R-97-10-23-10D - 10/23/1997LAW OFFICES
McCALL, PARKHURST & HORTON L.L.P
717 NORTH HARWCOD 1250 ONE AMERICAN CENTER 1225 ONE RIVERWAL5 PLACE
NINTH FLOOR AUSTIN, TEXAS 78701 -3248 SAN ANTONIO, TEXAS 78205-3503
DALLAS, TEXAS 75201-6587 TELEP,-1CiNE _1. T6 3605 TEI_EE"'VNE 21C 22.,2600
TELECOrY .4 754.9250
MEMORANDUM
TO: Christine
PROM: C. D. Polumbo
RE: October 23, 1997 Council Meeting \�_�
DATE: October 22, 1997
I will be unable to attend the meeting due to a scheduling conflict, but have enclosed five
originals of the Resolution Approving Preliminary Official Statement Relating to General Obligation
Refunding Bonds, series 1997 and Authorizing Distribution of Preliminary Official Statement for
execution. Once they have been signed, please return them to me at your earliest convenience.
If you have any questions, please do not hesitate to call me.
THE STATE OF TEXAS §
COUNTIES OF WILLIAMSON AND TRAVIS §
CITY OF ROUND ROCK §
We, the undersigned officers and members of the City of Round Rock, Texas (the "City "),
hereby certify as follows:
1. The City Council of the City convened in REGULAR MEETING ON THE 3& It
DAY OF OCTOBER, 1997, at the City Hall (the "Meeting "), and the roll was called of the duly
constituted officers and members of the City, to -wit:
AYES:
CERTIFICATE FOR RESOLUTION
Charles Culpepper, Mayor
Earl Palmer - Mayor Pro -Tem Place 4
Robert Stulka - Councilmember Place 1
Rod Morgan - Councilmember Place 2
Rick Stewart - Councilmember Place 3
Martha A. Chavez - Councilmember Place 5
Jimmy Joseph - Councilmember Place 6
and all of the persons were present, except the following absentees: 0 , thus constituting
a quorum. Whereupon, among other business, the following was transacted at the Meeting: a written
RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT RELATING
TO GENERAL OBLIGATION REFUNDING BONDS, SERIES 1997 AND
AUTHORIZING DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT
was duly introduced for the consideration of the City Council. It was then duly moved and seconded
that the Resolution be passed on first reading; and, after due discussion, said motion carrying with
it the passage of the Resolution, prevailed and carried by the following vote:
NOES:
2. A true, full and correct copy of the Resolution passed at the Meetings described in the
above and foregoing paragraphs is attached to and follows this Certificate; that the Resolution has
been duly recorded in the City Council's minutes of the Meetings, that the above and foregoing
paragraphs are a true, full and correct excerpt from the City Council's minutes of the Meeting
pertaining to the passage of the Resolution; that the persons named in the above and foregoing
paragraphs are the duly chosen, qualified and acting officers and members of the City Council as
indicated therein; that each of the officers and members of the City Council was duly and sufficiently
notified officially and personally, in advance, of the time, place and purpose of the Meetings, and that
the Resolution would be introduced and considered for passage at the Meetings, and each of the
officers and members consented, in advance, to the holding of the Meetings for such purpose, and
that the Meetings were open to the public and public notice of the time, place and purpose of the
meeting was given, all as required by Chapter 551, Texas Government Code.
3. The Mayor of the City has approved and hereby approves the Resolution; that the
Mayor and the City Secretary of the City have duly signed the Resolution; and that the Mayor and
the City Secretary of the City hereby declare that their signing of this Certificate shall constitute the
signing of the attached and following copy of the Resolution for all purposes.
I /JL/L ' iA_, /I /
[CITY SEAL]
SIGNED AND SEALED the
RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT RELATING
TO GENERAL OBLIGATION REFUNDING BONDS, SERIES 1997 AND
AUTHORIZING DISTRIBUTION OF PRELLIINARY OFFICIAL STATEMENT
WHEREAS, the City Council of the City has authorized the District's financial advisor, First
Southwest Company (the "Financial Advisor "), to prepare a Preliminary Official Statement (the
"Preliminary Official Statement ") in connection with the refinancing of certain outstanding obligations
of the City; and
WHEREAS, the City has reviewed the Preliminary Official Statement; and
WHEREAS, the City deems it appropriate to approve the Preliminary Official Statement and
authorize the distribution of the Preliminary Official Statement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ROUND ROCK, TEXAS THAT:
Section 1. APPROVAL AND DISTRIBUTION OF PRELIMINARY OFFICIAL
STATEMENT. The 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 Council
and City staff. The Financial Advisor to the City is hereby authorized and directed to distribute the
Preliminary Official Statement to potential bond purchasers and to do all things necessary to market
such bonds.
Section 2. OTHER MATTERS. The Mayor, City Manager or Director of Finance 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.
RROCR. RES -APPR P05
RESOLUTION NO. R- 97- 10- 23 -10D
A RESOLUTION APPROVING PRELIMINARY OFFICIAL
STATEMENT RELATING TO GENERAL OBLIGATION REFUNDING
BONDS, SERIES 1997 AND AUTHORIZING DISTRIBUTION OF
PRELIMINARY OFFICIAL STATEMENT
WHEREAS, the City Council of the City of Round Rock has
authorized the District's financial advisor, First Southwest
Company (the "Financial Advisor "), to prepare a Preliminary
Official Statement (the "Preliminary Official Statement ") in
connection with the refinancing of certain outstanding obligations
of the City; and
WHEREAS, the City has reviewed the Preliminary Official
Statement; and
WHEREAS, the City deems it appropriate to approve the
Preliminary Official Statement and authorize the distribution of
the Preliminary Official Statement; Now Therefore,
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS THAT,
Section 1. APPROVAL AND DISTRIBUTION OF PRELIMINARY
OFFICIAL STATEMENT. The 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 Council and City staff. The Financial Advisor to the City
is hereby authorized and directed to distribute the Preliminary
Official Statement to potential bond purchasers and to do all
things necessary to market such bonds.
Section 2. OTHER MATTERS. The Mayor, City Manager or
R:\ WPDOCS \RSSOLUTI \RS71023D.WPD /S16
Director of Finance 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.
The City Council hereby finds and declares that written notice
of the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to
the public as required by law at all times during which this
Resolution and the subject matter hereof were discussed, considered
and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended, and the Act.
RESOLVED this 23rd day of October,j 1997.
ATTEST:
2
CHARLES CULPEPPER, Mayor
City of Round Rock, Texas
RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT RELATING
TO GENERAL OBLIGATION REFUNDING BONDS, SERIES 1997 AND
AUTHORIZING DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT
WHEREAS, the City Council of the City has authorized the District's financial advisor, First
Southwest Company (the "Financial Advisor "), to prepare a Preliminary Official Statement (the
"Preliminary Official Statement') in connection with the refinancing of certain outstanding obligations
of the City; and
WHEREAS, the City has reviewed the Preliminary Official Statement; and
WHEREAS, the City deems it appropriate to approve the Preliminary Official Statement and
authorize the distribution of the Preliminary Official Statement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ROUND ROCK, TEXAS THAT:
Section 1. APPROVAL AND DISTRIBUTION OF PRELIMINARY OFFICIAL
STATEMENT. The 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 Council
and City staff. The Financial Advisor to the City is hereby authorized and directed to distribute the
Preliminary Official Statement to potential bond purchasers and to do all things necessary to market
such bonds.
Section 2. OTHER MATTERS. The Mayor, City Manager or Director of Finance 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.
PRELIMINARY OFFICIAL STATEMENT
$5,765,000"
CITY OF ROUND ROCK, TEXAS
(Williamson and Travis Counties)
GENERAL OBLIGATION REFUNDING BONDS, SERIES 1997
DRAFT
- 1( -G1'1
Ratings:
Dated October 23, 1997 Moody's: ""
S &P: "
(See "Other Information
NEW ISSUE - Book - Entry-Only Ratings" and "Bond
Insurance" herein)
In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes
under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum tax on
corporations.
Dated Date: October 15, 1997 Due: August 1, as shown on inside front cover
PAYMENT TERMS ... Interest on the 55,765,000` City of Round Rock, Texas, General Obligation Refunding Bonds, Series
1997 (the "Bonds "), will accrue from the dated date shown above, will be payable August 1 and February 1 of each year
commencing February 1, 1998, and will be calculated on the basis of a 360 -day year consisting 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 $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the owners
thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co.,
which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the
beneficial owners of the Bonds. See "The Bonds - Book - Entry-Only System" herein. The initial Paying Agent/Registrar is
Texas Commerce Bank National Association (see "The Bonds - Paying Agent/Registrar ").
AUTHOnrrY FOR ISSUANCE ... The Bonds are issued pursuant to the Constitution and general laws of the State of Texas (the
"State "), including particularly Article 717k, Vernon's Texas Civil Statutes ( "V.T.C.S. "), as amended, and are direct
obligations of the City of Round Rock, Texas (the "City"), payable from a continuing ad valorem tax levied on all taxable
property within the City, within the limits prescribed by law, as provided in the ordinance authorizing the Bonds (the
"Ordinance ") (see "The Bonds - Authority for Issuance ").
PURPOSE ... Proceeds from the sale of the Bonds will be used to (i) advance refund certain outstanding obligations of the City
(the "Refunded Bonds "), (ii) pay the costs associated with the issuance of the Bonds. See Schedule I - Schedule of Bonds to be
Refunded.
INSURANCE ... The City has applied to several bond insurance companies and will consider the purchase of insurance after an
analysis of bids has been made.
