issue discount allocable to the period that such Original Issue Discount Bond continues to be awned 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 Original Issue Discount Bond prior to stated maturity, however, the anwunt realized by such owner in excess of the basis of such Original Issue Discount Bond 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 was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond 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 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 for purposes of determining the amount of gain or lass 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 original 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 The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds 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 should consult their own tax advisors with csy,cct to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds 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. 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. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. 25 The following discussion is applicable 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 companies, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain 5 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 MAYBE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX - EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS. Interest on the Bonds 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 for corporations, or 26 percent for noncorporate taxpayers (28 percent for taxable income exceeding 5175,000), 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 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 52,000,000. Interest on the Bonds may be subject to the "branch profits tax" imposed by section 884 of the Code on the effectively - connected earnings and profits of a foreign corporation doing business in the United States. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Bonds, if such obligation was acquired at a "market discount" and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity ar, in the case of a bond issued at an original issue discount, the "revised issue price" (Le., the issue price plus accrued original issue discount). The "accrued market discount" is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. 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 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. 26 OTHER INFORMATION Ratings The presently outstanding Wastewater and Sewer System revenue debt of the City, which is on a parity with the Bonds, is rated "A" by Moody's and "A" by S&P. Three outstanding waterworks and sewer system issues are rated Aaa" by Moody's and "AAA" by S&P by virtue of municipal bond insurance relating to such issues provided by various commercial insurance companies. Applications for contract ratings on this issue have been made to Moods and S&P. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. 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 Bonds for Sale The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(aX2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. Legal Investments and Eligibility to Secure Public Funds in Texas Section 9 of the Bond Procedures Act provides that the Bonds "shall constitute negotiable instruments, and are investment securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of law or court decision to the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas ". The Bonds are eligible to secure deposits of any public funds of the state, its agencies and political subdivisions, and are legal security for those deposits to the extent of their market value. No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. Legal Opinions and No-Litigation Certificate Except as hereinafter noted, Bond Counsel has not verified and has not passed upon, and assumes no responsibility for the accuracy, completeness or fairness of the information and statements contained in the Official Statement In the performance of its duties, Bond Counsel has reviewed the information relating to the Bonds and the Ordinance contained under the captions, "PLAN OF FINANCING ", "BOND INFORMATION" (exclusive of subcaptions "Book - Entry-Only System" and "Municipal Bond insurance "), `CONTINUING DISCLOSURE OF INFORMATION'; "TAX MATTERS ", "OTHER INFORMATION - Legal Investments and Eligibility to Secure Public Funds in Texas" and "OTHER INFORMATION - Legal Opinions and No- Litigation Certificate" and APPENDIX C - Form of Bond Counsel's Opinion contained in the Official Statement to determine whether such information purported to be shown therein is a fair and accurate summary of the information purported to be shown therein and that the information and descriptions contained under such captions relating to the provisions of applicable state and federal laws conform to such state and federal laws. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds is contingent on the sale and delivery of the Bonds. The legal opinion will accompany the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the Book - Entry-Only System. Certain legal matters will be passed on for the Underwriters by their counsel, Vinson & Elkins L.L.P., Austin, Texas. Financial Advisor First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of 27 the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. Verification of Arithmetical and Mathematical Computations The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the City relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and interest to redeem the Refunded Bonds and (b) computation of the yields of the Refunding Bonds and the restricted Federal Securities were verified by KPMG Peat Marwick, certified public accountants. Such computations were based solely on assumptions and information supplied by First Southwest Company on behalf of the City. KPMG Peat Marwick has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. Underwriting The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the City, at an underwriting discount of S . The Underwriters will be obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds to be offered to the public may be offered and sold to certain dealers (including the Underwriters and other dealers depositing Bonds into investment trusts) at prices lower than the public offering prices of such Bonds, and such public offering prices may be changed, from time to time, by the Underwriters. 