REDEMPTION OrrtoN ... The City reserves the right, at its option, to redeem Bonds having stated maturities on and after
August I, 2008, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on August 1, 2007, or any
date thereafter, at the par value thereof plus accrued interest to the date of redemption. In addition, Bonds maturing in the year
2020 are subject to mandatory sinking fund redemption prior to maturity as described herein (see "The Bonds - Optional
Redemption" and "- Mandatory Sinking Fund Redemption ").
LEGALITY ... 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 Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel,
Austin, Texas (see Appendix C - "Form of Bond Counsel's Opinion "). Certain matters will be passed upon for the
Underwriters by Vinson & Elkins L.L.P., Austin, Texas.
DELIVERY ... It is expected that the Bonds will be available for delivery through The Depository Trust Company on December
4, 1997.
LEGG MASON WOOD WALKER, INCORPORATED SOUTHWEST SECURITIES, INC.
• Preliminary subject to change.
MATURITY SCHEDULE
See Inside Front Cover
MATURITY SCHEDULE
Price or Price or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$ 320,000 2000 $ 290,000 2013
105,000 2001 305,000 2014
110,000 2002 320,000 2015
25,000 2003 215,000 2016
410,000 2004 225,000 2017
195,000 2005 235,000 2018
205,000 2006 245,000 2019
20,000 2007 260,000 2020
20,000 2008 275,000 2021
25,000 2009 285,000 2022
170,000 2010 305,000 2023
265,000 2011 325,000 2024
275,000 2012 335,000 2025
$ % Term Bond Due August 1, , at a Price of
(Accrued Interest from October 15, 1997 to be added)
[The remainder of this page intentionally left blank]
2
This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the
solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale.
No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other
than those contained in this Official Statement, and, if given or made, such other information or representations must not be
relied upon.
The information set forth herein has been obtained from the City and other sources believed to be reliable, but such
information is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the
Financial Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be
realized.
The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of
this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been
no change in the affairs of the City or other matters described.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITERS MAY OVER -ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR M AL TAIN THE MARKET PRICES OF THE BONDS AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN ELARKET. SUCH STABILIZING, IF COMMENCED MAY BE
DISCONTINUED AT ANY TIME.
OFFICIAL STATEMENT
Description of the Bonds 1
OFFICIAL STATEMENT SUMMARY 4
CITY OFFICIALS, STAFF AND CONSULTANTS 6
ELECTED OFFICIALS 6
SELECTEDADIsIIMS7RATIVE STAFF 6
CONSULTANTS AND ADVISORS 6
INTRODUCTION 7
THE BONDS 7
BOND INSURANCE 11
TAX INFORMATION 11
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL
OBLIGATION DEBT 14
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY
CATEGORY 15
TABLE 3 - VALUATION AND GENERAL OBLIGATION
DEBT HISTORY 15
TABLE 4 - TAX RATE, LEVY AND COLLECTION
HISTORY 16
TABLE 5 - TEN LARGEST TAXPAYERS 16
TABLE6 - TAX ADEQUACY 16
TABLE 7 - ESTIMATED OVERLAPPING DEBT 17
DEBT INFORMATION 18
TABLE 8 - PRO -FORMA GENERAL OBLIGATION DEBT
SERVICE REQumEb]ENTs 18
TABLE 9 - INTEREST AND SINKING FUND BUDGET
PROJECTION 19
TABLE 10 - COMPUTATION OF SELF- SUPPORTING
DEBT 19
TABLE 11 - AUTHORIZED BUT UNISSUED GENERAL
OBLIGATION BONDS 19
TABLE OF CONTENTS
3
FINANCIAL INFORMATION 20
TABLE 12 - GENERAL FUND REVENUE AND
EXPENDITURE HISTORY 20
TABLE 13 - MUMCIPAL SALES TAX HISTORY 20
TAX MATTERS 23
CONTINUING DISCLOSURE OF INFORMATION25
OTHER INFORMATION 27
RATINGS 27
LITIGATION 27
REGISTRATION AND QUALIFICATION OF BONDS FOR
SALE 27
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE
PUBLIC FUNDS IN TEXAS 27
LEGAL OPINIONS AND NO-LITIGATION CERTIFICATE 27
AUTHENTICITY OF FINANCIAL DArs AND OTHER
INFORMATION 28
FINANCIAL ADVISOR 28
VERIFICATION OFARNDIMETICAL AND MATHEMATICAL
COMPUTATIONS 28
UNDERWRITING 28
MISCELLANEOUS 28
SCHEDULE
Schedule of Bonds to be Refunded 29
APPENDICES
GENERAL INFORMATION REGARDING THE CITY A
EXCERPTS FROM THE ANNUAL FINANCIAL REPORT
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 Official Statement.
OFFICIAL STATEMENT SUMMARY
This summary 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 summary from this Official Statement or to otherwise use it without the entire Official
Statement.
THE Crry The City of Round Rock, Texas (the "City"), is a political subdivision of the State of Texas
(the "State ") located in Williamson and Travis Counties, Texas, operating as a home -rule
city under the laws of the State and a charter approved by the voters in August, 1977 (the
"Home Rule Charter "). The City operates under a Council/Manager form of government
where the mayor and six councilmembers are elected for staggered three -year terms. The
Council formulates operating policy for the City while the City Manager is the chief
administrative officer.
The City is located in Williamson and Travis Counties, Texas, 8 miles north of Austin and
85 miles south of Waco an Interstate Highway 35. The City is also situated on U.S.
Highway 79, which runs east and west. Both U.S. Highway 79 and Interstate Highway 35
are main arteries of traffic in the State (see Appendix A - "General Information Regarding
the City").
TreE BoNns The Bonds are issued as $5,765,000• General Obligation Refunding Bonds, Series 1997.
The Bonds are issued as serial bonds maturing August 1, 2000 through August 1, 2025 and
Term Bond(s) maturing August 1, _ (see "The Bonds - Description of the Bonds ").
PAYMENT of INTEREST Interest on the Bonds accrues from the dated date, and is payable February 1, 1998 and each
February 1 and August 1 thereafter until maturity or prior redemption (see "The Bonds -
Description of the Bonds" and "The Bonds - Optional Redemption" and "Mandatory Sinking
Fund Redemption ").
AUTHORITY FOR ISSUANCE The Bonds are issued pursuant to the general laws of the State, including particularly Article
717k, V.T.C.S., an Ordinance passed by the City Council of the City (see "The Bonds -
Authority for Issuance ").
SECURITY FOR THE BONDS The Bonds constitute direct and voted obligations of the City, payable from the levy and
collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on
all taxable property located within the City (see "The Bonds - Security and Source of
Payment ").
REDEMPTION OF BONDS The City reserves the right, at its option, to redeem Bonds having stated maturities on and
after August 1, 2008 in whole or from time to time in part in principal amounts of $5,000 or
any integral multiple thereof, on August 1, 2007 or any date thereafter, at the par value
thereof plus accrued interest to the date of redemption. In addition, the Bonds maturing in
the year are subject to mandatory sinking fund redemption prior to maturity as
described herein (see "'The Bonds - Optional Redemption" and "- Mandatory Sinking Fund
Redemption").
TAX EXEMPTION IR 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 the caption "Tax Matters" herein, including the alternative minimum tax on
corporations.
USE OF PROCEEDS Proceeds from the sale of the Bonds will be used to (i) advance refund certain outstanding
obligations of the City (the "Refunded Bonds "), (ii) pay the costs associated with the
issuance of the Bonds.
BOND INSURANCE The City has applied to several bond insurance companies and will consider the purchase of
insurance after an analysis of bids has been made.
• Preliminary, subject to change.
4
RATINGS The presently outstanding, uninsured tax supported debt of the City is rated "Al" by
Moody's Investors Service ( "Moody's ") and "A +" by Standard & Poor's, a Division of The
McGraw -Hill Companies, Inc. ( "S &P "). The City also has ten issues outstanding which are
rated "Aaa" by Moody's and "AAA" by S &P as a result of insurance provided by various
commercial insurance companies. Applications for contract ratings on the Bonds have been
made to Moody's and S &P (see "Other Information - Ratings ").
BOOK - ENTRY -ONLY
SYSTEM The definitive Bonds will be initially registered and delivered only to Cede & Co., the
nominee of DTC pursuant to the Book - Entry-Only System described herein. Beneficial
ownership of the Bonds may be acquired in denominations of $5,000 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
participating members of DTC for subsequent payment to the beneficial owners of the Bonds
(see "The Bonds - Book - Entry-Only System ") .
PAYMENT RECORD The City has never defaulted in payment of its general obligation tax debt.
(1) Revaluation.
(2) Includes the Bonds. Excludes the Refunded Bonds
(1) Unaudited.
SELECTED FINANCIAL INFORMATION
Fiscal Per Capita
Year Estimated Taxable Taxable Funded
Ended City Assessed Assessed Tax
9 -30 Population Valuation Valuation Debt
1992 33,769 $ 836,585,606 S 24,774 $ 38,738,400
1993 36,139 914,420,536 25,303 40,961,100
1994 39,460 1,078,249,127 27,325 38,261,000
1995 41,650 1,404,239,617 33,715 43,069,000
1996 43,500 1,681,361,634 38,652 51,967,000
1997 46,485 1,976,785,606 0) 42,525 53,435,000
1998 48,809 2,325,756,421 47,650 50,168,000
(2)
GENERAL FUND CONSOLIDATED STATEMENT SUMMARY
Fiscal Year Ended September 30,
Ratio Funded
Per Debt to
Capita Taxable % of
Tax Assessed Total Tax
Debt Valuation Collections
$ 1,147 4.63% 99,80%
1,133 4.48% 100.65%
970 3.55% 101.59%
1,034 3.07% 100.15%
1,195 3.09% 99.86%
1,150 2.70% (') 100.11%
1,028 (2) 2.16% (1) N/A
1997 1996 1995 1994 1993
Beginning Balance $ 8,430,942 $ 6,729,950 $ 6,334,254 $ 5,119,893 $ 4,330,104
Total Revenue 21,400,925 17,197,375 14,533,053 11,698,621 10,142,724
Total Expenditures 19,666,947 15,738,578 13,586,674 10,882,851 10,060,735
Net Transfers 404,075 242,195 (550,683) 398,591 707,800
Net Funds Available 2,138,053 1,700,992 395,696 1,214,361 789,789
Ending Balance $ 10,568,995 $ 8,430,942 $ 6,729,950 $ 6,334,254 $ 5,119,893
5
ELECTED OFFICIALS
City Council
Charles C. Culpepper
Mayor
Earl Palmer
Mayor Pro -Tem Place 4
Robert Stluka
Councilman Place 1
Rod Morgan
Councilman Place 2
Rick Stewart
Councilman Place 3
Martha A. Chavez
Councilwoman Place 5
Jimmy Joseph
Councilman Place 6
SELECTED ADMINISTRATIVE STAFF
CONSULTANTS AND ADVISORS
Name
Robert L. Bennett, Jr.
Joanne Land
David Kautz
Stephan L. Sheets
Auditors Pella, Swayze & Company
Round Rock, Texas
Bond Counsel McCall, Parkhurst & Horton L.L.P.
Austin, Texas
Financial Advisor First Southwest Company
Austin, Texas
For additional information regarding the City, please contact:
CITY OFFICIALS, STAFF AND CONSULTANTS
David Kautz
Director of Finance
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
(512) 218-5400
Length of Term
Service Expires Occupation
4 Years May 1999 Self-Employed
7''A Years May 1999 Retired Businessman
7 ; Years May 1999 Associate Consultant, Tonn & Associates
5 % Years May 2000 Self - Employed
6 1 Years May 1998 Retired Businessman
4 A Years May 2000 School Teacher, RRISD
8 ''A Years May 1998 Self-Employed
Position
City Manager
Assistant City Manager /City Secretary
Director of Finance
City Attorney
Length of
Service
19 14 Years
27 ; Years
20 ' Years
19 % Years
Garry Kimball
First Southwest Company
or 98 San Jacinto Blvd., Suite 370
Austin, Texas 78701
(512) 481 -2000
(512) 481 -2010 Fax
6
• Preliminary, subject to change.
OFFICIAL STATEMENT
RELATING TO
$5,765,000•
CITY OF ROUND ROCK, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 1997
INTRODUCTION
This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of
$5,765,000• City of Round Rock, Texas, General Obligation Refunding Bonds, Series 1997 (the `Bonds "). Capitalized terms
used in this Official Statement have the same meanings assigned to such terms in the Ordinance to be adopted on the date of
sale of the Bonds which will authorize the issuance of the Bonds, except as otherwise indicated herein.
There follow in this Official Statement descriptions of the Bonds and certain information regarding the City and its finances.
All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such
document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company, Austin,
Texas.
DESCRIPTION OF THE Crry ... The City is a political subdivision and municipal corporation of the State, duly organized and
existing under the laws of the State, including the City's Home Rule Charter, originally approved by voters in 1977. The City
operates under a Council/Manager form of government with a City Council comprised of the Mayor and six Councilmembers
elected for staggered three -year terms. The City Manager is the chief administrative officer for the City. Some of the services
that the City provides are: public safety (police and fire protection), highways and streets, water and sanitary sewer utilities,
recreation, planning and zoning, and general administrative services. The 1990 Census population for the City was 30,923,
while the September 30, 1997 estimated population was 46,485. The City covers approximately 24 square miles
THE BONDS
PURPOSE , .. A portion of the proceeds from the sale of the Bonds will be used to (i) advance refund certain outstanding
obligations of the City (the "Refunded Bonds "), (ii) pay the costs of issuance for the Bonds. See Schedule I - Schedule of
Bonds to be Refunded.
The City will enter into an escrow agreement (the "Escrow Agreement ") with Texas Commerce Bank National Association (the
"Escrow Agent "), pursuant to which a portion of the proceeds of the Bonds will be invested in direct obligations of the United
States of America (the "Escrow Obligations "), deposited in an escrow fund and applied, together with uninvested cash balances
held under the Escrow Agreement, to provide for scheduled payments of principal of and interest on the Refunded Bonds and
for payment of the redemption price of the Refunded Bonds on their redemption dates. At the time of delivery of the Bonds,
Grant Thomton LLP, independent certified public accountants, will verify that the Escrow Obligations will mature and pay
interest at times and in amounts that, together with uninvested monies held pursuant to the Escrow Agreement, will be
sufficient to pay the principal of, and interest on, the Refunded Bonds when and as due.
Upon deposit of the Bond proceeds with the Escrow Agent and the purchase of the Escrow Obligations pursuant to the Escrow
Agreement, the City will have effected the defeasance of the Refunded Bonds. In the opinion of Bond Counsel, as a result of
such deposit, fum banking and financial arrangements will have been made for the discharge and final payment of the
Refunded Bonds pursuant to the Escrow Agreement, and such Refunded Bonds will be deemed to be fully paid and no longer
outstanding except for the purpose of being paid from the funds provided therefor in such Escrow Agreement. The monies and
Escrow Obligations held under the Escrow Agreement will not be available for payment of the Bonds.
The refunding of the Refunded Bonds will result in present value debt service savings to the City.
DEscRIPrton OF THE BONDS . The Bonds are dated October 15, 1997, and will mature on August 1 in each of the years and
in the amounts shown on the inside front cover page hereof. Interest will be computed on the basis of a 360 -day year of twelve
30-day months, and will be payable on August 1 and February I, commencing February 1, 1998, The definitive Bonds will be
issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and
delivered only to Cede & Co., the nominee of The Depository Trust Company ( "DTC ") pursuant to the Book- Entry-Only
System described herein. No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if
any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of
the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See
"The Bonds - Book- Entry-Only System" herein.
7
AuraoartY FOR ISSUANCE ... The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas,
particularly Article 717k, V.T.C.S., as amended; and the Ordinance authorizing the issuance of the Bonds (the "Ordinance ").
SECURITY Arm SOURCE OF PAYMENT ... All taxable property within the City is subject to a continuing, direct annual ad
valorem tax levied by the City, within the limits prescribed by law, sufficient to provide for the payment of principal of and
interest on all Bonds.
TAX RATE LIMITATION... All taxable property within the City is subject to the assessment, levy and collection by the City of a
continuing, direct annual ad valorem tax, within the limits prescribed by law, sufficient to provide for the payment of principal
of and interest on all ad valorem tax debt. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits
its maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home Rule Charter
of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed Valuation.
Administratively, the Attorney General of the State of Texas will permit allocation $1.50 of the $2.50 constitutional tax rate for
debt service on the Bond.
OPTIONAL REDEMPTION ... The City reserves the right, at its option, to redeem Bonds having stated maturities on and after
August 1, 2008, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on August 1, 2007, or any
date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds are to be
redeemed, the City may select the maturities of Bonds to be redeemed. If less than all the Bonds of any maturity are to be
redeemed, the Paying Agent/Registrar (or DTC while the Bonds are in Book- Entry-Only form) shall determine by lot the
Bonds, or portions thereof, within such maturity to be redeemed. If a Bond (or any portion of the principal sum thereof) shall
have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount
thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from
and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by
the Paying Agent/Registrar on the redemption date.
MANDATORY Suvtarrc FUND REDEMPTION .. In addition to being subject to optional redemption, as provided above, the Bonds
maturing on August 1, are subject to mandatory sinking fund redemption prior to maturity in the following amounts, on
the following dates and at a price of par plus accrued interest to the redemption date from amounts required to be deposited in
the Interest and Sinking Fund:
Mandatory
Redemption Date
Bonds maturing August 1,
Principal Amount
The principal amount of the Bonds required to be redeemed pursuant to the operation of the mandatory sinking fund
redemption provisions shall be reduced, at the option of the City, by the principal amount of any Bonds of the stated maturity
which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the City, at a price not exceeding
the principal amount of such Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation, (2) shall have been purchased and cancelled by the Paying Agent/Registrar at the request of
the City, with monies in the Interest and Sinking Fund at a price not exceeding the principal amount of the Bonds plus accrued
interest to the date of purchase thereof, or (3) shall have been redeemed pursuant to the optional redemption provisions and not
theretofore credited against a mandatory sinking fund redemption requirement.
Norma OF REDEMprtoN ... Not less than 30 days prior to a redemption date for the Bonds, the City shall cause a notice of
redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed,
in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at
the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL
BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER
RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL
BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY
BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR
PORTION THEREOF SHALL CEASE TO ACCRUE.
Boar- ENrRy -Otvtx 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 each such maturity and will be deposited with DTC.
8
DTC is a limited- purpose trust company organized under the New York Banking Law, a `banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning
of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 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
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
Antes 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 DTC Participants, which will receive a credit for such
purchases 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 or 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 Bands, except in the event that use of the book -entry system described herein 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 on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct Participant in such issue 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 (hereinafter defined). 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 on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the
City, subject to any statutory or regulatory requirements as may be in effect front 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.