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 Ordinance authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Underwriters. ATTEST: JOANNE LAND City Secretary 28 CHARLES C. CULPEPPER Mayor City of Round Rock, Texas 'Preliminary, subject to change. SCHEDULE OF REFUNDED BONDS. Waterworks & Sewer System Revenue Bonds, Series 1985 Original Original Interest Issued Amount Original Dated Date Maturity Rates Amount 57,180,000 11 -1 -1985 2 -1 -1997 8.70% S 480.000 5 480 000 Waterworks & Sewer System Revenue Bonds, Series 1986 Original Original Interest Issued Amount Original Dated Date Maturity Rates Amount 57,450,000 4-1 -1986 2 -1 -1997 6.75% S 400,000 2 -1 -1998 6.75% 425,000 2 -1 -1999 6.80% 475,000 2 -1 -2000 6.90% 500,000 2 -1 -2001 7.00% 550,000 2 -1 -2002 7.00% 600,000 2 -1 -2003 7.00% 650,000 2 -1 -2004 6.50% 700,000 2 -1 -2005 6.25% 750.000 5 5 050 000 Waterworks & Sewer System Revenue Bonds, Series 1987 Original Original Interest Issued Amount Original Dated Date Maturity Rates Amount 52,910,000 2 -1- 1987 8-1 -1998 6.10% S 155,000 8-1 -1999 6.20% 170,000 8 -1 -2000 6.30% 180,000 8-1 -2001 6.40% 195,000 8-1 -2002 6.50% 210,000 8-1-2003 6.50% 225,000 8-1 -2004 6.60% 240.000 3 1 175 000 29 Schedule I APPENDIX A GENERAL INFORMATION REGARDING THE CITY Location The City of Round Rock 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. Economy The Central Texas regional economy continues to lead the state. Job growth has exceeded the expectations of most economists. The City's share of this growth has been impressive with gains in both basic and non -basic jobs. Calendar year 1994 has been notable in the completion of some major projects as well as the extremely strong activity from major companies seeking relocation or expansion opportunities. Dell Computer completed their first building on time and moved in the first week of August, 1994. The 232,000 sq. ft. telemarketing facility has now been filled with over 1,400 employees. This tremendous growth has caused the company to break ground on the second building, a copy of the first. Plans are for occupancy in November of 1995. Michael Angelo's Gourmet Foods moved into their facility ahead of schedule. Their 125,000 sq. ft. plant now employs over 300 workers which is almost twice their projected employment for this time period. While these jobs are mostly "low- tech," they provide an important element to the diversification of the City's work force. Two smaller industries recently completed new plants. AMP Packaging Systems has built a 50,000 sq. R. building that will almost double their local size. This facility provides an additional 200 jobs. Following AMP was the new plant for Micro- Bac International. Originally a home -grown Austin company, this producer of bacteria used in environmental clean -up applications will employ a relatively small (30) work force of highly trained engineers and scientists. The fourth quarter of 1994 produced the greatest number of industrial plant relocation or expansion inquiries that the City has ever experienced. City and Chamber of Commerce staff are working with seven of the City's top 20 industrial employers on expansion plans. These range in size from 10,000 sq. ft. additions for existing facilities to major campus complexes designed to consolidate multi-building growth. In addition, the City has participated with the Austin Chamber of Commerce in producing proposals for three leading computer chip manufacturers. Two of these prospects are continuing to look at the City with final decisions expected by June, 1995. Finally, formal announcements from two Austin industries seeking expansion opportunities outside of their current sites are expected during the spring of 1995. 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 1994. Company Round Rock Independent School District Dell Computer Farmers Insurance Tellabs, Inc. Round Rock, City of Wayne Dresser AMP Packaging Systems Westinghouse Motor Cypress Semiconductor TN Technologies, Inc. McNeil Consumer Products DuPont Photo Mask, Inc. Weed Instruments Source: Round Rock Chamber of Commerce. A -1 Description School District Computers Insurance Telephone Components City Government Pump Controls Computer Backplanes Industrial Motors Semiconductors Electronic Measurements Tylenol Products Manufacturing Electronics Employees 3,200 1,500 725 490 332 330 320 261 253 250 175 152 135 Labor Market Profile Source: Texas Employment Commission. Education Facilities Austin Metropolitan Statistical Area May May 1995 1994 Total Civilian Labor Force 614,100 577,100 Total Employment 594,700 556,500 Total Unemployment 19,400 20,600 Percent Unemployment 3.2% 3.6% State of Texas (000'0 May May 1995 1994 Total Civilian Labor Force 9,580.7 9,326.4 Total Employment 9,042.4 8,736.3 Total Unemployment 538.3 590.1 Percent Unemployment 5.6% 6.3% City Government and Community Services The City is governed by a Council/Manager form of government with a Mayor and six councilmembera. The City's fire department consists of 55 full-time and 47 volunteer part-time members with 14 fire fighting vehicles. The City's police department has a staff of 77, 57 of which are certified officers, and it maintains 32 vehicles. The City also has 1,026 acres of parks, which include eleven tennis courts, 22 baseball fields, 5 soccer fields, 1 swimming pool and other facilities that are available to the community. A public, daily fee golf course is available for use. The Round Rock Leader, a weekly newspaper, an Austin daily newspaper, and a public library with 83,000 volumes are just a few of the many community services offered to the citizens of the City. The Round Rock Hospital was completed in 1983 and is located an a 24-acre site near Brushy Creek between the City and U.S. Highway 183. The medical staff is currently comprised of approximately 100 active staff physicians with 65 of these physicians having offices located in Round Rock. The Hospital's total medical staff totals more than 250 active and courtesy staff' physicians. The Creekside Minor Emergency Center, located in the City, has 5 doctors on call 24 hours a day. First Care Medical Clinic, a minor emergency and family practice clinic, is staffed by four primary care physicians. Other hospital services are easily accessible in nearby Austin and Georgetown. Financial Institutions The City has access to eight banks and one major savings and loan association. 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. 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 1994 Net Taxable Assessed Valuation of 54,363,818,631. 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. A -2 Recreation 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. A -3 APPENDIX B EXCERPTS FROM THE CITY OF ROUND ROCK, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 1994 The information contained in this Appendix consists of excerpts from the City of Round Rock, Texas Annual Financial Report for the Year Ended September 30, 1994, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information. A-4 APPENDIX C FORM OF BOND COUNSEL'S OPINION Mayor Charles Culpepper Mayor Pro-tem Earl Palmer Council Members Robe, St!uka Rod Morgan Rick Stewart Martha Chavez Jimmy Joseph City Manager Robert L Bennett. Jr. City Attorney Stephan L Sheers July 17, 1995 Carol Polumbo McCall, Parkhurst & Horton 600 Congress Avenue One American Center, Suite 3100 Austin, TX 78701 -3248 Dear ai i6o: Resolution No. R- 95- 07- 13 -10H was approved by the Round Rock City Council on July 13, 1995. Enclosed is a copy of the resolution, along with the Certificate for Resolution and signature pages for your files. If you have any questions, please do not hesitate to call. Sincerely, Joanne Land Assistant City Manager/ City Secretary Enclosure(s) THE CITY OF ROUND ROCK 221 East Main Street Round Rock, Texas 78669 512-255-3612 Fax 512-255-6676 1 -800- 735 -2989 (TDD) 1 -800- 735 -2988 (Voice)