9
Information concerning DTC and the Book - Entry-Only System has been obtained from DTC and is not guaranteed as to
accuracy or completeness by, and is not to be construed as a representation by the City or the Purchasers.
PAYING AGENT/REGISTRAR ... The initial Paying Agent/Registrar is Texas Commerce Bank National Association. 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 until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a
commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally
authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the
Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each registered
owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new
Paying Agent/Registrar.
TRANNSFER, 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 at its principal place of payment in Dallas, Texas (the "Designated Payment Office") and
such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other
governmental charges required to be paid with respect to such registration, exchange and transfer. Bonds may be assigned by
the execution of an assignment form on the respective Bonds or by other instrument of transfer and assignment acceptable to
the Paying Agent/Registrar. New Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bonds being transferred
or exchanged, at the Designated Payment 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 canceled, and the written instrument of transfer or request for exchange duly executed
by the registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Bonds 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 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. Neither the City nor
the Paying Agent/Registrar shall be required to transfer or exchange any Bond called for redemption, in whole or in part, within
45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange
by the registered owner of the uncalled balance of a Bond.
RECORD DATE FOR INTEREST PAYMENT ... The record date (the "Record Date ") for the interest payable on the Bonds on any
interest payment date means the close of business on the 15th business day of the preceding month.
In the event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (a "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.
BONDHOLDERS' REMEDIES ... The Ordinance does not establish specific events of default with respect to the Bonds. Under
State law there is no right to the acceleration of maturity of the Bonds upon the failure of the City to observe any covenant
under the Ordinance. Although a registered owner of Bonds could presumably obtain a judgment against the City if a default
occurred in the payment of principal of or interest on any such Bonds, such judgment could not be satisfied by execution
against any property of the City. Such registered owner's only practical remedy, if a default occurs, is a mandamus or
mandatory injunction proceeding to compel the City to levy, assess and collect an annual ad valorem tax sufficient to pay
principal of an interest on the Bonds as it becomes due. The enforcement of any such remedy may be difficult and time
consuming and a registered owner could be required to enforce such remedy on a periodic basis. The Ordinance does not
provide for the appointment of a trustee to represent the interests of the bondholders upon any failure of the City to perform in
accordance with the terms of the Ordinance, or upon any other condition. Furthermore, the City is eligible to seek relief from
its creditors under Chapter 9 of the U.S. Bankruptcy Code. Although Chapter 9 provides for the recognition of a security
interest represented by a specifically pledged source of revenues, the pledge of taxes in support of a general obligation of a
bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay
provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or
bondholders of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9
protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require
that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for
broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond
Counsel will note that all opinions relative to the enforceability of the Ordinance and the Bonds are qualified with respect to
the customary rights of debtors relative to their creditors.
10
USE OF BONA PROCEEDS. . Proceeds from the sale of the Bonds are expected to be expended as follows:
Sources:
Proceeds from Sale of Bonds $
Accrued Interest
Total Sources of Funds $
Uses:
Original Issue Discount $
Underwriter's Discount
Deposit to Debt Service Fund
Deposit to Escrow
Bond Insurance Premium
Estimated Costs of Issuance
Contingency
Total Uses of Funds
BOND INSURANCE
The City has applied to several bond insurance companies and will consider the purchase of insurance after an analysis has
been made.
TAX INFORMATION
An VALOREM TAx law ... The appraisal of property within the City is the responsibility of the Williamson County Appraisal
District (the "Appraisal District "). Excluding agricultural and open -space land, which may be taxed on the basis of productive
capacity, the Appraisal District is required under the Property Tax Code to appraise all property within the Appraisal District
on the basis of 100% of its market value and is prohibited from applying any assessment ratios. The value placed upon
property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of three members
appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property
within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled
to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review
Board.
Reference is made to the Property Tax Code, V.T.C.A., for identification of property subject to taxation; property exempt or
which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the
procedures and limitations applicable to the Levy and collection of ad valorem taxes.
Article VIII of the State Constitution ( "Article VIII") and State law provide for certain exemptions from property taxes, for the
valuation of agricultural and open -space lands at productivity value, and for the exemption of certain personal property from ad
valorem taxation.
Under Article VIII, Section 1 -b, and State law, the governing body of a political subdivision, at its option, may grant: (1) an
exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the
disabled from all ad valorem taxes thereafter levied by the political subdivision; and (2) an exemption of up to 20% of the
market value of residence homesteads. The minimum exemption under this provision is $5,000.
In the case of residence homestead exemptions granted under Article VIII, Section 1 -b, ad valorem taxes may continue to be
levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt
if cessation of the levy would impair the obligation of the contract by which the debt was created.
State law and Article VIII, Section 2, mandate an additional property tax exemption for disabled veterans or the surviving
spouse or children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real
or personal property with the amount of assessed valuation exempted ranging from $1,500 to a maximum of $3,000.
Article VIII provides that eligible owners of both agricultural land (Section 1-d) and open -space land (Section 1d -1), including
open -space land devoted to farm or ranch purposes or open -space land devoted to timber production, may elect to have such
property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both
Section 1d and Section 1-d -I.
11
Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing
body of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem
taxation.
Article VIII, Section 1-j of the Texas Constitution provides that goods, wares, merchandise, other tangible property and ores,
other than oil, natural gas and other petroleum products, which have been acquired or brought into the state for assembling,
storing, manufacturing, processing or fabricating and shipped out of the state within 175 days ( "freeport goods ") are exempt
from taxation unless action to tax was taken by the governing body of the political subdivision prior to April 1, 1990. Decision
to tax may be reversed in the future while decisions to exempt freeport property are not subject to reversal.
The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones, under which
the tax values on property in the zone are "frozen" at the value of the property at the time of creation of the zone. The City also
may enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees
to construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value
attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up
to 10 years.
EFFECTIVE Tax RATE AND ROLLBACK Tax RATE ... By each September 1 or as soon thereafter as practicable, the City
Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for
funding of maintenance and operation expenditures, and (2) a rate for debt service.
Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate ".
The City Council may not adopt a tax rate that exceeds the lower of the rollback tax rate or 103% of the effective tax rate until
it has held a public hearing on the proposed increase following notice to the taxpayers and otherwise complied with the
Property Tax Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require
that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate.
"Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values
(adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not
included in this year's taxable values.
"Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's
values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted)
divided by the anticipated tax collection rate.
The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize
an additional one -half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the
rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year.
Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the
calculation of the various defined tax rates.
PROPERTY ASSESSMENT AND Tax PAYMENT ... Property within the City is generally assessed as of January 1 of each year.
Business inventory may, at the option of the taxpayer, be assessed as of September 1. Oil and gas reserves are assessed on the
basis of a valuation process which uses an average of the daily price of oil and gas for the prior year. Taxes become due
October 1 of the same year, and become delinquent an February 1 of the following year. Taxpayers 65 years old or older are
permitted by State law to pay taxes on homesteads in four installments with the first due on February 1 of each year and the
final installment due on August 1.
PENALTIES AND LvrEREST ... Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows:
Cumulative Cumulative
Month Penalty Interest Total
February 6% 1% 794
March 7 2 9
April 8 3 11
May 9 4 13
June 10 5 15
July 12 6 18
After July, penalty remains at 12 %, and interest increases at the rate of 1% each month. In addition, if an account is delinquent
in July, a 15% attorney's collection fee is added to the total tax penalty and interest charge. Under certain circumstances, taxes
which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no
additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels,
pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against
an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities,
12
including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents
governmental units from foreclosing on property and prevents liens for post - petition taxes from attaching to property and
obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many
cases post - petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court.
CITY APPLICATION OF TAX CODE ... The City grants an exemption to the market value of the residence homestead of persons
65 years of age or older of $22,000; the disabled are also granted an exemption of from $1,500 to $3,000.
The City has not granted an additional exemption of 20% of the market value of residence homesteads.
See TABLE 1 for a listing of the amounts of the exemptions described above.
Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt.
The City does not tax nonbusiness personal property, and the Round Rock Independent School District collects taxes for the
City.
The City does not permit split payments, and discounts are not allowed.
The City does not tax freeport property.
The City does collect the additional one -half cent sales tax for reduction of ad valorem taxes.
The City has adopted a tax abatement policy. The City has granted abatements under various agreements, covering total
property currently valued at $89,078,599. These agreements will expire between 1998 -2004.
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13
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT
1997 Total Appraised Value Established by Williamson County Appraisal District $ 2,690,717,901
Less Totally Exempt Property (including Open Space land Use) 161,750,307
1997 Market Valuation Established by Williamson County Appraisal District $ 2,528,967,594
Less Exemptions/Reductions at 100% of Market Value
Over 65 and Disabled Homestead Exemptions S 17,935,251
Disabled Veterans Exemptions 2,067,000
Freeport Exemptions 53,036,787
Tax Abatement Reductions 89,078,599
Other Reductions 1,326,192 163,443,829
1997 Certified Taxable Assessed Valuation $ 2,325,756,421
City Funded Debt Payable from Ad Valorem Taxes:
General Purpose Obligations (as of 9/30/97) S 48,090,000 I
The Bonds 5,765,000 to
Funded Debt Payable from Ad Valorem Taxes S 53,855,000 (4")
Less: Self Supporting Debt
Waterworks and Sewer System General Obligation Bonds
Combination Tax and Revenue Certificates of Obligation°
$ 7,234,629
6,065,000 $ 13,299,629
Net Funded Debt Payable from Ad Valorem Taxes 9 40,555,371
Interest and Sinking Fund (estimated as of 9- 30 -97) $ 1,648,062
Ratio of Funded Debt to 1997 Taxable Assessed Valuation 2
Ratio of Net Funded Debt to 1997 Taxable Assessed Valuation 1.74%
1997 Estimated Population - 46,485
Per Capita 1997 Taxable Assessed Valuation - $42,525
Per Capital Funded Debt - 1,149
Per Capita Net Funded Debt - 872
(1) Reduction made to the appraised value of productive agricultural and open -space land under the provisions of Sections
1 -d and 14 -1 of Article V111
(2) Pursuant to authority permitted by Section 1 -b of Article VIII, the City, beginning in 1975, has granted a property tax
exemption to the residence homestead of property owners over 65 years of age.
(3) The Texas Legislature, pursuant to a constitutional amendment and Section 1 1.22 of the Texas Tax Code, mandated an
additional property tax exemption, beginning in 1976, for disabled veterans or the surviving spouse or children of a
deceased veteran who died while on active duty in the armed forces. The exemption from taxation applies to either real
or personal property with the amount of Assessed Valuation exempted ranging from $1,500 to 53,000, dependent upon
the amount of disability or whether the exemption is applicable to a surviving spouse or children.
(4) Excludes the Refunded Bonds.
(5) Preliminary, subject to change.
(6) Any transfer of Waterworks and Sewer System revenue for the payment of general obligation debt is discretionary. No
assurance can be given that the City Council will, in the future, authorize the use of any Waterworks and Sewer System
revenues to pay debt service on the Bonds or any other City debt payable from ad valorem taxes.
(7) Allocation of Series 1995 Combination Tax & Revenue Certificates of Obligation to Golf Course, which is self -
supporting. Under an operating contract entered into in October 1995, debt service allocated to the Golf Course must be
paid with any and all funds available from Golf Course operations after the payment of operating expenses, excluding
management fees.
14
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY
Taxable Appraised Value for Fiscal Year Ended September 30,
1998 1997 1996
% of %of %of
Category Amount Total Amount Total Amount Total
Real, Residential, Single- Family $ 1,252,730,438 49.54% $ 1,085,291,467 55.98% $ 948,826,139 54.92%
Real, Residential, Multi- Family 191,966,764 7.59% 143,170,483 7.39% 124,289,924 7.19%
Real, Vacant Lots/Tracts 73,284,983 2.90% 56,740,366 2.93% 51,761,992 3.00%
Real, Acreage (Land Only) 103,300,866 4.08% 52,477,802 2.71% 66,808,027 3.87%
Real, Farm and Ranch Improvements 3,197,556 0.16% 2,129,323 0.11% 1,752,305 0.10%
Real, Commercial 431,962,318 17.08% 268,021,643 13.83% 236,557,231 13.69%
Real and Tangible Personal, Utilities, Other 48,489,706 1.92% 37,750,738 1.95% 33,898,139 1.96%
Tangible Personal, Commercial /Industrial 424,030,670 16.77% 293,061,409 15.12% 263,640,281 15.26%
Tangible Personal, Other 4,293 0.00% 2,298 0.00% 2,658 0.00%
Real Property, Inventory 0 0.00% 0 0.00% 0 0.00%
Total Appraised Value Before Exemptions 0 2,528,967,594 100.04% $ 1,938,645,529 100.00% $ 1,7.17,536,696 100,00%
Less: Total Exemptions/Reductions 203,211,173 98,198,495 94,743,974
Plus: Arbitration Values 0 136,338,572 48,568,912
Taxable Assessed Value 2 315 756 411 $ 1,976,18 ,606 $ 1,681,361,634
(1) Revaluation.
(2) Includes the Bonds. Excludes the Refunded Bonds.
Taxable Appraised Value for Fiscal Year Ended September 30,
1995 1994
/0 of %of
Category Amount Total Amount Total
Real, Residential, Single -Family $ 832,524,130 57.88% $ 606,451,376 5338%
Real, Residential, Multi- Family 116,344,182 8.09% 93,004,600 8.19%
Real, Vacant Lots/Tracts 50,058,590 3.48% 17,594,492 1.55%
Real, .Acreage (Land Only) 48,650,999 338% 29,478,200 2.59%
Real, Farm and Ranch Improvements 2,336,633 0.16% 2,095,627 0.18%
Real, Commercial 195,420,480 13.59% 171,042,557 15.05%
Real and Tangible Personal, Utilities, Other 32,387,477 2.25% 29,447,478 2.59%
Tangible Personal, Commercial /Industrial 160,535,656 11.16% 176,403,714 15.53%
Tangible Personal, Other 2,658 0.00% 33,716 0,00%
Real Property, Inventory 0 0.00% 10,618,350 0.93%
Total Appraised Value Before Exemptions 0 1,438,260,809 100.00A $ 1,136,170,110 100.00%
Less: Total Exemptions/Reductions 34,021,158 57,920,983
Plus; Arbitration Values 0 0
Taxable Assessed Value a 1,404, 0,64 / 6 1 U /8 249 117
Note: The values shown in this table are calculated at the beginning of each tax year and are subject to appeal.
Source: Williamson County Appraisal District.
TABLE 3 - VALUATION AND GENERAL. OBLIGATION DEBT HISTORY
Funded Ratio Funded
Fiscal Per Capita Debt Debt to Per
Year Estimated Taxable Taxable Outstanding Taxable Capita
Ended City Assessed Assessed at End Assessed Funded
9 -30 Population Valuation Valuation of Year Valuation Debt
1992 33,769 $ 836,585,606 (t) $ 24,774 $ 38,738,400 4.63% $ 1,147
1993 36,139 914,420,536 25,303 40,961,100 4.48% 1,133
1994 39,460 1,078,249,127 27,325 38,261,000 3.55% 970
1995 41,650 1,404,239,617 33,715 43,069,000 3.07% 1,034
1996 43,500 1,681,361,634 38,652 51,967,000 3.09% 1,195
1997 46,485 1,976,785,606 (9 42,525 53,435,000 2.70% (2) 1,150
1998 48,809 2,325,756,421 47,650 50,168,000 (2) 2.16%/ 1,028 (2)
15
TABLE 7 - ESTIMATED OVERLAPPING DEBT
Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such
entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their
expenditures. This statement of direct and estimated overlapping ad valorem tax bonds ( "Tax Debt") was developed from
information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the
amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no
person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have
issued additional bonds since the date hereof, and such entities may have programs requiring the issuance of substantial
amounts of additional bonds, the amount of which cannot be determined. The following table reflects the estimated share of
overlapping tax debt of the City.
City's
Overlapping Authorized
Total Estimated G.O. But Unissued
G.O. Tax % Tax Debt Debt As Of
Taxing Jurisdiction Debt Applicable As of 10/1/97 10/1/97
City of Round Rock $ 40,555,371 100.00% $ 40,555,371 N ` N $ 10,490,000
Round Rock Independent School District 206,881,167 28.68% 59,333,519 0
Georgtownlndepcndent School District 56,979,937 0.03% 17,094 0
Williamson County 34,455,000 19.50% 6,718,725 0
Travis County 183,494,014 0.46% 844,072 0
Total Direct and Overlapping Net G. O. Tax Debt $ 107,468,781
Ratio of Direct and Overlapping Net G. O. Tax Debt to Taxable Assessed Valuation 4.62%
Per Capita Overlapping G. O.Tax Debt $ 2,312
(1) Includes the Bonds. Excludes the Refunded Bonds and self- supporting debt (see "Debt Information" and accompanying
footnotes).
[The remainder of this page intentionally left blank.]
17
TABLE 8 - PRO -FORMA GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS
DEBT INFORMATION
Fiscal Total Less; Tax -
Year Outstanding Tax- Estimated Tax - Self Supported %of
Ended Supported Debt Service (1) Refunding This $5,765,000 Issue (2) Supported Supporting Net principal
30-Sep Principal Interest Total Savings Principal Interest Total DehtService DebtService(3) Debt Service Retired (4)
1997 $ 3,717,000 S 2,842579 $ 6,559,579 $ - $ - $ - $ - $ 6,559,579 $ 2,579,902 $ 9,279,677
1998 3,687,000 3,003,462 6,690,462 44 - 219,842 219,892 6,910,260
2,279,110 4.636,150
1999 3617,000 2,686,830 6,303,830 39 ,525 - 293,123 293,123 6,557,428 1,889,338 9,668,090
2000 3,277000 2,518,693 5,795,693 64,525 320,000 293,123 613,123 6,394,291 1,473,439 9,870,852
2001 3,507,000 2,339,803 5,846,803 1,023 105,000 280,003 385,003 6230,783 1,460,726 4770,057 28.505
2002 3,277000 2,162,459 5,439,459 310 110,000 275,540 385,540 5,824689 1,367,036 4,457,653
2003 3,518,000 1,992079 5,510,079 4,495 25,000 270,755 295,755 5,801,339 1,376,326 9925,013
2001 3,163000 1,811,774 9,974,774 608 410,000 269,643 679,693 5,653,809 1,237,428 4,916,381
2005 3,318,000 1,623,514 4,991,514 900 195,000 250,988 445,988 5,386,602 1,31,049 4,155,558
2006 1,308,000 1 ,437,134 2,745,134 4,768 205,000 241,920 496,920 3,187,287 987,538
2,699,799 56.255
2007 1, 298,000 1,357859 2655,859 3,303 20,000 32, 285 252 185 2404842 983,537 2421,305
2008 1260,000 1,287219 2547,219 4,253 20,000 31,335 251,335 2,794,302 485,541 2308,761
2009 1,320,000 1,218,138 7938,138 213 25,000 230,375 255 ,375 2,793,301 486,756 2306,545
2010 1,145,000 1,145,707 2290,707 1,438 170,000 229,150 399,150 2,688,420 461,015 2,227,405
2011 1,120,000 1,072539 2,192,539 513 265,000 220,650 985,650 2,677,677 460,575 2217,102 69.62%
2012 1,180,000 995,844 2175,844 9,735 275,000 207,268 62,268 2,653,377 459,365 2194012
2013 1,245,000 913,734 2158,734 3,215 290,000 193,105 483,105 2638,624 457,065 2,181,559
2014 1,315,000 826,637 2,191,637 1,690 305,000 178,025 483,025 2,622972 459,150 2,163,822
2015 1,380,010 739,533 2,119,533 175 320,530 162,013 982013 2,596,371 455,313 2,141,(68
2016 1,438,000 636,979 2066,979 3385 215,000 145,053 360,053 2,423,647 455,625 1,968,022 85.58%
2017 1,510,000 543,013 2053,013 2,388 225,000 133,550 358,550 2409,176 455,000 1,954,176
2018 1,125,000 442,848 1,567,848 1,300 235,000 121,513 356,513 1,923,061 453,438 1,469,623
2019 1485,000 363,578 1,548,578 5,123 245,000 108,940 353,940 1,897,396 450,938 1,496,458
2020 2264,000 279,890 1,539,890 3,543 260,000 95,833 355,833 1,892180 452500 1,439,680
2021 1,330,000 190,893 1,520,893 1,828 275,000 81,93 356,923 1,875,988 657,813 1,423,175 99.96%
2022 75,000 96,875 171,875 9,998 285,000 67,210 352,210 519,108 451,875 67,233
2023 75,000 74,688 149,685 2,725 305,000 51 ,963 356,963 503,926 499,688 54,238
2024 80,000 51,250 131,250 293 325,000 35,645 360,645 491,603 451,250 40,353
2025 85,000 26,250 111,250 2,680 335,00 18,258 353,258 961,828 496,250 15,578
$ 51,887,000 $ 34,676,001 $ 86,983,801 $ 163,969 $ 5,765,000 $ 5,139,024 $ 10,909,024 $ 97,223,856 $ 3,801581 $ 73,919,275
Excludes Refunded Bonds.
Calculated using 5.29% Net Interest Rate.
A percentage of the following issues debt service is considered self- supporting:
G.O. Bonds, Series 1979 - (8.72%)Waterworks & Sewer System; G.O. Bonds, Series 1981 -A - (100.00 %) Waterworks & Sewer System
G.O. Refunding Bonds, Series 1987 - (34.57%) Waterworks & Sewer System; G.O. Refunding Bonds, Series 1993 - (29.05 %) Waterworks & Sewer System
Combination Tax & Revenue C /O's, Series 1995 - (77.90 %) Golf Course
Net of principal related to self - supporting debt. See: Table 1 and related footnotes for additional detail on self- supporting debt.
18
TABLE 9 - INTEREST AND SINKING FUND BUDGET PROJECTION n)
Estimated Net General Obligation Debt Service Requirements, Fiscal Year Ending 9 -30 -98 $ 4,636,150
Interest and Sinking Fund, 9 -30 -97 $ 1,079,511
1998 Interest and Sinking Fund Tax Levy @ 98% Collection $ 4,694,942
Estimated Investment Income (Fiscal 1998) $ 130,000
Estimated Balance, 9 -30 -98 $ 1,268,303
(1) 1997 data not yet available.
TABLE 10 - COMPUTATION OF SELF - SUPPORTING DEBT
Net Revenue from the City's Water and Sewer System, Fiscal Year Ended 1996 $ 8,688,857
Less: Revenue Bond Debt Service Requirements, 1996 Fiscal Year $ 1,738,756
Balance Available for Other Purposes $ 6,950,101
Water and Sewer System General Obligation Debt Requirements, 1998 Fiscal Year $ 2,274,110
Balance $ 4,675,991
Percentage of Water and Sewer System General Obligation Debt Self- Supporting 100%
(1) Any transfer of Waterworks and Sewer System revenue for the payment of general obligation debt is discretionary. No
assurance can be given that the City Council will, in the future, authorize the use of any Waterworks and Sewer System
revenues to pay debt service on the Bonds or any other City debt payable from ad valorem taxes.
TABLE 11 - AUTHORIZED Bvt UNISSUED GENERAL OBLIGATION BONDS
Amount
Date Amount Being Unissued
Purpose Authorized Authorized Issued Balance
North Fork Water and Sewer Project 9 -06 -80 $ 10,000,000 $ 8,415,000 $ 1,585,000
Public Safety 1 -20 -96 2,015,000 605,000 1,410,000
Library 1 -20 -96 3,525,000 3,525,000
Parks & Recreation 1 -20 -96 4,705,000 2,475,000 2,230,000
Public Works 1 -20 -96 9,755,000 5,395,000 4,355,000
Maintenance Facility 1 -20 -96 910,000 - 910,000
$ 30,910,000 $ 20,415,000 $ 10,490,000
ANTICIPATED ISSUANCE OF GENERAL OBLIGATION DEBT ... The City anticipates the issuance of approximately 98,910,000 in
additional general obligation debt within the next twelve months.
OTHER OBLIGATIONS ... The City annually enters into a lease purchase agreement for equipment acquisition. The lease
balance as of September 30, 1996 was $1,893,801 with final maturity scheduled to occur by September 30, 2003.
PENSION FUND ... The City provides pension benefits for all of its full -time employees through the Texas Municipal
Retirement System ("TMRS"), a State -wide administered pension plan. The City makes annual contributions to the plan equal
to the amounts accrued for pension expense. (For more detailed information concerning the retirement plan, see Appendix B,
"Excerpts from the City's Annual Financial Report" - Note 11 8).
19
FINANCIAL INFORMATION
TABLE 12 - GENERAL FUND REVENUE AND EXPENDITURE HISTORY (1)
For Fiscal Year Ended September 30,
1996 1995 1994 1993 1992
Revenues:
Taxes $ 13,926,639 5 11,803,926 $ 9,322,242 $ 7,910,542 5 6,561,912
Licenses and Permits 539,241 576,718 583,935 387,776 266,380
Charges for Services 1,210,486 951,760 765,287 629,454 501,081
Fine and Forfeitures 637,471 496,577 632,967 520,159 405,803
Miscellaneous 883,538 704,072 394,190 694,793 373,488
Total Revenues $ 17,197,375 5 14,533,053 $ 11,698,621 5 10,142,724 $ 8,108,664
Expenditures:
General Government $ 3,925,058 $ 3,444,821 $ 2,571,601 $ 2,118,627 $ 2,013,830
Public Safety 6,803,488 5,875,865 4,641,358 4,411,114 3,538,469
Public Works 2,543,184 2,133,271 1,871,751 1,919,195 1,587,165
Culture and Recreation 2,466,848 2,132,717 1,798,141 1,611,799 1,352,009
Total Expenditures $ 15,738,578 $ 13,586,674 $ 10,882,851 5 10,060,735 $ 8,491,473
Excess (Deficiency) of
Revenues over Expenditures $ 1,458,797 5 946,379 $ 815,770 5 81,989 5 (382,809)
Budgeted Transfers In 8 1,300,000 5 1,250,017 $ 1,200,000 $ 1,139,000 $ 924,880
Budgeted Transfers Out (1,057,805) (1,800,700) (801,409) (431.200) (993,555)
Total Transfers $ 242,195 $ (550,683) 5 398,591 5 707,800 $ (68,675)
Net Increase (Decrease) $ 1,700,992 $ 395,696 $ 1,214,361 5 789,789 5 (451,484)
Other Miscellaneous Adjustments - - - -
BeginningFundBalance 6,729,950 6,334,254 5,119,893 4,330,104 4,781,588
Ending Fund Balance $ 8,430,942 $ 6,729,950 $ 6,334,254 $ 5,119,893 $ 4,330,104
(1) 1997 data not yet available.
(2) Includes lease purchase financing proceeds.
Source: City of Round Rock Finance Department.
TABLE 13 - MUNICIPAL SALES TAX HISTORY
The City has adopted the Municipal Sales and Use Tax Act, Chapter 321, Texas Tax Code, V.T.C.A., which grants the City the
power to impose and levy a 1Y,% Local Sales and Use Tax within the City, the proceeds are credited to the General Fund and
are not pledged to the payment of the Bonds. Collections and enforcements are effected through the offices of the Comptroller
of Public Accounts of the State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City
monthly.
Fiscal Equivalent
Year % of of
Ended Total Ad Valorem Ad Valorem Per
9 -30 Collected Tax Levy Tax Rate Capita
1991 S 2,851,861 55.59% 0.1 S 88.53
1992 3,231,220 59.85% 0.1647 95.69
1993 4,159,852 72.86% 0.2121 115.11
1994 5,069,127 82.59% 0.2584 128.11
1995 7,144,297 103.48% 0.3642 164.24
1996 8,974,450 123.02% 0.4575 206.31
(1) Based on estimated or U. 5. Census population for all years.
20
FINANCIAL Poucn s
Basis of Accounting . . .The City's 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
unmanned 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.
Budgetary Procedures . . .The City Charter establishes the City's fiscal year 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 August 1. The
City Manager subsequently submits is budget of estimated expenditures and revenues to the City Council by August 1. 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 appropriations 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.
INVESTMENTS
The City of Round Rock invests its investable funds in investments authorized by Texas law in accordance with investment
policies approved by the City Council of the City of Round Rock. Both State law and the City's investment policies are subject
to change.
LEGAL INVESTMENTS ... Under State law, the City is authorized to invest in (1) obligations of the United States or its agencies
and instrumentalities, (2) direct obligations of the State or its agencies and instrumentalities, (3) collateralized mortgage
obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is
guaranteed by an agency or instrumentality of the United States, (4) other obligations, the principal of and interest on which are
unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State or the United States or their
respective agencies and instrumentalities, (5) obligations of states, agencies, counties, cities, and other political subdivisions of
any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent, (6)
certificates of deposit issued by a state or national bank domiciled in Texas or a savings and loan association domiciled in
Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation or are secured as to principal by obligations
described in clauses (1) through (5) or in any other manner and amount provided by law for City deposits, (7) certificates of
deposit and share certificates issued by a state or federal credit union domiciled in the State that are guaranteed or insured by
the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by
obligations described in the clauses (1) through (5) or in any other manner and amount provided by law for City deposits, (8)
fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations described in
clause (1), and are placed through a primary government securities dealer or a financial institution doing business in the State,
(9) bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its
parent are rated at least A -1 or P -1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial
paper that is rated at least A -1 or P -1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one
nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a United
States or state bank, (11) no -load money market mutual funds regulated by the Securities and Exchange Commission that have
a dollar weighted average portfolio maturity of 90 days or less and include in their investment objectives the maintenance of a
stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange
Commission that have an average weighted maturity of less than two years, invests exclusively in obligations described in the
preceding clauses; and are continuously rated as to investment quality by at least one nationally recognized investment rating
firm of not less than AAA or its equivalent.
21
The City may invest in such obligations directly or through government investment pools that invest solely in such obligations
provided that the pools are rated no lower than AAA or AAA- or an equivalent by at least one nationally recognized rating
service. The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments
on the outstanding principal balance of the underlying mortgage- backed security collateral and pays no principal; (2)
obligations whose payment represents the principal stream of cash flow from the underlying mortgage- backed security and
bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4)
collaterlized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a
market index.
INVESTMENT POLICIES ... Under State law, the City is required to invest its funds under written investment policies that
primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality
and capability of investment management; and that includes a list of authorized investments for City funds, maximum
allowable stated maturity of any individual investment and the maximum average dollar- weighted maturity allowed for pooled
fund groups. All City funds must be invested consistent with a formally adopted `Investment Strategy Statement" that specifically
addresses each funds' investment. Each Investment Strategy Statement must describe the investment objectives for the particular fiend
using the following priorities: (1) suitability of investment type; (2) preservation and safety of principal; (3) liquidity, (4) marketability
of each investment, (5) diversification of the portfolio; and (6) yield.
Under State law, City investments must be made `with judgment and care, under prevailing circumstances, that a person of
prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but
for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the
investment officers of the City shall submit an investment report detailing: (1) the investment position of the City; (2) that all
investment officers jointly prepared and signed the report; (3) the beginning market value, any additions and changes to market
value and the ending value of each pooled fund group; (4) the book value and market value of each separately listed asset at the
beginning and end of the reporting period; (5) the maturity date of each separately invested asset; (6) the account or fund or
pooled fund group for which each individual investment was acquired; and (7) the compliance of the investment portfolio as it
relates to: (a) adopted investment strategy statements and (b) Slate law. No person may invest City funds without express
written authority from the City Council.
AoDmoNaL PRovrsIoNS ... Under State law the City is additionally required to: (1) annually review its adopted policies and
strategies; (2) require any investment officers' with personal business relationships or relatives with firms seeking to sell securities to
the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (3) require the
registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy, (b) acknowledge
that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c) deliver a written
statement attesting to these requirements; (4) perfonn an annual audit of the management controls on investments and adherence to the
City's investment policy, (5) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (6)
restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no
greater than the term of the reverse repurchase agreement (7) restrict the investment in mutual funds in the aggregate to no more than
80% of the City's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service and further
restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt service and
to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt
service; and (8) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation,
and advisory board requirements.
Current Investments: The City is currently invested in a portfolio of U.S. Treasury Securities, Federal Home Loan Bank
Discount Notes, Federal Home Loan Mortgage Corporation Discount Notes, Federal National Mortgage Assn. Discount Notes,
Commercial Paper, FFCB 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 Director of Finance.
The City's 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 City's practice to value its
investments at least quarterly. Based upon the most recent valuation of its investments which occurred September 30, 1997,
the City reports its investments totaling 964,590,757 in book value had a market value of 964,618,265 or 100.04% of book
value.
22
TAX MATTERS
OPSUoN ... On the date of initial delivery of the Bonds, McCall, Parkhurst & 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(a)(5) of the Internal Revenue Code of 1986 (the "Code "). Except as
stated above, Bond Counsel will express no opinion as to any other federal, state or local tax consequences of the purchase,
ownership or disposition of the Bonds. See Appendix C - "Form of Opinion of Bond Counsel ".
In rendering their opinion, Bond Counsel will rely upon (a) the District's federal tax certificate and (b) the verification report of
Grant Thornton LLP independent certified public accountants covenants of the District 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 District 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 Dtscourvr ... The initial public offering price to be paid
for 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 Discount 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 Cade) 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 owned by such
owner. For a discussion of certain collateral federal tax consequences, see discussion set forth below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity,
however, the amount 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 loss
recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each
accrual period is equal to (a) the sum of the issue price and the amount of 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 dicier from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors
with respect 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 FEOEnaL 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. 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 S corporations with
Subchapter C earnings and profits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase
tax- exempt obligations.
23
INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD
CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT
FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX - EXEMPT OBLIGATIONS BEFORE DETERMINING
WHETHER TO PURCHASE THE BONDS.
Prospective purchasers should be aware that because the first interest payment will be made more than one year after the issue
date of the Bonds, the first payment may be treated as original issue discount. While such treatment of the payment will not
adversely affect the excludability of the interest portion of the payment from a holder's gross income, special tax accounting
treatment may apply. This tax accounting treatment would cause a portion of the interest payment to be recognized in the
taxable year in which the Bonds are purchased, rather than the taxable year in which the payment is received by the holder.
This treatment may accelerate any alternative minimum tax consequences for corporations and any other collateral federal
income tax consequences for certain holders. Prospective purchasers should consult their tax advisors for advice regarding
such consequences.
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 non corporate taxpayers (28 percent for taxable income exceeding 3175,000), 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 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 minimus 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 or, in the case of a certificate issued at an original issue discount, the "revised
issue price" (i.e., 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 over 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.
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24
CONTINUING DISCLOSURE OF INFORMATION
GENERAL... In the Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners
of the Bonds. The City is required to observe the agreement 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 information from the vendors.
ANNUAL REPORTS ... 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 Tables numbered 1 through 5, 8, 12, 13 and
information under the subheading "Financial Information - Current Investments ", The City will update and provide this
information within six months after the end of each fiscal year ending in or after 1997. The City will provide the updated
information to each nationally recognized municipal securities information repository ( "NRMSIR ") and to any state information
depository ( "SID") that is designated by the State of Texas and approved by the State of Texas and approved by the staff 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 unaudited financial statements within the required time and will provide audited fmancial
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 time to time pursuant to state law or regulation.
The City's current fiscal year end is September 30, 1997. Accordingly, it must provide updated information by March 30, in
each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify each NRMSIR and the SID of
the change.
The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a
qualified SID. The address of the Municipal Advisory Council of Texas is 600 West 8th Street, P. O. Box 2177, Austin, Texas
78768-2177, and its telephone number is 512/476 - 6947.
MATERIAL Evervr NOTICES ... The City will also provide timely notices of certain events to certain information vendors, The
City will provide notice of any of the following events with respect to the Bonds, 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
fmancial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or
events affecting the tax- exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9)
defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes. Neither
the Bonds nor the Ordinance make any provision for debt service reserves or liquidity enhancement. 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 the SID
and to either each NRMSIR or the Municipal Securities Rulemaking Board ( "MSRB ").
AVAn.ABu rry of INFORMATION FROM NRMSIRs AND SID ... The City has agreed to provide the foregoing information only to
NRMSIRs and the 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.
Lm4 rAnores 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 makes 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 agreement or from any statement made
pursuant to its agreement, although holders and beneficial owners of Bonds may seek a writ of mandamus to compel the City to
comply with its agreement.
The City may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i)
the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering described herein in
compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as
well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the
25
outstanding Bonds consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized bond
counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the
Bonds. If the City so amends the agreement, it has agreed to include with the next financial information and operating data
provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the
reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided.
COMPLIANCE Wrt$PRIOR UNDERTAKINGS ... The City has previously made a continuing disclosure agreement in accordance
with SEC Rule 15c2 -12 and is in compliance with such undertaking.
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26
RATINGS
The presently outstandi g, uninsured tax supported debt of the City is rated "Al" by Moody's and "A +" by S&P. The City also
has ten issues outstanding which are rated "Aaa" by Moody's and "AAA" by S &P as a result of insurance provided by various
commercial insurance companies. Applications for contract ratings on the Bonds have been made to Moody's and S &P (see
"Other Information - Ratings ").
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
OTHER INFORMATION
The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the
exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in
reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any
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. For political subdivisions in Texas which have adopted investment policies
and guidelines in accordance with the Public Funds Investment Act (V.T.C.A., Government Code, Chapter 2256), the Bonds
may have to be assigned a rating of "A" or its equivalent as to investment quality by a national rating agency before such
obligations are eligible investments for sinking funds and other public funds. No review by the City has been made of the laws
in other states to determine whether the Bonds are legal investments for various institutions in those states.
LEGAL OPINIONS AND NO- LITIGATION CERTIFICATE
The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds,
including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Bond and to the effect
that the Bonds are valid and legally binding obligations of the City, and based upon examination of such transcript of
proceedings, the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be
excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters
described under "Tax Matters" herein, including the alternative minimum tax on corporations. The customary closing papers,
including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and
delivery of the Bonds, or which would affect the provision made for their payment or security, or in any manner questioning the
validity of said Bonds will also be furnished. Bond Counsel was not requested to participate, and did not take part, in the
preparation of the Official Statement, and such firm has not assumed any responsibility with respect thereto or undertaken
independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such fum has
reviewed the information describing the Bonds in the Official Statement under the captions "The Bonds" (other than
information under the subcaptions "- Book - Entry-Only System" and "- Use of Proceeds"), "Tax Matters," "Continuing
Disclosure of Information," (other than information under the subcaption "- Compliance with Prior Undertakings ") and "Other
Information - Legal Investments and Eligibility to Secure Public Funds in Texas" to verify that such description conforms to the
provisions of the Ordinance and is correct as to matters of law. 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.
27
AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION
The financial data and other information contained herein have been obtained from City 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.
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
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 accuracy of the mathematical computations of (i) the adequacy of the maturing principal of and interest earned on the
escrow securities together with other available funds held in the escrow account, to provide for the payment of the Refunded
Bonds, and (ii) the "yield" on the escrow securities and on the Refunding Bonds, will be examined by Grant Thornton LLP, a
firm of independent certified public accountants.
These computations will be based upon information and assumptions supplied by the First Southwest Company on behalf of the
City. Grant Thornton LLP has restricted its procedures to examining the arithmetical accuracy of the computations and has not
evaluated or audited the assumptions or information used in the computations.
UNDERWRITING
The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the City, at an underwriting discount
of $ . 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 the 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 Purchaser.
ATTEST:
JOANNE LAND
City Secretary
28
CHARLES CULPEPPER
Mayor
City of Round Rock, Texas
Redemption Date: 6 -1 -2005
Redemption Price: 100.00%
• Preliminary, subject to change.
SCHEDULE
Schedule of Bonds to be Refunded'
Series 1995 Certificates of Obligation Series 1990 Certificates of Obligations
Principal Interest Principal Interest
Amount Rate Maturity Amount Rate Maturity
$ 240,000 5.90% 6 -1 -2011 $ 75,000 6.90% 8 -1 -2001
255,000 6.15% 6 -1 -2012 80,000 7.00% 8 -1 -2002
270,000 6.15% 6 -1 -2013 145,000 6.50% 8 -1 -2010
285,000 6.15% 6 -1 -2014
300,000 6.25% 6 -1 -2015
200,000 6.25% 6 -1 -2016
210,000 6.25% 6 -1 -2017
220,000 6.25% 6 -1 -2018
235,000 6.25% 6 -1 -2019
250,000 6.25% 6 -1 -2020
265,000 6.25% 6 -1 -2021
280,000 6.25% 6 -1 -2022
300,000 6.25% 6 -1 -2023
320,000 6.25% 6 -1 -2024
335,000 6.25% 6 -1 -2025
Series 1988 Certificates of Obligation
Principal Interest
Amount Rate Maturity
$ 225,000 6.25% 8-1-2004
Redemption Date: 8 -1 -1998
Redemption Price: 100.00%
Series 1987 Certificates of Obligation Series 1987 General Obligation Bonds
Principal Interest Principal Interest
Amount Rate aM tint yt Amount Rate Maturity
$ 120,000 6.30% 8 -1 -2000 $ 225,000 6.25% 8-1 -2000
155,000 6.00% 8 -1 -2004
170,000 6.00% 8-1 -2005
185,000 6.00% 8-1 -2006
Redemption Date: 2 -1 -1998 Redemption Date: 2 -1 -1998
Redemption Price: 100.00% Redemption Price: 100.00%
29
Redemption Date: 8 -1 -2000
Redemption Price: 100.00%
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
(Insert Map)
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.
Economic Development
Round Rock has earned accolades both for its economic development efforts and its pro- business stance. The City has
attracted a number of high - technology companies, including Cypress Semiconductor and Dell Computer. Cypress announced
a two -phase $700 million expansion m 1996 while Dell is completing work on its $100 million campus.
Named by Texas Business Magazine in its June 1995 issue as the top choice in the State for business relocations and
expansions, Round Rock also is home to Abbott Laboratories, State Farm Insurance, Tellabs Texas, Texas Instruments,
Westinghouse, DuPont Photomask, Intermedics Orthopedics and Sysco Foods. Other major employers include McNeil
Consumer Products, TN Technologies, MagRabbit Inc. and Weed Instruments.
Round Rock has become a magnet for business and industries, in large part because it has one of the most pro - business
attitude of any community in Central Texas. The City prides itself on a smooth development process and on a pragmatic
political leadership that extends a warm welcome to new employers.
The median household income of Round Rock residents, according to the 1990 U.S. Census, was $33,228. This compares
with $27,016 for Texas as a whole.
Round Rock has a young population: The median age is 30.9. Nearly 30 percent of Round Rock's residents aged 25 and
over have completed high school, and a slightly higher percentage have a college, graduate or professional degree.
According to the 1990 U.S. Census, 26 percent of Round Rock residents hold professional positions, while 38 percent work
in administrative or sales jobs.
Manufacturing and high - technology industries have fueled Round Rock's growth. Since 1991, 30 businesses have located or
expanded in Round Rock, creating 5,800 jobs and investing more than $300 million. The result has been close to full
employment. Round Rock's unemployment rate is below 2 percent.
In addition to its corporate base, the City, which lies within Williamson County, boasts extensive entrepreneurial and
innovative talent. In fact, Williamson County generates more patents than any other county in the Austin MSA.
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 February 1997.
Source: Round Rock Chamber of Commerce.
Company Employees
Dell Computer 3,600 -4,000
Farmers Insurance Group, Inc. 1,100
AMP Packaging Systems - A Division of AMP, Inc. 600
Wayne Division - Dresser Industries, Inc. 476
Tellabs Texas, Inc. 465
Westinghouse Motor 440
Michael Angelo's Gourmet 425
Cypress Semiconductor, Inc. 370
SYSCO Foods 365
DuPont Photomask 250
A -1
Labor Market Profile
City Government and Community Services
City of Round Rock
August 1997 August 1996
Total Civilian Labor Force 26,615 26,431
Total Employment 26,062 25,985
Total Unemployment 553 446
Percent Unemployment 2.1% 1.7%
State of Texas (000's)
August 1997 August 1996
Total Civilian Labor Force 9,996.3 9,810.0
Total Employment 534.0 537.6
Total Unemployment 9,462.0 9,272.4
Percent Unemployment 5,3% 5.5%
The City is governed by a Council/Manager form of government with a Mayor and six councilmembers. The City has 1,026
acres of parks, which include eleven tennis courts, 22 baseball fields, 5 soccer fields, 2 swimming pools and other facilities
that are available to the community. A public, 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 on 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 twelve banks and one major savings and loan association.
Transportation
The City is easily accessible from the Austin Municipal Airport and Executive Airpark, a private airport located near the
City. Austin - Bergstrom International Airport is scheduled to be operational in 1998. Two major railroads, two motor freight
lines and a bus line serve the City.
Education Facilities
The City is located entirely within one of the fastest growing school districts in the State, the Round Rock Independent School
District. The District is comprised of 110 square miles with a current 1996 Net Taxable Assessed Valuation of
$6,415,571,812. The City is within 90 miles of six of the major universities in the State, including The University of Texas at
Austin, just 15 miles away. Southwestern University is located eight miles north in the City of Georgetown.
Recreation
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 21 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.
Utilities
The City is served by Southwestern Bell Telephone Company, Texas Utilities Electric Company and Lone Star Gas
Company.
A -2
APPENDIX B
EXCERPTS FROM THE
CITY OF ROUND ROCK, TEXAS
ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 1996
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, 1996, and is
not intended to be a complete statement of the City's fmancial condition. Reference is
made to the complete Report for further information.
APPENDIX C
FORM OF BOND COUNSEL'S OPINION
APPENDIX D
SPECIMEN BOND INSURANCE POLICY
DATE: October 17, 1997
SUBJECT: City Council Meeting, October 23, 1997
ITEM: 10. D. Consider a resolution approving and distributing the Preliminary
Official Statement and authorizing the City's Financial Advisors to
proceed with the sale of General Obligation Refunding Bonds, Series
1997.
STAFF RESOURCE PERSON: David Kautz
If we achieve a market interest rate of 5.30% or lower, we propose to issue $5,765,000( *1) in
refunding General Obligation Bonds, Series 1997 and achieve a 3% present value savings, all
costs included. That is, debt service on the new issue would be about $160,000 less over the life
of the issue compared to the old debt service. This provides annual debt service savings of
about $6,100.
Portions of outstanding bond issues affected by this refunding are the
1987 COs
1987 GOs
1988 COs
1990 COs and
1995 COs
Staff recommends obtaining authorization from the Council for this refunding, then conducting
the sale at the most advantageous market position available to the City.
( *1) Preliminary, Subject to Change